Slavery and How It Impacted Economic Growth

Slavery and How It Impacted Economic Growth

Introduction

Slavery was a legally accepted system in the U.S. that impacted the core aspects of economic growth. Africans were captured and transported to America and used as a source of cheap labor in Cotton, Tea, and other crops plantations. From the 16th century throughout the 19th century, the American economy depended on slavery for is survival. The Europeans had discovered large tracks of land in America and without adequate labor, this land could not be utilized to the maximum. The Europeans therefore resorted into cheap African slave labor with an aim of fully exploiting the abundant land in America. Slavery systems of labor were favored by most European intellectuals, however, neither the American natives nor the European sources of labor proved to be capable to provide adequate labor. The trans-Saharan slave trade had supplied labor to work in the Mediterranean sugar plantations alongside Russian and Balkans white slaves. The same trans-Saharan trade provided about 10000 slaves per year to work in Iberian Peninsula, North Africa and Middle East. The slaves had proved to be competent in all these scenarios such that the colonial masters in the U.S. chose them to be there preferred labor force. The slaves were imported in large numbers, and they were regarded as commodities, too many were they such that they became the overwhelming majority of the colonial populations of the Americans (Ball, 1836). Of the 5.5 million immigrants who managed to cross the Atlantic Ocean and settle in America, 5.5 million were Africans. At the same time, 1 million were European, bringing a clear indication of how the American economy depended on slave labor for economic prosperity. Throughout this paper, the economic history of slaves will be discussed together with how it impacts the American economy to date.

Cotton kingdom

The southern commercial centers, such as New Orleans, had already established themselves as the centers for the most significant wealth concentrations in America. The issue of slavery had already shaped the culture of southern society, especially on white supremacy. Many people residing in the south commercial centers believed that slavery sustained the economic prosperity of the southern economy. However, cotton farming was a labor intensive economic activity, and many of the plantation owners started reducing the number of people they had enslaved due to high costs and low inputs involved. However, Eli Whitney invented the cotton gin, a device that was used to separate seeds from cotton, which was a huge boost in cotton production Baker, R. V., & (Griffin Jr, 1984). The labor, which was extraordinarily labor intensive, could be completed easily and quickly. By the 1800s, cotton farming had become the major economic activity in the southern economies superposing other crops such as tobacco, tea, sugar, and rice. Plantation owners started producing cotton for commercial purposes. This means that the farmers of the plantation produced enough for themselves and sold the surplus to the world market. Cotton was the most preferred crop because it was easily transported and stored. The demand for slave-grown cotton was rising among the industrial textile mills in Great Britain. The slaves played a role in planting the picking of cotton in which instrumental to an industrial revolution both in Great Britain and America.

The lucrative cotton trade in the international market increased the amount of wealth for the residents in New Orleans. People traveled through the new water highway of the U.S., river Mississippi in search of greener pastures in New Orleans. After the invention of steamship, the transport of cotton became easier and efficient. Slaves had transformed New Orleans such that by 1840, America’s 12 percent of the total banking capital was concentrated around New Orleans transforming New Orleans from a rather unimportant city in North America to the same significance as New York City. By 1850, America had more than 3.2 million slaves, and out of these, 1.8 million were dealing cotton, proving the colossal impact the slaves had in cotton production. Ten years later, i.e., by 1860, slaves were producing more than two billion pounds of cotton annually, an equivalent of two-thirds of total global supply and production continued to increase. The South were too prosperous economically due to the cotton slavery such that by the time the American Civil started, James Henry Hammond, the South Carolina politician, claimed that the North could never defeat the South because cotton is King (Elliott, 1860). The production of cotton in the South brought America more firmly into the larger America and Atlantic markets. More than 75 percent of cotton produced in America was exported into global markets, subsequently turning America into a global leader in Cotton production.

Sold Down the River

The phrase “sold down the river” was coined by Harriet Beecher, referring to the mass migration of people from the upper southern states to Deep South through river Mississippi to grow cotton. Slave trade provided many economic opportunities by fostering the growth of cotton. Further south, the chances of slave escape and conditions of slavery became progressively worse, and due to this, the slaveholders in the Upper South exerted the concept of “sold down the river” as a threat to keep their slaves in line (Monitor, 2001). The movements of slaves from the upper South to the Deep South accounted for the highest number of forced migrations in the U.S. Because of forced trade labor the number of millionaire’s per capita income was more in river Mississippi than anywhere else in the U.S. further proving the economic impact of slaves in this region.

Slavery as an economic institution

There existed a small portion of slaves who were working as domestic servants working as cooks, coachmen, and seamstresses. Another negligible percentage worked as craftsmen in fields of masonry, carpentry, and blacksmiths. The word “spare slaves” referred to a portion of slaves who were worked as factory or mill laborers and as skilled artisans. Although many slaves worked in rice, cotton, sugar, and tobacco plantations, a small percentage was set aside to help small tasks. The occupational distribution of slaves shows the nature of the economy of the southern society that was mainly centered on agricultural activities with limited urbanization and industrialization as compared to the North. However, irrespective of the tasks that these slaves were assigned, they were profitable. The expense incurred by their owners when housing, feeding, and clothing the slaves was considerably low compared to the value brought in by the slaves. According to various estimates, the revenues their masters collected was two times more than the costs they incurred to maintain the slaves. In the 19th century, profitability increased as the prices of the cash rose while the expenses of keeping slaves remained level. The slaves themselves were a source of investments for some Americans. As the demand for cotton increased, the cotton plantation owners were under pressure to produce more cotton. Subsequently, the demand for slaves also rose, leading to increased prices for these slaves. The prices for young, energetic teen slaves increased considerably, while those of women remained almost the same. This shows that the value of slaves increased according to their strength and their ability to complete tasks. Therefore, slave owners treated slavery as an enterprise, buying and selling slaves for income.

Slavery and Capitalism

Slavery shaped America’s capitalistic economy because it acted as a stepping stone for America’s economic development and growth. Slavery helped turn a poor fledging nation into an economic giant. Cotton was among the world’s most exported products, and it was also America’s principal export commodity. Slavery played a crucial role in promoting the industrial revolution. Plantation owners, merchants, and shipbuilders used slaves to accumulate fortunes, which they used to establish industries that expanded the reach of capitalism across the world. The expansion of slaves in the first eight decades after America gained independence was a significant driving factor towards the modernization and evolution of critical economic aspects in the U.S. The South grew from a strip worm-out strip of tobacco into a substantial continental empire with cotton has its major commodity while the U.S. evolved into a giant industrial, modern and capitalist economy. Slave owners gained a lot from slavery which enable America to control the world cotton market, the fundamental raw material during the industrial revolution hence become a powerful and a prosperous nation. America therefore owes her first existence to slavery. However, capitalism and slavery appear to two different ideologies because one relies on free labor and the one relies on forced labor. However how much counterpoised the two are, it is evident that capitalism could not have happened without slavery. Profit was not only made from the cotton which the slaves picked, but slavery also acted as a central establishment of the industries which dominate the U.S. economy today, such as the real estate, insurance, and finance. Wall Street was built through slave labor, which formed the northern boundary of the Dutch colony, which was built to bar the natives from getting their land back. The most famous American banks, such as the JP Morgan and Wachovia Corp and Wachovia Corp, accrued a lot of fortunes from the slave trade going to the extent of accepting slaves as collateral for before giving loans. JP Morgan admitted that it allowed more than 13000 slaves as collateral for their loans and took more 1250 slaves in their possession as a means of recovering their defaulted loans. In North America, Great Britain was the pioneer of the cotton textile industry and the hotbed for American abolitionism, who grew their wealth through slavery. The northern rich men were connected to slavery in numerous ways: they bought molasses, which was a product of slave labor, sold rum as part of the triangle trade, and bought which was shipped through slave labor. However, despite the black people playing a pivotal role in capitalism and the growth of the American economy, they did not enjoy the fruits of their hard work. The blacks were segregated based on race and color and more through the racial capitalist ideologies.

Slavery Economic Legacy

Slavery left behind race-based economic inequality. Slave trade legacy plays a crucial role in the American economy and society at large. According to various studies, there exists a considerable economic gap between the counties which had a high slave share and those who had low slave share. The counties with a high slave share seem to be having left behind economically as compared to those who had little slave share (Leary, 2017). The explanation behind this is the existing education disparities between the blacks and the whites. The slave legacy heavily influences the nature of education funding and provision. Because of the separate but unequal education policies which existed in the southern states till the 1960s, the local officers seemed to divert the funds meant for education of the blacks and use the funds to fund the whites. They, therefore, imposed lower property tax and spent little on education. Thereafter, the segregated education system was abolished; however, the local officers continued imposing lower tax rates negatively affecting the education for the blacks. Such educational disparities aimed at segregating the blacks can be attributed to the lagging behind of the blacks economically.

Economic Impact of Slavery on Property Ownership

The economic historians have given much of their attention to the historical evolution of racial differences in education and income, giving very little attention to economic status such as housing. The racial gaps in wealth are much larger than the racial gaps in income. Blacks, who came to America through slavery have been neglected in many economic policies in America. Many blacks emerged from slavery with no wealth at all; however, by the start of the 20th century, 22 percent of black men owned houses showing the economic progress of the African-American slaves within a short period. Considering that most of the Blacks had zero wealth by 1870, acquiring homes was a tremendous economic accomplishment. Over the next fought years, the economic disparities between the blacks and whites was insignificant. The house ownership among the blacks rose in the first 20 years of the 20th century, but the rate of house owner declined thereafter (Schweninger, 1989). The reason behind this was that many African-Americans migrated from rural areas to urban cities, in doing this, the probability of them owning homes decreased. This is because the possibility of blacks living in urban centers to acquire a home is very role further proving the racial, economic segregation in the American multiracial society. In the 1970s, the value of black-owned houses declined dramatically, while the value of black-owned houses increased. The ratio between the relative values of houses owned by blacks to those owned by the whites was found to be higher. The ratio was found to be high in cities dominated by former African slaves, further proving the slavery still impacts the American economic aspects up to date.

Economic racism in America Today

The importation of slaves is the reason behind the issue of economic racism in America today. Almost all the African-Americans are the descendants of their slave ancestors. Most African Americans remain situated in societies with the lowest opportunities for upward mobility. This is not an accident, but it shows both the intended and unintended outcomes of U.S. economic policies that have been shaped in a manner that they determine the opportunities that people are exposed to according to their race and color (Blauner & Blauner, 1972). The poverty in the southern counties where slavery was mostly practiced is higher than anywhere else in today’s American society. Black populations are concentrated in central counties of large metropolitan areas, whereas the white population is concentrated in relatively smaller metropolitan areas and rural counties. This pattern is not accidental; instead, it is associated with widespread discrimination aimed at blacks. The blacks have been targeted through racial employment, making it very hard for them to build wealth in their communities. The systematic racism in the U.S. is a great contributor to the economic gaps witnessed in the U.S. and based on racial differences. The white have enjoyed significant economic privileges for decades hence making it very hard for blacks to achieve economic security.

Conclusion

The impacts of the economic effects of slavery in America can be deduced easily. However, slaves played a crucial role in the agricultural progress of the United States of America. Agriculture was a fundamental component of the American economy during the slave trade error. The Americans took advantage of the slave trade and built a giant economy that depended on plantation farming, especially cotton. Cotton farming was a significant economic transformation that was initiated by blacks. Cotton was one of the major cash crops which transformed the world through industrialization. Slaves themselves were treated as personal property; hence most slave owners sold them to earn income. Slaves were the pioneers of the American capitalist ideologies. The American economy grew to become the best in the world due to the inputs of slaves. Slavery impacted almost every sector of the American economy, including the shipping sector, where they were used to load and offload goods. The role of slaves in the Industrial Revolution can be classified as the most significant impact of slavery. Slaves were involved in the production of low materials, especially by working the America’s plantations, which were used during the industrial revolution. The economic impacts of slavery are still witnessed today, whereby blacks are discriminatory during the formulation and implementation of various economic policies. Nevertheless, the slave trade was abolished decades ago; however, their role in propelling America to become a global economic powerhouse will be recognized forever.

References

Baker, R. V., & Griffin, Jr, A. C. (1984). Ginning. Cotton, 397-436.

Ball, C. (1836). Slavery in the United States. JW Shugert.

Blauner, R., & Blauner, R. (1972). Racial oppression in America (pp. 53-56). New York: Harper & Row.

Elliott, E. N. (1860). Cotton is king and pro-slavery arguments. Johnson Reprint Corporation.

Ernest, T. W. S. (1963) The gospel of the Redman: A way of life. Seton Village.

Leary, J. D. (2017). Post-traumatic slave syndrome: America’s legacy of enduring injury and healing. Joy DeGruy Publications Incorporated.

Schweninger, L. (1989). Black-owned businesses in the South, 1790–1880. Business History Review, 63(1), 22-60.