Slavery's Role in Modern Capitalism

Most people have heard of the term “wage slave” as part of the Marxist critique of capitalism, but the term is generally understood as a metaphor to convey harsh working conditions inadequately compensated. In recent years, however, the relevance of slavery to capitalism, especially in its beginnings, has become ever more insistent. Thus we have a sentence like this in a recent essay by economists Sven Beckert and Seth Rockman:

America's "take-off" in the 19th century wasn't in spite of slavery; it was largely thanks to it. And recent research in economic history goes further: It highlights the role that commodified human beings played in the emergence of modern capitalism itself.

Their essay, “How Slavery Led to Modern Capitalism,” posted on Bloomberg View on February 24, 2014, provides fascinating details about the roots of early American bankers and capitalists in either the slave trade, southern plantations, or both. New York banker James B. Brown of Brown Brothers & Co., for example, is reported to have had investments in the American South exceeding $1.5 million, “a quarter of which was directly bound up in the ownership of slave plantations.” Other bankers with links to southern slavery, according to Rockman and Beckert, were the Biddles, the Barings and the Rothschilds. But it was not just the United States version of capitalism that owed its origins to the immense profits from slavery and the slave trade. Eric Williams in 1944 wrote his seminal Capitalism and Slavery (U of No. Carolina Press; access at https://archive.org/details/capitalismandsla033027mbp), a book that goes into great detail to demonstrate how much British capitalism and the industrial revolution itself owed to the slave trade and plantation slavery in the West Indies. Calling slavery “an economic institution of the first importance,” Williams notes that “in modern times it [slavery] provided the sugar for the tea and the coffee cups of the Western world. It produced the cotton to serve as a base for modern capitalism” (5). And, like the American bankers cited above, British bankers who were so crucial to the financing of British industry often inherited their money from forebears who had made it in the slave trade and/or plantation slavery. Thomas Leyland, for example, became, in 1802 “senior partner in the banking firm of Clarkes and Roscoe,” but he was “one of the most active slave traders in Liverpool and his profits were immense” (99). Even more renowned is the British banking name of Barclay. Williams points out that not only were “two members of this Quaker family, David and Alexander…engaged in the slave trade in 1756,” but David “actually owned a great plantation in Jamaica” (101). Moreover, Lloyd’s of London, whose name is synonymous with great insurance endeavors, began as a coffee house where runaway slaves could be returned. It then moved, like most other insurance companies of the time, into insuring slaves and slave ships, and one of its most “distinguished” chairmen was one Joseph Marryat, “a West Indian planter” (104), which is to say, an owner/exploiter of slaves.

            Williams makes much of these West Indian sugar planters because they were not only the jewel in the crown of British trade, but the source of much of the wealth that fueled the subsequent industrial revolution in England. That wealth, of course, derived from African slaves, both from their unpaid labor on huge sugar plantations in Jamaica, Barbados, Antigua and other British-owned Caribbean islands, and from the profits made by slave traders who captured and transported them to those islands to sell as slaves. British cities owed their dramatic expansion to this slave trade: first Bristol, which “in the first nine years of free trade…shipped 160,950 Negroes to the sugar plantations,” and then Liverpool, “the greatest slave trading port in the Old World,” which between 1783 and 1793 alone shipped over 300,000 slaves valued at over 15 million pounds in 878 ships for an “average annual profit” of “over 30%” (36). And the most powerful institutions supported this trade: the British government itself, the Catholic Church (Jesuits, Dominicans and Franciscans were involved in sugar cultivation), and Quakers, as noted above in the case of Barclay’s bank. That was because, of course, slavery made immense sums of money. West Indies planters became some of the most conspicuously wealthy men in England, returning to their homeland to buy huge estates where they could and did entertain royalty. And the related industries involved in what is known as the “triangular trade” (England supplied the exports and the ships; Africa the human merchandise; the plantations the colonial raw materials) contributed even more profits. According to Williams, the lucrative triangular trade worked as follows:

The slave ship sailed from the home country with a cargo of manufactured goods. These were exchanged at a profit on the coast of Africa for Negroes, who were traded on the plantations, at another profit, in exchange for a cargo of colonial produce to be taken back to the home country (51).

Again, the profits from this trade were not only key to British wealth in the mercantilist 17^th and 18^th centuries, they also provided the financial base for the subsequent industrialization that England pioneered in the 19^th. As Williams notes: “The profits [i.e. from the slave trade] obtained provided one of the main streams of that accumulation of capital in England which financed the Industrial Revolution” (52). And that industrialization consisted in large part, early on, of cotton cloth and garment manufacture (Williams calls cotton the “queen of the Industrial Revolution”). In the process, the wealth and activity shifted from the trading port of Liverpool to the manufacturing center of Manchester, otherwise known as ‘Cottonopolis.’

            Of course, cotton was the product par excellence of the American South, a fact which made British industry dependent on a steady source of cotton from those former colonies. This in turn meant that, despite the growing objections of British abolitionists to the continuing slavery upon which American cotton plantations depended, there was little chance that moral scruples would kill the golden goose of slavery. Consider the numbers it took for England to clothe the world:

The first steam loom factory was built in Manchester in 1806. In 1835 there were 116,800 power looms in all Great Britain, all but 6% in the cotton industry….The population employed by the industry rose from 350,000 in 1788 to 800,000 in 1806 (128).  

So while England abolished its own slave trade in 1807, and slavery itself in 1833—essentially because by that time its West Indian sugar plantations had lost the sugar battle to cheaper sugar from French islands like Saint Domingue and, increasingly, sugar plantations in Asia—British manufacturers continued to depend on slavery in the newly independent United States for the raw cotton critical to British cotton and clothing industries. Nor did this hypocrisy go unnoticed. Williams cites an editorial in the London Times from 1857 that says it all:

We know that for all mercantile purposes England is one of the States, and that, in effect, we are partners with the Southern planter; we hold a bill of sale over his goods and chattels, his live and dead stock, and take a lion’s share in the profits of slavery…We fete Mrs. Stowe, cry over her book, and pray for an anti-slavery president…but all this time we are clothing not only ourselves, but all the world besides, with the very cotton picked and cleaned by ‘Uncle Tom’ and his fellow-sufferers. It is our trade. It is the great staple of British industry. We are Mr. Legree’s agents for the manufacture and sale of his cotton crops (176).

The Mrs. Stowe, of course, is Harriet Beecher Stowe, author of Uncle Tom’s Cabin, and Mr. Legree the chief villain and torturer of slaves in that abolition-inciting novel.

            In short, capitalism grew with slavery as its virtual progenitor, first in providing immense profits from the 17^th and 18^th century West Indian sugar plantations that depended on African slaves for their labor, and second in providing the capital derived from those sugar plantations to finance the industrial revolution, itself based in slave-grown U.S. cotton, that undergirded the entire British Empire in the 19^th Century. Williams puts it thus: “The commercial capitalism of the 18^th century developed the wealth of Europe by means of slavery and monopoly.” More than that, plantation slavery not only required constant renewing of its labor force (hence the encouragement of slaves to reproduce), but also constant expansion of the cultivated land—for the simple reason that slave-worked land wore out astonishingly fast since slaves had no incentive to husband the soil they worked. That legacy remains today in the tendency of capitalism to ‘externalize’ its costs, to expropriate life itself, and thus to lay waste to the very resources upon which it and all economic activity depends. 

            This is something to think about when we consider the critical role of capital in our time. Capitalism, as Thomas Piketty (Capital in the 21^st Century) has recently reminded us, eminently involves inherited wealth. The fortunes in profits made in the slave trade and the related slave plantations growing sugar, tobacco and cotton—fortunes possible only via the gross exploitation of humans considered expendable, commodifiable—not only provided that wealth initially, but literally constitute the history and background, indeed the prime ingredient of early capitalism in both England and the United States. As Balzac maintained, behind every great fortune, there is a great crime (his actual words, in Pere Goriot: “The secret of great fortunes without apparent cause is a forgotten crime…”) And the corollary secret behind capitalism may well be said to be the buying and selling of living human beings known as slavery.

Lawrence DiStasi

Unreal Reality

I know; it’s an oxymoron. But it’s no more oxymoronic than ‘virtual reality,’ and in our strange time may just be an accurate description of the world we now operate in. What I’m talking about is the feeling I’ve been having lately—perhaps stimulated most recently by the new Downton Abbey season which debuted last night—that most of what we now engage in somehow departs from what used to be called ‘reality.’ Like Downton Abbey’s new season, it all seems contrived. That word, ‘contrived,’ is usually applied to a work of literature or other art form that doesn’t have the authentic feel of reality or inevitability. The situations and the characters seem contrived to create a preconceived effect. In Downton Abbey’s case, this gradually dawned on me as I watched the writers deal with the death of a major character, Matthew Crawley, in a car accident—also a contrived way to dispatch a character—at the end of last season. The writers apparently also had to deal with the loss of the major villain in the series, O’Brien, Lady Cora’s personal maid. A new villain was needed, and so Thomas Barrow was recycled into his old role (he had been saved from doom and disgrace, as a homosexual, by the compassion of Mr. Bates and Anna, and seemed to have reformed.) In the new season, however, Barrow, now under-butler, goes back to his old ways of motiveless evil, destroying the new nanny for no apparent reason, and then seeking to repay Bates and Anna for their earlier kindness by informing on them as the despoilers of some prized item of clothing actually ruined by Lady Cora’s new maid (herself improbably recycled from her last season’s firing due to unprofessional flirting). Reflected on, it all seemed contrived. The writers seemed to be straining, and the sense we had earlier of inevitability, of something plausible and true to life as it might have been around the turn of the 20^th century, seemed to be slipping away. The drama starts to seem more like what it is, a TV soap opera with the dramatic scaffolding showing through, rather than a glimpse of reality.

            Strangely enough, this is how life in our time begins to feel as well. The partisan fighting in the U.S. political system, especially Congress, seems contrived. Everyone appears to be playing a role with no relation to the reality that millions of Americans are unemployed and the economy has never quite recovered—except, that is, for the wealthiest Americans who do not have to work but grow richer and richer off their investments in a booming stock market. In an earlier era, this obscene transfer of wealth from the poorest Americans to the already wealthy—to the very Wall Streeters and banksters who brought about the economic crash in the first place—would have been greeted with protests at best and riots in the streets at worst. Not now. It all seems to be happening at some remove from reality. We see the numbers on our nightly business reports, we see film of and interviews with the unemployed, we feel it in our own inability to get ahead (or even have the chance to keep up), and yet it all seems to be happening elsewhere, on another level of reality. In a parallel way, we see the harrowing numbers confirming the reality of global warming—to wit, that the global carbon level in our atmosphere has now passed 400 parts per million, a number that at one time was almost inconceivable (350 ppm was considered the livable limit). And yet, we see it, it is recorded somewhere in our consciousness as a terrible warning siren, and yet we and most of the world go on burning fossil fuels as usual, even exulting in our new sources. The collapse of arctic ice, the warming and acidification of the oceans, the increasingly severe weather systems like the recent typhoon in the Philippines or hurricane Sandy on the east coast, all seem to be bothersome little news snippets that occupy us and our screens for a few days, and then fade to blankness. Even the diversions that occupy us—the world series, the current professional football playoffs, the upcoming winter Olympics—occur mainly as televised events that occur in TV sports time. Nothing is ever final. We are always waiting to “really” see them in instant replay; and then see them again and again. Real time hardly seems to count; slow motion is how we now judge everything.

Only that reality doesn’t occur in slow motion. Our reality occurs in human time and it requires attention. It requires that we understand what is happening, and that we pay attention to how it is happening and how it is affecting us, how we are reacting to it. It requires that we actually be there. Be with those who are our co-responders and co-creators. Those with whom we are having a conversation or a conflict. And increasingly, those co-responders and co-conversationalists are no longer present. They come to us on our screens (I find that something about skyping makes me very uncomfortable; unnatural; forced or contrived). They appear as disembodied words in our emails. As magically uploaded photos and commentaries on our facebook pages. As cryptic verbiage (I am assuming this, since I don’t text or tweet, thank god) in our text messages and tweets. And less frequently, now, as talking heads and brief filmed sequences on our TV screens. In the latter case, and in films, more and more often the “reality” we are presented with is digitized, computerized representations of animals and humans for whom there are no dramatic or earthly limits. This, I assume, is why advertisers use these computerized versions—plus it must be cheaper than paying actual actors. But it must also be the case that we have become so acclimated to computerized reality that many people feel more comfortable with the smooth, antiseptic reality of digitization, even in animations that urge us to buy another useless product. When the product is itself a fantasy promising that our lives will suddenly be peopled by beautiful people also seduced by our possession of the new product, then perhaps it makes sense to present it in a fantasy drama portrayed digitally and jerkily and virtually. On a screen. Where most of our lives now seem to take place. 

Indeed, I am at a screen right now. The letters forming this blog post appear as if by magic as I type them. It is a convenience I no longer think about and can no longer do without. And yet. I am completely divorced from any sensory input of paper or pencil or an actual text I used to have on my desk, or in my typewriter. There is no sensory product anymore. There is only this virtual text that is taking shape on my screen, and which I will, when finished (and easy editing is one of the great boons of computer composition), simply drag and click to upload to my blog page, and post on my facebook page, and paste to my email list, and then push a button to send out to the world where others like me will, perhaps, read it as computer text and perhaps respond in an email or a comment, and perhaps even say a word to someone else or more likely email this computerized message to someone else. And that will be the reality of this comment on the absence of reality, on the unreality of reality in our time.

I don’t know what to do about this. There may be nothing to be done. All I can do is comment on it, on the strangeness of it, on the weirdness of how “reality” or whatever this is, feels in our time. And wonder, again and again, what the effect of this ever-increasing estrangement from our actual lives, our natural lives, this apartness from what, at some deep level, I am convinced is necessary for human existence, will be. Because the truth is, we have never, most of us, ever quite figured out what we’re doing here, what our relationship in the most profound sense, to all else, consists of. And I can’t help feeling that these latest estrangements are removing us ever farther from that fundamental and necessary realization.

Lawrence DiStasi

Penny Pritzker: Obama's Payoff to His Masters

I have written in the past about Class Traitors, especially those in the Bush Administration. Luminaries like Condoleeza Rice, Alberto Gonazalez, Colin Powell and John Yoo accepted positions in an infamous administration and, because of their origins among the “people,” provided cover for the mandarin class Bush represented. I also pointed out that this is a common practice, bearing many similarities to what slave masters did in the ante-bellum South when they promoted some of their slaves to work in the massa’s house. Having a slave impose order and punishment on the field slaves made the necessary control go down better. The same operates in government. Having Colin Powell or Condoleeza Rice justify the invasion of Iraq made the operation less susceptible to the accusation that it was a ‘white man’s war of exploitation.’

Now, in light of his payoff nomination of Penny Pritzker to be Secretary of Commerce, we are beginning to see that Barack Obama has been another example of this practice. Far from being a representative of the exploited classes—a champion of workers and the poor and the millions who lost their homes and much else in the economic collapse caused by Wall Street banksters—Obama has revealed that he has really been representing the wealthy, exploitative classes all along. This is why not a single banker has been slapped with a penalty for the fraud committed in the financial collapse. This is why virtually every initiative of Obama’s, including his heralded health care reform, has been designed to enrich corporations and the wealthy, rather than help the poor or middle classes as advertised.

In order to understand this, we have to know who Penny Pritzker is, and how she got to be one of the wealthiest women, or men, in America (worth $1.8 billion). According to muckraking journalist Greg Palast, Pritzker met Obama when Barack was a state legislator from Chicago’s South Side, with little or no power. But she saw a fitting candidate for higher office, and promoted him to her Lake Shore friends. They apparently liked him too, and before long, Obama was a U.S. Senator, and then a presidential candidate, with Penny Pritzker as his finance chair. She raised nearly a billion dollars for the “candidate of the people,” along the way introducing him to Robert Rubin, CEO of Citibank and former Secretary of the Treasury under President Clinton, who in turn “opened the doors of Wall Street” to the candidate. In return, of course, Obama was persuaded to nominate Rubin’s protégés, Larry Summers and Tim Geithner to the top economic posts in his administration. (See Greg Palast, Billionaires and Ballot Bandits, Seven Stories Press: 2012.)

Obama also had plans to nominate his friend Penny as Commerce Secretary in 2008, unfazed by her role in the original sub-prime scandal at her Superior Bank of Chicago. But the firestorm of opposition this raised—with the sub-prime fiasco of 2007 still fresh in everyone’s minds—persuaded him to settle on another Commerce Secretary. That Superior Bank scandal, though, was a doozy. According to Dennis Bernstein, host of KPFA’s Flashpoints (in a May 3 piece on Consortiumnews.org, originally written Feb. 28, 2008), it was Penny Pritzker, along with associates at Merrill Lynch (to sell securitized bonds based on subprime loans) who virtually invented the sub-prime scams. First, she and her family—billionaire heirs of the Hyatt chain of hotels and nursing homes—in 1988 bought the failed Lyons Savings Bank for the bargain-basement price of $42.5 million. Aided by $645 million in tax credits from the government, these richest of the rich only had to come up with $1 million in cash, even getting their deposits insured by FSLIC. Then, under Penny’s leadership, Superior Bank concentrated its dealings on sub-prime lending, mainly on home mortgages, acquiring Alliance Funding as a wholesale mortgage business as well. According to Bert Ely, the bank then engaged in all kinds of shady practices, paying “its owners huge dividends and providing them favorable loans and other financial deals deemed illegal by federal investigators.” Their borrowers, by contrast, mostly low-income and minority buyers, were lured in and exploited through “predatory lending techniques, including exorbitant fees, inadequate disclosure and high interest rates.” By 2001, Superior Bank had collapsed, one of the largest failures of its kind ever, and a failure “directly attributable to the Bank’s Board of Directors and executives ignoring sound management principles,” according to FDIC Inspector General Gaston Gianni Jr. in his 2002 report. Penny Pritzker, as owner and board chair, was actually named in a RICO (Racketeer Influenced and Corrupt Organizations Act) class action suit brought for 1,400 depositors who had lost over $50 million in savings. She was also fined $460 million for the predatory, racist practices of her bank.

This is the woman Barack Obama has just named to be Commerce Secretary.

Nor does her lurid past end there. While she was on the board of the Hyatt Corporation, she was regularly attacked by the AFL-CIO for violations in the areas of worker safety, discouraging union membership, and laying off regular workers to replace them with cheaper employees. This would seem to make her an inveterate enemy of unions—including the unions that were assiduously courted to help elect Barack Obama. The teachers’ unions have also taken her to task for favoring the closing of Chicago public schools and promoting charter schools instead, as well as for using the influence to get taxes on her family mansion in the Lincoln Park Area slashed, tax money that funds public schools. When she resigned from the Chicago Board of Education after hearing of her Commerce announcement, the head of the Chicago’s Teachers Union said, “good riddance.”  

President Obama and his team have apparently concluded that Americans have forgotten about the sub-prime disaster of 2007 and that it is now safe to pay off his moneyed master, Penny Pritzker. No doubt the sub-prime queen has let him know, in no uncertain terms, that she expects this as part of the bargain they made to put him in the White House. It is always thus. The Massa doesn’t promote the slave to a position of power without getting his/her due, with interest. All the signs point to a quick confirmation, since the Republicans appear to be delighted with the prospect that one of their own will be running Commerce. If retired banking consultant and researcher Tim Anderson has his way, though, the confirmation may not be a slam dunk. As he noted in a recent CBS interview,

“What has not been focused on until now is what was Penny's role in the subprime mortgage meltdown. It was the Pritzkers who got investment-grade ratings on subprime debt. It was the Pritzkers who were into subprime lending long before Wells Fargo, Countrywide and Washington Mutual. They were in the forefront of the subprime fiasco, but they have never been held accountable.”

Wouldn’t it be something if someone—someone prominent and probably gloating over her apparent escape from justice and imminent rise to unprecedented power and renown—were finally held accountable?

Whether or not such an unlikely turnabout comes to pass, one thing is certain: Barack Obama has lost all the credibility he might still, in some circles, retain. His attempt at a payoff has made perfectly obvious who his real masters have always been. He has also made absolutely clear that there no longer exists a political party or a politician in these United States who hasn’t long been bought and paid for, and placed on a very short, and very unforgiving leash. 

Lawrence DiStasi