Has America Always Embraced Capitalism?

Yves here. This is an awfully simplistic history of American economic organization. For instance, it acts as if everyone in the East packed up and went West. In fact, a lot of those settlers were Europeans who came directly to the Great Plains (this is particularly true of Germans and Scandinavians). By contrast, coming from old Yankee stock, the post overdoes the patriarchy bit. Coastal New England towns depended on fishing and whaling. Most of those boats went out for four to six weeks, leaving the wives alone and very much in charge (hence also the fixture in some old oceanfront houses of the “widow’s watch,” for the wives to see if their man’s ship was pulling into port). So depicting the “north” as a patriarchy is simplistic in terms of how things worked in practice. I’m sure readers can fill on other ways in which the broad strokes are a little too broad.

Nevertheless, it makes the point that until the later part of the 1800s, subsistence farming was the most important way most households provided for themselves.

By James Parisot, who currently teaches in the Department of Sociology at Drexel University. He is co-author of the book American Hegemony and the Rise of Emerging Powers (published by Routledge). Originally published at openDemocracy

The flag of US capitalism, red and gold to honor our fallen comrades. Credit: Wikimedia/HHemken.CC BY-SA 3.0.

What is normal?

Is it the right for white men to own slaves?

Is it the idea that freedom can be realized through wage labor?

Is it a society in which democracy is viewed as compatible with an economy run by a small number of massive banks and corporations?

None of this is normal. But while slavery is no longer seen as acceptable, capitalism seems ordinary. Just as Europeans colonized most of the world’s peoples and justified this as the ‘natural’ way of things with racist, Eurocentric ideology, so the tendency in American history is to read the past through the lens of the present: to take what appearsas normal today and see it as the regular order of things for all times.

But in many respects capitalism was not always a normal or natural part of American life. This was especially the case in the American north in the seventeenth and eighteenth centuries. Here, the family farm remained a mainstay of rural life. And in cities, artisanal production organized around masters, journeymen, and apprentices tended to be the norm. Of course, there were capitalist interests involved in the colonial endeavor from the start; it was a private joint stock company – the Massachusetts Bay Company – that aimed to profit by sending settlers across the Atlantic in the 1600s.

But the social relations that formed in the northern colony and pushed expansion to the western frontier were not exactly ‘capitalist’. The typical small farm of the period was organized around a patriarchal, gendered hierarchy in which men tended to push their families to the frontier, leaving little choice but for their wives and children to join them. They were the rulers of the household, hunting and farming while their wives took care of household chores. However, the goal of social life was not profit, and wage labor was seen as a form of social dependence againstfreedom. In other words, freedom and wage labor were not necessarily viewed as compatible.

Similarly, an artisan controlled his own schedule and tools, and owned what he produced. The artisan’s labor was not alienated from him – what he produced was not owned by another – but controlled by him: his patriarchal freedom was defined against being a dispossessed wage laborer.

This is not to be idealistic. The northern social structure was organized around racism, sexism, and patriarchy. There was a mix of capitalist and non-capitalist elements at work, particularly as tensions grew between settlers who saw the frontier as a zone of independence for their farm-based lifestyles, and capitalist speculators who viewed the west as a great space for profits. But the point is simply that capitalism itself, and capitalist labor, was not necessarily ‘normal’.

In the south though, capitalist slavery wasnormal. It was not so for the slaves themselves, of course, who were brought to the south with their entire lives and bodies controlled by white masters, not just their labor time. But it was normal for politicians, slave owners and poor whites who worked as patrollers at night to capture slaves who had escaped. Racial inferiority was seen as the natural way of things; after all, classically-educated slaveowners read that even Aristotle had said that some people are naturally slaves and others naturally masters.

The normality of slavery was extinguished with the Civil War, wherein somewhere between half to three-quarters of a million people were killed. As slaves rushed to northern lines, and northern military leaders gradually realized it was in their interests to free the slaves (at least in the rebelling states) to strengthen their forces and weaken the south, the north, driven by slave resistance, abolished slavery in the confederacy.

After the war, as the south was reconstructed, the goal of the north was essentially to rebuild the south on the basis of capitalist wage labor. Rarely were ex-slaves given ’40 acres and a mule’. Instead, they were hired as wage laborers or became sharecroppers. As freed blacks pushed to become independent farmers and the white elite worked to resubordinate black plantation labor, so a new class balance was reached as the owners of land and tools allowed freed blacks to work on farms, so long as they paid a price to their former masters who could sell their production for profit.

Meanwhile in the north, capitalism increasingly became naturalized. By the 1880s, western expansion was driven less and less by the family farm and increasingly by the power of capital as apprentices and journeymen became wage laborers, masters became capitalists or workers themselves, and family farms were replaced by agribusiness. The Midwest became the breadbasket of America as the far west, from Montana and Nevada to New Mexico and California, was developed by railroad and mining companies. While some family farms persisted and were granted land by the Homestead Act of 1862, the west, like the rest of a country born through the racial cleansing of native peoples, became a massive zone of resource extraction.

Overall, by the late 1800s capitalism had effectively become the norm. By this time both the Democratic and Republican Party’s ideologies of freedom and democracy meant, essentially, freedom for capital to control the United States.

As recent pollshave shown, millennials have become increasing critical of capitalism and increasingly supportive of socialism. Symbolized by the popularity of politicians including Alexandria Ocasio-Cortez and Bernie Sanders, and the rise of the Democratic Socialists of America, this younger generation appears to be looking for a different way forward.

This is complicated by the fact that many Americans have little idea what socialism means, though more often than not the term is used to refer to increased corporate taxes and better welfare programs rather than the rearrangement of our social lives away from profit maximization and wage labor towards cooperation and the collective management of work.

But if anything is clear from this history it is that capitalism isn’t normal, even in the case of America. And if capitalism isn’t normal, we can certainly imagine other ways of organizing ‘normal’ social life.

James Parisot’s new book is How America Became Capitalist: Imperial Expansion and the Conquest of the Westpublished by Pluto Press.

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  1. skippy

    Natural or Normal is where critical thinking takes the first step off into the narrative [tm] and …. were falling … in some cases for a life time … real is another whopper …

  2. Colonel Smithers

    Thank you, Yves.

    Speaking of New England whalers, in the 19th century, the ships came as far as Mauritius, a place to replenish and for R&R for Antarctic expeditions. Some crewmen stayed on the island and married local women. One such settler wrote to the Carnegie foundation and got some money for a library, a 19th century colonial building that still stands and is named after the benefactor, in Curepipe.

  3. rob

    My guess is that until the 20th century most people didn’t even know what capitalism was. I would also guess that the people who thought they did, really didn’t. I would imagine that the world then was like today, there are systems around us, that may effect us, but that we really don’t understand. Before the 20th century, most people who could read, may have read about “capitalists”, and they were either some far off robber barron, or rail road magnate, but they also could have been the despised local robber barron, or industrialist….. or even worse a british factory owner.

    Most people didn’t really have a need to know what capitalism was, their lives were too small in the scheme of things. Capitalists, really became more prominent as the industrial revolution gained ground on this continent. As concentration of wealth and in particular in the externalities of factories and railroads and shipping, made things people could understand were controlled by the rich, and they were forced to buy them, if they couldn’t make them themselves. The general store owner, or the timber mill owner weren’t capitalists(even though they were), as much as the railroad barrons and the bankers.
    My guess is that just like today, those with better knowledge talk to themselves as to details, but really the masses, think in terms of generalities, and not even accurate ones. So the idea people “knew” things,is debatable. And my guess, is that “capitalist” was a dirty word mostly. It was the banker to a farmer, or a factory owner to an indentured servant,or immigrant laborer. It was the guy who did nothing and got rich while you worked yourself to death.
    Something I heard that makes great sense as to why those that lived through the depression were sympathetic to the socialists in the thirties, was the feeling of poverty. Those who have experienced hardship, and felt the community support in those times, probably believed the socialist story to be one “of the people”. The story, may not reflect the reality, but again, people think one thing, and reality shows many others. Mostly that all the stories are wrong, each leader makes their own version of the ideology.And historians try to re distill what actually happened into some semblance of what was supposed to happen, so people aren’t confused.
    I do think that mostly, the socialists in belief were the ones who saw the labor movement from the side of the laborer, the fascists were the ones who saw the labor disputes from the sides of the “capitalists”. That is in the twenties and thirties when the american legion and the liberty league were the strikebreakers for the “capitalists”, and were the muscle behind the “capitalist” attempted coup of FDR, as was exposed by gen. Smedly Butler in the thirties. The fascists, were on the side of “capitalism”, while those who supported fairness and freedom from oppression were in the socialist camp. By nature of what they believed. And what does that have to do with world definitions of others who shared the same terms, very little. Except at the apex. The “capitalists” in this country at the beginning of the 20th century, were the ones who collaborated and worked with the nazi’s before, during, and after WWII.

    1. lyman alpha blob

      My guess is that until the 20th century most people didn’t even know what capitalism was.

      I think you are correct however the much smaller cohort of men considered ‘founding fathers’ most certainly knew what capitalism was and made sure from the get-go they they would be the beneficiaries of the new capitalist economic policies they were developing. And from the get-go those capitalist policies were designed to screw the small farmers and rural population.

      Check out the history of the Whiskey Rebellion as a good example of this. Alexander Hamilton wasn’t much for democracy and made sure that the capitalist class would be the ones to run things.

    2. Susan the Other

      Yes, this is the history. But to get to the nub of “socialism” we really need to answer Yves question of a few days ago when she wondered about modern day “ownership of the means of production.” I think the idea has evolved to now mean the “ownership of social decisions.” That’s how I think socialism has trended. The means of production, aka exploitation, was almost like the dissipation of energy – in this sense. Oil. Oil came along, turbo fueled the industrial revolution and progress took off like a rocket. Capitalism was based on profit and profit was based on cheap energy. Sorta like Steve Keen’s version. I think the US did not “gradually” become capitalist at all; I think it exploded into capitalism, everyone trying to make a fortune on all that excess energy. But alas, there was entropy too. Used up resources. Over-population. No easy opportunities. And a devastated planet. And we are looking at that side now. So decisions should no longer be made by the symbol of can-do-oil-industrialism, profit and money, but by the acceptance that it has run its course and decisions should be made by and for society and the planet. And effectively control production for society. Capitalism was a flash in the pan. But fun for some. It has become irrelevant today because of its own excesses. As Wolfgang Steeck would say.

  4. David

    One reason it’s simplistic is questions like “Is it the right for white men to own slaves?” Slavery was the norm in large parts of the world (not least Africa) at the time. It was an inevitable consequence of needing a large agricultural workforce and domestic and court servants in areas of low population density. If the workforce could not be induced to come to you, you had to go and get them by force. To that extent, slavery is a fairly common economic model in agrarian societies, and tended to fade away with industrialisation and population growth, to be replaced by new models, themselves also often coercive. Slavery lasted longest in areas (such as parts of Africa) where population density was very low and the economy was overwhelmingly agrarian. So it’s easier to see both slavery and capitalism as successive stages by which a workforce can be acquired and retained, through more or less open coercion. Oh, and colonies are hardly a European invention.

    1. PlutoniumKun

      I’ve seen it argued that the specific form of slavery in the Southern States was as much cultural as economic. David Hackett Fischers book ‘Albions Seed’ (I think, its a long time since I read it), suggested that the persistence of slavery was related to the specific background of the English royalists who settled and dominated the politics of the southern states. American slavery (so I’ve understood) largely emerged from a feudal system whereby mostly white indented servants were replaced by black slaves over time.

      I’ve always been curious as to why it took a terrible civil war to end slavery in the US, when it largely faded away with (relatively) little argument in the rest of the Americas and elsewhere. I think the cultural explanation is one possible reason.

      Incidentally, slavery is having a comeback in Africa, mostly thanks to the ‘liberation’ of Libya by the usual suspects.

      1. Carolinian

        Slavery may have been a moral abomination but the system was also cold bloodedly practical and had to do with the Southern climate where malaria was a major problem. The plantation rice growers of my state felt they had to have African labor because whites couldn’t survive the malarial coastal summers (when the owners themselves would flee to the north or the upstate mountains).

        That said, over time it did become cultural and those Dixie defenders who claim the system was largely paternal ignore the rapes and other abuses that at least some of the planters came to view as their right.

      2. Stillfeelinthebern

        I would recommend “The Half Has Never Been Told-Slavery and the Making of American Capitalism” by Edward E. Baptist. I never understood the transformation of American slavery before reading this book. It is filled with statistics, personal narratives, cultural information that tell a complex story of the economic rise of all of the United States as well as Great Britain based on the backs of southern slaves.

        1. marym

          Just started reading it – expecting it will transform my understanding of US capitalism’s relationship to the labor of enslaved workers, as you suggest.

      3. David

        I think it depends whether slavery was just a feature of the society (Brazil, for example, where there were more slaves than in the US, but where slavery faded away, as you say) or whether it was the entire basis of society and the economy, as was the case in parts of Africa. In the latter case, it took force, in the form of European colonists, to overthrow the system
        I don’t know enough about the ins and outs of the American experience to say, but I imagine that slavery must have been pretty fundamental to the functioning of the Southern economy at the time?

        1. JBird4049

          The first imported (black) slaves at New Amsterdam became indentured servants like the later British indentured as the local Dutch didn’t really have Southern style chattel slavery. Being indentured was often lethal and at times might look almost as bad, but one still had rights and had to be freed and given supplies after a set period of time. Sometimes the servants would just leave either joining the natives or moving far away to escape. One more European immigrant among many.

          It was an effort for the elites to separate the natives, the poor, the indentured, and later slave or poor blacks from each other. There were always some people who wanted to unite them as the establishment was exploitative of all the lower classes. Jumping to (post) Reconstruction, the efforts to unite most people against the planter families was successfully prevented using extreme violence. It was one of the main reasons for lynching. They say that it was all about the racism, but don’t believe that. Racism had a very large role, but getting rid of those pestiferous successful blacks who owned businesses and farms along with their white allies was also important. Rather like the Trail of Tears was also. Getting those Indians off their farms and businesses.

          I would not be surprised if one of the reasons the poor were pushed off their land was because having property was often a requirement for voting early on. Being a poor farmer who could vote and still had connections with the even poorer landless must have been a threat.

          I need to reread what I have and add more books to my pile on the subject as there is too many similarities to now.

      4. Colonel Smithers

        Thank you, Gentlemen.

        In 17th and early 18th century Mauritius, blacks and whites were slaves, the latter included, oddly, some Germans. It was the same in the Caribbean. In the Caribbean, Irish were often in that number. Their descendants are to be found in Barbados (“redlegs”), Montserrat and Trinidad.

        My father was based in Riyadh from 1992 – 2013 and was told by wealthy colleagues, especially those from the Hejaz, that they had slaves until the 1970s and often still employ the descendants of their former slaves.

        When slaves were freed in Mauritius, the first name on the register of slave owners to be compensated was a Tamil. There were mixed race people, descendants of slaves and slave owners, on the register, too. This was the case in Louisiana, too.

        1. Colonel Smithers

          The last delegation from Mauritius in search of indentured labour from India, in 1920, was composed solely of Indo-Mauritian Hindu and Muslim planters, often former sirdars. They were turned down by the colonial government. It’s not politically correct in Mauritius to point this out and the equally shameful conduct of Indian planters, including the massacre of four workers, recently unionised and members of the infant Labour Party (founded the year before), at the Gujadhur family’s Union Flacq sugar estate in 1937.

          1. RBHoughton

            Always a pleasure to read your posts Colonel. Thank Heavens we live in an age when books cannot be burnt. Let all the poison out – its the only way.

        2. Yves Smith Post author

          A friend of mine visited the permanent residence of the Egyptian ambassador, which was then as it still is, in my apartment building. in the 1960s.

          He noted that the ambassador had some men who were squatting agains the wall and would run to perform minor tasks, like light his cigarette. My friend called them “slaves”. I thought he was being colorful. Maybe not.

      5. Joe Well

        Too much in your comment to address, so I’ll pick one. Your remark about slavery being more entrenched in the US is unfounded. There was a ton of opposition to abolition in Brazil, home to half or more of all slaves, which is why abolition came so late that it was much less economically sound than it had been in the US. The abolition of slavery was one of the issues that led to Bolivars downfall on Venezuela and Colombia. In Peru and Mexico they may have abolished slavery in paper but forced labor continued into the 20th century. And don’t get me started on Cuba and Haiti where it did take major wars to abolish slavery definitively albeit a century apart. And slavery was a cultural institution everywhere.

        Edited to add that forced labor, which was kind ofslavery 2.0, was a factor in the Mexican Revolution of 1910.

      6. Jessica

        One of the roots of slavery was warfare in tropical areas such as Africa and Southeast Asia. Because the land produced multiple crops per year, there was more than enough land, so wars were fought to seize captives not land.
        I am not sure that slavery ended all that peacefully elsewhere. Slaves fought in the wars of Latin American independence from Spain and forced the end of slavery. Haiti had a complex anti-slavery revolution, in which one of the forces was colored (mixed race) slave owners. Brazil ended slavery peacefully but quite late.
        Russia abolished serfdom and Thailand started to abolish slavery and serfdom at the time of the US Civil War. In Russia, the abolition itself was peaceful enough but the unresolved issues played a significant role in the Russian Revolution and even more so in the brutalities of collectivization.
        The various Caribbean slave islands (i.e. most off them) ended slavery mostly peacefully (except Haiti of course) but that was because the land was exhausted and because of fear of another Haiti.
        So the US is not unique in the end of slavery being violent.

  5. The Rev Kev

    I’m sorry but there is not enough rigor in the historical construct built up her to make historically accurate conclusions. The author seems to be saying that capitalism is only a thing in an industrialized society and not in rural societies. That is not true as in rural life there was a form of capitalism in operation what between markets, fairs, job markets and contractual obligations. In other words the building blocks were already there. The form of capitalism in an industrial society is larger of course but that was mostly a matter of scope and opportunity. Sure there was a “patriarchal, gendered hierarchy” in the family structure but that was because of a proven division of labour. Running a 19th-century household was a full-time job and was not a case of women being put down and the fact that the men were farmers was due to the need for muscle mass which tend to be the males of a couple. When the crop needed bringing in then it was everybody working at this and not a matter gender, status, age or colour. Too many assumptions here in this article from only a bare-thread structure of facts for my liking.

    1. ChiGal in Carolina

      Here’s a little historical rigor for you:

      It is fantastically disappointing to read something written as though the widely praised book White Trash: The 400-Year Untold Story of Class in America by historian Nancy Isenberg had not been published in 2016. In it she provides copious documentary evidence that the English got rid of their homeless and poor by providing them passage to the New World in exchange for their labor.

      Inequality was a given in the “Citty upon a Hill,” submission was regarded as a natural condition of humankind. In “A Model of Christian Charity” [John] Winthrop declared that some were meant to rule, others to serve their betters: “God Almightie in his most holy and wise Providence hath soe disposed the Condition of mankind, as in all times some must be rich and some poore, some highe and eminent in power and dignitie; others meane and in subjeccion.”…For Puritans, the church and state worked in tandem; the coercive arm of the magistracy was meant to preserve both public order and class distinctions.

      The Puritan elite depended on a menial labor force. At the top of the pecking order were apprentices and hired servants. Lower down were those forced into servitude because of debt or after having committed a crime…

      For servants, seventeenth-century New Englanders relied most heavily on exploitable youth, male and female, ages ten to twenty-one. By law, single men and women were required to reside with families and submit to family government. Children were routinely “put out” to labor in the homes of neighbors and relatives. (pp 30-31)

      1. Eclair

        Very enlightening book, White Trash!

        I was struck by Isenberg’s depiction of poor white families picking up and moving westward (which may have been Kentucky) settling, clearing, building, farming …. and then being tossed out when the ‘owner’ of the land (or his representative’ appeared and took possession. The ‘owner,’ probably gained his rights to the land from his association with others in his peer group, of aristocrats or other wealthy men, who had links with the current monarch who, of course, ‘owned’ everything in the New World. Crony Capitalism?

      2. The Rev Kev

        That later sounds like the indentured servants system that was common in America before the Revolution. For all its faults and abuses, it did provide a relatively safe place for those people to become acclimatized to the colonies and set up contacts while acquiring knowledge about local conditions. It was similar with the convict system in Australia where the convicts from the UK typically had to serve seven years in the colony before achieving a “Ticket of Leave” i.e. freedom.
        By that time the convicts learned how to farm in local conditions, where the markets were as well as acquiring essential bush-craft. To much bitterness in the UK, many of these ex-convicts went on to become quite wealthy in their own right. I wonder if anybody followed up on those ‘indentured servants’ in the American colonies after they were able to set out on their own?

        By the way, that bit about ‘the church and state worked in tandem’ was still common in the 19th century in Britain as often you had the local Church of England ministers serving as magistrates and administering justice to the same people that were in their ‘flock’. Of course they never, ever took advantage of being the magistrate to punish folks that were not regular attendees to their church. This all came about as those in the Church of England were as often as not recruited from the local gentry so identified with the local elite.

    2. Adam Eran

      Also omitted: the post-Civil-War situation of the South. Their money was no good (no taxes could be collected by the Confederacy), all their banks failed, and their biggest asset (slaves) was gone. The Populist Moment recounts the history, including the rise of populism, and says there was more currency in the state of Connecticut than in all the Confederate South.

      So…how did Southerners participate in the economy? Buying goods on credit from the “Furnishing Man” (later shortened to “The Man”)…who sold those goods at interest that would make a payday lender blush. Many became debt peons, and celebrated criminals who robbed the bankers.

      I mention this because it’s very much like our current situation, and the response (populism: The Farmers’ Alliance and the People’s Party) was similar, although more rural/agricultural than current political movements. These movements were popular throughout the South and Midwest, and successfully elected local, state and federal officials. They were part of the foundation of William Jennings Bryan’s presidential bids, too.

      The outcome then? The banks crushed the populists, and elected McKinley…but the need to revive the central bank persisted, and some remnants remain in rural coops and items like North Dakota’s state bank.

  6. jonst

    “Capitalism” may or may not be ‘normal’. But in the American mind ownership of private property is deeply ingrained. For good reasons I say. And the latter may imply, repeat, MAY go hand in hand.

  7. Carolinian

    Capitalism may not have always been in our American DNA but private property definitely has and George Washington himself was a land surveyor. One of the main rationales for displacing the native Americans was that they had no concept of private property (although they were certainly territorial) and therefore “savages” unfamiliar with the natural order of things. If the point of this post is the need for a new way of American thinking then clearly the real estate sector of our economy–as discussed yesterday in connection with AGW–will be a major impediment. Indeed if it’s time for a rethink then those 19th century “isms” of all stripes may be passe and one problem with socialism is that it has always had a hard time being able to “stick.” Even the mild European flavor that Sanders favors is becoming increasingly neoliberal. Perhaps too much emphasis is placed on social theories in general and time to pay more attention to what we are about as individuals.

    1. Synoia

      Those “savages” considered the land to be a part of the “Commons.”

      A discussion of private Land ownership is incomplete without the concept of commons. A concept much downplayed in the US.

    2. Wukchumni

      Real estate demarcation among the Yokut tribes here was based on oak trees, not imaginary lines later to be backed up by a wall or wire.

      Seeing as acorns were 2/3rds of their diet, it made a lot of sense.

  8. Carla

    The U.S. Constitution was written to protect the rights of property, which is why the Bill of Rights had to be ADDED to it. Although with the Civil War we finally determined and decreed that people are not property, now we need a constitutional amendment establishing that property (a corporation) is not a person and capital (money) is not speech. Pramila Jayapal will be the new lead sponsor introducing a house joint resolution to that effect in the 116th Congress. We’re not yet sure what number it will have, but you can read the full text here:

  9. Anthony K Wikrent

    Parisot’s interpretation is now standard fare in the academy, and is very misleading. I might even venture to say it does more harm than good by failing to understand the radical shift in economics effected by the creation of the USA as a republic.

    The central point of my critique can be grounded on Parisot’s sentence, “In the south though, capitalist slavery was normal.” In my reading of history, this is entirely untrue. Slavery in the south was a throwback to feudal and pre-feudal economics, in which the sole sources of wealth were considered to be ownership of the land, and ownership of slaves, peasants, or serfs, whose function was to work the land from which all wealth came as “the bounty of nature.”

    First Treasury Secretary Alexander Hamilton shattered the stranglehold of this feudal economics by designing a system for attracting concentrations of capital, and transforming it into a form of money. Hamilton did this based on his and Washington’s experiences during the Revolutionary War, when they realized the major strategic advantage of the British empire was its ability to raise funds to support its armies and fleets. What Hamilton did created the foundation for modern industrial capitalism to emerge (which, to provide an accurate history here, we must note has been the past half century steadily usurped and replaced by financial / rentier capitalism, which is actually neofeudal in form and effect).

    I stress “emerge” because the words capitalism or capitalistic do not appear anywhere in either the Constitution or The Federalist Papers. This is not because the capitalist form of economy was not already in process of being formed, but simply because the terminology does not achieve full development as an intellectual construct until after publication of Marx’s Capital. How then could the creation of a “capitalist” economy be a goal of the Constitution’s framers?

    What Hamilton set in motion was an economy in which the CREATION of new wealth in the form of new science and technology, took precedence, in the form of machinery, which increased the productive power of labor. The left’s typical critique of Hamilton – that he merely created a new government that perpetuated the wealth and privilege of the already existing elites – is simply wrong, and entirely misunderstands what Hamilton did. The key to understanding Hamilton is his 1791 Report to Congress on the Subject of Manufactures, most especially “Section II: As to an extension of the use of Machinery…” viz.:c“The employment of Machinery forms an item of great importance in the general mass of national industry. ‘Tis an artificial force brought in aid of the natural force of man; and, to all the purposes of labour, is an increase of hands…”

    In short, Hamilton did not intend to preserve existing wealth. He intended to marshal existing wealth and use it to finance the creation of new wealth. The proof of this is to compare the late 18th century elites of USA with the late 18th century elites of England and Great Britain. Where today are the fabulously wealthy families of the descendants of Franklin, Washington, Adams, Hamilton, Jefferson, Madison, etc.? There are none, so far as I know. Look then in contrast at the continued wealth, privilege, and rank in Britain of the families of Windsor, Grosvenor, Schroder, Barclay, Cavendish, Somerset, Seymour, and others, all of which go back three centuries or more.

    As a side note, I want to focus on the problem of “profit maximization,” mentioned by Parisot near the end of his article. I have before me a scan of the Sixteenth Annual Report of the Fitchburg Rail Road Company, January 1858, which states on page 10 “The managers of railroads need not now have the fear, which was seriously entertained a few years since, of excessive profits — at least they need have no such fear during the life of the present generation, for as large as their profits may be they will need all, in our opinion, to give reasonable returns to their shareholders, and keep their roads in good order.”

    Fear of excessive profits?! Can you imagine any CEO, COO, CFO, director, or fund manager of today discussing seriously the danger of “excessive profits”? Clearly, the capitalism of today is a far different, more voracious beast than the capitalism of 1858. Rather than recycling again and again the leftist nostrums about “capitalism,” as Parisot does here, what we need are through and detailed investigations of what shifted in the reigning philosophy of USA economics since the founding of the republic, when we could find such thinking as this:

    “In a republic “each individual gives up all private interest that is not consistent with the general good, the interest of the whole body.” For the republican patriots of 1776 the commonweal was all encompassing—a transcendent object with a unique moral worth that made partial considerations fade into insignificance. “Let regard be had only to the good of the whole” was the constant exhortation by publicists and clergy. Ideally, republicanism obliterated the individual. “A Citizen,” said Sam Adams, “owes everything to the Commonwealth.” “Every man in a republic,” declared Benjamin Rush, “is public property. His time, his talents—his youth—his manhood—his old age—nay more, life, all belong to his country.” “No man is a true republican,” wrote a Pennsylvanian in 1776, “that will not give up his single voice to that of the public.” “
    –Gordon Wood, Creation of the American Republic, pp. 60-61.

    What we need to understand, and rectify, is how republicanism was replaced by capitalism, which became increasingly exploitative and sociopathic, until it became the dangerous monster it is today.

    1. Colonel Smithers

      Thank you, AW.

      I would also add the ancestors of David Cameron and the Queen’s cousin, the Earl of Harewood, owner of Harewood House, and actor Benedict Cumberbatch. The descendants of their slaves carry their names, Lascelles and Harewood (including the actor David) for the Harewoods and eponymous Cumberbatch (including cricket journalist Donna and umpire Clyde).

      Cameron’s great grandfather also ran HSBC for its opium dealer founders.

    2. Carolinian

      The Southerners were trying to reproduce England’s landed aristocracy (itself a throwback to feudalism) in their own “peculiar” way. So those who think the antebellum South was uniquely horrible should look to the source. Of course it wasn’t all one thing. The cotton planters of Mississippi with their vast and ruthless plantations were not the same as the older group in SC with their airs of gentility and increasingly played out land. It was that latter group that thought they had nothing to lose by their irrational choice to secede. It was indeed, as PK says above, cultural as well as about money.

    3. RBHoughton

      Thank you for an interesting and persuasive post Mr Wikrent. You have somewhat rehabilitated Hamilton in my thoughts, I having previously excoriated him for promoting credit over value in the US economy.

  10. Lynne

    Oh, my. Hard to get past the ignorant sexism in this piece, or in the narrow view of capitalism. Perhaps the author has never studied much US history, or Northern European history? Speaking of one region in particular, Norwegian women in many parts ran the grazing part of the family ag operation in the highlands, while men stayed in the valleys and farmed. A not insignificant number of single women homesteaded, and the women in farming families were not usually shrinking violets. One of the biggest culture shocks of my life was coming out of a screening of Country and hearing a couple “valley girls” speaking scornfully of Jessica Lange’s chaaracter for not being sufficiently sympathetic to her husband, totally missing the point that the land they were losing in the movie was HER land.

    Maybe Yankee women are helpless appendages of their men, but I kind of doubt it. And, as Yves points out, the Midwest and plains were settled by immigrants, not Yankees.

    I wonder, too, what definition the author has of capitalism. Most people I know consider themselves capitalists, and believe the current system is an abomination and corruption of capitalism. In true capitalism, banks don’t get to make up fake foreclosures.

      1. Lynne

        Didn’t say it has been. That doesn’t change that what the author apparently classifies as capitalism is no such thing, or that we were closer to it in what the author characterized as pre-capitalism

  11. Wukchumni

    Capitalism wasn’t about money so much early on in the USA, it was more about adding bodies-not booty. Who had time to accumulate wealth when you had 9 mouths to feed?

    The situation of course has largely reversed itself, except for the money part.

  12. John Beech

    This was an interesting piece Susan, but blacks and slaves from 150 years ago were a sideshow to the piece in my opinion. Rep. AOC and Senator Sanders envision something rather different. And Millennials as a whole are still on their back foot and not politically conscious (yet).

    Yet decrying all of socialism isn’t my intent because it would be the heigtht of hubris to throw the baby out with the bathwater. Neither is it my thought that pure capitalism is the be all end all because it works, in its present incarnation as a steam engine without a governor.

    Instead, I envision a future with a mix, socialism where it makes sense (health care), capitalism where it makes better sense (business) generally . . . unless the bread lines of the 80s in the Soviet Union, or the morass of Venezuela today, where babies are malnourished – whilst sitting on the world’s largest proven oil reserves – makes sense to anybody.

    Anyway, nice piece.

    1. pretzelattack

      babies are malnourished in venezuela because of the sanctions and severe economic constraints imposed on venezuela by the united states. and let’s not forget the long, long history of actions against the ussr, starting with trying to topple its government post world war 1. the russians desperately wanted nukes to defend themselves after we used them in japan.

      1. Stephen Gardner

        And North Korea needs nukes for the same reason. And that, my friends, is why regardless of what Trump or any other POTUS might say or do, they will NEVER give up their nuclear program. Unfortunately for Iran, Khomeini thought nukes were haram. They would be much safer with them than without. Israel would know that a nuclear attack on Iran would be fatal for it too.

        1. thesaucymugwump

          North Korea started the Korean War by invading with tanks on June 25, 1950. The DPRK killed a great many civilians and military personnel over the years, with the 1976 axe murder incident, the 1987 Flight 858 bombing, and the 2010 sinking of the Cheonan being just a few examples. The US would never invade the DPRK unless North Korea foolishly attacked US forces. Kim Il-sung wanted to reunify the peninsula under his brutal terms and his offspring have had the same idea. The only reason North Korea needs nukes is to keep the dictator in power. If the DPRK were to eliminate its nuclear weapons and empty its labor camps, its economy would be the fastest-growing in the entire world for at least twenty years.

          1. The Rev Kev

            Would that be before or after the US attacks it with a Coalition of the Witless? Non-nuclear countries like Libya, Iraq and Syria want to know.

      2. thesaucymugwump

        Venezuela is a mess because Maduro and his family have stolen a great deal of money from the people of Venezuela, Maduro replaced the experienced workers of PDVSA with soldiers, and Maduro is incompetent and vain. And Chavez wasn’t much better.

        And the Soviets wanted nukes because the Russian Empire / USSR / Russia had/have a great fear of being invaded due to the actions of Napolean and Hitler. The fact that Stalin was grossly incompetent — he had the head of the air force shot for wanting to move all aircraft away from the front before they were destroyed on the ground, which happened in the first few days of the war — seems to not be important to many Russians.

        1. JBird4049

          I’ll have to push back on the “Maduro and his cronies are the reason for Venezuela’s economic collapse” story.

          Maduro’s is goofy and incompetent, and his regime corrupt as heck; however, between the deliberate crippling of the oil industry by the oil companies, the embargo of everything especially currency by the United States, repeated coup attempts, and a right wing under the leadership of the pre Chavez regime has done anything it can internally to sabotage the country. This includes boycotting the last national elections at the behest of the United States State Department; since the opposition parties “lost” and are not adequately represented in the government that means that the Maduro government is illegitimate; said illegitimacy due to the American directed boycott.

          Greed and betrayal combined with corruption and folly with the American government gleefully helping are the reasons.

  13. Swamp Yankee

    I need to re-read this piece as well as the comments, as I’m moving quickly today, but I did want to note that I wrote my doctoral dissertation on this subject (on Plymouth County, Massachusetts, up through 1815; I argue that the establishment and maintenance of an English style commons regime provides powerful evidence of a non-capitalist economy and certainly society), and thought I’d provide a few reading recommendations for those interested in this active debate.

    The historiography here is extensive; the question has been debated for well over a century. However, it can in important ways be traced to the Consensus school (late 40s through mid-1960s) vision of America as springing fully capitalist off the Mayflower, which was in turn challenged by the New Social, Political, and other Histories of the 1960s and 1970s, arguing that early America was in important ways not a capitalist mode of production. By about the mid-1980s, we have the neoliberal turn, which sees things like capitalism and consumerism extending farther back than we’d been prepared for. This in turn has been challenged by a return to Marxist historiography that emerged after the Carsh of 2008 (and yes, a school that, full disclosure, I associate with).

    So it very much depends, who, when, where, etc., we are talking about.

    That said, I did want to provide a thoroughly unexhaustive, though hopefully useful, account of the debate, from various points of view.

    You might start with Charles and Mary Beard’s Economic Interpretation of the Constitution of the United States, original, Progressive era work, that is in turn answered in the Consensus period by Louis Hartz and his The Liberal Tradition in America . The more left- (rather than liberal) oriented New Histories of the 1960s are well represented by, inter alia, E.P. Thompson, “The Moral Economy of the English Crowd in the 18th Century”; Eugene Genovese, Roll, Jordan, Roll: The World The Slaves Made . Later examples from this school, which I love, would include David P. Szatmary’s book on Shays’ Rebellion and Christopher Clark’s book on the transition to capitalism in western Massachusetts from 1800-1860. I’d also plug my own dissertation advisor’s work, J. Mills Thornton III, Politics and Power in a Slave Society: Alabama, 1800-1860 A fine collection that includes great work is Stephen Hahn, ed., The Countryside in the Age of Capitalist Transformation .

    The neoliberals include work by folks like T.H. Breen, who writes about what he understands as consumerism in the 18th century, or David Hancock, with his stuff on wine merchants.

    A good intro to all of the above debates, or rather a crystallization of them, would be (for the non-capitalist side) Charles G. Sellers, The Market Revolution: Jacksonian America, 1815-1846 , with Daniel Walker Howe’s rejoinder, What Hath God Wrought: The Transformation of America, 1815-48 .

    That was just a partial list, but if you’re interested in this debate, these are some good resources.

  14. Eclair

    I am reading fast here, too, Swamp Yankee, and I may have misinterpreted. But your mention of the transition in Plymouth Plantation and the later Commonwealth, brings back a memory from my childhood. Heavens knows why it remains with me!

    It was in the late forties or very early fifties, a full-page advertisement (don’t remember the sponsor) in The Saturday Evening Post, around Thanksgiving. It pointed out the ‘truth’ that the US did not really flourish under the ‘socialism’ of the early Pilgrims, where they shared land and its outputs. It was not until they discovered ‘capitalism,’ private property and the joy of profits, that our country really began to grow.

    It must have been at this point that I began to be suspicious of anyone who tried to convince me that their system was the best.

  15. DJG

    The broad brush is so broad that Parisot misses women’s work: “while their wives took care of household chores.”

    Does Parisot have any concept of what chores on a farm entailed at that time? He is making the same mistake as feminists who think that because most women of the time “worked at home,” they must have been involved in pointless work that oppressed them. All the way back to all of those Greek women who supposedly were locked in the house, doing nothing.

    The household as the center of the world. It was also a school, a center of industry and handicrafts, a farm, a garden, and so on.

    As a book that I read years back commented, for most of human history, most human beings were involved in agriculture or in making cloth. Those were our main occupations for hundreds of years. So the women weren’t making the occasional avocado toast or writing up the occasional marketing plan for the farm. They were part of the management of the farm, contributed tremendous amounts of work, helped to direct planting of crops and harvesting of crops: Just read something about women feeding the workers during the wheat harvest. Just read what happened during the slaughter of pigs in the autumn. Histories of U.S. cookery write about New England women making pies by the hundreds, which were then put into storage for the family.

    Further, Parisot seems to miss the point that much of the Great Lakes States was settled by New Englanders. So the small towns of this part of the country (the supposed breadbasket) are modeled after towns in New England. And it hard to argue that they were an extension of the patriarchy, because of the division of labor I point out.

    And along the shores of the Great Lakes, the Anishinaabeg also traded, hunted, and farmed–with the women often in charge of all three, especially when men were away.

    Nevertheless, the spirit of much of the North was and is skeptical of capitalism.

  16. Swamp Yankee

    Hi Eclair — yes, that was very much the Consensus view of it; I think the reality is more complex. The primitive communism of the first couple of years actually allowed them to survive almost unimaginably harsh conditions (New England’s coastal waters in the Little Ice Age were something like 3 degrees centigrade colder than today, I remember reading somewhere; thus you’d have conditions more like contemporary Labrador than Cape Cod). Once the crisis was over, they returned to traditional forms of English land-tenure. Even these were hardly capitalist, as the presence of extensive unenclosed commons was an essential aspect of this land-regime. We’re also not really talking about farming for the market, etc.

    The local right-wingers here in Plymouth love this line of attack on socialism, by the way, I think often reflecting what they were taught in the late 40s/early 1950s.

    That being said, Plimoth Plantation does a pretty good job. Though it’s management are pretty anti-union and exploitative, I hear….

  17. notabanker

    I am sensitive, and highly critical of, casting generalizations on “millennial”. I have two sons in this generation. I’ve spent a fair amount of time talking to them and their social networks of friends about a wide range of subjects. I have yet to meet a millennial socialist.

    What I have met many insightful young people who are openly questioning the world they live in, and why that is so. For instance:
    – How can a university that has a 75% student athlete population serve food whose only nutritional value is carbs? It is designed solely to made quickly and cheaply and withstand 4-6 hours under heat lamps.
    – What exactly is a Chief Storyteller? It sounds to me like telling people a bunch of BS to get them to do what you want them to do.
    – Should the government be in the business of producing ipad and iphone technology? (laughter) Should the private sector be in the business of making profits incarcerating people? (equally ridiculous laughter)

    My final point here is that this progressive movement should in no way be confined to the millennial generation. I’ve spoken to plenty of people in the 25-55 age group that are fed up with this way of life, and would take a path out of it if it were feasible.

    1. Wukchumni

      I have yet to meet a millennial socialist.

      Aren’t they ersatz socialists whether they acknowledge it or not, in the capitalist sharing community they’ve embraced?

    2. Unna

      Don’t discount Gen Z, said to start from the year 1997. The Great Recession which begins in 2008 with economic loss, general economic and political destabilization and general insecurity of their parents plus austerity which is still with us and going strong is the only thing they’ve known from childhood/adolescence. No avocado toast and more hard reconning for most of this cohort, maybe. I wonder how they will turn out politically as a group if it can be said that “groups” turn out.

  18. Hepativore

    Just my two cents as I am 35, so I have no direct experience on what life was like during the postwar economic “golden years” that lasted until the 1980s but I do have some small observations…

    It really depends on what form of “capitalism” is defined, here. There are many flavors of “capitalism” and “socialism” as there are anything else. What does seem to have changed, though, is the fact that conglomeration and monopolies have reared their ugly heads again. The US was indeed “capitalist” during the heyday of the postwar era, but small businesses and “mom and pop” shops were much more common. Now, other than restaurants, and some plant nurseries, many people are forced to go shopping at places like Menard’s, Home Depot, or similar places to get things like hardware and so on.

    Also, before the start of the neoliberal era, it was thought by a large swath of the US population and politicians that a “mixed” economy was best as some things were thought to be best served by public institutions while other things were best left to the private sector. The type of capitalism pushed by neoliberalism, however, has never met something that it did not want to privatize.

    Anyway, when people say “capitalism” vs. “socialism” it gets rather confusing because there are so many different forms of capitalist and socialist systems. Neoliberalism bears little to no resemblance to the capitalism that was present during the post-WWII years of the US.

  19. Sound of the Suburbs

    The average American used to be the most prosperous in the world and this ensured they won the ideological battle against Communism.

    The US is the flagship of capitalism in the world and it doesn’t look too clever these days.

    China’s central planning looks much better than the US’s economic liberalism. Globalisation saw China become a superpower and the US go into decline, and China appears to be winning today’s ideological battle.

    How did they mess up so badly?
    They had moved to a very different form of capitalism.

    The need to get back to the basics.

    Income from dividends, rent, interest and capital gains overtook earned income in 1984 and it has become a rentier’s paradise. With the rentiers siphoning off so much there isn’t that much left for employees.

    There are three groups in capitalism; employers, employees and the rentiers.

    There are two productive groups and one parasitic group, the rentiers.

    “The interest of the landlords is always opposed to the interest of every other class in the community” Ricardo 1815 / Classical Economist

    Our man on free trade was part of the new capitalist class and the old landowning class were a huge problem with their rents that had to be paid both directly and through wages.

    Disposable income = wages – (taxes + the cost of living)

    Employees get less disposable income after the landlords rent has gone.
    Employers have to cover the landlord’s rents in wages, reducing profit.

    In Ricardo’s day employees always rented, he just means housing costs.

    The US has forgotten that small state, unregulated capitalism has existed before and should start thinking about why it is so different to their expectations today.

    The initial battles of capitalism were against the old money, idle rich who did so little and took so much.

    By the end of the 19th century they sort to use banks to create the money (capital) for investment in business and industry, so they weren’t reliant on the parasitic, rentier class for investment capital.

    Capitalism then becomes a mutually beneficial arrangement for the two productive classes.

    The employees do the work to generate the profits for employers.
    The employers pay the wages to allow employees to live a reasonable life.

    The parasitic, rentier class is relegated into obscurity.

  20. Home for Wayward Trout

    Hello Yves,

    You are right that this article is simplistic (and a bit offensive in the way it assumes that everything about the western migration was based on patriarchy). Among other things the western states gave us women’s suffrage >30 years before the rest of the country and I don’t think that was an accident. The farm and ranch women that I have known are extremely independent and capable and they openly credit their mother’s, grandmother’s and great-grandmother’s for what they are.

    In general I think this article confuses wealth with political power. Since Citizen’s United wealth is political power but that is not our history and I don’t like it when a history asserts that it has always been this way.

    Since the original question is whether or not the United States has always embraced capitalism I am surprised that no mention has been made of the early communes at Oneida in New York, Brooks farm in Massachusetts and the early Mormon dabbling in communism (and I am sure there are many more examples around the country with which I am not familiar). I assume that most people of the time looked on these communities as naive and impractical but I doubt they slandered them as anti-Christian in the way that communes and communism are viewed today by those on the religious right. My impression is that in much of our history capitalism was seen as a necessary evil that was acceptable as long as it was balanced with a sufficient dose of charity.

    In my Mormon Sunday School upbringing I was taught that the United Order (communism) was the highest form of civil government but attempts at it failed because we aren’t good enough yet to live that way. I was in Sunday School in the early ’60s and that history may have been purged from today’s Mormon Sunday School lessons.

  21. everydayjoe

    Why does this author think capitalism is a western creation? India had a fledging cotton and silk garment manufacturing industry that exported to Europe way before British arrived. A book titled Behemoth,that chronicles the history of modern manufacturing, also talks about Indian manufacturers supplying machinery to cloth mills in 18th century Britain. So maybe capitalism is as much a part of human evolution as is the need to live amongst groups.

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