Integrating Black and White American Economic History

By Trevon Logan, Hazel C. Youngberg Trustees Distinguished Professor of Economics, Ohio State University, and Peter Temin, Elisha Gray II Professor Emeritus of Economics, Massachusetts Institute of Technology. Originally published at the Institute for New Economic Thinking website

In this paper, we combine white and black economic histories of the United States from its formation to the present.

The Constitutional compromises between slave and free states set the stage for rapid economic growth as cotton from Southern slave states provided the raw material for the emerging cotton industry in the North. The cooperation between states also set up tensions that intensified over time as the addition of new states reiterated the Constitutional compromise over and over again with increasing acrimony.

This tension led to the Civil War that brought with it the 13th Amendment freeing slaves. But Reconstruction after the war proved to be only a temporary reprieve for African Americans. Despite all the carnage and death in the Civil War, gains for African Americans proved highly elusive. President Grant did what he could as Congress increasingly lost interest in the progress of democracy in the post-war South. Isolated opposition to black office-holders showed itself in violence and murder and formed a pattern of opposition to the Federal troops enforcing Reconstruction. The 1876 election was very close, and the Republican candidate was allowed to take the office by promising to remove Federal troops from the South, ending Reconstruction.

The fortunes of the South and West then diverged as the cotton industry was replaced as a center of economic growth by growing manufacturing, mining and wheat exports. Racial violence that had grown during Reconstruction increased after its end. The Supreme Court invalidated the 14th Amendment as it applied to local violence in the 1880s, and blacks were trapped in a stagnant agricultural setting without education or votes to alleviate their lot. Their conditions deteriorated as the South stagnated and Jim Crow Laws proliferated, while the North leapt ahead with the settlement of the West.

White Americans became the industrial leaders and dominant country through world wars and a world-wide depression in the first half of the 20th century. The peace treaty after the First World War led to the Second World War as the Constitutional compromise led to the Civil War. Black American families peacefully moved North and West through this aggregate turbulence. Whites obscured the racial divergence by using a new technology to project their hostility and violence onto blacks in The Birth of a Nation.

The Second World War ended with an unconditional surrender, and the western world enjoyed thirty years of robust growth. However, blacks moving North in the Great Migration were largely prevented from sharing in these gains by their exclusion from many of the GI bills’ provisions, their inability to move to the new suburbs, and white flight from cities where blacks moved in.

The Civil Rights Movement started with the desegregation of the armed forces and education in 1948 and 1954. It continued with President Johnson’s Great Society. Educated blacks were included in the growth of the white economy, while working-class blacks found that doors were closed to them as growth slowed. This echo of Reconstruction ended badly as urban riots spread in newly black cities around the country in the late 1960s. As after the Civil War, this “second Reconstruction” was met by the determination of the white population to refuse most African Americans full integration into the American economy.

Average wages ceased to grow around 1970 as conservative politicians came forward to erase gains blacks had made in the Civil Rights Movement. The Great Migration ceased as Northern jobs suffered, and mass incarceration began to separate blacks from whites. One in three black men was incarcerated by the end of the 20th century, making modern prisons into a New Jim Crow. Prisons now separate blacks and whites the way Jim Crow laws did in the previous Gilded Age even though state prisons contain more poor whites than blacks.

The middle class lost ground as unskilled and semi-skilled jobs became scarce. The distribution of income became wider, and rich people supported a rollback of the social services introduced in postwar prosperity. Their influence was increased by a Supreme Court opinion that gave money a free hand in politics in 2010. And the Supreme Court gutted the 1965 Voting Rights Act in 2013, sending us back to a voting order echoing the original Jim Crow. As in the 1880s, the Supreme Court withdrew the legal foundations of an inclusive American society only a few years after they were passed.

The net result of this second attempt at racial integration was that educated African Americans are now accepted in white society—one even was elected President—while the mass of black Americans are deprived of economic opportunities and votes.

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  1. ObjectiveFunction

    Some hard data.

    There were approximately 700,000 slaves in the United States at the time of the signing of the Constitution [growing to] to 4,000,000 in 1860.

    American cotton production soared from 156,000 bales in 1800 to more than 4,000,000 bales in 1860 (a bale is a compressed bundle of cotton weighing between 400 and 500 pounds).

    Cotton accounted for over half of all American exports during the first half of the 19th century.

    [In 1860] Nearly 4,000,000 of Britain’s total population of 21,000,000 were dependent on cotton textile manufacturing. Nearly forty percent of Britain’s exports were cotton textiles. Seventy-five percent of the cotton that supplied Britain’s cotton mills came from the American South.

    Mississippi attracted investors as well as residents. Auctions of cheap Indian lands as a result of cessions of land by the Choctaw and Chickasaw nations drew bidders from the South and East.

    In 1850, twenty-five percent of the population of New Orleans, Louisiana, was from the North and ten percent of the population in Mobile, Alabama, was former New Yorkers.

    It has been estimated that New York received forty percent of all cotton revenues since the city supplied insurance, shipping, and financing services and New York merchants sold goods to Southern planters. The trade with the South, which has been estimated at $200,000,000 annually, was an impressive sum at the time.

    New York investors financed New York-based slave ships that sailed to West Africa to pick up African captives that were then sold in Cuba and Brazil.

    1. Lee

      IIRC, I read in The Fall of the House of Dixie that pressure from northern finance capital played an important role in reversing the policy of granting to former slaves ownership of the land they had worked as slaves.

    2. Eclair

      Nice summary, Objective Function. However, while I realize that ‘cession’ is not your choice of word, I would take exception to it. It is a relatively bloodless legal term, meaning the formal giving up of rights to territory or rights, by a state or nation. We should acknowledge that behind that relatively benign word, lies decades of violence against the Indigenous inhabitants of what we now call North America. And which was referred to by many of the native nations, as Turtle Island. That seizure of millions of acres of land, along with its forests, grasslands and minerals, combined with the forced labor of millions of Black people, laid the foundations for the great wealth accrued by the European settler/colonists. And, is part of our racist history.

  2. Amfortas the hippie

    and all that jim crow and related social engineering didn’t just spring up organically out of the ground:

    this bit of knowledge about our history is part of my arsenal when engaging with strangers(fieldwork).
    even if they’re reluctant to believe it, it still introduces doubt.
    even in overt racists(if they don’t try to kill you…an activity not for the faint of heart)

  3. Stephen V.

    Yikes Anfortas. That’s quite a potent little piece.
    Also, There are no small number of college endowments that have their origins in slavery.
    Just sayin’

  4. TG

    OK let’s try this again.

    In the 1880’s and later, massive immigration of Europeans reduced working class wages and massively boosted profits for the elites – and eliminated any need for Northern industries to compete for black workers, who remained stuck in low-wage agricultural settings in the south.

    After things started to pick up in the 1940’s, the combination of economic growth and very little immigration resulted in a booming demand for workers, and wages and job prospects shot up. Finally northern industries started competing for black workers – and indeed, there were many institutional attempts to hold them down. But eventually blacks started to make gains, they began to unionize, and things began to look up.

    Then in the 1960’s, the elites replaced blacks en masse with Mexicans, who could be forced to work for much cheaper and whom the elites saw as less troublesome. Yes really, while today immigration is holding down US wages across the board, at first it was blacks specifically that were targeted.

    But – blacks were due affirmative action, to redress past discrimination. How to replace blacks with Mexicans, when blacks had special hiring preferences? Easy! Just give affirmative action status to Mexicans, now the rich could throw American blacks on the trash can, have all the cheap labor they want, AND preen about how wonderfully moral and enlightened they are! Win-win all around!

    And no analysis of the labor market, no matter how well meaning, can have any validity if it refuses to ignore how the elites manipulate the supply of labor.

    1. barnaby33

      and yet Mexicans work harder. Racist, maybe, but true. The “Elites” did not create the waves of immigration, they just profited off it. You make it sound like a coordinated plot instead of an opportunistic pivot.

      1. Eclair

        Gee, barnaby33, the work ethic of ‘Mexicans’ changed drastically since the 1940’s. I remember images of ‘Mexicans’, sleeping under enormous sombreros, draped in colorful serapes, propped up against adobe walls. My mother (bless her heart) had ‘sleeping Mexican’ bookends to hold up her cook books. In 1947, people all over the US were humming Peggy Lee’s hit song, “Mañana (Is Soon Enough for Me).

        The faucet she is dripping and the fence she’s fallin’ down
        My pocket needs some money, so I can’t go into town
        My brother isn’t working and my sister doesn’t care
        The car she needs a motor so I can’t go anywhere ….

        And it goes on from there. (From my vantage point today, I shudder when I think of how unthinkingly my friends and I sung this ‘catchy’ tune that celebrated the supposed fecklessness of ‘Mexicans.’)

        But, I get your point. In LA in the 90’s and later, the meme was, hire a Mexican; they work harder and are more reliable than African Americans (although neither really speak English) and are a hell of a lot cheaper than White people. Forget ‘Indians,’ even if you can find one who has wandered off the rez. Of course, we’re not talking positions as CEO’s, doctors, bank loan officers, or teachers here. Just someone to bus tables, clean your pool and toilets, do your yard work, and bring up your kids

        I am not sure when or how ‘Mexicans’ acquired their work ethic. Or just when the narrative of the ‘hard working Mexican’ came into being. Maybe other commenters have some ideas. (Clarification: I am not saying ‘Mexicans,’ a catch-all term that includes Indigenous people from South and Central America, are NOT hard working. Just questioning the changing narrative.)

      2. Stratos

        The “Elites” on both sides of the border did create waves of immigration through NAFTA. To smooth the passage of NAFTA, the Mexican government demolished common land grants dating back to the Mexican Revolution of 1910. A 2012 article by The Nation notes:

        “…Carlos Salinas de Gortari, the country’s corrupt president, pushed through changes to Article 27 of the Constitution in 1992, dismantling land reform and allowing the sale of ejidos, or common lands, as private property.

        Waves of tobacco and coffee farmers sold their land because they could no longer make a living on it. Many became migrants. But allowing the sale of ejidos to foreigners made it possible for Carroll Foods to buy land for its swine sheds. Displaced farmers then went to work in those sheds at low wages.

        Simultaneous changes in the United States also accelerated migration. The Immigration Reform and Control Act, passed by Congress in 1986, expanded the existing H2-A visa program, creating the current H2-A program, which allows US agricultural employers to bring in workers from Mexico and other countries, giving them temporary visas tied to employment contracts. Growers in North Carolina became large users of the program, especially through the North Carolina Growers Association. Landless tobacco farmers from Veracruz became migrant tobacco workers in the Carolinas.”

        High level and coordinated plotting by governments in the US and Mexico affected the livelihoods of Mexican tobacco, coffee, corn and pork farmers. Just as their plotting affected the livelihoods of US textile workers, garment workers, meatpackers and other factory workers.

        The “Mexicans work harder” trope is laughable. I distinctly remember a time when Mexicans were depicted as lazy and backward. They were routinely criticized for their siesta tradition as well as being slow and inefficient workers by US media (newspapers, magazines, television and movies). Funny how perceptions change according to the needs of “Elites”.

        1. Amfortas the hippie

          see any Speedy Gonzales episode for examples of the siesta prone, large hatted lazy trope.
          i’m an honorary Mexican(american), due to marriage.
          1. they’re just people-with all the variations in work ethic of any other group of humans.
          2. many of the more recent immigrants i know around here, do, indeed, outwork their white neighbors, and are fairer and more honest, to boot. I prefer working with them, in fact.
          so the lazy trope likely derives from projection on the part of lazy rednecks…similarly to fears of same regarding well endowed black men stealing their wimmens.
          in fact, the one place i still hear the lazy mexican thing bandied about is at the coffee table in the front room of the feedstore, where the ancient ranchers sit around on their a$$es all day, complaining.

  5. JBird4049

    One can add that often lynching was used to remove blacks who were successful business owners. Heck, I think that on very rare occasions it was done to successful whites in the South and especially reformers of any color. Black, white, native. The whites were often given a chance to run. Usually.

    A form of it was also done to black communities and towns. Dig down into the story and political and economic power was often the cause. Tulsa, Oklahoma for instance. The black community in Tulsa had been called the Black Wall Street. IIRC, a few small towns were simply erased. As in not there anymore except for the foundations. It is disturbing that I live in a country that gave the Turks and the Germans lessons on ethnic cleansing; don’t think that the Europeans at the time did not notice and that much of the Nazis’ racist ideology came from British and Americans.

    Of course, finding these missing communities has been difficult because of time and the coverups. Even back then, destroying whole communities because “reasons” was really frowned on. So things like destroying newspaper issues, as was done in Tulsa, happened.

    So when I hear about all the racism, the racists, the hatred, the lynchings, I hear a cash register also.

    It is one of the reasons for my own hatred of the modern neoliberal version of Identity Politics. This playbook has been used before. From the Trail of Tears to the California Native American Genocide to Tulsa to the modern factories run by today’s American carceral state.

  6. Titus

    Having just read John Quincy Adams biography and read some the original documents used in that biography, I’m have a very hard time with almost all the premises of the article. Time does not allow me to go through them all but →

    “The cooperation between states also set up tensions that intensified over time as the addition of new states reiterated the Constitutional compromise over and over again with increasing acrimony.”

    There was no compromise between the slave states and non slave states among the original 13. After Washington it could be argued it was all hate all the time. What was agreed to was an agreement to disagree for that moment in time. No new salves were to be brought in the the US (1807) and it was believed by non slave states that a constitutional amendment was need for acquiring new land. Further non slave states did not believe the constitution allowed for any new slave states and that was a federal right not a state right. The problem starts (and ends in (1864 & 1865) with the 3/5 rule which allowed the US congress to in essence be packed by Southerners who by this formula would always have more votes than non slave state’s. An irony here is of course no blacks were ever elected before 1865 to serve in Congress 3/5 rule or not. Adams was of course right a war was fought that ended slavery but alas not racism.

    J.Quincy Adams as senator for 6 reasons consistently attempted to bring up anti slavery bills. Same as president for 4 years, same as congressman for 20, and clearly when he argued his fourth case to the SCOTUS – Amistad. Which he won. Congress passed a gag rule about any discussions of slavery for 15 of the 20 years Quincy was in Congress. He absolutely was opposed to any expansion of slavery. As the U.K. abolished slavery empire wide in 1830, Quincy wanted to know when the US was going to do the same. In 1835 he ‘stated’ the Union was in a dismal state, getting worse, with war being the only likely outcome to resolve slavery. (Sounds similar to today’s climate change problem). At one point Quincy managed to have himself declared for treason so he could take the floor and talk for 4 days straight about slavery. He never wavered. In his final two years he was joined by A. Lincoln who voted with Quincy – on issues about slavery. All the presidents from Jefferson and ending with Lincoln (he was not for slavery, his stance was complex and evolved) were pro slavery. Or as I think of it 80 years of Trump. Adams firmly believed slave holding states produced a mindset where it was inconceivable to live any other way than with slaves. Cotton was irrelevant. But that’s another argument for another day.

    1. Lambert Strether

      > Adams firmly believed slave holding states produced a mindset where it was inconceivable to live any other way than with slaves

      Hmm. I wonder if there are parallels to anything more current… Can anybody recommend a good biography of Adams?

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