Slavery - Free Markets Unfettered

There is strong disagreement as to whether the Free Market needs any guidance, how much and if so, from whom. The right tends to think that there should be little guidance and it should come from the business world with the Libertarians believing it should have none because left to its own devices the market will resolve all problems. The liberals, on the other hand are sensitive to the collateral damage resulting from unencumbered market activities and feel that government needs to guide the market to minimize the damage done to the people selling labor. People bringing their labor to the market are generally the ones suffering most from the dynamics of the markets. Both sides profess to be in favor of a free market and indeed, to a degree they both are.

The free market works. It basically is a system wherein goods, services and labor are exchanged on a global scale. In theory it works on the principle that in commerce, pursuit of individual self-interest collectively results in benefits to the overall society. We tend to speak of free markets, democracy, socialism, monarchy, etc. as if they were like systems. It’s like mixing apples and oranges or better yet apples and pomegranate juice. Free market capitalism is an economic system whereas a democracy is a system of governing. One can have a totalitarian system of government that works on free market economic principles. The market, in and of itself, has nothing inherent in it driving for the betterment of society. The fact that it does is strictly coincidental. Adam Smith in the Wealth of Nations, refers to the force that serves the general good as the “invisible hand”. T
Unlike business whose quest is individual benefit, the role of a government, whether it does it well or for that matter at all, is to ensure that its population prospers. In commerce, one of its key role is keeping the market free and ensuring that the self-interest of individuals translate into benefit for society.

I firmly believe that for the free markets to work for the well and benefit, not only the individual but an entire population, it must have some level of regulation from somewhere and that somewhere is the government. Furthermore, I believe that the market unfettered will not only fail the betterment of society but will collapse. The challenge is to provide it just enough guidance. Too much and it will not function and too little it will choke. I would like to use slavery as an example of damage done to society when a free market is unrestricted and show how long it takes to recover. To this day, the damage done to a society by slavery, driven by market forces, has not as yet been completely mended.

During the 17th century North America was settled by Europeans funded with money from European corporations looking to extract raw materials from the “New World” and create markets for commodities manufactured in their countries. (The Plymouth Plantation was such an enterprise.) There was plenty of land to be taken at low to no cost from the Natives. The land in the North, though good, was not suited for large agro-businesses and could be farmed by family members with occasional assistance from outside labor. The land in the South, on the other hand, was plentiful and fertile and the weather ideal for large plantations. The problem was that to fully realize these advantages it took much more labor than was available in a family. The people who acquired the land through their European Governments couldn’t hire enough laborers nor could they get enough indentured servants working off their debt from Europe, to realize the full potential of their enterprises. The promise of slave labor became very appealing.

Slaves were not brought here to save on labor costs. In fact the wages paid to “free” labor at that time were not much above what it cost a family to eat and have a roof over their heads and even though slaves were not paid, they had to be bought, fed and housed. The problem was availability of labor in the South, not the cost. Slavery solved this. Driven by self-interest, the plantation owners come up with a working solution to maximize their profits. In that sense the market worked. Even the unintended benefit to the society as a whole was realized if you don’t count the population of African origin brought into this country as slave though they represented a large percentage of the total population in the young country. The slave traders were also free marketers. They recognized a demand in the market (slaves), raised capitol to fund the transatlantic journey, kidnapped a bunch of people from Africa and made a whole lot of money doing it. The governments of Europe interfered with slave trade in their respective countries, finding the enslavement of human beings immoral and outlawed slavery. Europe had plenty of labor so slavery was of no great financial benefit to them anyway. On this continent, however, the commerce created through the labor of slaves was a huge part of the economy and a strong contributor to its success. Thus it was allowed in the New World. After gaining independence, our government could have and should have interceded on the basis of the Constitution. After all the founders wrote in the Declaration of Independence “We hold these truths to be self evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, liberty and the pursuit of Happiness.” The stakes were very high and the “powers that be” having strong influence in politics as they always do, did not allow this principle to come into play when it came to slavery. Adam Smith’s “invisible hand”, though it worked for the majority, fell asleep for society as a whole. It needed some guidance.

So people kidnapped in Africa were brought to the Colonies, bought and sold and forced to labor for their masters. Not only did the government not de-legitimize slavery, laws were passed to ensure their continued servitude. Their culture was destroyed and the family structure devastated. The meaning of head of a household became diluted and the slave owners or their minions made the decision regarding the well being, to the extent there was any, of families. Lost were any relationships with how hard one toiled and how well one lived. Yes, there were varying degrees of “magnanimity” among slave owners but under any circumstances a slave was still a slave.

After a while, people, including church going ones in the South, started questioning the morality of slavery and the plantation owners were faced with a populist move to eliminate it. This created a business dilemma. Being good businessmen and driven by self-interest they found a solution. We humans tend to tolerate mistreatment if the mistreated are though to be members of another species, not ours. For example, the Germans during the Second World War treated Western European prisoners of war in relative humane ways consistent with the customs of war at the time. However, they had convinced themselves that Eastern Europeans, on the other hand, were subhuman and thus perpetrated all kinds of atrocities in Poland and Russia that were not seen in France or Holland. Realizing this, the plantation owners launched a propaganda campaign to dehumanize the Africans and thus stem the moralizing on the part of people of conscience. They painted the Africans as ignorant, incapable of anything but rudimentary learning, child-like and lazy, lacking any virtues and just barely fit to the tasks plantation owners assigned them. In fact, they tried to convince people that the slave owners were doing the slaves a favor by housing and feeding them. This propaganda was so effective, that to this day there are still pockets, particularly in the South, where the propaganda originated and was focused, that still believe this dribble.

It took a couple of centuries and a civil war to end slavery and another near century to allow African Americans to vote, ride in the front of a buss and drink from the same water fountain as Whites. Unlike European immigrants who easily integrated into our society, former slaves could not until very recently. The effectiveness of the propaganda and their strong distinction from the Europeans majority by virtue of their colour, essentially confined them to all Black communities. Not only had their culture been destroyed, because of their isolation, they could not benefit from assimilation into the existing culture that was the conglomeration of the better parts of all the other cultures brought into this country.

Even with intervention, it took hundreds of years to reach the current state. Though greatly improved, there is still damage uncorrected. Attempts to try to mitigate the long lasting effects of slavery introduces by the progressives were not met with popular support. One such project was Affirmative Action that gives an advantage to African Americans in employment and education. The argument against such policies is that now that we are indeed equal we all have an equal chance. Slavery is a long gone thing now and, though the slaves were indeed taken advantage of, the African American population today is not. If you want to take something away from someone, take it away from those that benefited from slavery, families of plantation owners. Furthermore, families of new immigrants did not benefit from slavery so why should they be required to pay retribution?

The fact of the matter is that the majority of the population benefited then and is still benefiting from slavery. The availability of slave labor created commerce that spawned many enterprises unrelated to farming. It helped created a nation with a strong economy, allowing it to continue as a vibrant democracy (except for slaves) and grow in power and prestige. People immigrating to this country today do so because of this evolution. Their success is in part a result of the slaves work. On the other hand, slavery and the propaganda justifying it along with the laws that encouraged and enforced segregation, has greatly disadvantaged descendants of slaves and these effects still lingers to this day..

Getting back to free markets; market forces have worked and when it came to slavery in the Americas, it allowed for the creation of great wealth. The commercial possibilities were so large that it was allowed to function without any intervention until the Civil War. Self-interest was successful and the “invisible hand” worked for the majority of the population’s benefited. But without a “guiding hand” there was great collateral damage done to a significant portion of our population and to the moral fiber of our Nation. It has taken over one hundred years to recover and we still have some way to go