The Half Has Never Been Told: Slavery and the Making of American Capitalism

by Edward E. Baptist

Slavery permitted unchecked dominance and promised unlimited fulfillment of unrestrained desire. That made the behavior of entrepreneurs particularly volatile, risky, profitable, and disastrous. Then, in the 1830s, as white people, especially men, tried to build southwestern empires out of credit and enslaved human beings, they sought out more and more risk. This behavior planted the seeds for a cycle of boom and bust that would shape the course of American history, and one cannot understand it without studying both careful calculation and passionate craving. Although modern economics often assures itself it is a science, assuming that people are perfectly rational actors who choose their actions based on a clear, even quantifiable understanding of their own economic self-interest, that assumption is false. People rarely have sufficient information to measure the consequences of one act or another. More to the point when planters talk about “fever” and “ecstasy”: pure rationality does not always drive people’s actions, even—and sometimes especially—their “economic” ones. This is what the great British economist John Maynard Keynes was trying to explain to his readers when he wrote that “animal spirits”—emotions and desires—drive the ebbing and flowing financial tides. More recently, behavioral economists who run experiments on human test subjects have demonstrated seemingly hardwired connections between sexual desire and risk-taking decisions about buying and selling. When...