Cotton and Race in the Making of America: The Human Costs of Economic Power

Published by EH.NET (March 2010)

Gene Dattel, Cotton and Race in the Making of America: The Human Costs of Economic Power. Chicago: Ivan Dee, 2009. xiv + 416 pp. $29 (hardcover), ISBN: 978-1-56663-747-3.

Reviewed for EH.NET by Melinda Miller, Department of Economics, U.S. Naval Academy.

Gene Dattel, an independent scholar with a background in the finance industry, weaves together cotton and race into a sweeping narrative of racial oppression and its role in the economic growth of the United States. His central premise is that economic self-interest, and not moral or ethical imperatives, has driven much of American history. Although most of the facts in this book will be familiar, Dattel nicely draws together the literature on the cotton South, financial markets, and northern racism to make the compelling argument that the South?s desire for cotton and northern complicity irrevocably altered American racial history. The book?s narrative is divided into six parts.

In Part One, Dattel uses the Constitutional Convention to illustrate how ?the desire for economic development trumped … almost all else? (p. 5). He persuasively argues that freedom for slaves was sacrificed to commercial interests, order, and security.

Part Two explores cotton?s role in American economic growth from 1787 until 1861. It begins with an analysis of factors influencing the tremendous increase in the supply of and demand for cotton at the beginning of the nineteenth century. The remainder of this part explores the burgeoning cotton industry?s influence on the United States and its expansion throughout the South. Dattel carefully chronicles the business and finance of cotton while demonstrating that, through cotton, slavery touched the world: New York City profited from cotton finance; Britain, France, and New England depended on raw cotton; and the federal government depended on the tariff revenues made possible by cotton’s favorable effect on the balance of trade.

Part Three documents the conditions of blacks in the North before the Civil War. While the northern states had outlawed slavery, their citizens were not welcoming to African-Americans and wished to rid themselves of their black populations. Chapters 8 and 9 provide a detailed analysis of northern laws and document the hostile and racist atmosphere for blacks in the North. Chapter 8 focuses on the original northern colonies, while Chapter 9 discusses the western states. These two chapters can serve as a concise, freestanding compilation of racist laws and attitudes in the North. They could very nicely be incorporated into an economic history class to dispel any misperceptions students have about the history of racial (in)equality in the North.

Part Four focuses on the role of cotton in the Civil War and argues, ?none of this destruction would have occurred if not for cotton? (p. 166). Cotton served as both a bargaining tool and a means of credit for the South. These dual roles were possible largely because Great Britain?s textile industry relied on southern cotton. Chapter 13 delves deeply into the role of cotton in war financing. The Confederacy developed complicated financing schemes, including the famous Erlanger bond, which Dattel praises as both ?prescient and brilliant? (p. 188). Overall, however, the Confederacy bungled financing. The origins of its fundraising problems can be found, Dattel suggests, in the South?s choice to use cotton as a bargaining chip, and not just a fundraiser. Entertaining tales of blockade-runners who moved cotton out of the South and brought guns and supplies to the Confederates dominate chapter 14. There was also a large illicit flow of cotton within the United States. In another example of shameful and prejudiced northern behavior, General Grant blamed the Jewish population of Tennessee for this trade and expelled them from parts of the state. Part Four concludes with a discussion of the future of the freed slaves. For the North, there was a simple answer: containment of the freedmen in the South and in the cotton fields.

Part Five examines the lives of blacks and carpetbaggers from 1860 to 1930. The central argument of this section is that ?the possibilities for black acceptance in these years (1865-1876) have been grossly exaggerated in our history.? During Reconstruction, the lives of freedmen were largely shaped by two forces: the northern hatred of blacks, and the southern desire for cotton. Together, they led to Federal and state government policies that served to firmly anchor blacks to the cotton fields. These included the decision to restrict land acquisition by freedmen, the failure of most civil rights legislation, Supreme Court decisions that reinforced racist policies, and a lack of adequate schooling for freed slaves and their children. While this era also saw an increase in racial violence in the South, the life of northern blacks was so poor that southern blacks were essentially trapped.

Part Six takes on the issue of cotton production after the war, particularly the expansion of cotton and the rise of sharecropping. The state of postwar southern financial markets and the unique financing needs of cotton together served to severely constrain the economic advancement of freedmen. Dattel presents sharecropping as inevitable: ?With cotton production as the goal, sharecropping was a predictable outcome? (p. 331). He presents the tale of Mound Bayou, an all black town in Mississippi, to illustrate this point. Mound Bayou was both owned and controlled by blacks. Despite some initial success, it eventually succumbed to the vagaries of King Cotton and a lack of financial infrastructure and provides us with an ?abject lesson in the futility of black economic hopes after the Civil War? (p. 341). Both part six and cotton?s hold on African-Americans concluded with the rise of the mechanical cotton picker. This technology ended the need for black labor in the cotton fields.

Dattel?s choice to conclude with a technological innovation fits well with one of his underlying themes: history is largely shaped by technology and finance. As Dattel argues in the introduction, ?the slaveholder and the slave before the Civil War, and the plantation owner and the sharecropper afterwards, were all ? each in his own way –pawns in the hands of finance? (p. xi). Shortly thereafter he returns to this general theme when arguing that, ?the cotton boom was a perfect example of how machines and technology control human destiny? (p. 30). Dattel tends to treat both finance and technology as exogenous, and then argues that fates of both African-Americans and the South were ?foreordained? (p. 312) given the financial system and state of technological progress. Although insight can be gained from this approach, I think this ultimately fatalistic viewpoint of the past introduces two weaknesses into Dattel?s analysis. First, despite the repeated emphasis on finance and technology, an important set of questions remains unaddressed. Why did the financial system and technology evolve as they did? Were they, too, foreordained given some initial conditions? Or could government policy have influenced their organization and, ultimately, the status of African-Americans? A second, related issue concerns public policy. Dattel seems to leave little role for government programs, legislation, or institutions to influence the economic status of former slaves and their descendents. Despite a brief mention of current issues facing African-Americans on the closing pages, the potential role of government policy today remains unclear. Could anything mitigate racial disparities today? Or does finance and technology still trump all?

Melinda Miller is an assistant professor of economics at the U.S. Naval Academy. Her research focuses on slavery, emancipation, and racial inequality. She can be reached at mmiller@usna.edu.

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