Debt and Dispossession: Racial Capitalism and African American Economic Life in Historical Perspective

Endorsed by the Business History Conference and the Labor and Working-Class History Association (LAWCHA)

Saturday, April 4, 2020, 3:00 PM - 4:30 PM

Type: Paper Session

Tags: African American; Business and Economy; Slavery


The intersections of racism and capitalism have re-emerged as a focal point of historical study. From the foundations of American capitalist development to the racial wealth gap, scholars have begun, with renewed interest, to plumb the archives in search of new ways to analyze why wealth inequality continues to persist in American society along racial lines. But, important questions remain. What does the history of American slavery and emancipation reveal about modern wealth inequality? More directly, what happens when we situate the history of modern capitalism within conversations about the lingering effects of bondage that continue to plague African-American communities? Scholars—from political scientists to economists and sociologists—have started to investigate these questions. However, there is more to be understood about how the history of slavery and freedom has influenced the current state of African-American economic life. This panel features scholars whose work sits at the intersection of race and capitalism. By shifting the conversation about economic inequality from the twentieth century to the nineteenth century and the period of legal slavery, members of this panel will consider the ways in which African Americans took advantage of, but were ultimately excluded from, full participation as economic agents in the promise of American financial prosperity.

Shennette Garrett-Scott will discuss the intersection of racial capitalism and gender by exploring the ways in which African American women’s labor fulfilled the demand for low-cost clothing during the Civil War and Reconstruction. She will show that elite Northern white women and members of the Freedman’s Bureau who promised to train and employ black women workers ensured that they would never succeed economically as earners. Garrett-Scott will investigate the economic challenges under which African-American women emerged out of slavery in the nineteenth century.

Amanda Gibson will locate Elizabeth Keckley—the formerly enslaved dressmaker employed by Mary Todd Lincoln—within the history of credit, debt, and freedom in nineteenth-century America. She argues that credit served as a crucial tool for enslaved people to purchase their freedom. Moreover, free people of color believed that access to credit would protect them from the ubiquitous threat of re-enslavement. Gibson concludes that former bondspeople, like Keckley, relied on the promise of credit and the burden of debt to finance their escapes from bonded servitude.

Calvin Schermerhorn will reflect on one of the most enduring questions in the history of race and American capitalism: What is the relationship between the racial wealth gap and the vestiges of slavery? By considering the last 400 years of American history, Schermerhorn offers an audacious argument about the genesis of economic inequality. He contends that to fully understand how and why economic inequality hits African Americans disproportionately, we must understand the entire history of the American republic and the origins of modern American capitalism.

Ultimately, this panel will investigate how regimes that attempted to cripple the economic prospects of enslaved people and former slaves continued (and continues) to influence African Americans’ prosperity today.

Papers Presented

Disinherited, Dispossessed, and Decapitalized: The Limits of Black Wealth in America, 1619–2019

African Americans have one-tenth the income of white Americans fifty years after civil rights and 150 years after emancipation from slavery. This research contextualizes the 400-year history of the racial wealth gap in terms of structural changes and the development of modern capitalism. Black Americans have been subject to bundled disadvantages that arise from how capitalism developed: individual barriers or impediments fall, but new ones take their place. The bundle persists in large part because racism infuses the structures even as they transform them. In the colonial era, property in black people was foundational to white wealth creation and transfer. In the early United States, the Republic became a modern economy through the stolen labor and productive capacities of African-descended people. And many structural features of that black dispossession survived emancipation in 1865. Slavery exited the bundle but was replaced by convict leasing and debt peonage. In the twentieth century, black Americans were excluded from programs leading to economic security and middle class formation. High opportunity costs for black Americans became part of the bundle. And the tragedy of the last fifty years is that at precisely the moment Black Americans were poised to claim the economic entitlements that so many white Americans had seized, real wages stagnated as owners rather than workers profited from productivity gains. Escalators into the middle class slowed and stalled. The tragic irony of the racial wealth gap is that the roots of black inequality are the same as the roots of American wealth stratification generally.

Presented By
Calvin Schermerhorn, Arizona State University

Debt and the Promise of Freedom: Evidence from Slave Narratives on Credit Arrangements before Modern Banks

Elizabeth Keckley was immortalized for a new generation as the dressmaker and confidante to Mary Todd Lincoln in the 2012 film Lincoln. Keckley was born enslaved in Virginia and suffered the terrors inherent in the system before purchasing her freedom. Less well-known is that Keckley borrowed the money with which she broke the chains of slavery. Historians of the post–Civil War period have shown evidence for the exploitive nature of lending and the simultaneity of the importance of access to credit for African Americans after emancipation. This paper relies on slave narratives to show that these issues did not begin in the modern banking era. Credit was often fundamental to gaining freedom for those who were enslaved. For free people credit was a buffer against the threat of re-enslavement and the indignities of white supremacy. But the use of credit also made African Americans vulnerable to further exploitation. This research describes credit arrangements for African Americans asserting freedom in the eighteenth and nineteenth centuries before the rise of savings banks and lines of credit. Loans were between individuals with a pre-existing relationship and took several standard forms. Sometimes these credit arrangements resulted in draining precious little resources from an already-exploited population. Other times borrowers, such as Elizabeth Keckley, were able to take advantage of debt to get a toehold on freedom.

Presented By
Amanda White Gibson, College of William & Mary

Domesticating Racial Capitalism: Freedwomen and Industrial Sewing Schools, 1863–1872

The uncompromising metal of free labor ideology melded with the domestic economy to forge a new alloy—the industrial sewing school—in the crucible of capitalist transformations in the mid- to late-nineteenth-century United States. During the Civil War, military officials and Northern reformers expressed anxieties about putting freedwomen back to work and shaping their character as wage workers. Industrial sewing schools organized exclusively for black women and girls emerged as an early solution. Funded by Northern capital and philanthropy and led by elite, Northern white women, the schools were more factory than classroom. Black women and girls produced tons of clothes shipped around the country and sold at below-market rates in place of free clothing rations at Freedmen’s Stores and by Army Quartermasters where no stores existed. The schools proved very profitable, in no small part because black women seldom received their promised wages. White women superintendents and teachers, aid society officials, and Freedmen’s Bureau officials found it impossible to reconcile black women as free-market actors and womanly dependents. Industrial sewing schools gendered racial capitalism. The schools reinforced black women’s economic dependence and positioned white women as exemplars to degraded black womanhood. The schools ensured black women would never do well enough financially to challenge men as the legitimate providers for families and fitted black women for work for but not parity with whites, especially white women. The hierarchies of free-market relations, like those of the plantation household, quickly adapted themselves to the context of emancipation.

Presented By
Shennette Garrett-Scott, University of Mississippi

Session Participants

Chair and Commentator: Justene Hill Edwards, University of Virginia
Justene Hill Edwards is a scholar of African-American history, specializing in the history of slavery in the United States. She received her doctorate in History from Princeton University in 2015. She also holds an M.A. in African New World Studies from Florida International University and a B.A. in Spanish from Swarthmore College. Hill Edwards was a Consortium Fellow at the McNeil Center for Early American Studies at the University of Pennsylvania and a Quin Morton Teaching Fellow in Princeton University’s Writing Center. Her dissertation, “’Felonious Transactions: The Legal Culture and Business Practices of Slave Economies in South Carolina, 1787-1860,” was a finalist for the C. Vann Woodward Prize from the South Historical Association, a finalist for the SHEAR Dissertation Prize from the Society for Historians on the Early American Republic, and a finalist for the Herman E. Krooss Dissertation Prize from the Business History Conference. Her scholarship has been supported by the Program in American Studies at Princeton University, the Center for African American Studies at Princeton University, the Program in International and Regional Studies at Princeton University, and the College of Arts and Sciences at the University of Virginia.

Hill Edwards is finishing her first book, titled Black Markets: The Slaves’ Economy and Capitalist Enterprise in South Carolina (under contract with Columbia University Press, in the Columbia Series in the History of U.S. Capitalism). Black Markets is an innovative work that explores an overlooked aspect of the rise of American capitalism: slaves’ personal economic activities, or the slaves’ economy. The first book to center the slaves’ economy in the rapid growth of capitalist enterprise in the 18th and 19th century American South, Black Markets reveals the detrimental influence of capitalist innovation on slaves’ economic pursuits in South Carolina, the most pro-slavery state in America on the eve of the Civil War.

Presenter: Shennette Garrett-Scott, University of Mississippi
Shennette Garrett-Scott is a historian of gender, race, and business who focuses on black women in the financial industry. Her first book Banking on Freedom (forthcoming Fall 2018, Columbia University Press) is the first full-length history of finance capitalism that centers black women and the banking institutions and networks they built from the eve of the Civil War to the Great Depression. Black women played essential roles in black communities’ efforts to use finance to carve out possibilities within U.S. capitalism and society. As black women created, maintained, and used their own financial institutions and networks, they linked political demands, such as equal access to public accommodations, with other demands for reparative justice, such as access to credit, fair prices, and better housing. Black women’s complicated entanglements with U.S. finance reveal how race and gender mutually reinforce each other as categories of exclusion and difference—and inclusion and participation—in U.S. capitalism. Financial institutions and practices represented a terrain upon which black women worked out familial and community strategies to achieve economic and social justice under the Jim Crow system of racial apartheid—even as those same institutions and practices constrained their vision of what constituted justice.

Presenter: Amanda White Gibson, College of William & Mary
Amanda White Gibson is a doctoral candidate at the College of William and Mary where she is researching the credit market experiences of African Americans in antebellum Virginia. She holds graduate degrees from the College of William and Mary and the University of Delaware and an undergraduate degree from James Madison University.

Presenter: Calvin Schermerhorn, Arizona State University
Calvin Schermerhorn is Professor of History at Arizona State University, focusing on slavery, capitalism, and African American inequality. He teaches courses in US and global history and advises graduate and graduate students. He is currently the Associate Director for Undergraduate Studies in the School of Historical, Philosophical, and Religious Studies. His most book Unrequited Toil: A History of United States Slavery (Cambridge University Press, 2018) gives a thematic overview of African American slavery from the Revolution to Reconstruction with particular attention to the lives and perspectives of African Americans. He is the author of The Business of Slavery and the Rise of American Capitalism, 1815-1860 (Yale University Press, 2015), which was a finalist for the Harriet Tubman Prize awarded by the Lapidus and Schomburg Center for Research in Black Culture at the New York Public Library. Previous books include Money over Mastery, Family over Freedom: Slavery in the Antebellum Upper South (Johns Hopkins University Press, 2011) and a long-lost ex-slave autobiography by Henry Goings (c.1810-18??), Rambles of a Runaway from Southern Slavery, co-edited with Mike Plunkett and Edward Gaynor (University of Virignia Press, 2012).