Between Slavery and Capitalism
The Legacy of Emancipation in the American South
By Martin Ruef
PRINCETON UNIVERSITY PRESS Copyright © 2014 Princeton University Press
All rights reserved.
Institutional Transformation and Uncertainty
For many observers, the transformation of the South after the U.S. Civil War was one of the most dramatic institutional changes they had witnessed. As Mark Twain and Charles Warner wrote in The Gilded Age (1873), "The eight years in America from 1860 to 1868 uprooted institutions that were centuries old, changed the politics of a people, transformed the social life of half the country, and wrought so profoundly upon the entire national character that the influence cannot be measured short of two or three generations."1 Although the emancipation of former slaves and political upheavals of Radical Reconstruction are perhaps the most evident features of this institutional metamorphosis, it touched upon almost every aspect of Southern society, ranging from urban life to class structure to the organizations that populated the region's agriculture and industry.
The Civil War itself left the country in a shambles, with a human and financial toll that has few parallels in American history. When the war ended, in April 1865, roughly 750,000 men in the North and South were dead, representing the greatest number of American casualties in any military conflict. The direct economic cost of the war to the Union and Confederacy combined has been estimated conservatively at $6.6 billion, or one and a half times the gross domestic product of the United States in 1860.3 The institutional interventions of the immediate postwar period seemed to bear the fruits of these costs and casualties of war. Slavery and indentured servitude were abolished by the Thirteenth Amendment in 1865. Emancipation was soon accompanied by an unprecedented federal effort to transition four million black men, women, and children into freedom and to incorporate the American South more fully into the economic and political life of a nation. In the twenty-first century, when sectarian struggles and civil wars again rage in many parts of the world, the experiences of the postbellum United States would appear to hold valuable lessons for those facing the challenge of intervention and institution building in developing countries.
Despite the sheer scale of federal intervention in the South, however, its necessity and effect continue to be widely debated. A majority of scholars now agree that the institution of chattel slavery was not economically moribund at the eve of the Civil War, though some informed voices contend that the American political system was equipped to eradicate it peaceably and that the war was avoidable. Many others suggest that bondage persisted in the institutions of the postbellum era in subtle and not-so-subtle ways, including the convict leasing system, debt peonage, and the path dependence of black labor. Yet others have argued that the economic institutions of the antebellum South were not as different or inefficient as one might suspect. Among economic historians, the late Robert Fogel has advanced perhaps the most cogent argument for continuity between the essentially capitalist character of American slavery and the market institutions that we recognize today. Even considering the property rights that it granted in human life and labor, Fogel and his collaborators have argued that the antebellum South possessed "a flexible, highly developed form of capitalism."
Whether one emphasizes the advanced capitalism of the antebellum South or the rejection of free labor in the postbellum era, the conclusion with respect to institutional continuity remains the same: the effects of federal intervention in the South were superficial and, in many respects, temporary. With the departure of federal troops and the end of Reconstruction governments in the late 1870s, the region simply reverted to its old pattern of exploiting black labor and ensuring the dominance of the planter class. In lieu of transformation, this historical narrative thus highlights the path dependence of institutional arrangements in the late nineteenth-century South. Social scientists have often located the roots of such path dependence in the inertia afflicting organizations in preindustrial and industrial society, as well as in the durable inequality that results when old status distinctions—such as those between slaves and owners—are mapped to new ones—such as tenants and landlords.
By contrast, this book begins with the premise that postbellum transformation of the South's organizations and economy was profound and that, by many measures, the New South that resulted after Radical Reconstruction evidenced a more capitalist and market-driven society than its antebellum counterpart. As I will argue later in this chapter, support for this premise could be found in the spatial dispersion of financial institutions and capital in the Cotton South, in the extensive rating of Southern businesses for credit markets, in the transition from subsistence to commodity agriculture among small farmers, in the rise of urban economies in the interior of the region, and in the availability of laborers who could be hired at will or on short-term contracts. These changes did not always portend unambiguous improvements in the lives of Southerners, black or white. And, in many cases, they existed alongside the vestiges of institutions imported from the era of slavery, leading to contention and confusion around the logics guiding the economy of the New South.
A key component of this premise is that the transformation involved a transition and clash in economic institutions, not simply political ones. Many of the influential treatments of the postbellum era have offered "top-down" political histories, in which the actions of great men, feeble carpetbagger governments, and fickle coalitions contributed to the reversal of Radical Reconstruction. This reversal culminated in the alleged compromise between the presidential candidates Rutherford B. Hayes and Samuel Tilden in 1876, purportedly giving Hayes the presidency while relaxing the federal presence in the South. The emphasis on politics has led scholars to contend that Reconstruction was a failure—indeed, judged on the criterion of political inclusion of Southern blacks, that it was a unique failure in Western history. By contrast, the perspective offered here is one of "bottom-up" history, in which institutional transformation is reflected in thousands of economic transactions and trajectories among blacks and whites who were learning to navigate the shoals of a Southern economy that was transitioning between slavery and capitalism.
A second key premise of the book is that enduring uncertainty was a defining feature of this transition between precapitalist and capitalist institutions. As the historical sociologist Rebecca Emigh has pointed out, there has been an appropriate trend toward using "the plural forms 'transitions' and 'capitalisms' to emphasize their variability and complexity." The idiosyncrasies of the New South economy reflect many of the virtues of this nomenclature. It is not surprising, therefore, that some historians speak of "Reconstructions," while others acknowledge that the postbellum era merely offered "one kind of [economic] freedom" to emancipated blacks. These labels are not mere scholarly hedges, but reflect the contention and heterogeneous views of institutional transformation among Union authorities and ex-Confederates, freedpeople and planters, Redeemers and Scalawags, townsfolk and rural farmers.
Uncertainty goes beyond mere contention to reflect the difficulty that participants and observers have in making sense of a situation. It is understood, as Jens Beckert has pointed out, "as the character of situations in which agents cannot anticipate the outcome of a decision and cannot assign probabilities to the outcome." Attention to uncertainty has been understated in previous treatments of economic transitions between precapitalist and capitalist institutions, owing partially to disciplinary orientations. Among historians, there has been a tendency to document the factual features of Radical Reconstruction and the emergent New South using a retrospective lens. Among economists, the tendency has been to deploy precise models of individual or organizational productivity (or regional growth), eliding the tremendous ambiguity surrounding the folk models employed by historical participants. In a paper written half a century ago, the Canadian economist W. T. Easterbrook suggested that uncertainty could be "a possible key to the study of economic change," though the "categories of uncertainty" employed by economists and historians at the time were too restrictive to offer much leverage in the analysis of capitalist transitions. Easterbrook concluded, optimistically, that uncertainty might be "a unifying concept ... in working toward a systematic approach to long-run economic change" and he expected to "hear much more about [it] in the historical areas of economics and related disciplines."
In this book, I reflect on the uncertainty affecting historical participants—including former slaves, Freedmen Bureau agents, planters, merchants, and politicians—during the period of Reconstruction and ask how it continues to influence our understanding of this era. Following the Civil War, uncertainty was one of the most pervasive features of everyday life, leading to fundamental questions about the valuation of labor (How should emancipated slaves be reimbursed in wage contracts?), social stratification (What occupations and class positions would be available to blacks and whites in the postbellum South?), organizational arrangements (What forms of agricultural tenure could persist? To what extent would the antebellum system of merchandising be replaced?), and regional development (What paths to economic or demographic growth would be viable for postbellum communities?). By interpreting the economic changes associated with emancipation through the lens of uncertainty, social scientists can come closer to the lived experience of institutional transformation than they would exclusively with the certitude of facts that have been collected (or models that have been deployed) with historical hindsight.
To draw out the implications of these premises, the next two sections consider the concepts of uncertainty and economic transformation in more detail. I begin by formulating a general theory regarding the evolution of uncertainty over the course of institutional transformation, and then discuss the specific transitions toward capitalism that occurred in the economy of the U.S. South during the postbellum era. A concluding outline for the book connects those transitions back to the outcomes experienced by individuals, organizations, and communities in the aftermath of American slavery.
The Problem of Uncertainty
A distinctive feature of the sociological perspective on economic institutions and institutional change is its emphasis on uncertainty. While modern economics is well versed in analyzing situations of risk, where probabilities or payoffs can be assigned to outcomes even if those outcomes are indeterminate, the technical apparatus of economics is ill equipped to deal with contexts of uncertainty, where probabilities and payoffs cannot be assigned and actions can no longer be deduced from the preferences of agents. The problem of uncertainty is magnified in circumstances where economic institutions—the understandings, norms, routines, and governance structures that constrain economic action—are themselves in flux. Sociologists and heterodox economists have traditionally looked to institutions as "devices" that help coordinate economic action when markets are imperfect or the knowledge of market participants is incomplete. In the absence of these devices (i.e., under conditions of institutional change), individuals must reassemble elements of older traditions and organizational forms in order to confront uncertainty and find a new basis for social order.
The incorporation of uncertainty as a central element in explanations of institutional change carries several analytical advantages. One important insight comes from recent work on social fields, which may be conceptualized as institutionalized arenas in which individuals, organizations, social movements, and the state vie to influence one another and structure the rules and perceptions that govern behavior. Uncertainty in social fields is typically seen to be a result of destabilizing changes that are introduced exogenously. In the field of Southern agriculture after the Civil War, uncertainty arose due to new rules (e.g., the Thirteenth Amendment's ban on slavery and involuntary servitude), new types of actors (the Freedmen's Bureau), new relations among actors (the transition from paternalistic to arm's-length employer-worker relationships), and new meanings (such as the unusual connotation of "freedom" under Black Codes and other restrictions on Southern blacks). A simple view of uncertainty maintains that field participants experience it most intensively in the immediate aftermath of the introduction of such changes, which then gradually become taken-for-granted elements of daily life.
Recent perspectives on social fields offer a more nuanced view of uncertainty in the process of institutional change. In their Theory of Fields, Neil Fligstein and Doug McAdam argue that destabilizing changes, by themselves, do not automatically generate pervasive uncertainty. The critical question is what attributions are made to those changes by field participants (who may characterize them as threats or opportunities), how those attributions contribute to the mobilization of claims and resources, and whether that mobilization leads to forms of collective action that were previously prohibited or unthinkable. With these mechanisms, Fligstein and McAdam argue, we obtain the conditions for profound uncertainty following destabilizing institutional changes. Moreover, the "generalized sense of uncertainty and chaos" feeds back into contention among field participants, contributing to escalating—not decreasing—uncertainty as time following the initial destabilizing changes passes.
Two historical examples of reactions to Abraham Lincoln's Emancipation Proclamation help to illustrate the conditions under which we might expect to observe (or not observe) escalating uncertainty. Given that Lincoln issued the proclamation under his war powers on September 22, 1862, uncertainty about its constitutional validity and effects prevailed from the beginning. This uncertainty was augmented because it applied to people of color, whose political and citizenship status in the United States—even considered outside the context of slavery—had been stripped by the Supreme Court's Dred Scott ruling six years earlier. Among white abolitionists, the vagaries surrounding the Emancipation Proclamation meant that it could be celebrated more for its symbolism than as an opportunity. Lincoln's efforts to mobilize support invoked two provisions that were widely criticized by the abolitionists. One, which became part of the proclamation, was the exclusion of Union-occupied territory and border states from the president's executive order. The other provision, which did not make it into the proclamation, was Lincoln's advocacy for compensated emancipation, in which slaveholders would be remunerated for the loss of human property that they would incur. The result was a document that was treated as decidedly equivocal by abolitionists, both in its content and in Lincoln's intent. As the leading abolitionist William Lloyd Garrison quipped, the president could "do nothing for freedom in a direct manner, but only by circumlocution and delay." Given the initial uncertainty generated by the document, many abolitionists were disappointed and treated it as a preservation of the status quo.
The reception of the Emancipation Proclamation among Union military officials and black "contrabands" fleeing enslavement was more spirited. Lincoln's executive order contained a key provision allowing for "such [slaves] of suitable condition [to be] received into the armed service of the United States." Northern military authorities seized upon it as an opportunity for efforts, already under way, to mobilize former slaves for the Union army. Fugitive slaves, viewing it as a path toward freedom and a certain form of citizenship rights, initiated an exodus toward Union lines. In reaction, other actors highlighted the threats from Lincoln's executive order. This included not only Southern slaveholders, but also Northern politicians who emphasized the "Negro Influx Question" in the state and congressional elections held between the preliminary proclamation and the executive order issued on January 1, 1863. As the Union military characterized Lincoln's declaration as an instrument of war, slaves near Union lines characterized it as an opportunity, Southerners underscored the legal threat to their property rights, and some elements of the Northern public raised the specter of black immigration, uncertainty around the effects of the proclamation grew. The more military authorities sought to enlist the assistance of fugitive slaves, the more they attracted dependent families and freedpeople who would not be able to offer military service or support; the more they sought to regulate the behavior of former slaves and relocate some blacks North from the battle lines, the more they undermined the political impetus behind the military effort. As a result of this potentially vicious circle, the Emancipation Proclamation was no longer the tepid symbolic statement lamented by some abolitionists, but a contingency that could dictate the course and political support for the entire war. (Continues...)
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