Face Value: The Entwined Histories of Money and Race in America

Face Value: The Entwined Histories of Money and Race in America

by Michael O'Malley

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From colonial history to the present, Americans have passionately, even violently, debated the nature and the character of money. They have painted it and sung songs about it, organized political parties around it, and imprinted it with the name of God—all the while wondering: is money a symbol of the value of human work and creativity, or a symbol of some

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From colonial history to the present, Americans have passionately, even violently, debated the nature and the character of money. They have painted it and sung songs about it, organized political parties around it, and imprinted it with the name of God—all the while wondering: is money a symbol of the value of human work and creativity, or a symbol of some natural, intrinsic value?

In Face Value, Michael O’Malley provides a deep history and a penetrating analysis of American thinking about money and the ways that this ambivalence unexpectedly intertwines with race. Like race, money is bound up in questions of identity and worth, each a kind of shorthand for the different values of two similar things. O’Malley illuminates how these two socially constructed hierarchies are deeply rooted in American anxieties about authenticity and difference.

In this compelling work of cultural history, O’Malley interprets a stunning array of historical sources to evaluate the comingling of ideas about monetary value and social distinctions. More than just a history, Face Value offers us a new way of thinking about the present culture of coded racism, gold fetishism, and economic uncertainty.

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Editorial Reviews

Adam Rothman
"Michael O’Malley’s witty, insightful Face Value traces the American quest for a stable source of value in a society that prized freedom.Through deft analysis of a wide range of sources, O'Malley shows that arguments over money and arguments over race have had much in common, and indeed, have often intersected in the United States in surprising and disturbing ways—even now. Most important is O’Malley’s contention that the monetary chaos of the nineteenth century, which has bewildered so many students of American history, turned whiteness into a crucial sign of individual worth."

Scott A. Sandage
“This is a ‘big idea’ book that no one but Michael O’Malley could even have thought of—much less pulled off with such nuance and clarity. From the wampum that sustained the Pilgrims to the gold fever that accompanied the Obama presidency, this swift-moving, plain-talking book explains how ‘the money question’ and ‘the race question’ are really two sides of the same coin. Grounded in smartly told stories about fascinating historical characters, and written in a conversational style that is wry but never cynical, Face Value is worth its weight in ideas.”
Benjamin Reiss
 “O’Malley’s new book is a magnificent piece of scholarship on a topic that is at once timely and surprising. O’Malley shows our twin national obsessions—money and race—dancing together across economic policy reports, the pages of literary fiction, the stage, the screen, and the airwaves. I recommend this book wholeheartedly.”
Stephen Mihm
Face Value is a provocative, imaginative, and gracefully written work of cultural history, one that unearths hitherto unimagined connections between markets, money, and race. In the process, Michael O’Malley manages to show how currency, which historians and economists too often treat as timeless and neutral, has for centuries been entangled with the institution and legacy of American slavery.”

Journal of Social History
Face Value extends a powerful tradition of resisting the reduction of economic life to material interest. Stripped of the initial article’s telling invocation of Foucault’s The Order of Things, O’Malley’s long-awaited monograph aspires to do more than explore resemblances between historical discourses.”

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University of Chicago Press
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New Edition
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5.90(w) x 8.90(h) x 0.80(d)

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Face Value

The Entwined Histories of Money and Race in America


Copyright © 2012 The University of Chicago
All right reserved.

ISBN: 978-0-226-62937-7

Chapter One

This New Black Flesh Coin

I was brought on board by one Robertson Mumford, steward of said vessel, for four gallons of rum, and a piece of calico, and called VENTURE, on account of his having purchased me with his own private venture. Thus I came by my name.

Circumstances forced Colonial Americans to rethink money. Trained to regard money as gold or silver, something with a fixed, natural value, they responded to the lack of gold or silver in North America by inventing new forms of money. These new forms depended on social agreement, not natural value: they emphasized the infinite potential of labor rather than the finite stock of material goods, and so paper money upset the idea of "natural" class distinctions. In these same years, Americans adopted racial slavery, a system based on the idea of natural, intrinsic difference but at the same time deeply enmeshed in market exchange and negotiation. Like the idea of gold's intrinsic value, the supposedly non-negotiable racial difference of Africans stabilized value in exchange: as the idea of intrinsic class difference declined, Americans built a financial system in which racial value anchored monetary value. Americans resorted to racial slavery partly because they lacked a "natural" standard of value and character in commerce.

* * *

Slave narratives often include a moment when the slave considers buying his or her own freedom. The moment always stands out as pivotal. Sometimes the slave rejects the possibility altogether, because buying oneself legitimizes slavery's principles. Sometimes the moment comes with relief, tempered by necessity; sometimes it comes with elaborate details of the negotiation.

This moment of potential sale dramatizes several interesting problems, most notably the fairly obvious point that if the slave can earn the value of his or her redemption, then the slave must have a value beyond that price—bringing the master cash for one's redemption only advertises one's continuing value as a slave. But if the slave can earn more than his or her purchase price, then the slave has no fixed value, which undermines the central premise of racial slavery, the black person's natural, fixed state of inferiority and lesser value. The slave at that moment is in effect worth more than he or she is worth, and in fact the moment of self-purchase implies that this would always be so: what if the master doubled the redemption price, and the slave met it? Of course the master must balance the utility of cash in hand against potential future value; the same considerations that would apply with, for example, houses or stocks or cows. Except cows do not come with cash in hand asking to buy themselves; nor are they keenly aware of the ironies of their situation.

Olaudah Equiano had a Quaker master, merchant Robert King, who had promised Equiano he could one day buy his own freedom. In 1766, after much hard work, Equiano took the forty pounds he had earned trading on the side and humbly asked King if he could redeem himself. This speech seemed to confound King, Equiano recalled; "he began to recoil: and my heart that instant sunk within me." His master asks, "Why, where did you get the money? Have you got forty pounds sterling?" "Yes, sir," Equiano answers, with justifiable pride, he had got the money by honest thriving industry. "On which my master replied, I got money much faster than he did; and said he would not have made me the promise he did if he had thought I should have got money so soon."

Confounding indeed—a slave who can so quickly earn his own purchase price is always already more valuable than the price itself; the very act of earning the purchase price demonstrates the price's inadequacy as a mark of value. Equiano's request raised a set of questions about the difference between the slave's value as a good, a commodity, versus the slave's potential to generate value beyond the selling price. The passage initiates what would later become a central part of antislavery debate, the comparative economic value of slave and free labor. Was he worth more as a slave or as a free man?

Equiano had wisely brought a friend with him, who points out to King that "[Olaudah] has earned you more than an hundred a-year, and he will still save you money, as he will not leave you—Come, Robert, take the money." The master relents, to Equiano's joy. In this account the promise of wage labor trumps the value of slave-owning; King will get the pounds sterling now and a promise of continued profits in the future. Equiano's narrative points quite deliberately to the logic of the "free market" and to the way wage labor will eventually replace slavery. It also shows two ways of understanding the self—the self as a fixed quality, an essential value, and the self as a bundle of endless future potential, literally "priceless."

As a slave Equiano had a more or less fixed value, a price, and that price depended on and from his body—its strength and health but also fundamentally, in the slave market, on its blackness, its "race." But he also had the potential to earn more value than his price, a market potential limited only by his own energy and ambition, and in this light his race is irrelevant: indeed, his master sees clearly that Equiano is worth more—"gets money faster"—than King himself. Caught between boundless potential and fixed, essential value, between speculation and the bottom line, Equiano literally embodies both. This contradictory position is crucial to understanding the peculiar character of American racial slavery and its relation to the colonial economy.

* * *

Why slavery? Well before the American Revolution, Europeans could see the economic inefficiencies in slave labor. Widely attributed to Adam Smith, the notion that slaves worked less efficiently "was commonplace in eighteenth century Britain." So "why would Europeans revive slavery [at a time] when the institution had disappeared from large parts of Europe?" They had other forms of unfree labor to choose from—mostly indentured servitude and apprenticeship—which worked quite well. Cheaper than slaves, indentured men or women had some incentive to work hard knowing freedom lay at the end of the indenture term. Colonial North Americans eagerly extracted as much labor as they could from indentured servants, who they often treated quite badly. Up to the moment of the American Revolution, ads for runaway indentured servants filled the Pennsylvania Gazette. Why resort to slavery? We do quite well today without it; indeed, the example from Equiano's narrative, quoted above, shows a clear awareness, in 1766, of wage labor's superiority to slavery as a money-making proposition.

And why racial slavery? Colonial Americans were more than happy to treat indentured servants badly, as disposable inferiors, because they had entrenched traditions of class and rank to draw on. When advertising for runaway indentured servants in the Pennsylvania Gazette, owners often showed little interest in the difference between white and black, so long as they got their labor back. Why did they need the elaborate and creaky intellectual apparatus of race?

For though it worked and still works with pernicious efficiency, "race" was and is a hard idea to maintain. Common sense, in the form of people of mixed race, and in the form of slaves capable, like Equiano, of doing virtually any kind of work, kept pointing out the failures of racism's most basic premises; its boundaries, like sandbanks in a rising current, needed constant shoring up. There was unfree labor available, in reasonably plentiful supply, without the idea of race. And there was work for wages, again with no need for "race" as a justification. Why bother with racial slavery if the whole point is just extracting labor from people?

Presentism obviously informs the question, because slavery went away: not entirely, of course, but the modern reader lives in a world where racial slavery is almost unimaginable. Teachers struggle every semester to help students understand a worldview that made racial slavery not just possible but ubiquitous, because nowhere in the world today is the permanent hereditary enslavement of millions of people ever contemplated. It is now unacceptable on moral grounds, and it simply does not pay as well as hiring wage hands. Why resort to it?

Historians have offered many possible answers to these questions. Slavery had existed for centuries—better to ask "why not slavery?" Slavery could make the master and his nation a great deal of money. Slavery reinforced a rank-ordered view of the world. Slavery was possibly cheaper than indenture in the long term; racially based, hereditary slavery allowed for increases in wealth in the same way raising cattle did. And as a bonus, racial slavery allowed the ruling class to divide the working class. These are all good answers, but they overlook some of the oddities of slaves as goods, as market objects and market actors.

Historians generally explain racial slavery in the U.S. either with economic arguments, in which slavery appears to have economic advantages to the ruling class, or with ideological arguments, in which a supposed predisposition to racism leads English people to treat Africans as less than human, even in the face of economic rationality. I would like to propose another answer, an answer that combines the economic and the ideological.

Americans resorted to racial slavery, and resorted to it with particular enthusiasm, because racial slavery recapitulated the assumptions and tensions underlying free market exchange itself. The slave had a generative, speculative potential to make wealth, like money loaned on credit, like paper bills circulating on faith, but also a fixed character that could never be negotiated away or altered, like the value embodied in gold bars. Slaves literally embodied the contradictory desires at the heart of capitalism; they were like money, and like money they were founded in irrationality and paradox.

Racial slavery turned people into property by imagining a "bottom line" of identity, a place at which negotiation stopped. "Blackness" served as a non-negotiable difference, the thing that marked Africans as enslavable; it marked them as different, and different in a way set by nature and not subject to human reconsideration. But as a resolutely commercial enterprise slavery put the enslaved at the forefront of commercial negotiation—as objects for sale, as producers of value, and as targets of sexual opportunity and genetic exchange. Racial slavery was a product of capitalism, but not just of capitalism's desire for profit or its need for a tractable labor force. Racial slavery helped ease the transition from mercantilism, with its essentialized notions of wealth, to modern capitalism, with its more subjective, virtualized sense of wealth and value. Racial slavery re-presented the dilemmas and attractions of exchange itself, and particularly it re-presented the problem and potential of money.

In the spring of 1766, Olaudah Equiano journeyed to Charlestown, South Carolina, to earn the money he would use to buy his freedom. Robert King of Monserrat, his master, traded at sea; Equiano had brought sundry goods with him from Monserrat, hoping to find time to trade on his own. He found Charlestown "illuminated" by bonfires, ringing with the sound of weapons fire, cheering, and multiple "other demonstrations of joy shewn." England had just repealed the hated Stamp Act.

The Stamp Act, passed in 1765, required that colonists pay a modest tax on a wide range of goods. Taxed goods would bear the Crown's "stamp." England hoped the tax would recover some of the high cost of quartering troops in North America, especially the costs associated with Indian war.

The measure outraged colonists for two main reasons. First, it marked an example of taxation without representation. Second, it continued a long history of England's attempts to hinder colonial commerce by controlling the money supply. The Crown required payment of "stamp" taxes in "specie," meaning gold or silver coin. Benjamin Franklin, then serving in England as agent for Pennsylvania, argued forcefully that the measure would bleed money from the colonies, bringing commerce to a halt and choking enterprise. The violent opposition the act inspired startled English observers, but the colonial economy had always operated in strange ways.

* * *

Had the first colonists found gold in North America events might have turned out very differently. But all the gold lay buried far to the south and west, and so while the Spanish mined or stole mineral wealth from Central and South America, English colonists scratched around looking for ways to make money—literally. The original colonists, north and south, had energy and ambition. They just claimed to have no money to conduct commerce with.

Just as we could call nearly all the European settlers simply "Christian," by ignoring the often-violent differences between their different Christian beliefs, so in economic thinking we might generalize and call the English colonists "mercantilists." The word "mercantilism" could have many shades of meaning. It generally revolved around questions of international trade, and how one nation prospered and another failed. For our purposes we can concentrate on one general assumption: for mercantilists, real wealth was finite.

"Wealth" consisted of tangible physical goods, especially land and precious metals. An industrious people could turn gold or other useful commodities into ships, then use the ships to get more gold or silver or other commodities, and thereby grow wealthier. But it cost real money to build ships, so financing the ships' construction depended ultimately on gold or silver, or on land that could produce other material assets, like timber or wheat, which artisans could turn into a ship or into goods traded for gold. The world contained only so much gold or silver, only so much fertile land; only so much "real wealth," according to mercantilism. The Stamp Act reflected this philosophy—it required colonists to pay taxes and other bills to the English government in specie, so that gold would flow from the colonies to London. Nations prospered, mercantilism argued, only by taking some of this finite material wealth from other nations or regions.

This might seem like simple common sense, but it gradually stopped making sense beginning sometime roughly in the eighteenth century, as the power of money and credit—capitalism—replaced mercantilist notions with new visions of wealth as something less tangible, something more like "standard of living." Who today believes in any natural limit to how rich a corporation can grow, for example? According to the most enthusiastic prophets of capitalism, the world can simply get richer and richer. Industry, making vast quantities of goods amazingly cheaply, complicated the idea of wealth. So did the elaboration of forms of credit complicate what "wealth" means. Today, when we think about it at all, we probably tend to think "wealth" consists more in the fantastic products of human ingenuity, like digital devices or mortgage bonds or private equity firms, than it does in acres of timber or national gold reserves. Acres of timber, or bars of gold, are still good to have, but they are not the only measure of "real" wealth, as they had seemed to Anglo-American traders in 1700; those men had a much more literal notion of "wealth."

England hoped to prosper by getting gold from the New World—the world that had brought Olaudah Equiano, by a complex, tangled path, to Charlestown, South Carolina in 1766. Equiano's autobiography claims he was born in Benin around 1745, fell into African slavery and then, at age eleven, into the hands of English slave traders. He spent most of his life as a sailor; his extraordinary narrative describes a world of constant international mobility, from England to the Caribbean to the North American coast to the Arctic Circle. The ships Equiano served on carried a variety of goods, including slaves, back and forth between England, Africa, the Caribbean islands, and North and South America. Even then, forms of speculative credit were challenging mercantilist orthodoxy. Equiano's narrative gives vivid details of the horrors of slavery and sharp accounts of his own spiritual struggles with Calvinist Christianity. The narrative also, to a surprising extent, describes his economic activity, in one of those classic Protestant accounts in which the author's spiritual and financial progress mingle unembarrassed. Equiano managed, though careful trading, to buy his own freedom and eventually become a wealthy man. Indeed, Equiano's story is largely a story of "free" trade and exchange, its limits and its advantages. He spent his adult life trying to negotiate what marketplace freedom might mean.


Excerpted from Face Value by MICHAEL O'MALLEY Copyright © 2012 by The University of Chicago. Excerpted by permission of THE UNIVERSITY OF CHICAGO PRESS. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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