Blood in the Bank: Hidden Profits of American Slavery and the Call for Reparations

By Youhanna Haddad

During the 2020 Democratic presidential primaries, Senator Bernie Sanders declined to support reparations. He instead proposed instituting programs to help “distressed communities” in general, believing this indirect approach to compensation to be superior. “There are better ways to [repay blacks] than just writing… a check,” Sanders insisted.

But the patchwork of social-democratic reforms that comprised the Senator’s presidential platform are wholly insufficient to this task. To see why, we must scientifically analyze the role chattel slavery played in the construction of the United States. Doing this leads us to an obvious and inescapable conclusion. As Karl Marx himself observed, “Cause slavery to disappear and you will have wiped America off the map of nations.”

Origins of Bondage

In what is now the United States, chattel slavery developed primarily to produce agricultural commodities. Europeans constructed race to justify the creation of a class in permanent bondage, forced to work the vast estates they’d amassed through genocide of the indigenous population. Millions of slaves kidnapped and transported to the New World harvested cash crops like cotton, coffee, sugarcane, and tobacco. They did so, of course, under unimaginably toilsome and oppressive conditions. Sugarcane production, for example, entailed such dangerous conditions that deaths among slaves outnumbered births. Slaves were forced to produce sugar until their health crumbled, necessitating constant importation of additional slaves to keep plantations profitable. 

The need for labor pervaded the colonial economy. Even large portions of white immigrants came to address this demand through the system of indentured servitude. Nearly half of European immigrants arriving in the colonies came in this manner. Upon arrival, they began a stint of hard and often degrading labor for paltry wages. However, within several years of starting their contracts, these servants would become free citizens. They were then entitled to “freedom dues” from their masters, which typically included land or money. Despite the unsavory terms of the contract, servitude was largely an opportunity for Europeans seeking access to land and wealth unavailable in their homelands. Their contracts allowed them to become settlers without needing capital as a prerequisite.

Despite the exploitative character of indentured servitude, it is utterly incomparable to chattel slavery. Only the former included an element of voluntariness, and the chance to improve one’s economic situation. Indentured servants typically chose to sign their rights away. Of course, this was often done under coercive conditions. Nevertheless, indentured servants had opportunities that slaves were never granted. And the option to leave for the New World is one servants would have only chosen if they believed their life would improve in the colonies. Marxist historian Christopher Hill alludes to this in his 1967 book Reformation to Industrial Revolution:

“For many of the early settlers servitude was a temporary phase through which one worked one’s way from freedom to land-ownership.”

Indeed, many emancipated servants would go on to join the ranks of the rich and powerful. In 1629, for example, nearly 17% of members in “Virginia’s House of Burgesses [were] former indentured servant[s].” This mobility led Marx to remark that classes in early America “continually change[d] and interchange[d] their elements in constant flux.”

The ability to ascend economically, however, was enjoyed almost exclusively by whites. Conversely, Africans in the New World faced maximal exploitation, generation after generation. Aside from limited exceptions, until 1865, they could not escape enslavement and subsequently died in shackles. Europeans benefiting from this racial caste system were well aware of its titanic productive capacity. As British merchant Malachy Postlethwayt noted in 1745…

Is it not notorious to the whole World, that the Business of Planting in our British colonies, as well as in the French, is carried on by the Labour of Negroes, imported thither from Africa? Are we not indebted to those valuable People, the Africans for our Sugars, Tobaccoes, Rice, Rum, and all other Plantation Produce?”

Calculating the Theft

Scholars have spilled a lot of ink trying to estimate the dollar value of labor stolen from black slaves. Considering the breadth of industries involved, and the interconnected nature of markets, such a figure is exceedingly difficult to calculate. However, by summing the hours of labor performed by American slaves, policy scholar Thomas Craemer produced an estimate. He concluded that “the present value of U.S. slave labor… ranges from $5.9 to $14.2 trillion.” in 2009 dollars. Adjusted for 13 years of inflation, the range is $8.2 to $19.6 trillion in today’s money. The upper limit of Craemer’s estimate is therefore roughly equivalent to America’s entire gross domestic product!

If we utilize Craemer’s upper limit and think that black Americans today should be compensated for the value of their ancestors’ labor, they’re each owed a whopping $467,000. Even the lower limit still comes in at around $195,000. And this by no means covers all of the profits derived from the institution of slavery.

Banks, for example, lent vast sums of money to productive plantations and profited off the interest. The shipping industry got rich from building and selling slave ships. Insurance corporations grew wealthy from insuring the shipments of slaves and the products of slave labor. Furthermore, the explosion of the textile industry was facilitated by the abundant supply of cotton picked by slaves. Great Britain was considered the titan of textiles in the early industrial period with over half of British cotton imports produced from American slave labor.

We must recognize the variety of ways in which capitalist development benefited from chattel slavery. Ignoring them suppresses proper academic investigation of questions pertinent to racial justice. The colonial project as we know it would’ve been impossible without the forced labor of millions of African slaves. And that has strategic implications for how society should try to rectify the historical and ongoing oppression of black people.

 

Ramifications of Ignorance

Particularly since the deaths of Malcom X and Martin Luther King Jr., the American political establishment has tried to co-opt the black liberation struggle. Every February, school children are taught that black leaders look down from heaven with approval at a nation that never went beyond piecemeal reforms to address gross historical injustices. This mischaracterization of the black liberation struggle and its leaders is only possible due to misunderstanding the function of slavery. From Bernie Sanders to Mitch McConnell, American politicians do not wish to see the reappropriation of stolen wealth to black people. To do so would acknowledge the incredible economic benefit slavery provided to the nation and, more importantly, force the beneficiaries to pay compensation.

In essence, the effort to downplay the role of slavery in American development is a matter of legitimacy to the United States regime. Obscuring the role of slavery in American development allows liberals to falsely assert that “liberal-democratic values” are the root of American exceptionalism. This erroneously whitewashes history with the self-congratulatory implication that European ideologies, rather than African labor and Native land, built the world’s most successful empire. In order to eradicate capitalist pseudo-history from the realm of fact, we need to tirelessly examine how exploitation is the real engine of growth in capitalist development.

While reparations alone would not end global capitalism, it is always necessary and beneficial to explore the economic contributions of every exploited group. The unrecognized domestic labor of women, the wage slavery in factories of the Global South, the historical theft of trillions of dollars in assets from the Global South — this is the hidden life force of capitalist states. Without recognizing these contributions, it is impossible to materially analyze history to the benefit of the masses.

In our mission to end capitalism, the vast majority of our allies are the highly exploited masses of Africa and Asia. Their exploitation is still financed through the reinvested wealth created by African slaves. Connecting these struggles is an essential prerequisite to building the durable, international, class solidarity of the colored masses needed to end capitalism once and for all.