The development of core capitalism in the antebellum United
States: tariff politics and class struggle in an upwardly mobile semiperiphery
Christopher
Chase-Dunn
in Albert J. Bergesen (ed.) Studies of the Modern World-System.
New York: Academic
Press, 1980
In
the context of an expanding and deepening capitalist world-economy,
"national development" can be understood as upward mobility in the
hierarchical division of labor between the core and the periphery. Most areas
that are incorporated into the expanding world-economy become organized as
peripheries and are unable to escape this position. The process of
peripheralization, or as Andre Gunder Frank calls it, the "development of
underdevelopment," reproduces the structures that perpetuate peripheral
capitalism and block the emergence of core capitalism. Occasionally, however, a
nation is able to overcome the forces of peripheralization and develop core
activities by which it reorganizes its relationship to the larger
world-economy.
In
the late sixteenth and early seventeenth centuries, core capitalist
manufacturers and farmers in semiperipheral England were able to recapture the
home market from core producers in the United Provinces. This was the beginning
of England's long rise to world hegemony culminating in the nineteenth century.
Similarly, shipbuilders and merchants of New England and the middle colonies in
the eighteenth century were able to begin the process of capital accumulation
in types of production that allowed them to compete with producers of core
products in England. The later rise of the United States to core status and
world hegemony stems from these developments.
This
chapter summarizes recent work, which reinterprets the original successes of
the New England merchants and shipbuilders from the world system perspective,
but its main task is to investigate the struggles in the antebellum period
(1815-1860), which allowed U.S. core producers to expand and attain political
hegemony in the Federal state. It is the story of core production and how the
controllers of core production struggle for sufficient state power to realize
their coreness over the long haul. The particular focus of this investigation
is the politics of the import tariff. Tariff politics are one reflection the
class forces that were contending for state power in the antebellum period.
Domestic core producers seeking to compete with British products in the home
market needed tariff protection. Peripheral producers (exporting raw materials
to England and importing manufactured goods) opposed tariffs because they
raised the price of the imports and because they feared British retaliation.
Thus, the conflict that eventually led to the Civil War was not
"sectional" except insofar as geography contributed to the emergence
of classes that had contradictory interests vis á vis the world-economy.1
This class struggle between core capitalists and peripheral capitalists
within the United States is the focus of this paper. The problematic here is
not, then, the emergence of core activities, but rather their survival. The
establishment of shipbuilding firms and textile factories in New England did
not inexorably lead to the rise and triumph of core capitalism, but rather the
forces of peripheral capitalism and competing interests in England constantly
challenged the very survival of these core producers.
Definitions
of Core and Peripheral Types of Production
Immanuel
Wallerstein's world-system perspective involves a reinterpretation of the
nature of capitalism. For Wallerstein, the capitalist system is constituted by
an economic division of labor between core areas and peripheral areas. The
political side of capitalism is the institution of unequal and competing
nation-states which political scientists call the "international system."
The capitalist world-economy has expanded and deepened since its emergence in
Europe in the long sixteenth century, but its basic nature has not changed
(Chase-Dunn and Rubinson, 1977).
Core
areas of the system are areas where core types of production are most
concentrated. Peripheral areas are areas where peripheral production is most
concentrated. At the most analytic level, core activities are those types of
production that employ relatively capital-intensive techniques and
utilize skilled,
highly paid labor. Peripheral activities are those types of production that use
relatively labor-intensive techniques and employ coerced, low-wage labor. At a
less abstract level, we can usually identify core production as the production
of highly processed goods. But this is not always the
case. As Arghiri
Emmanuel (1972) has pointed out, textile manufacturing, a key core activity in
the nineteenth century, has become a peripheral activity in the twentieth
century relative to the capital-intensive production currently occurring in
core. Similarly, peripheral activities cannot always be identified in terms of
the production of raw materials. Wheat production in the twentieth-century
United States is more capital intensive than much manufacturing activity
occurring in the contemporary periphery.
Peripheral
production often creates a class of merchants in the periphery who exchange
peripheral products for core imports. These merchants align themselves with the
political interests of peripheral producers and the core areas for which they
are producing. Thus, they often oppose the development of domestic core
activities that would threaten their import-export business. These mediators of
the core-periphery exchange occasionally have reason to support the development
of core activities in peripheral areas, however. These exceptions are worthy of
attention, especially in the case under investigation.
Wallerstein
(1978) argues that there are no semiperipheral activities as such, but rather
there are semiperipheral states that incorporate within their boundaries a
relatively equal mix of core and peripheral types of production. Upwardly
mobile semiperipheral states are ones in which core producers are in the
ascendance, while downwardly mobile semiperipheral states are dominated by
peripheral producers or former core producers who were pushed out of the world
market. The state in the semiperiphery is more crucial than in core or
peripheral areas, and class struggle for the control of
the state is intense
because of the very contradictory interests of the core producers and
peripheral producers.
The
conceptualization of classes utilized in this study focuses on production
relations that are both national and worldwide. Arghiri Emmanuel's (1972)
theory of unequal exchange provides a basis for understanding world classes
that is grounded in the production and distribution of surplus
value. This theory
implies that wage differentials beyond differences in productivity create
unequal exchange between core states and peripheral areas of the world economy,
and that this affects the interests of classes. Nicos Poulantzas (1975) has
argued that class position is determined not only by
the relationship
between the direct producer and his or her immediate overseer, but also by the
political, legal, organizational, and ideological structures in which each
producer is located. The state, then, is a major constituent of production
relations, and, in the world-economy, one's relationship
to states (foreign
and domestic)" is an important determinant of class position. I would
argue that the wage differentials, which cause unequal exchange, are a
consequence of class struggle and political processes that are not exogenous to
capitalist development, but are rather an integral part of it.
The
Origins of Core Capitalism in North America
From
the world-system point of view, one of the main effects of the capital
accumulation process is to reproduce the core-periphery division of labor
through unequal development. The mechanisms by which the "development of underdevelopment"
occurs have been studied in operation in Eastern Europe, Latin America, Asia,
and Africa. Yet some areas have managed to escape the process of
peripheralization.2 Although a general
explanation for these exceptions has not yet been formulated, there are case
studies that form the basis for a theoretical understanding.3
A
great deal has been written about the development of capitalism in North
America, and much of this has had an implicitly comparative perspective. It has
been asserted that the protestant ethic of the Puritans inclined them toward
thrift and investment, and that the democratic ideas of the Glorious Revolution
in England encouraged those bold embattled farmers to resist exploitation.
These ideas, it is held, led to the creation of a new society in which
individualism and competitive capitalism expanded unfettered by the feudal
remnants of the Old World. While it would be unwise to neglect the effects of
ideology, the world-systems perspective directs us to the institutional and
structural conditions under which such ideologies contribute to social
development. Not all Puritans, and not all English subjects, were able to
establish core industries in the late seventeenth and early eighteenth
centuries.
Karl
Marx understood that the colonists of North America did not arrive empty
handed. They brought with them a recipe for the creation of a purified form of
capitalism.
In
these colonies, and especially in those which produced only merchandise such as
to-
bacco,
cotton, sugar, etc. and not usual food stuffs, where, right from the start, the
colo-
nists
did not seek subsistence but set up a business. ...They did not act like the
Ger-
mans,
who settled Germany in order to make their home there, but like people who,
driven
by motives of bourgeois production, wanted to produce commodities, and
their
point
of view was, from the outset, determined not by the product but by the sale of
the
product
[Marx, 1863/1968:239; italics in the original].
Samir Amin (1976)
argues that "simple commodity production"4
was established in North America and allowed to develop unfettered by the
existence of feudal remnants which survived in European society But he
distinguishes between peripheral capitalism, which developed under the
influence of the
core, and the
proto-core capitalism, which developed independently of the core. Wallerstein
(1980) points out that the colonists of New England did not produce exports for
the core during the first 40 years of their existence. Instead, simple
commodity production developed without regard to the
core-periphery
division of labor.
Andre
Gunder Frank (1979) argues that it was the combination of a relatively
egalitarian distribution of land (with most farmers engaged in both subsistence
and commodity production) and the "benign neglect" of British
mercantile policy during the turmoil of the Glorious Revolution and
its aftermath that
allowed core capitalism to develop in New England. He contends that an agrarian
class structure composed mostly of yeomen is a necessary, but sufficient,
condition for the emergence of core capitalism. Other peripheral areas, such as
Costa Rica, the Spanish West Indies, Argentina, and Jamaica {before its
development as a sugar island} as well as Canada, had a yeomanry without
developing core industry.5 Such a
class structure provides the basis for the development of a diversified
domestic market for core commodities. This potential home market, however, does
not automatically lead to the development of core industries. In areas where
there is a strong colonial administration, industries that are potential
competitor with producers in the mother country are discouraged. In addition,
merchants mediating the core-periphery exchange often oppose the development of
domestic core industries.
Why
did this not happen in New England? Wallerstein {1980} argues that the key core
industry which developed in seventeenth century New England was the
shipbuilding industry and its associated fishing industry and carrying trade.
How and why was the shipbuilding industry able to develop in New England, and
why did it not develop elsewhere in the periphery? Wallerstein agrees with
Frank that part of the answer is benign neglect. The British were preoccupied
with political struggles at home; this prevented them from realizing their
mercantile grand plan to develop colonies that would enrich the mother country
.The wave of colonization, which started under the Tudors, developed with
little direct interference-or support.
In
the southern colonies and the British West Indies, soil and climate facilitated
the creation of classical peripheral capitalism using coerced labor {slaves} to
produce agricultural commodities for export to the core. But in the less
hospitable North, the production of staple exports was much less
profitable. In New
England, poor soil and climate were capable of sustaining only subsistence
production and production for the local market on small owner-worked farms.
Thus, the agrarian class structure of New England was characterized by a
relatively equal distribution of land tenure and
income. In the middle
colonies soil and climate were more favorable and larger farms produced cash
crops such as wheat, some of which was exported. With the exception of the
Hudson River valley,6 these farms were worked
by their owners and the distribution of land tenure was fairly equal. The
attempt by the Dutch West India Company to introduce slaves into agriculture in
New Amsterdam was thwarted by the greater demand for slaves from southern
planters. The slaves imported in the North were quickly sold to higher bidders
and reexported. Governor Stuyvesant's tax on the export of slaves was to no
avail. The economics of slavery favors a long growing season since the slaves
must be fed all year round. The great and owners of the Hudson Valley preferred
tenants who were responsible for their own subsistence through the winter.
The
upper South is another intermediate case. In the Chesapeake tidewater, natural
conditions favored the growing of tobacco. This was most efficiently done on
middle-sized plantations using small slave labor forces. These plantations were
smaller than the great agrarian enterprises producing indigo, rice, and sugar
further south, but larger than the farms of the middle colonies or New England.
The ruling class of the upper South was a larger percentage of the population
than in the deep South. There was also a large number of small owner-worked
farms growing tobacco in the upper South. The adoption of more republican and
less aristocratic political institutions in the upper South stems from this
(Greene, 1976). Thus, the God-given conditions of agronomy seem to have had
more effect on the class structure than the revealed knowledge of the Puritans
or the Catholic doctrine of Maryland. Soil and climate favorable to the
employment of slave labor would quickly have transformed Boston into
Charleston.
Stein
and Stein (1970) suggest that part of the success of the British colonies was
due to their extermination of indigenous populations and the creation of
culturally homogenous settlements in which the working classes were paid
relatively high wages. This argument confuses what Frank's treatment makes
clear. First, a yeoman-based, culturally homogenous class structure is
insufficient by itself and is not solely the product of British colonialism.
The less profitable (and more neglected) areas of the Spanish empire also
evolved such a class structure. Second, the British lost no time in importing
African slaves when they found conditions favorable to plantation agriculture.
Finally, British, Dutch, and French colonists in northern North America made
every effort to extract wealth from the indigenous peoples (seen most vividly
in the fur trade) but the less hierarchial indigenous social
organization of the
native North Americans rendered them particularly unsuitable as slaves or
serfs. As it was, New England had to fall back on one natural resource it had:
timber (Clark, 1916). The export of lumber was not as profitable, however, as
the building of ships with the lumber. The shipbuilding industry was stimulated
by the fishing industry and the opportunities for entering the carrying trade
among the colonies and between the core and the periphery.
Shepherd
and Walton (1972) have shown that the so-called "triangle trades" were
not usually carried on by individual shippers. Most shippers shuttled between
the northern colonies and England, while some traded with southern colonies and
the West Indies, and others sailed to Southern
Europe and Africa. As
Shepherd and Walton (1972) have stated
trades
involving two or more overseas areas, such as from the West Indies to Great
Britain and back to the colonies, were not typical. It is possible, of course,
to describe the
pattern
of international settlements as triangular or multilateral (for example, the
West
Indies
earned surpluses in their trade with Britain, the continental colonies earned
surpluses in their West Indies trade, and Britain earned surpluses in its
American trade) [p. 156].
By 1770, the negative
balance of trade of the American colonies with Britain
was largely
compensated by so-called "invisible exports" such as merchandising
and shipping services, and these incomes returned largely to the merchant
shippers of New England and New York. Thus, the merchant shippers accumulated
investment capital from their profitable mediation between the European core
and the American, West Indian, and African peripheries.
But
buying cheap and selling dear (merchant capitalism) does not in itself create
the basis of core production, and the merchants who mediate the exchange
between core and peripheral areas most often come to have a stake in the
exchange, leading them to resist changes in the division of labor.
For example, the
merchants of New England and New York often opposed tariff protection of
domestic core manufactures and sided with peripheral capitalists in the early
nineteenth century. What led the eighteenth century merchants of New England,
New York, and Philadelphia to invest their
profits in production
that would compete with core industries (e.g. shipbuilding) rather than invest
in peripheral production? And why were they allowed to do so ?
The
answer to the first question is that they had a comparative advantage in
shipbuilding and profits were high. Even though labor costs were higher than in
England, the low cost of raw materials encouraged New Englanders to build ships
for their own use and for export. Shepherd and Walton (1972:244) report that an
estimated 57% of the shipping tonnage built in the colonies during 1769-1771
was sold aboard.
But
why was this North American industry-and the complementary carrying trade and
fishing industry allowed to compete with similar producers from the mother
country? Competitive advantage in production (the ability, in this case to produce
ships more cheaply than others) is no guarantee that such production will be
allowed to develop, especially in a mercantile world of monopoly protection.
Shipbuilders, fishermen, and merchant mariners in England were undoubtedly
opposed to the competition from the colonies.
Benign
neglect was undoubtedly part of the answer. The political turmoil in England
and the rivalry between England and France allowed the emerging Yankees some
space. But it was also the eighteenth century upturn in the world-economy, and
especially the rapid increase in trade in the Atlantic economy, which
facilitated the emergence of core production in New England. In an expanding
economy the interests of consumers in buying cheaply come to outweigh the
interests of producers in maintaining monopoly, at least relative to periods of
contraction. The development of the shipbuilding industry and the ability of
the New England merchants to insert themselves into the core-periphery Atlantic
economy in a semiperipheral {intermediate) position allowed them to accumulate
capital rapidly and to expand their operations. The increased space for core
production was a
function of expansion
of the world economy as a whole.
This
explains why core production survived outside the previously core areas during
this period. But why did this development occur in New England as opposed to
elsewhere? Wallerstein suggests that it was to New England's benefit, relative
to other areas in the periphery, that it was a British colony. Britain was
uniquely Britain, but it was also the emerging hegemonic core power of the
world-economy and was experiencing a rapidly accelerating industrial
revolution. It was less important that the colonies inherited British cultural
and institutional characteristics {such as parliamentary democracy) than that
Britain had a unique location in the world economy. During the colonial period,
the British colonies had greater access to the most advanced technological
developments through information flows and immigration of skilled labor than
did the colonies of other core powers. After the War of Independence, the North
Americans were suspicious of, and resistant to, British attempts to influence
and control them. This is in contrast to the Latin American new nations, which
made
their anti-imperial
revolts with the aid of the British and in order to do business with them.
The
settler colonialism of the British-sending whole communities rather than only
overseers to direct the extraction of surplus from natives is due in part to
the racism of the English who, unlike the French, insisted on bringing their
women with them rather than marring daughters of the
local chiefs.7 Settler colonialism was also due to the
intensified commercialization of agriculture in Britain, which drove migrants
to the cities and to the colonies.
To
summarize, five factors contributed to the emergence of core activities in New
England: (a) the natural conditions of New England that discouraged peripheral
agriculture and encouraged the shipbuilding and maritime industries; (b) a
relatively egalitarian class structure; (c) the expansion
of the Atlantic
economy which created space for the emergence of the core producers and
lessened the resistance of those already engaged in these industries; (d) the
benign neglect of the British during the seventeenth and early eighteenth
centuries; and (e) the advantage of being a British colony
rather than a colony
of another core power.
The
Expansion of Core Capitalism in the Antebellum Period
We
have reviewed arguments about the original emergence of core activities in New
England arid the middle colonies. "Here we turn to the question of how
these activities were expanded and politically protected in the period between
1815 and 1860. The discussion will focus on the issue of
tariff politics. The
state is understood to be the main mechanism by which classes and alliances of
classes distort market forces in their own interest.8
From the world-systems point of view, this is not exogenous to the workings of
capitalism. The state system and the utilization of state structures by
competing and
conflicting classes in the world-economy are understood to be the political
side of capitalism. The arena of market competition is always larger than the
political domain of any single state, and so the differentiation between
economic and political institutions occurs at the level of the
whole system rather
than at the national level.
The
politics of import duties reflects the struggle between classes that have
different interests in relation to the larger world economy. This does not
imply that these interests are perfectly reflected, or that individuals always
know their own economic interests. As Marx pointed out, politics
often reveals only a
shadowy relationship to the underlying class forces operating in society .This
investigation of tariff politics tends to confirm that insight. Yet the
outlines of the struggle between core capitalists, peripheral capitalists, and
the other classes that ally with or oppose them, can be discerned in the tariff
history of the United States between 1815 and 1860. As to the correspondence
between the attitudes of individuals and their class interests, we do not
assume a naive "economic man" model. In a study of recent United
States tariff politics and attitudes, Bauer, Pool, and Dexter
(1968) have shown
that individuals often do not know what their interests are, and that, in
response to social pressures, they often act in ways which are inconsistent
with their own interests. Benjamin Franklin, as a Philadelphia manufacturer,
supported free trade and the doctrine that agriculture is inherently superior
to industry.
On
the other hand, aggregate political processes do tend to reflect the economic
rationalities of conflicting interests. This will be seen in the following account
of nineteenth century tariffs, but it is also illustrated in the study by
Bauer, Dexter, and. Pool. They document the transition from the long-standing
policy of protectionism to free trade in the late 1950s. Then the U.S. economy
had attained economic hegemony in the larger world and producers shared a
common interest in expanding to foreign markets, rather than in protecting the
home market. As such, it was similar to the British adoption of free trade in
the 1840s and the Dutch advocacy of free trade in the seventeenth century.
From
the point of view of U.S. core capitalists, what had been accomplished by 1815?
The main political accomplishment was the construction of a sovereign state,
independent of imperial control and capable of protecting the interests of its
producing classes-both core and peripheral-in the larger world economy. The
contrasting case of Canada and the other northern colonies shows the importance
of political independence. The continuation of the colonial system in Canada
stimulated the export of timber with "differential duties" until the
British adopted free trade in 1846 (Lower, 1973).
Wood
(1977) compares nineteenth-century India and the United States to show the
different effects of British influence. Direct colonial control of India led to
the perpetuation of that country’s peripheral position in the
world-economy. The railroad system that
the British built created an infrastructure that entrenched colonial control
but did not promote independent economic development. British investment in
U.S. railroads was much more at the behest of U.S. core capitalists, and had a
beneficial effect on the integration.
The
American Revolution and the process of early state formation need to be
reinterpreted from a world-systems perspective but I will not attempt to do so
here. Clearly core and peripheral producers and colonial merchants supported
the formation of an independent state.9
Core producers did not dominate the new state, but neither were they excluded
from it. The anticolonial victory did not, in itself, guarantee the upward
mobility of the United States in the world-economy. After all, the Latin
American republics successfully established formal political independence in
the early nineteenth century, but economic "neo-colonialism"
continued to produce the development of underdevelopment and they remained in a
peripheral position in the world division of labor (Stein and Stein, 1970).
This leads us to consider the upward mobility of the United States as
problematic, and to inquire how the class forces supporting the development of
domestic core production were capable of winning out over the interests that
supported the maintenance of peripheral production for export to the
established core in Europe.
The
creation of the Federal state and the Constitution in 1789 was a necessary step
in the direction of further upward mobility (national development), but did not
guarantee it. The Constitution institutionalized the interests of property
owners (both core and peripheral capitalists, as well as merchants) in the
state. It consolidated the power of the planters, the merchants, and the
nascent manufacturers over the small farmers, artisans, and slaves and created
a semiperipheral state capable of enforcing its own mercantile policy to protect
the international interests of these dominant classes. At first this was
evidenced by tariffs and navigation laws favorable to the carrying trade of the
merchants and shippers. A navy was necessary to enforce these laws and to
protect American ships. The war with Tripoli in 1801 was an effort to halt
piracy of U.S. vessels in the Mediterranean, as well as to demonstrate to the
European powers that the u.s. could intimidate Barbarians as well as any core
power (Field, 1969).
The
interests of potential core producers were not strongly supported by the
Federal state prior to the tariff of 1816, but there had been an intellectual
defense of the protection of core activities. Alexander Hamilton, as Secretary
of the Treasury in 1791, addressed to Congress an eloquent pre-Listian defense
of import substitution entitled " A Report on the Subject of
Manufactures". Hamilton's argument was partly a defense against the claim
of the Physiocrats that agriculture is inherently more productive than
industry. But Hamilton also argued for protection against core imports on the
grounds that the core powers discriminated against U.S. agricultural exports.
In
such a position of things, the United States cannot exchange with Europe on
equal
terms;
and the want of reciprocity would render them [the U.S.) the victim of a system
which
would induce them to confine their views to agriculture, and refrain from
manufactures. A constant and increasing necessity, on their part, for the
commodities of Europe, and only a partial and occasional demand for their own,
in return, could not but expose them to state of impoverishment compared with
the opulence to which their political and natural advantages authorize them to
aspire [Cole, 1928:265].10
The
significance of Hamilton's position is made clear by a comparison with the
Latin American republics. In the United States after the War of Independence,
as in Latin America, politics became polarized around the issue of
centralization versus local autonomy. But there was one essential difference.
For example, in Argentina the centralizers were based on urban merchant
interests in Buenos Aires who mediated the core-periphery exchange. The
ideology of these centralizers was free international trade (and their own
monopoly over this trade) (Burgin, 1946).11
In the United States, on the other hand, some of the centralizers argued for
protection of domestic industry against competition from core imports. This
difference reflects the different prior histories of the areas, which allowed
fledgling core activities to develop in the u.s. but not in Latin America.
The
contention between Hamilton and Jefferson was, in part, over different visions
of the future of the United States. Although Jefferson later opted for a policy
of expansion and competition for power in the larger world economy, his
original vision was of an Arcadian society composed gentleman farmers, isolated
from the vicissitudes of world market competition but freely importing and
exporting to meet the needs of a stable, no-growth agricultural republic. It
has been pointed out that Jefferson's own arcadia, contrary to all his. Jacobin
sympathies, was based on slave labor
{Vidal, 1973). The
struggle between the Federalists {Hamiltonian centralists) and Republicans
Jeffersonian decentralists) resulted in the political victory of the Virginians
and their subsequent adoption of most of the Hamiltonian program, including
territorial expansion, a permanent navy, a sound fiscal basis for the Federal
State, the creation of the first United States Bank.
The
Napoleonic Wars were a great stimulus to the carrying trade because the U.S.
was granted neutral status by the European powers. Merchants enjoyed a virtual
monopoly over the carrying trade between the West Indies, Latin America, and
Europe. The interruption of this profitable business by Jefferson's Embargo and
Non-Intercourse Acts and Madison's declaration of war against Britain caused
New England to consider secession from the Union at the Hartford Convention in
1814. But these Acts and protection from import competition afforded by .the
war with Britain stimulated the growth of import-substituting manufactures,
especially in Pennsylvania, Massachusetts, and Rhode Island. Peacetime was a
disaster to these new industries as the post-war market was flooded with cheap
English "gee-gaws" auctioned in New York City at prices below their
cost of production. Dumping of core products in New York was a conscious policy
of British manufacturing interests. As Lord Brougham explained to Parliament in
1816, it was "well worth while to incur a loss upon the first exportation,
in order, by the glut, to stifle in the cradle those rising manufactures in the
United States, which war had forced into existence, contrary to the natural
course of things." {Forsythe, 1977: 69). The newly established cotton
textile manufacturers were shut down until the tariffs of 1816 and later years
provided protection from English imports.
The
United States tariff policy between 1815 and 1860 can be roughly outlined as
follows. The war duties (intended for revenue) were replaced in 1816 with a
tariff that, although not high, was intended to be protective. The average rate
in 1816 was 25% ad valorem. This was increased in 1824 to 33%, and again
in 1828 to 50% (Freehling, 1967). In 1833, Southern planter and Northern
merchant opposition forced the adoption of the Compromise Tariff that lowered
rates slowly until 1842. In 1842 protection was renewed until 1846 when the
Walker Tariff, a victory for the free traders, was adopted. In 1857 tariffs were
lowered even further. The Republicans passed the ultra-protectionist Morrill
Tariff and protectionism reigned from then until after World War II.
This
tariff history reflects the process of class formation in the antebellum
period. Core manufacturers expanded after the War of 1812 and, in alliance with
farmers, succeeded in passing protectionist legislation. The peripheral
capitalism of King Cotton expanded even more rapidly and the core and
peripheral interests contended for power in the Federal state by making
alliances with other classes: merchants, workers, and yeoman farmers.
Peripheral capitalism in the South was by no means moribund. Indeed it was a
dynamic and differentiated economy based on commodity production with slave
labor. By the 1840s the upper South had become a slave-breeding and
semi-industrial region (Bateman and Weiss, 1976). But the main form of
appropriation in this slave-based peripheral economy remained the production of
cotton for the European core of the world-economy. The plantocracy of the South
was able to dominate the Federal state during most of the antebellum period by
allying with Western farmers and Northern workers in the Democratic Party. This
alliance, which ushered in the period of low tariffs in the 1840s and 1850s,
eventually foundered on the issue of the legal status of slavery in the new
territories of the West.
The
access of core producers to state power before 1815 can be assessed by
examining tariff politics. As argued, tariff politics and tariff policies are a
reflection of the strength of classes with conflicting interests in the world
economy. Pennsylvania created protective tariffs "during the period of the
Articles of Confederation (Eiselen, 1932) but the tariffs enacted by the Union
from 1789 to 1816 were, with few exceptions, designed only as a source of
revenue. Other state policies, such as the Navigation Acts and creation of the
permanent navy to defend shipping, clearly benefited shipping interests and
merchants, but these policies were supported by the planters. The interests of
Northern merchants and Southern planters were harmonious, but they came into
conflict with the core capitalist manufacturers who were spawned by the dearth
of imports during the Embargo and the War of 1812.
The
post-war slump and flood of British imports showed that the United States
remained an economic neo-colony of Britain. In 1815 the success of the
manufacturers was by no means certain. The Tariff of 1816 was a crucial turning
point because the Federal state began to use its power
for the first time to
foster core capitalism.
The Rise
of Protectionism
Protectionism became the policy of
the Federal government between 1816 and 1832 for several reasons. Core
producers were strong enough to flood Congress with memorials demanding relief
from the influx of cheap foreign goods, and there was little opposition to such
pleas. The War of 1812 made obvious the dependence of the United States on
European imports and there was wide support for the development of
manufacturing that would lessen this dependence. John C. Calhoun, later the
champion of the Southern anti-tariff cause, supported protectionism for
national development until the mid-twenties. The Tariff of 1816 passed the
House 88 to 54. It was not a party line bill and sectional divisions were only
faintly visible. The 8 Southern states were split 25 for and 39 against. There
was strong support from Kentucky and a majority in favor in South Carolina and
Tennessee. New England was split. The only solid protectionist area was the
middle states, New York, Pennsylvania, New Jersey,and Delaware. Ohio voted
solidly for the bill (Forsythe, 1977).
What
determined which commodities would be protected and how high the rates would be
for different commodities? If the theory of protection for "infant
industries" had been followed we would expect those industries that were
weakest but most essential for national security and economic development to be
the ones given the most protection. Eiselen's (1932) thorough study of the
politics of protection in Pennsylvania concludes, however, that it was not
generally the weakest industries that received protection, but rather those
that were strong enough to exercise influence on Congress. Pincus's (1977)
econometric study of the Tariff of 1824 shows that industries which were
concentrated in a particular geographical area, rather than spread over a wide
area, were more likely to organize political pressure and receive protection.
Competition within a particular industry could also influence the height of the
tariff wall. Zevin (1971) reports that in 1816 Francis Lowell, a cotton textile
manufacturer who had recently observed production techniques in England and
returned to invent his own power loom, lobbied against the high rate proposed
by the less efficient textile producers in Providence. The tariff that was
adopted was high enough to allow Lowell and the other producers who adopted
mechanized production to make a profit, but low enough to drive out the
less efficient
producers.
The
Panic of 1819 followed the post-war boom. The price of agricultural commodities
fell rapidly and unemployment in the cities of the North reached alarming
proportions. The last great Corn Law was passed by Parliament in 1815 to
protect English agriculture from foreign imports. This,
and the recovery of
agriculture in Europe, caused American exports of grain to fall. The declining
price of their produce induced the farmers of Pennsylvania and other Northern
states to rally to the cause of industrial protection. Similarly the unemployed
mechanics and workingmen were told by the
Philadelphia protectionist, Matthew Carey, that a high tariff would
promote industrial employment and raise wages (Tayor, 1953). Eiselen (1932) in
reflecting on the ebb and flow of Pennsylvania protectionist enthusiasm during
the antebellum period, notes that economic slumps always resulted in a
clamoring for tariffs as prices fell, while good times reduced tariff
enthusiasm.
Henry
Clay of Kentucky proposed his " American System" to promote the
alliance between agriculture and industry based on the protected development of
the diversified national market. In Clay's scheme the Federal government would
stimulate manufacturing by applying a protective (but not prohibitive) tariff.
The revenues resulting from the tariff would enable the government to sell
Western land cheaply and to finance internal improvements in transportation
between the agricultural West (and, presumably, the South) and the industrial
East. Clay's program created the political alliance among core capitalists,
farmers, and labor, which supported increasing protectionism until Southern
opposition reversed this trend in 1833. The program of internal improvements
began in 1818 with the completion of the National Road, a Federally built
highway that connected Baltimore with the Ohio Valley (Broude, 1964). The
General Survey bill of 1824 proposed an elaborate national transportation
system of roads and canals, most of which were later built under the auspices
of the separate states, but with Federal encouragement (Goodrich, 1960). The
Erie Canal was completed in 1825.
The
maritime and commercial interests of New England were against protection at
first. To his later embarrassment, Daniel Webster made spirited free trade
speeches at the behest of the shipping concerns of New Hampshire. Commercial
interests were opposed to import tariffs because their profits were gained
mainly from the core-periphery trade. Financial connections with London led
many New York and New England merchants to oppose protection of American core
industries throughout the antebellum period.
The
shipbuilders of New England, formerly the most developed core capitalists in
America, also opposed the tariff bills that Congress passed during the first
era of protection. They did this in part because some of the commodities
protected were raw material inputs into their industry, particularly hemp and
iron. Core products were not the only protected commodities. Indeed core
producers obtained protection by making alliances with other producers.
Logrolling resulted in tariff bills that supported both core products, such as
textiles and glass manufactures, and also raw ma-
terials, such as
coal, iron, hemp, and lead. Shipbuilders were understandably unwilling to
support legislation which increased their costs. In addition, the “Tariff of
Abominations” (1828) was intentionally constructed by the Jacksonians to be
unpalatable to New England in order to embarrass the Adams administration. It
included tariffs on sugar and molasses, which were offensive to the New England
distilleries.
New
England eventually came over to protectionism, however, “In 1825, the great
firm of W. and S. Lawrence of Boston turned its interest and capital from
importing to domestic manufacturing, and the rest of State Street fell in
behind it. So did Daniel Webster, who was now to become Congress' most eloquent
supporter of protection [Forsythe, 1977]." What were the effects of the
tariffs? Free traders, as we shall see claimed broadly evil consequences.
Advocates of protection argued that stimulated industrial growth and enhanced
both profits and wages. Henry C. Carey, the first American contributor to the
science of political economy blamed every economic slump in the antebellum
years on free trade and attributed every period of prosperity to protection
(Stanwood, 1903). Taussig's (1964) classic study of tariff history and
industrial growth, first published in 1892, concluded that, especially after
1824, tariffs did not great contribute to the growth of particular industries.
According to Taussig the protection afforded by the War of 1812 and the Tariffs
of 1816 and 1820 were helpful to some infant industries, but probably not
essential for the survival and growth.
The
onslaught of British imports after the War of 1812 was only partly affected by
the tariffs, which, although protectionist in intent, were not very effective
(Pincus, 1977:102). An exception was the protection of cotton textiles. Most
protected items were given an ad valorem rate based on a percentage of
their import price. In 1816 cotton textiles were also given a “minimum"
rate, which meant that, no matter how low the market price dropped, they would
be treated as if their price was a certain minimum. This minimum rate proved to
be extremely important when the price of British textiles dropped rapidly in
the years following 1816.
Eiselen
(1932) argues that for most industries the effect of protection on prices was
only temporary .A price rise due to a tariff increase encouraged new firms to
enter production and the increased competition tended to drive prices back down
again. David (1975) argues that the temporarily higher profits may have allowed
manufacturers of cotton textiles to "learn by doing," that is, to
experiment with production techniques and to increase efficiency.12 His econometric analysis of six firms
during the period from 1834 to 1860 does not provide much support for this
argument,
however, and he
concludes that Taussig's contention about the tariff effect is basically
correct. Zevin's (1971) econometric study of the causes of growth in the
textile industry finds that the largest portion of the phenomenal growth of
factory cloth production in New England in the period from 1815 to 1833 is due
to change in the composition of total production between home and factory, that
is, the growth of demand for manufactured cloth as a replacement for homespun.13 He concludes that the tariff made a
negligible contribution to the growth of American demand for New England mill
products.
On
the other hand, Fogel and Engerman (1971), studying the growth of iron
production between 1842 and 1858, estimate that reductions in the tariff rate
caused a 10.8% fall in the price of domestic iron and a 29% reduction in
output. Taussig never claimed, however, that the tariff had no effects, but
rather that it was not essential to the establishment and growth of particular
industries. Protection undoubtedly affected the timing and rate of growth of
industry, and, from the perspective of the competitive world-economy, timing can
be very important. The advances made by the core industries in the 1820s and
1830s enabled them to survive and prosper in the period during the 1840s and
1850s when peripheral producers reestablished their control of the Federal
state. Zevin (1971) reports that between 1820 and 1830 American consumption of
cotton cloth increased from 50 to 175 million yards, while the share of that
consumption supplied by New England increased from about 30% to about 80%. By
1825 even Hezekiah Niles, the ardent Baltimore protectionist, admitted that
American coarse cotton textiles no longer needed protection. By 1832 these
coarse cottons were competing with British products in the markets of the Far
East. Thus further protection of cotton textiles was redundant.
Even
though Taussig's careful study of individual industries led him to the
conclusion that protection was not essential to the birth and survival of any
single industry by itself, he nevertheless acknowledged the importance of the
protectionist movement in stimulating the overall transition from the
agricultural and mercantile economy that existed before 1815 to the more
diversified manufacturing economy that developed thereafter. This observation
helps us understand the ambivalence of the shipbuilders and commercial
interests of New England who were the key core industries of the earlier era.
Shippers and mercantile capitalists
were hurt badly by the ending of the Napoleonic Wars. Their semi-monopoly over
the Atlantic Trade and the credibly profitable "business" of
privateering came to an end. The post slump was not followed by a new expansion
of the maritime industry until the, thirties. Nevertheless, there was
considerable United States support for the Latin American independence wars
against Spain, especially from traditionally Catholic city of Baltimore
(Bornholdt, 1949).14 In 1823
President Monroe refused Canning's proposal for a joint British-United States
declaration in
support of Latin American independence and issued the precociously
paternalistic Monroe Doctrine forbidding European interference in Pan-American
affairs.
In
the 1820s world shipping revived and increased competition caused freight rates
to fall. The maritime industry recovered slowly from the postwar slump.
Nevertheless, regularly scheduled packet lines leaving at designated intervals
connecting New York City with the ports of Europe were established, but profit
rates were lower than in manufacturing (North, 1966). This explains the growing
integration of the maritime interests with domestic manufacturing, and the
increasing support for protectionism. But, at the same time, the forces of
opposition were gathering.
The Rise
of Opposition to Protection
The
peripheralized colonial Southern economy based on tobacco, rice, and indigo
seemed to have reached its zenith before the turn of the century. It was
predicted by contemporaries such as Jefferson that slavery would wither away;
others thought that the South would turn toward maritime and industrial
activities. But the invention of the cotton gin and the demand for cotton to
feed the mills of the English midlands gave plantation slavery a new lease on
life. The cotton gin made cultivation of the short fiber, upland cotton
commercially profitable with the application of slave labor.
The
growth of the new core-periphery division of labor between the South and
England also had effects on the maritime and commercial interests of the North,
particularly New York City. New York merchant shippers bought most of the
cotton from the planters, at first transporting the cotton to New York for
inspection before shipment to Liverpool. Later the New York merchants
established factors in the port cities of the South that enabled them to ship
directly (Buck, 1925). But they maintained financial control of most of the
trade between the south and England. Credit facilities by which American
merchants could purchase English goods with drafts on London banks were
established by specialized merchant-banker firms such as Baring Brothers and
George Peabody and Company. Peabody, a Baltimore dry goods merchant,
established a firm in London for this purpose and hired another dry goods
importer, Junius Spencer Morgan of Boston; through this connection, the Morgan
family entered the calling of high finance (Hidy, 1951).
Opposition
to protectionism arose in the South after the Panic of 1819. Cotton prices fell
from 31¢ a pound in 1818 to 14¢ in 1920; 10¢ in 1826; and 8¢ in 1831. This was
due to the worldwide expansion of cotton production. The cotton planters of
South Carolina were hit particularly hard by this fall in prices because it
corresponded with increasing soil exhaustion on their upcountry plantations.
Cotton planters further west and low country rice planters were less severely
affected (Freehling, 1968). The antiprotectionist movement in South Carolina
began to develop after 1819-particularly among the cotton planters.
Pincus
(1977) points out that, in a democratic polity, a minority with a great deal to
win or lose can frequently have its way when the cost to the majority of
individuals is small arid dispersed. Thus producers often exert more influence
over the state than consumers because they stand to gain much more than
consumers (individually) stand to lose. This is part of the explanation of the
fact that most nations most of the time have protectionist tariffs. It is also
consistent with the development of strong opposition to protection among
Southern "consumers" in the antebellum United States.
These
consumers were not simply individuals buying for their own use. Tariffs on
coarse woolen and cotton textiles came to be opposed by the Southern planters
who were purchasing these commodities to clothe their slaves. It was not that
these buyers, and the New York merchants who were their agents, were too small
and dispersed to mobilize, rather they were simply unmobilized in 1816.
Both
Northern merchants and Southern planters came to fear that their British
customers would retaliate against U.S. protection by obtaining their raw
materials from other than U.S. producers. Also Southern exporters were made
aware that, as international economists have demonstrated, a tariff on imports
is not only a tax on consumers of imports but is also effectively a tax on
exporters. Dr. Thomas Cooper, a disciple of Adam Smith and President of the
College of South Carolina, suggested that the time had come for the marriage
between the states was somewhat less than a transcendent relationship received
a great deal of criticism from the patriots of the North, but Cooper’s logic
was based on this inflammatory, but not entirely inaccurate, appraisal:
There
is not a petty manufacturer in the Union, from the owner of a spinning factory,
to
the
maker of a hobnail, ...from the mountains of Vermont to the swamps of Patapsco,
who
is not pressing forward to the plunder; and who may not be expected to worry
Congress
with petitions, memorials and querulous statements for permission to put his
hands
into the planter's pocket. The avowed object now is, by means of a drilled and
managed
majority in Congress, permanently to force upon us a system, whose effect will
be
to sacrifice the South to the North, by converting us into colonies and
tributaries ...to
tax us for their own emolument ...to
claim the right of disposing of our honest earnings
...to
forbid us to buy from our most valuable customers ...to irritate into
retaliation our
foreign
purchasers, and thus confine our raw material to the home market ...in short,
to impoverish the planter and to stretch the
purse of the manufacturer [Bancroft, 1928:32].
Southern
memorials to Congress complained bitterly of the unequal effects of the tariff
and the failure of the program of internal improvements to benefit the South.
Senator George MacDuffie argued that, of every 100 bales of cotton produced in
the South, 40 of them were stolen by the North. This was an exaggeration, but
Van Deusen's (1928) study shows that the costs to the South were by no means
insignificant.
The
Tariff of 1828 raised rates and extended protection to a large number of
commodities not protected before, including a number that angered New England.
Antiprotectionist sentiment was growing and free traders hoped that the
election of Andrew Jackson would bring relief. But Jackson did not act to lower
the duties. Southern planters organized an unsuccessful boycott of Northern
products and leading politicians appeared in public in homespun to dramatize
their cause. The most rabid of the South Carolinians were talking of secession
when Calhoun devised what he thought to be
a compromise that
would preserve the Union. Antitariff politicians had argued that tariff
protection was unconstitutional. Calhoun (anonymously at first) proposed the
doctrine that states have the right to nullify Federal laws that they deem
unconstitutional (Bancroft, 1928). Nullification received enthusiastic support
in South Carolina, but not in the other Southern states. In 1832 the South
Carolina legislature called a convention and adopted nullification
unilaterally, but President Jackson stood firm against this challenge to the
sovereignty of the Federal state and, after some sabre-rattling, the South
Carolinians backed down.
The controversy over the tariff is
often portrayed as being based on sectionalism, and indeed the Congressional
voting record on the tariff acts from 1820 on shows that it was increasingly
the Southern states that opposed protection. I would argue, however, that it
was largely a class conflict between core capitalists interested in creating a
diversified and integrated national economy and peripheral capitalists
specializing in the exchange of raw materials for European core products. These
two groups contented throughout the antebellum period for the support of other
politically important classes: merchants, farmers, and increasingly, workers.
Evidence for this contention can be seen within sections as well as between
them.
Boucher
(1968) shows that the backcountry, non-slave-owning yeomen of South Carolina
did not support the political actions taken by the antitariff forces in the
state. And Freehling (1968) demonstrates that the merchants of Charleston were
much more likely to support the Unionist cause than the planters. Farmers in
the North and West alternately supported protection or opposed it as their
fortunes in the world market changed. The closing of the European markets for
their produce caused them to support protection and the development of the home
market. But later growth of grain exports to Europe brought them to the cause
of free trade. The middle states, with the biggest concentration of manufacturers
producing for the home market, were staunch supporters of protection. Kentucky,
a slave state, was strongly protectionist not only because its hemp was in
competition with foreign peripheral producers for the shipbuilding market of
the maritime states, but because it was a manufacturer of cotton bagging. And
as we have seen, the merchants of New England shifted their support to
protection when they became interested in investments in domestic
manufacturing.
It
is interesting to ask what differences there were in the 1820s between the
farmers of Pennsylvania and the upcountry cotton planters of South Carolina
that caused them to respond in exactly opposite ways to the falling prices of
their export commodities. In theory, the planters could have supported Clay's
scheme on the basis that an internal demand for cotton would be created by
domestic textile production. Similarly the farmers of Pennsylvania could have
opposed protection in the hope that the European market would again buy their
commodities-not necessarily a worse bet than the growth of the home market
demand for food. There are many differences between the planters and the
yeomen. The farmers were employing only themselves and their families, while
the planters were employing slave labor. Freehling (1967) reports that planters
recognized in the 1820s that the abolition movement would eventually pose a
threat to their "peculiar institution." The Denmark Vesey conspiracv
in Charleston, a planned slave revolt foiled in 1822, was attributed to the
antislavery sentiments expressed in Congress during the debate over the
Missouri Compromise in 1820 (Genovese, 1976).
Another difference between yeomen
and planters, which may account for their divergence on the tariff question,
was the nature of British trade regulation. The Corn Law was directed against
grain, but not against cotton. Thus the British state, in reflecting its own
class coalitions, was exercising political power against the Pennsylvania
farmers but not against the cotton planters of the South. This most probably
affected opinions about the
proper policy of the
United States government.
Compromise
and the Jacksonian Economy
In
1828 part of Calhoun's strategy against the tariff was to split the alliance
between Northern manufacturers and Western farmers. He envisioned a coalition
in which Southern and Western agriculture would oppose tariffs and support
liberal land policies. Northern manufacturers tended to
oppose cheap land
policies that drew away their employees, which created a labor shortage and
upward pressure on wages. Western Senator Thomas Hart Benton, in response to a
Connecticut Senator's proposal to limit the sale of public lands, suggested the
similarity between restrictions on land sales and the protective tariff-both
were indirect subsidies to manufacturers (Forsythe, 1977). Senator Robert Hayne
of South Carolina proposed a combined program of low tariffs and low land
prices, but Daniel Webster temporarily forestalled this alliance by
transforming the discussion into a debate about states rights. His stirring
invocation of patriotism carried the day, but the rise of Jacksonian democracy
was not to be halted by a single debate.
The
regime crisis (Forsythe, 1977) over nullification caused by the unhappy
Southerners resulted in the Compromise Tariff of 1833, the first of Henry
Clay's political recipes for balancing the contradictions between core and
peripheral capitalism. The bill was supported by the South and the West and
opposed by New England and the middle states. It was mostly a face-saving
device for the South, however. The principle of protection was abandoned and
henceforth tariff advocates had to couch their proposals in terms of
"incidental protection." But the bill specified that tariff rates
were to be lowered slowly until 1842, when they were to be drastically reduced
to an average of 20% ad valorem. The stated object of the slow reduction
was to give manufacturers a period of adjustment before opening the ports. But
many protectionists expected that the Southern opposition would cool and the
proposed reduction in 1842 would never come to pass.
Cotton exports were the largest
export commodity from 1815 to 1861, increasing from 32% of all exports in 1815
to 56% in 1835, and the varying from 40% to 57% from 1835 to 1860 (North,
1966). Wheat flour exports to England, which would become one of the most
important export commodities after the Civil War, began to grow rapidly in 1829
(Potter, 1960: Table IV). This new interest in the foreign market undoubtedly
lessened the enthusiasm of U.S. wheat growers for protectionism. The
convergence of interests between the planters of the New South and the farmers
of the Ohio Valley was also facilitated by the development of New Orleans as
their common entrepot, and by the growing importance of the South as a
market for Western produce.
In
addition, both farmers and planters were increasingly dissatisfied with the
tight money policies of Eastern bankers; the 1830s saw the growth of labor
organizations opposed to municipal monopolies and restrictive land sales
policies that were associated with Eastern financial and manufacturing
interests. The Democratic Party chose Andrew Jackson, an Indian fighter from
Tennessee, to symbolize the new coalition of farmers, laborers, and planters.15 Jackson was not sympathetic to free
trade, nor did he yield to nullification, but his election was the beginning of
the coalition between the South and the West, which was to increasingly delimit
the power of the domestic core capitalists in the Federal state in the 1840s
and 1850s.
The
Bank War, in which Jackson and the soft money forces refused to recharter the
Second United States Bank, was the first attack on the institutionalized power
of the indigenous core capitalists. The dissolution of the U.S. Bank and the
growth of state banks has been alleged to have caused the rampant inflation of
the 18305. Temin (1969), however, argues that most of the credit expansion and
inflation was actually caused by an increase in the supply of silver specie
from an influx of investment capital from Britain and a change in the balance
of payments in the China trade. The reduced need to pay for Chinese exports in
silver (because of increased opium smuggling
into China) allowed
Mexican silver, previously used in the China trade, to be imported into the
United States. This increased bank reserves and allowed the expansion of
credit. Temin may be correct that the dismantling of the U.S. bank was not
the cause of the credit expansion and the influx of specie, but the
decentralization of banking did eliminate the only institution that might have
been able to modify the effects of international economic forces. As such, it
was symptomatic of the decline of the political power of core capitalists and
their policies of economic nationalism.
The
1830s saw an incredible economic boom based mainly on the expansion of cotton
production in the New South, but also on the growth of the West and the
continued growth of manufacturing in the East. The price of cotton rose from 8¢
a pound in 1831 to an average of 14¢ a pound between 1834 and 1837. This, along
with Jackson's easy land policy easy credit, caused land sales to rise
dramatically in 1835 and 1836. In Mississippi and Louisiana plantation banks
were established to finance the expansion of slave-grown cotton. English
capital was invested in the securities of these banks. In the West, extensive
state-sponsored canal projects were undertaken by floating bonds in London; in
the East, the first railroad expansion was financed by British rail sales in
exchange for stock in the newly created railroad firms. Speculation in land and
cotton trading was heavy.
In
an attempt to slow the land boom and “excessive trading," Jackson declared
the Specie Circular, which required that all further public land sales be paid
for with specie-gold or silver. Many historians have seen this as the act that
brought about the Panic of 1837, but Temin (1969) argues
that it was the
contraction of credit initiated by the Bank of England that punctured the
bubble. The monetary crisis of 1837 had no real affect on production, but the
Crisis of 1839 initiated a depression which, according to North (1966), was as
severe as great depression of the 1930s.
The
increasing interdependence of the economies of the United States and Britain in
this period has been documented by Potter (1960,1976). The new core-periphery
division of labor was based primarily on slave-grown cotton exports, but the
agricultural produce of the free farmers played an increasing, role from 1830
onward. British investment capital flowed into the U.S. in the 1830s but was
stung by the crash of 1839 in which thousand of firms failed and nine states
defaulted on securities held by English investors. Domestic manufacturing
continued to expand but was faced with stiff competition from a growing influx
of British imports.
In
the 1830s, the cities of the East saw the growth of labor unions, city
centrals, and labor parties opposed to municipal monopolies and in support of
the 10-hour day and the extension of free public education (P. Foner,1975). The
depression that followed the crisis of 1839 saw the demise of most of these
early labor organizations and the rise of Utopian movements and religious
sects. Waves of Irish and German immigrants from Europe and the massive movement
of population toward the West discouraged stable working class political
organization and encouraged both ethnic politics and Utopian escapism, which
have been recurring features of American political life.
Table 9.1
Ratio of British
General Imports to the United Statesa
to
the U.S. Realized
National Income in Manufacturingb
__________________________________________________________
___________________________________________________________
Year Ratio Year
Ratio
____________________________________________________________
.
1821 .365 1869
.146
1829 .249 1879
.104
1839 .387 1889
.078
1849 .191 1899
.039
1859 .241
____________________________________________________________
a-United States Bureau of the Census, 1975
part 2:907.
b-Martin, 1939, tables 1 and 17.
The
maritime and shipbuilding industry of the East experienced a new expansion as a
result of the growth of the Atlantic economy and the trade with China and Latin
America. Philadelphia, New York, and Boston merchants joined the British in
opium smuggling and the tea and porcelain trade with the Chinese treaty ports
(Basu, 1979; Goldstein, 1978). American clipper ships set new speed records in
an era when time was becoming an increasingly important element in economic
calculation.
Even
though manufacturing continued to grow, the core capitalists of the United
States faced an increasingly difficult battle against British imports. The
struggle for the home market was by no means yet won. Table 9.1 shows that the
ratio of imports from the United Kingdom to the United States Realized National
Income in manufacturing increased dramatically between 1829 and 1839.16 This was not a result of the Compromise
Tariff of 1833 since rates were only mildly reduced. Imports were encouraged by
favorable terms of trade, as U.S. prices were high and British goods
correspondingly cheap. The growth of imports created a negative trade balance
but this was offset
by the inflow of British investment capital.
The
reduced influence of indigenous core capital over the Federal state was not due
to its absolute decline. Indeed, manufacturing continued to expand throughout
the antebellum period. The loss of power in the state came from the shifting of
alliances and the increasing importance of Southern cotton production as the
major export commodity. Core capitalists achieved protectionist Federal policy
in the early part of the period-from 1816 to 1833-because of the unmobilized
Southern opposition and because the free farmers supported the notion of
developing the national market. Also some agricultural and mining raw materials
were brought into the protectionist camp through logrolling. The weakening of
the protectionist forces in 1833 was due to the desertion of the farmers, who
saw a new opening if the world market, and also to the increased mobilization
of the Southern planters, rather than to an actual decrease in the power and
prosperity of the manufacturers. The Crisis of 1839 brought new demands for
protection and the tariff was renewed at a high rate until 1846. But in that
decisive year the nation and the world turned toward free trade.
Free Trade
The
Compromise Tariff of 1833 prescribed that tariffs should be cut drastically in
1842. The low rates were in effect for only two months before Congress,
responding to new clamoring for protection, doubled the rates for textiles,
iron goods, and many other products. Since the South opposed the bill, Northern
and Western Democratic votes were necessary to enact it as law. As had happened
before, the years of depression influenced farmers and workers to support
protection, and the bill passed with considerable support from the West. But
this was the last protectionist bill to be passed until the enactment of the
ultra-protectionist Morrill Tariff in 1861.
By
1846 the economy was recovering and with it the Southern-Western alliance
against protection. The peripheral producers of the South achieved their last
ascendancy in the Federal state in an alliance with the West cemented in the
Democratic Party. In the election of 1844 protection was an issue; Polk had
tried to be on both sides of the question. But his appointment of Robert J.
Walker from Mississippi as Secretary of the Treasury made his true sentiments
plain. The Walker Tariff, which was passed by Congress in 1846, lowered rates
drastically and was considered a great victory for free trade. Its support was
more along party lines than along sectional ones. It passed the House 114 to 95
with 18 Democrats voting against it: 11 from Pennsylvania; 4 from New York; 2
from New Jersey; and 1 from Maryland. Only 2 Whigs supported the bill. Thus the
Western Democrats, and many Northern ones, supported the bill (Stanwood, 1903).
Secretary
Walker argued that the bill would be good for farm prices because it would
expand the foreign market. He claimed that adoption of the bill would bring
reciprocity from England in the repeal of the Corn Law. In fact the Corn Law
was repealed prior to the final passage of the Walker
Tariff, and Anti-Corn
Law League propagandizing in the United States was thought by some to have had
an illegitimately large influence on the decision. Protectionists disparaged
the bill as a product of foreign intervention in American politics (Eiselin,
1932).
Walker
also attacked the argument that protection raises the wages of the working
class, and argued, on the contrary, that it increases the power of capital over
labor. "When the number of factories is not great, the power of the system
to regulate the wages of labor is inconsiderable; but as the profit of capital
invested in manufactures is augmented by the protective tariff there is a
corresponding increase of power, until the control of such capital over the
wages of labor becomes irresistible [quoted in Stanwood, 1903:47]." This
argument was apparently successful in obtaining the support of Northern
Democrats from labor constituencies.
In
1845 the potato famine in Ireland caused prices of American agricultural
commodities to rise due to increased foreign demand. The recovery of .the West
from the crash of 1839 had been slow but the new demand caused a renewal of
expansion and brought the West back into the free trade coalition with the
South. This raises the question of the world class position of the free farmers
of the United States.
Were they core producers or peripheral producers?
WORKING MEN!
You Pay a Tax of Tenpence
Upon every Stone of Flour you and your
wives
And little ones consume.
If there was not the Infamous CORN LAW you
and you Families
Might buy THREE LOAVES for the same money
that you now pay for Two.
Upon every Shilling you spend for Bread,
Meat, Bacon, Eggs,
Vegetables, &c..you pay 4d. Tax for
Monopoly.
DOWN, DOWN
With The
Infamous Bread Tax!
Figure
9.1. Handbill. (From Free Trade by Norman McCord, Newton
Abbot, Great Britain: David & Charles, 1970, p. 75.)
As
producers of raw materials for export they had political interests in common
with the planters. But agricultura1 production is not necessarily peripheral
production. Capital-intensive, high-wage wheat grown in the twentieth century
U.S. is clearly a core product. Nor is the determination of class location in
the world-system simply a matter of the formal nature of production relations.
Yeomen in seventeenth century England were core producers relative to the
larger world economy, but this was not due entirely to their legal status as
middle-sized, self-employed capitalist farmers. Yeomen in twentieth century
Africa producing cash crops for export are peripheral producers selling the
labor of themselves and their families to a world market that is coercive in
the sense that the prices at which they sell their products and buy core
products are determined by a political structure which exploits them (Lipton,
1977).
So
we cannot answer the question about the free farmers of the antebellum period
by looking at their formal legal control over property, nor by determining whether
they sell primarily to the national or the world market. We must ask about the
returns of their labor from the exchanges in which they were engaged.
Unfortunately,-I have not been able to locate data on the "wages" of
the free farmers. It seems likely that their average incomes, including
subsistence production in an abundant natural environment, were high compared
to the wages of other core workers. At least they were high enough to cause
migration from England, Germany, and the Atlantic states.
It
is also known that the terms of trade of the free farmers varied over time with
the rise or fall of the prices of their products relative to the prices of the
goods they bought on the market. If the yeomen were peripheral producers we
might expect them to have the same reaction to changes in the terms of trade as
the planters had. In fact, as we have seen, reactions were just the opposite.
Hard times caused farmers to support protection, while planters were driven to
greater efforts in favor of free trade. Thus, even though careful analysis of
the relative incomes of the antebellum farmers has not been done, it seems
reasonable to conclude that they were core producers.
Was
the period of free trade from 1846 to 1861 a period of crisis for core
capitalist manufacturers? Clearly, their power over the Federal state was
reduced. There is evidence that some were hurt by the tariff reduction. Fogel
and Engerman (1971) attribute the slow growth of iron production to the effects
of the low tariff. Table9.1 shows that the conquest of the home market by
domestic core producers was temporarily forestalled. The ratio of British
imports to Realized National Income in manufacturing increased from 1849 to
1859. This import boom was financed by a new wave of British capital investmentspecially
in railroads-and also by the export to London of much of the gold produced by
the California gold rush. Exports of wheat and cotton to Europe grew, but not
nearly enough to cover the new expansion of imports.
Nevertheless,
the conclusion that manufacturers were badly hurt by their temporary loss of
power in the Federal state would be unjustified. The growth rate of
manufacturing industry between 1844 and 1854 was 69%, higher than any other
decade in the antebellum period. And manufacturers recovered much more quickly
from the slump of the early 1840s than did the agriculturalists of the South or
the West (North, 1966).
Many
industries in the U.S. no longer needed protection from imports. Cotton
textiles were cheaper in New York than in Manchester. The home market had been
conquered by 1839, and the temporary setback of the decade from 1849 to 1859
does not contradict the conclusion that core production was so well established
by this period as to be able to succeed in the world market without direct
protection from the state.
The
1840s and the 1850s saw changes in the world economy that reduced the salience
of the protection issue to core capitalists in the United States. Schumpeter
(1939) points out that this period saw a long-term upswing in the pace of
economic growth throughout the world. There was a reduction in tariff barriers
all across Europe as the benefits of trade came to outweigh the injuries done
to .domestic producers (Fjelden, 1969). As the British economy shifted from the
production of mass consumption goods toward the production of capital goods
(Hobsbawm, 1968), the capitalists
of other core states
developed their own mass consumption industries by importing British machinery
and railroad equipment.
The
Crystal Palace Exhibition of 1851 was a great promotional effort to expand the
export of British technology, a reversal of the earlier attempt to monopolize
production techniques (Landes, 1969). The international division of labor
between core producers became less autarchical and protectionist as a result
(Krasner, 1976). Cobden and Bright traveled widely, lecturing on the beneficial
effects of a world free market. Their arguments were acted upon because the
actual gains from free trade to consumers came to outweigh the costs to
producers. And the producers, including core capitalists in the United States,
had less to lose because the pace of growth was expanding and they wanted to
import capital goods from England.
But
free trade among core powers does not necessarily mean the relaxation of
political coercion over peripheral areas. The 1840s was a decade of U.S.
expansionism. Texas was annexed in 1845; a treaty with Britain brought Oregon
into the Union in 1846; and, the war with Mexico gained California in 1848. The
South was the main supporter of the war with Mexico but the manufactures’
opposition to territorial expansion and cheap land was reduced by the great
influx of Irish immigrants willing to work in the urban industries of the East
for low wages. One consequence of the territorial expansion was a renewal of
the conflict over the status of new states. Though temporarily resolved by the
Compromise of 1850, this was the issue that finally divided the forces of core
capitalism from those of peripheral capitalism.
The
Tariff of 1857 lowered rates even further. The politics of this tariff bill
illustrate well the decline in the salience of the tariff issue for many
manufacturers. The main debate was between producers of woolen textiles and
woolgrowers. The woolen manufacturers argued that the tariff on raw wool was
driving them out of business and advocated a reduction. Except for Pennsylvania
iron masters and the woolgrowers, there was very little protectionist sentiment
in 1857.
Hofstadter
(1964) used the Tariff of 1857 to attack the Beard and Beard (1964) thesis that
the tariff was an important economic issue dividing the North and the South. He
points out that this tariff act was called the "manufacturers bill"
because the woolen manufacturers succeeded in lowering the duties on raw wool,
and that the bill was also supported by the commercial interests of New York.
The tariff issue had been an important source of conflict between Northern
manufacturers and Southern planters earlier in the century, but Hofstadter was
correct that this issue was no longer as volatile by 1857. His case that
economic interests were not involved in the coming conflict is hardly supported
by the example of the commercial interests of New York, however. These were the
same mercantile
interests who had previously
supported the politics of the Southerners because of their involvement in the
core-periphery trade. And these same New York merchants were to threaten
secession in 1861 because of their ties to the South (P. Foner, 1946). The
Beards were correct that the conflict had an economic and a class basis, but it
was not a war primarily between the capitalists of the North and the
"precapitalist" South.
Protection
Again: The Irrepressible Conflict
The
Panic of 1857 came a few months after the passage of the tariff bill. It was
similar to the depression of 1839 in that it followed a period of rapid
inflation, economic expansion, foreign investment, importation, and Westward
movement. But the expansionary phase was based on the growth of manufactures
and Western free agriculture rather than slave-grown cotton as the growth of
the 1830s had been. And, as before, the fall of grain prices (partly resulting
from the end of the Crimean War which allowed Russian wheat back on the world
market) and the fall of wages and employment renewed the spirit of
protectionism.
The new growth of the labor movement
(especially among immigrant German workers), the opposition to the extension of
slavery to the Western states, and the renewed enthusiasm for cheap land led to
the birth of the Republican Party .The greatest issue of the new party was
"free soil" and the passage of the Homestead Act (E. Foner, 1970).
The Republicans attracted Democratic voters with the slogan "vote yourself
a farm" and they supported pro-labor legislation. Lincoln avowed the
principle that labor is the source of all wealth and won the support of
immigrant workers by his opposition to an alliance between the Republicans and
the Know-Nothings (P. Foner, 1975). The Republicans were antagonistic to the
"money power" of the East, but they eventually adopted protectionism
in order to appeal to the manufacturers.
The
success of the Republicans and the split between the Northern and Southern
Democrats broke the alliance between the farmers of the West and the planters
of the South, which had allowed the Southerners to control the Federal state
through the Democratic party. The crumbling of this alliance provoked the Civil
War17 even though the Republicans never
advocated the abolition of slavery but only prevention of its extension to the
West. Southern peripheral capitalism was expansionist because of its extensive
nature and the quick exhaustion of the soil, but this was not the main reason
why the South desired the extension of slavery to the West. The main issue for
the South was control over the Federal state. Planters opposed the creation of
free states because the alliance with free farmers was tenuous and they felt
they would have less and less power in the Federal state. The result would be a
direct attack on their "peculiar institution" and their subjugation
to the North as an internal colony. Therefore, when the South- West coalition
crumbled and Lincoln won the election in 1860, South Carolina did not even wait
for him to take office. As Rubinson (1978) has pointed out, the Presidency was
everything because there was hardly a Federal bureaucracy in which the South
could have institutionalized control. South Carolina seceded immediately, and
most of the other slave states followed when it became clear that the North
would make war in order to preserve
the Union.
The
argument that the conflict between the North and the South was due to the
economic inefficiency of slavery has been sufficiently demolished. Let me only
add that plantation slavery remained highly profitable and the Southerners were
well aware that emancipation in the British West Indies in 1834 had increased
the cost of sugar production considerably. Slavery was not simply the basis of
an aristocratic civilization, it was a profitable business. The plantocracy of
King Cotton was probably the most successful peripheral capitalism in the whole
history of the world-system because it was less encumbered by precapitalist
institutions than the Hispanics, Germanics, Slavs, or even the British, and French
colonies had been. This was truly successful capitalist agriculture and its
very success led to dreams of slave empire and the challenge to the Northern
and Western interests (Genovese 1965). After all, the slaveholders started the
Civil War. The core capitalists, workers, and farmers of the North only
grudgingly made war to keep the Union intact.
The
contention that capitalism and slavery were incompatible for political or
cultural reasons simply does not fit with the historical facts. Barrington Moore's
(1966) observation that the legal and political legitimation of slavery
contradicted the more opaque form of exploitation that existed in
the North is true,
but insufficient to explain the violent conflict which developed. Similarly
Eugene Genovese's (1969) characterization of the divergence between the
political culture of the aristocratic and precapitalist South from that of the
fully developed capitalist mode of production based on wage labor in the North
does .not explain the Civil War. Regardless of cultural differences both the
North and the South were capitalist, only the North had become an area of core
capitalism employing relatively high wage labor, while the South had remained
an area of peripheral capitalism utilizing coerced low "wage" slave
labor (Wallerstein, 1979b).
The
evidence that supports the foregoing contention is to be seen in the political
history that led to the Civil War. Northern manufacturers were not against
slavery. In fact, in the face of increasing labor struggles they may have been
envious of it. Their biggest conflict with the South had been over
the tariff issue, and
that was no longer crucial to them by 1860. The main cause of the Civil War was
the opposition of the free workers and farmers to the extension of slavery to
the West. These core workers and farmers were not abolitionists. The main issue
for them was the threat of competition
with slave labor for
the lands of the West. Their unhappiness with the Compromise of 1850 was seen
most vividly in the battle for Kansas and in the fight against Southern
opposition to the Homestead Act.
The
Lincoln Administration did not contemplate emancipation until well after the
war had begun, and then mainly to head off English and French support for the
South (Case and Spencer, 1970). Queen Victoria adopted a formally neutralist
stance. The cotton famine caused by the blockade of Southern ports resulted in
massive unemployment in the English midlands. English support for Southern
naval raiders allowed them to sink a large portion of the Northern merchant
marine.18 The Emancipation Proclamation generated
enough support for the Northern cause in England and France to prevent further
aid to the South.
It
was not slavery that was the main issue but the question of who would dominate
the Federal state. Free farmers and workers found themselves at odds with the
interests of the peripheral capitalists of the South on the issue of the
frontier, and so cast their lot with core capital. In so doing, they destroyed
the plantocracy and created a strong core state. The Civil War and
Reconstruction firmly established the hegemony of core capitalism and core
labor over the Federal state. The upward mobility of the United States was
hereafter assured by the alliance between classes that was only disturbed by
quibbling over shares of an expanding pie, rather than by the regime crisis
that had characterized the antebellum period.
Conclusion
What
can be concluded from this examination of antebellum tariff politics? The
world-system perspective led us to expect that class forces contending for
state power would be important to the success or failure of core capitalism in
the United States. This study confirms that there was a great deal of conflict
between core and peripheral producers over the tariff and that the nascent core
capitalists needed alliances with other classes in order to overcome the
opposition of peripheral capitalists and the influence of extant core states.
But the prevalent conclusion among economic historians that the tariff was not
crucial to the survival of individual core industries does not support the idea
that protection was essential to the upward mobility of the United States in
the world-economy. This conclusion is supported by the research of Zevin
(1971), Taussig (1964), and David (1970) and is only partly contradicted by
Fogel and Engerman's (1971) study of the iron industry. What has not been done
is an analysis of the overall sectoral effects of protection. It is possible,
as Taussig implies, that protection was not crucial for any single industry but
was nevertheless important to the manufacturing sector as a whole. Further
research needs to be done before a definite conclusion can be reached.
Nevertheless,
the tariff issue is significant as a reflection of contradictory class
interests as perceived by the actors. The world-system perspective helps us
interpret the changing political alliances of classes and interest groups. As
mediators of the core-periphery trade the merchants often sided with the
peripheral capitalists, but when the imperial core state (Britain) became
unusually hostile, or when manufacturing became more profitable than the
maritime trade, they supported the politics of the domestic core capitalists.
The
class alliances of the free farmers were a function of their changing position
in the larger world-economy. This is not to say, as did Weber, that class
location is reducible to market position. The repeal of the Corn Law changed
the world market position of American farmers, but this was not
consequence of the
"sphere of circulation. " It was a change in the politically
structured conditions of agricultural production.
The
world-system perspective also reinterprets the class position and alliances of
American wageworkers, thereby shedding some new light on " American
exceptionalism." As Aglietta (1978} has argued, the original reliance of
the propertied classes on farmers and mechanics for support against the British
in the War of Independence created apolitical constitution that allowed the
extension of citizenship and political rights to men of little or no property.
In addition, the conflict between core and peripheral capitalists caused both
to try to mobilize the farmers and mechanics behind them. As we have seen, both
free traders and protectionists argued that adoption of their tariff policy
would raise wages.
In
addition, the dynamism of American economic growth was both a cause and
consequence of the interaction between capital and labor. The open frontier
allowed expansion and -even with massive immigration- kept wages higher than
they were in Europe. This encouraged capitalists to utilize laborsaving
machinery, and also provided an expanding home market for manufactures and
agricultural commodities. Thus the political constitution, the class structure,
and the rate of economic growth created the relative harmony between capital
and labor which Henry C. Carey elevated to a universal economic truth (Marx,
1858/1973 }. It also created the tendency for the reproduction.of an underclass
excluded from the mainstream of economic development.
The
end of continental expansion created the contradiction that led to the Civil
War. It was not the cultural incompatibility of slave society and wage-labor
capitalism, but the diminishing amount of new territory in which to expand that
led to the confrontation between core capitalism and peripheral capitalism. And
this was less a struggle between core capitalists and peripheral capitalists
(as the earlier controversy over the tariff had been) than a fight between
peripheral capital and core labor and farmers. The victory redounded to the
favor of the manufacturers, but it was not primarily their interests that led
to the conflict.
It
may be argued that the world-system perspective would lead us to expect that
the Civil War was caused by the conflict between core capitalists and
peripheral capitalists over the foreign policy of the Federal state, and indeed
this was my expectation when I began this study. The foregoing conclusion
focusing on conflict between core labor and peripheral capital over the
"internal" policies of the state is not inconsistent with a
sophisticated version of the world-system perspective, however. The examination
of class conflict as it occurs in the context of the world-economy seeks to eliminate
the internal-external distinction, which has confused much previous analysis.
The confrontation was caused by "internal" scarcities only because
the policy of annexation had come upon natural and political limits. And the
alliance between core capital and core labor, which is one of the most
interesting hypotheses of the world-system perspective, can be seen in formation
in the Civil War. This class coalition made possible the creation of a strong
core state that could rise to hegemony in the world-economy.
This
study also reveals that tariff politics are not always an ideal indicator of
struggle between core and peripheral producers. This is because the salience of
international boundaries and state regulation of trade varies with changing
conditions in the larger world-economy. State boundaries and other institutions
that are used to intervene politically in the market are more crucial during
periods of economic contraction than in periods of expansion. Class conflicts
are generally less severe in expansionary periods and so tariffs do not
accurately reflect contradictory class interests in these periods.
A
more complete understanding of the rise of core capitalism in the United States
requires the investigation of the world class basis of other types of state intervention
in the economy. Federal land policy, Indian removal, immigration policy,
regulation and deregulation of currency and credit, the extension of suffrage,
internal improvements, and the expansion of public education are all important
issues that reveal the nature of class contradictions and harmonies. Further
research should combine an analysis of these with our knowledge of tariff
politics in order to provide a fuller explanation of the rise of core
capitalism in the antebellum period.
Acknowledgments:
I would like to thank William P.
Quinn for his help on this chapter.
References
Aglietta, Michel
1978 "Phases of u.s. capitalist
expansion." New Left Review 110: 17 -28.
Amin, Samir
1976 Unequal Development. New
York: Monthly Review Press.
Aptheker, Herbert
1960 The American Revolution.
New York: International Publishers.
Bancroft, Frederic
1928 Calhoun and the South
Carolina Nullification Movement. Baltimore: Johns Hopkins University Press.
Basu, Dilip
1979 "The peripheralization of China
Notes on the opium connection." In Walter
L.Goldfrank (ed.), The World-System of Capitalism, Past and Present. Beverly Hills, Calif.: Sage.
Bauer, Raymond A.,
Ithiel de Sola Pool, and Lewis A. Dexter
1968 American Business and Public
Policy: The Politics of Foreign Trade. New
York: Atherton Press.
Bateman, Fred, and
Thomas Weiss
1976 "Manufactures in the
antebellum South," in Paul Uselding (ed.), Research in Economic History,
Vol. 1. Greenwich, Conn.: Jai Press.
Beard, Charles, and
Mary Beard
1964 "The tariff as a cause of
sectional strife and the Civil War." In Gerald
D. Nash (ed.), Issues in American Economic History. Boston: D. C. Heath.
[Originally published in 1927.)
Bornholdt, Laura
1949 "Baltimore and Early
Pan-Americanism." Smith College Studies in History, 34.Northampton,
Mass.
Boucher, Chauncey S.
1968 The Nullification
Controversy in South Carolina. New York: Russell and Russell. [Originally
published in 1916.)
Brenner, Robert
1977 "The origins of capitalist
development: A critique of neo-Smithian Marxism." New Left Review
104:25-92.
Broude, Henry W.
1964 "The role of the state in
American economic development, 1820-1890." In Harry N. Sheiber (ed.), United
States Economic History. New York: Knopf.
Buck, Norman S.
1969 The Development of the
Organization of Anglo-American Trade. Hamden, Conn.:Archon Books.
[Originally published in 1925.)
Burgin, Miron
1946 Economic Aspects of
Argentine Federalism. Cambridge: Harvard University Press.
Case, Lynn M., and
Warren F. Spencer
1970 The United States and
France: Civil War Diplomacy. Philadelphia: University of Pennsylvania
Press.
Chase-Dunn,
Christopher, and Richard Rubinson
1977 "Toward a structural
perspective on the world-system." Politics and Society 7:453-476.
Clark, Victor S.
1916 History of Manufactures in the
United States 1607-1860. Washington, D.C.: Carnegie Institute of Washington.
Cole, Arthur H. Ed.
1928 Industrial and Commercial
Correspondence of Alexander Hamilton Anticipating His Report on Manufactures.
Chicago: A. W. Shaw.
Crenson, Matthew A.
1975 The Federal Machine:
Beginnings of Bureaucracy in Jacksonian America. Baltimore: Johns Hopkins
University Press.
David, Paul A.
1975
"Learning by doing and tariff protection: A reconsideration of the case of
the antebellum United States cotton textile industry." In Technical
Choice, Innovation and Economic Growth. London: Cambridge University Press.
Eiselen, Malcolm R.
1932
The Rise of Pennsylvania Protectionism. Philadelphia: University of
Pennsylvania Press.
Emmanuel, Arghiri
1972
Unequal Exchange: A Study of the Imperialism of Free Trade. New
York: Monthly Review Press.
Field, James A.
1969
America and the Mediteranean World 1776-1882. Princeton: Princeton
University Press.
Fielden, Kenneth
1969
"The rise and fall of free trade." In C. J. Bartlett (ed.), Britain
Preeminent. London: Macmillan.
Fogel, Robert W., and
Stanley L. Engerman
1971
" A model for the explanation of industrial expansion during the 19th
century: With an application to the American iron industry." In R. W.
Fogel and S. L. Engerman (eds.), The Reinterpretation of American Economic
History. New York: Harper and Row.
Foner, Eric
1970
Free Soil, Free Labor, Free Men: The Ideology of the Republican Party Before
the Civil War. New York: Oxford University Press.
Foner, Philip
1946
Business and Slavery: The New York Merchants and Irrepressible
Conflict. Chapel Hill: University of North Carolina Press.
1975
History of Labor Movement in the United States, Vol. 1. New York: International
Publishers. [Originally published in 1947.].
Forsythe, Dall W.
1977
Taxation and Political Change in the Young Nation. 1781-1833. New York:
Columbia University Press.
Frank, Andre Gunder
1967
Capitalism and Underdevelopment in Latin America. New York: Monthly
Review Press.
1978
World Accumulation, 1492-1789. New York: Monthly Review Press.
1979
"On the roots of development and underdevelopment in the New World: Smith
and Marx vs. the Weberians." In Dependent Accumulation and
Underdevelopment, Chapter 3, New York: Monthly Review Press.
Freehling, William W.
1968
Prelude to the Civil War: The Nullification Controversy in South Carolina,
1816-1836. New York: Harper and Row.
1967
The Nullification Era: A Documentary Record. New York: Harper and
Row.
Genovese, Eugene D.
1965
The Political Economy of Slavery. New York: Random House.
1969
The World the Slaveholders Made. New York: Random House.
1976
Roll, Jordan, Roll. New York: Vintage.
Gold, David A.,
Clarence Y. H. Lo, and Erik 0. Wright
1975
"Recent developments in Marxist theories of the capitalist state." Monthly
Review 27(5):29-43.
Goldstein, Jonathan
1978
Philadelphia and the China Trade 1682-1846. University Park,
Pennsylvania: Pennsylvania State University Press.
Goodrich, Carter
1960
Government Promotion of American Canals and Railroads 1800-1890. New
York:
Columbia University Press.
Greene, Jack P.
1976
"Society, ideology and politics: An analysis of the political culture of
mid-18th century Virginia." In Jack P. Greene, R. L. Bushman, and Michael
Kammen, Society, Freedom and Conscience. New York: Norton.
Hale, Charles A.
1968
Mexican Liberalism in the Age of Mora, 1821-1853. New Haven: Yale
University Press.
Hechter, Michael
1975
Internal Colonialism: The Celtic Fringe in British National Development 1536-1966.
Berkeley: University of California Press.
Hidy, Muriel
1951
"The capital markets" in Harold F. Williamson (ed.), The Growth of
the American Economy. Englewood Cliffs, N.J.: Prentice-Hall.
Hobsbawm, E. J.
1968
Industry and Empire. Baltimore: Penguin.
Hofstadter, Richard
1964
"The tariff issue on the eve of the civil war" in Gerald D. Nash
(ed.), Issues in American Economic History. Boston: D. C. Heath.
Kim, Sung Bok.
1978
Landlord and Tenant in Colonial New York: Manorial Society, 1664-1775.Chapel
Hill: University of North Carolina Press.
Krasner, Stephen D.
1976
"State power and the structure of international trade" World
Politics 28,3:317-347.
Landes, David
1969
The Unbound Prometheus. Cambridge: Cambridge University Press.
Lindstrom, Diane
1978
Economic Development in The Philadelphia Region 1810-1850. New York:
Columbia University Press.
Lipton, Michael
1977
Why Poor People Stay Poor. Cambridge: Harvard University Press.
Lower, Arthur R. M.
1973
Great Britain's Woodyard: British America and the Timber Trade 1763-1867.
Montreal and London: McGill-Queen's University Press.
Lynd, Staughton
1964
"Who should rule at home?: Dutchess Country, N. Y. in the American
revolution." In Harry N. Scheiber (ed.), United States Economic History.
New York: Knopf.
Martin, Robert F.
1939
National Income in the United States 1799-1938. New York: National
Industrial Conference Board.
Marx, Karl
1968
Theories of Surplus Value, Part 2. Moscow. Progress Publishers.
[Originally published in 1863.]
1973
"Bastiat and Carey." In Grundrisse. New York: Vintage.
[Originally published in 1858.]
1974
"Articles on the North American Civil War." In Surveys From Exile.
New York: Vintage. [Originally
published in 1861.]
Mintz, Sydney
1969
"Labor and sugar in Puerto Rico and in Jamaica, 1800-1850." In Laura
D. Foner, and Eugene D. Genovese (eds.), Slavery in the New World.
Englewood Cliffs, N.J. Prentice-Hall.
Moore, Barrington
1966
Social Origins of Democracy and Dictatorship. Boston: Beacon Press.
Moulder, Frances
1977
Japan, China and the Modern World Economy. Cambridge: Cambridge
University Press.
North, Douglass C.
1966
The Economic Growth of the United States 1790-1860. New York: Norton.
Pincus, Jonathan J.
1977
Pressure Groups and Politics in Antebellum Tariffs. New York: Columbia
University Press.
Potter, James
1960
"Atlantic economy, 1815-60: The U.S.A. and the industrial revolution in
Britain." In L. S. Pressnel (ed.), Studies in the Industrial Revolution.
London: Athlone Press.
1976
"The Atlantic economy in the mid-19th century." Atti del I
Congresso Internazionale di Storia American, May 29. Genoa.
Poulantzas, Nicos
1975
Classes in Contemporary Capitalism. London: New Left Books.
Rubinson, Richard B.
1978
"Political transformation in Germany and the United States." In
Barbara H. Kaplan(ed.), Social Change in the Capitalist World Economy.
Beverly Hills, Calif.: Sage.
Schumpeter, Joseph
1939
Business Cycles, Vol. 1. New York: McGraw-Hill.
Shepherd, James F.,
and G. M. Walton
1972
Shipping, Maritime Trade and Economic Development of Colonial North America.
Cambridge: Cambridge University Press.
Stanwood, Edward
1903
American Tariff Controversies of the Nineteenth Century, Vol. 2.Boston:
Houghton- Mifflin.
Stein, Stanley J.,
and Barbara H. Stein
1970
The Colonial Heritage of Latin America. New York: Oxford University
Press.
Taussig, F. W.
1964
The Tariff History of the United States. New York: Capricorn.
Taylor, George R.
1953
The Great Tariff Debate 1820-1830. Boston: D.C. Heath.
Temin, Peter
1969
The Jacksonian Economy. New York: Norton.
Thompson, Tommy R.
1978
"Personal indebtedness and the American Revolution in Maryland” Maryland
Historical Magazine 73:13-29.
United States Bureau
of the Census
1975
U.S. Historical Statistics from Colonial Times to the Present, Part 2.
Washington, D.C.: U.S. Government Printing Office.
Van Deusen, John G.
1928
The Economic Basis of Disunion in South Carolina. Columbia University
Studies in History, Economics and Public Law, no. 305.
Vidal, Gore
1973
Burr. New York: Random House.
Wallerstein, Immanuel
1978
"World-system analysis: Theoretical and interpretive issues." In
Barbara H. Kaplan(ed.), Social Change in the Capitalist World Economy.
Beverly Hills: Sage.
1979a
"Class conflict in the world-economy." Pp. 283-294 in The
Capitalist World-Economy. Cambridge: Cambridge University Press.
1979b
" American slavery and the capitalist world-economy." Pp. 202-221 in The
Capitalist World-Economy. Cambridge: Cambridge University Press.
1980
"Semi-peripheries at the crossroads." In the Modern World-System:
Mercantilism and the Consolidation of the European World-Economy, 1600-1750.
Vol.2. New York: Academic Press.
Wood, Harold D.
1977
"Imperialism and economic development: England, the U.S. and India in the
19th century." In P. Uselding (ed.), Research in Economic
History. Vol. 2. Greenwich,Conn.: JAI Press.
Zevin, Robert B.
1971
"The growth of cotton textile production after 1815." In Robert W.
Fogel, and Stanley L. Engertnan (eds.), The Reinterpretation of American
Economic History. New York: Harper and Row.
Endnotes
1
This theoretical perspective calls our attention to the importance
of larger forces, such
as the world market and international
political and economic power, but it does not, as Robert
Brenner (1978) claims, ignore the
importance of class struggles. On the contrary, class relations
are seen to exist at the level of the
whole system, and class struggles are understood to take
place across, as well as within, state
boundaries (Wallerstein, 1976a). State boundaries overlay
the structure of world classes and are an
important influence on the subjective and organiza-
tional interests of classes. Capitalist
production relations include both wage labor in the core
and various forms of coerced labor in the
periphery, as well as the relationship between these
different types of labor control. From
this perspective class formation, state formation, and
nationbuilding are processes that occur
within, not exogenous to,
the operation of the capitalist
mode of production. Brenner's (1978:88-90)
contention that it was class forces in Virginia,
rather than in the world-system, which
determined the direction of development ignores the
question of how the class structure of
Virginia came into being.
The working out
of the logic of capitalist development is, of course, influenced by exoge-
nous variables, such as climate, soil
fertility, geographical features, and the institutional struc-
tures of precapitalist societies which are
incorporated into the world division of labor. These
exogenous factors influence the outcomes
of struggles between classes, states, firms, and so on.
But the main determinants of success or
failure come from the process of uneven development
itself, and the success of some means the
failures of others. The opportunities for increases in
income are limited by the socially created
and sustained scarcities, which the interests of super-
ordinate world classes place on the production and distribution of surplus product.
2 The conditions that allowed Japan to avoid peripheralization and develop core activities are described by Frances Moulder (1977). England's upward mobility is analyzed by Wallerstein (1974) and Frank (1978). Wallerstein (1980) also explains the emergence of semiperipheral Sweden and Prussia, as well as New England in the late seventeenth and early eighteenth centuries.
3 This
is an ironic reversal of approach when compared to the modernization literature
which sought to understand and promote the
development of "backward" nations in the basis
of
generalizations derived from the history of "advanced" ones.
4 Simple
commodity production exists when there is no differentiation between capital
and labor. Producers own the means of
production and produce commodities for sale on a
market. The free farmers working their own
land and producing cash crops constituted a large
part of the
colonial economy in the Northern and middle colonies.
5 These
are the areas that were least profitable in terms of the exploitation of raw
materials and labor, and thus subsistance farming created a relatively
egalitarian class structure. In
areas where mines or plantations created
an incentive for labor exploitation, either indigenous
or imported coerced labor forces were
utilized, resulting in a much more hierarchical class
structure. Mintz (1969) supports this
analysis with his comparison of Puerto Rico and Jamaica
in the early nineteenth century. The two
islands, which are very similar geographically, were
going through a transformation of class
structure in exactly opposite directions. Jamaica,
which had been a sugar colony for 150
years was, because of soil exhaustion, returning to a
rather egalitarian subsistence economy,
while Puerto Rico, which had been a neglected Spanish
colony with a subsistence economy, was in
the process of becoming a plantation economy
based on coerced wage labor.
6 Dutch
settlements (of Protestants) in the Hudson River valley evolved an agrarian
class
structure of large landlords and leasehold
tenants who worked on the estates (Kim, 1978 }. This
land tenure pattern remained after the
British took control of the area (Lynd, 1964 }. This indicates that, in regions
where soil productivity and climate is intermediate, political and
institutional factors more easily affect the type of class structure that
develops.
7 The
conscious policy of separation from indigenous peoples evolved from the earlier
experience in Ireland where English
overlords had become completely merged with the Gaelic
population and
thus beyond control.
8 This
description of the role of the status reflecting the combined interests of
dominant
classes does not exclude the possibility
that the state apparatus itself occasionally exercises influence in its own
behalf. My position is not a vulgar "instrumentalist" one (Gold, Lo,
and
Wright, 1975). For the case under
investigation, however, a sophisticated structuralist theory
of the state is hardly required. The
"relative autonomy" of the u.s. Federal state in the antebel-
lum period is out of the question. The
state apparatus itself was small (Crenson, 1975); thus the
vectors of class interest operated on state policy relatively unmediated by a government bureaucracy.
9 From
a world-system perspective it is understandable why emergent core producers in
a peripheral area and small commodity
producers relatively independent of the core-periphery
division of labor might support a War of
Independence. But why would Southern planters and
Northern merchants tied to the
core-periphery exchange support it? Of course, many large
property owners did not. Tory sentiment in
the South and in the commercial cities of the mid-
dle colonies (especially New York) was
high. But many merchants and planters were in debt to
British creditors (Thompson, 1978). The
planters shared with Northern farmers a resentment
Of the increase in what was perceived as
illegitimate taxation. Merchants resented the reorganization and attempted
enforcement of the Navigation Acts. And the planters also resented British
attempts to limit expansion westward with the Proclamation Line of 1763.
Plantation agriculture quickly exhausted the soil and necessitated expansion to
fresh areas. Aptheker (1960) suggests that rivalry between British and planter
land companies in the Ohio Valley contributed to Whiggish sentiment in Virginia.
But Frank (1978) argues that none of the above grievances would have been
sufficient in the absence of the cyclical economic slump that followed the
expansion of the first half of the eighteenth century. This, and the defeat of
the French by the British in the Seven Years War (and consequent French support
for the Americans) made the anti-imperial revolt possible.
10 The theory of unequal exchange (Emmanuel, 1972) does not appear full-blown here, but the argument bears a striking similarity to the “instability and inelasticity of demand” formulations of United Nations economists concerned with contemporary Latin American dependency.
11 The “free trade” postures of the Latin American regimes did not preclude all tariffs, but rather avoided a policy which systematically protected domestic core producers from British competition (Burgin, 1946). The occasional regimes that did advocate independent national development and protection were ineffectual and short-lived due to the strong opposition of peripheral producers supported by the British (Frank, 1967; Hale, 1968).
12 Whereas it has often been assumed that high wages were the main incentive for investment in machinery in the textile industry, David (1975:146) cites an unpublished work by Zevin which contends that one large firm held a monopsony (buyer monopoly) in the local labor market, and that this circumstance, probably shared by other leading firms, enabled manufactures to pay workers less than their marginal productivity even though labor was scarce. So it was labor scarcity rather than high wages that motivated these forms to employ additional machinery.
13 Zevin (1971) assumes that most of the increased demand for manufactures came from the rapidly expanding West, whereas North (1966) emphasizes the importance of the growing southern market. But Lindstrom’s (1978) study of the composition of demand and interregional trade demonstrates that most of the demand for manufacturers came from the East itself. The rapidly growing old maritime cities (Boston, New York, Philadelphia, and Baltimore), the new industrial centers (Pittsburgh, Wilmington, Providence), and the increased use of manufactures by the rural populations of the East were the main consumers of American core products in this period.
14 The clue which led me to Bornholdt’s (1949) article was a small. Seemingly incongruous, bust of Simon Bolivar encountered on walk up Baltimore’s North Charles Street.
15 Part
of the Jacksonian coalition involved an agreement to expand at the expense of
the
American Indians. Jackson's fame as an
Indian fighter and his toleration of the abrogation of
treaties and removal of Indians from the
lands of the South was an early example of the dark
side of American democracy. An alliance
between popular forces and large investors touted as
democracy was cemented by a common front
against an underclass, in this case indigenous
peoples. It is characteristic of upwardly
mobile semiperipheral states that the class coalition
upon which they are based is relatively
progressive in that it includes a larger percentage of the
"lower orders" than the class
coalitions upon which other contemporary states are based. And,
as well, the ideologies used to mobilize
development in these countries are usually relatively
egalitarian. Citizenship is cemented by treating some groups as non-citizens. In the U.S., it has been blacks, Indians, and recent immigrants. In Britian, it was first the propertyless Englishmen and later the Irish, Scots, and Welsh (Hechter, 1975). In the Soviet Union, it has been certain national minorities and political deviants. Thus the upwardly mobile countries mobilize national development by incorporating rather larger numbers of the population within the political community and the scope of development, and this an advantage relative to other countries because it solves some of the Keynesian problems of effective demand by creating a large home market. The exclusion of an internal underclass does not function primarily as a mechanism of economic exploitation, but rather to maintain the solidarity of the larger “egalitarian” alliance.
16 In order to study the development of core capitalism in the United
States we need to know the extent to which the home market was dominated by
British imports. None of the studies that examine the relationship between the
United States and Britain in the nineteenth
century
organize their comparisons in a way which would reveal this. North (1966) and
Potter (1960, 1976) stress the importance of the Atlantic economy in explaining
U.S. economic development, but they never directly examine the trend in the
proportion of the commodities
consumed
in the U.S. that are imported from Britain. Rather, they show the trend in the
value of imports by itself. Potter examines British exports to the U.S. as a
percentage of all British exports, but neither combines the British imports
with data on U.S. production or income.
Table 9.1 does
this. It shows the ratio of U.S. Realized National Income in manufacturing
to the value of British imports. We do not
have data on imports from Britain before 1821, but if
it is correct to extrapolate the trend in
table 9.1 backward in time, then the proportion of the home market served by
imports from Britain was high until 1839. Then this proportion declined until 1849,
experienced a small rise to 1859, and the declined continuously. The years are
not exact as data on Realized national Income for intervening years are not
available, but we can safely conclude that the peak of British domination of
the home market was around 1839 or earlier, and this domination declined from
then on, except for a slight recovery during the 1850s. Data on Realized
National Income in manufacturing are computed from Martin (1939) and British
imports from U.S. Bureau of the Census (1975).
17 Northern sympathizers called it the Civil war. Southerners called it the War for Southern Independence. A neutral name is the War between the States.
18 This injury and the emerging British superiority in ocean steamships caused the American maritime industry to go into a decline from which it did not recover until the end of the century.