October 24, 2016Brown University

Seth Rockman on new book: Slavery’s Capitalism and why it matters to 21st Century business leaders

Congratulations to Seth Rockman, Brown University History professor and IE Brown faculty member, on the publication of Slavery’s Capitalism: A New History of American Economic Development. Co-edited by Rockman and Harvard History Professor Sven Beckert, the book binds together the latest research on the subject of the role of slavery in the rise of modern American capitalism. The book also offers a glimpse into Rockman’s unusual MBA course offering, Shared History of Slavery and Capitalism, and the game-changing effect that his class has on students.

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The book upends the American dominant narrative that slavery was a holdover from an antiquated southern agrarian economy at odds with the needs of the industrial Northern economy. It exposes this myth, in part, by diving into the nitty-gritty ways in which modern managerial expertise and our modern finance economy developed - not out of the industrial north - but on the backs of slavery. The plantation emerged as an important site of innovation for the financial, accounting, and management practices of modern capitalism. As a result, the book casts doubt on the oft-heard claim that markets naturally lend themselves to maximizing human freedom.

“Slavery is the preeminent system of global integration in the modern period,” said Rockman in a recent interview. “Many of the problems at the heart of global exchange were solved not in the trade of abstract widgets, but in the violent transfer of humans as commodities from one continent to another.”

By the nineteenth century in the United States, mortgages and other financial securities tied remote investors to the buying and selling of human beings. Analogous to today’s housing market, slaves were purchased on credit through mortgages. The banks issuing such credit felt confident in their investments because slaves, like houses, could be foreclosed. But unlike houses, slaves could be moved to where demand was highest (New Orleans, for example) and resold at high prices even during times of economic contraction. Banks in London, Philadelphia, and elsewhere invested in Louisiana and Mississippi banks precisely because slave mortgages seemed secure. The bank deposits of a New York abolitionist might end up in the coffers of a Natchez bank, loaned out to facilitate the buying and selling of slaves. The web of complicity was far greater than we might think if we merely focus on a “free” North and a slaveholding South.

So why should business leaders care about the connection between slavery and capitalism? Why does this course belong in an MBA curriculum? “Because it reminds us that capitalism is not an abstract force outside of human politics, morality or culture,” said Rockman. “It doesn’t naturally bend toward human freedom.” As such, Rockman’s work broadens the mission of business beyond maximizing shareholder profit to include the societal impact of economic decisions.

Rockman’s course exemplifies how IE Brown leverages the liberal arts tradition of critical thinking to prepare leaders to question assumptions, breakthrough boundaries and build businesses that open up new possibilities and create a more fair and just world. His ongoing relationships with many of IE Brown students are a testament to the lasting effect his course has on their lives and careers.

In the words of Jennifer Seith, IE Brown 2016 and vice president, recruitment technology products at CareerBuilder.com, “As business leaders with the singular focus of driving revenue, few of us have ever considered the origins and complexities of the interconnected economies we must navigate. Even fewer have questioned the moral and ethical choices made that created the processes and guide the decisions in today's business world. Professor Rockman's course challenged me to think in broader terms about the interconnectedness of our decisions and assumptions and to always strive to understand that choices have consequences.”

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• To learn more about Slavery’s Capitalism, go here.
• To view a segment with one of the book’s contributors, MIT History Professor Craig Wilder, on Tavis Smiley, go here.
• To hear a radio interview with Professor Rockman with Dr. Alvin, go here.

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