The Declaration of Independence, which founded the United States as an independent nation, was written in 1776—the same year that Adam Smith published The Wealth of Nations, the most prominent early treatise on international capitalism. Whether that represents a coincidence remains an ongoing debate. What’s clear, however, is that over the past two and a half centuries, the United States emerged as a slave economy, a free labor economy, a debtor nation, a creditor nation, and ultimately a powerful empire.

How central was slavery to U.S. economic history? Why has the United States lacked a strong tradition of socialism? Is there something distinct about the role of immigration in U.S. economic history?

Those are just a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.

Cameron Abadi: Was slavery peripheral or central to American economic life at the beginning of the country’s history—and is that traceable today as well?

Adam Tooze: The short answer is surely yes. I mean, what was slavery if not an economic institution? The perversity of slavery consists precisely in the reduction of human beings to economic commodities. All the other issues associated with slavery—political, moral, civil—result from that original obscenity and that original act.

And in the historiography, this question is absolutely central, apart from anything else, because it explodes as an economic question into American history in the 1860s in the form of the Civil War. Because the Civil War is about—it isn’t about anti-racism. There are anti-racist abolitionists, and there are racist slaveholders. But it’s fundamentally a political economy question about whether as new states in the west are added to the United States, they’re added as slave labor or free labor states. And to put it crudely, the central project of challenging the slave institutions is to limit the extension of unpaid, coerced chattel slavery to further than the states in the South to which it already pertains, right? That’s the whole thing. And it’s only once that logjam is broken that then the railway buildout and the full integration of the rapidly expanding western territories can be accomplished. So no, it’s absolutely central.

And this question of how historians have read slave institutions has been absolutely fundamental and has rocked back and forth over the last 120, 130 years, from an original kind of liberal preconception that slavery was a backward, fossilized institution that had to be overturned by the more progressive North and that then unleashed rapid economic growth, to a revisionist reading that set in in the mid-20th century really which emphasized the fact that slavery could in its own terms be economically rational, to a really doubling down on that in the most critical versions of recent historiography, which insists that the foundation of American prosperity and American wealth is the violence of slavery, the racial violence of slavery, the anti-Black racism of slavery. All else follows from that initial moment, which, you know, the dating of the 1619 Project points to the fact that it wasn’t just free people coming from Western Europe that settled the United States, but that slavery came. And it’s changed to another line now, which is arguing that, well, maybe perhaps actually the functionality and the efficiency of slavery has been exaggerated and emancipation was in fact itself a driving force of further economic growth. So no, the pendulum has swung back and forth.

I have a great debt to the quantitative side of the economic history divide. And the kind of earnest, serious-minded efforts to quantify this point to the fact that, of the population of the United States in the 19th century, so the census of 1800 counts 17 percent of the population as Black slaves. By 1860, it’s 12.6 percent of the population, which is, roughly speaking, the percentage of African Americans in the United States today. If you look at the labor force—because slaves, all of them, worked—their share is higher, so it’s closer to 30 percent of the labor force in 1800, falling to a fifth by 1860 because of white migration. In agriculture, where 90 percent of slave labor was employed—not exclusively, but 90 percent—the share is in the order of 37 percent to 40 percent of the agricultural labor force was slave. So North American, United States slavery is somewhat different from Brazil, for instance, the other great slave society of the Americas where slaves were employed across the board in virtually every profession. I mean, in the U.S., they were above all concentrated in the agriculture of the Southern plantation economies.

And we can then do the math on what their output likely was. And you arrive at conclusions which suggest that roughly the same percentage of American GDP as slaves were share of the population is contributed by slave labor. So about 12, 13, 14 percent, something like that, of the total economic activity. Which is huge, right? So this is a giant sector. It’s like the manufacturing sector in an industry in the United States today. So it’s everywhere in various forms. It’s not the whole economy, except if you’re in the plantation South, but it’s a very substantial slice. It’s a fused society because of the prevalence of crops like cotton. The slaves were not just a stationary workforce implied in existing plantations, but it was slave labor that extended the plantation frontier into the Mississippi Delta, for instance. And in one of the most grotesque aspects of this, because human beings were productive capital, they could also be mortgaged. So you could build essentially securitized products on the basis of humans. Monticello, [Thomas] Jefferson’s beautiful mansion, was paid for in part by a mortgage raised on his slaves.

So in every respect, they were a key part of the American economy. And it remains one of the besetting forms of violence that runs through American society all the way down to the present day. It’s completely inescapable as a reality if you live in the United States, even if you live in the North, like in New York City. The reality of consequences of anti-Black racism running through American society all the way down to the 2020s, and most manifestly with regards to the criminalization and incarceration of African American men, it is shocking. If you come from other places of white racism like Britain or Europe, to encounter the American variety is a whole different beast. You know, it’s one of the great besetting curses of American society, this undigested legacy, which in its origins is absolutely, fundamentally economic. Never just that, because it takes a bunch of other supplementary arguments to justify this institution. But at its core, clearly rooted in economic logic.

CA: There is a long-running debate about how America is distinct in its lack of a strong socialist tradition. Is there something distinct about America’s periods of those kinds of managed capitalism versus perhaps other industrialized nations?

AT: This is a really fascinating question, and I just want to push back on that idea, because America in the late 19th century is, after all, full of European exiles who are absolutely part of the European socialist movement. [Karl] Marx and [Friedrich] Engels were obsessed with events in the United States around the American Civil War. Some of Marx and Engels’s comrades from Germany in the 1840s, after the defeat of the 1848 revolution about which they wrote the Communist Manifesto, end up in the United States fighting on the side of the Union army. In fact, one of them, [Franz] Sigel, is commemorated by a handsome statue just between my home on the Upper West Side and the Columbia University campus. And these were trans-Atlantic radicals, much more in the manner of a [Giuseppe] Garibaldi or Latin American figures of revolution that we think of. And May Day, the workers’ holiday around the world, the first of May, commemorates the Haymarket massacre in Chicago in 1886. So, the international labor movement designated May 1 as its global holiday of labor celebrated the world over because of a struggle in the United States. I mean, in the early 1900s, you have the formation of the Socialist Party of America, of the IWW, the Wobblies, the Industrial Workers of the World. Eugene Debs is the anchor figure of the resistance to America’s engagement in World War I. There was a very powerful vocal socialist movement which immediately attracts the attention of the American authorities and is violently repressed.

So part of the answer to the question of why socialism isn’t stronger in the United States is that it was indeed threatening in various ways and was crushed. It was crushed by the use of armed strike breakers, by the use of repression—the FBI, the American political police, is created largely to monitor socialist threats—by macroeconomic means, by the crushing of the post-World War I inflationary boom that comes down in tatters in 1920 and ends the greatest surge in labor militancy in America up to that point. But through the ’30s, ’40s, ’50s, ’60s, American socialism in various forms is kicking. If you look at the CIO, the more radical alternative to the AFL in the American labor movement of the 1930s, in Detroit, in the UAW, the autoworkers. You’ve got figures like Walter Reuther, who comes from a German émigré socialist family, who spent time in the Soviet Union in the 1930s building car plants for the Soviets that had been moved from Detroit, who is an absolutely key figure in the postwar period, which is this phase of social liberalism in the United States where, say, the Kennedy and the Johnson administrations are negotiating with an American new left, which is bringing elements of America’s socialist past, but also elements from European radicalism and global radicalism at that point. Not to mention, of course, the civil rights struggle being driven by Martin Luther King Jr. And Coretta Scott King, his wife, was truly a radical thinker in her socio and economic politics, not to mention many other people in the Civil Rights Movement.

So, I think it’s a kind of liberal overstatement to say, “Oh, well, America never had any socialism.” I think the fairer point would be to say it was always a minority view as a result of the vivid anti-communism in which many American socialists also participated. They amputated, perhaps, the American communist movement, which was also a powerful force of labor mobilization and civil rights activism in the ’30s and ’40s before the McCarthyite crushing. But this strain of American socialism has always been present. And it’s been one of the interesting things about [New York City Mayor Zohran] Mamdani’s, you know, New York’s radicalism that it has repeatedly been willing to invoke this. One of the reasons we are asking this question right now, presumably, is because of the surge made by Mamdani-endorsed candidates with DSA [Democratic Socialists of America] links in America in the last month. And the DSA explicitly invokes the legacy of American socialism. And it’s a party in its own right. Last time I looked, it had 50,000 or 60,000 members, which puts it on a par with say, I don’t know, Die Linke in Germany or a movement like that. So, there is this strain of American socialism which is present, which sits on the edges of American politics, which is really pushed to the margins in the ’70s, ’80s, and ’90s, but then has made a comeback recently. And which has authentic North American, but also European roots, and of course, also through migrants from Mexico and Central and South America, also deep roots in the leftism and the anti-imperialism of Latin America. So, there’s more there than meets the eye, perhaps. And it’s also a politics which has always been quite radical because of its need to engage with the Civil Rights Movement. We shouldn’t count it out, I mean, as a historical force, to a somewhat surprising degree, even in the present.

CA: America’s preferred self-narrative had for a long time been that the United States was distinct precisely as a country of immigration. And I guess I wanted to ask, is it accurate to say that this was something distinct about the U.S. economy, that the United States was different in some way in being open to outsiders in a special way?

AT: You and I both are products of this experience, right? So at some level, it’s clearly true that this is a feature of American society and America’s economic history. It is not by any means unique. I mean it’s distinctive, but it’s not unique. I think maybe that would be the way I would put it. The United States, first and foremost, is the product of a white settler colonial project—English, Scottish, Irish, German, essentially—through the middle of the 19th century, and an economy of slavery, of slave importation through 1808 when the importation of slaves was stopped. And as we were saying a minute ago, by the mid-19th century, about an eighth of the population are chattel slaves.

There was also a very large-scale Asian migration in California, but above all white migration from Europe, from both Western Europe, notably Germany and Scandinavia, but then Eastern Europe and Southern Europe. And again, this is dramatic in scale, but the overall pattern is familiar from the rest of the so-called white commonwealth within the British Empire, so Canada, Australia, but also, to an extent, which America sort of refuses systematically to recognize, with Latin America, of course, with Argentina, with Brazil, with Uruguay, with Costa Rica, with Chile. All of those zones, notably Brazil and Argentina, are huge zones of large-scale European migration with big, big Italian populations, notably. All of them integrated within the zone of British capital, trans-Atlantic capital, which was also decisive for America’s development.

And then America leads the world, really, in the 1920s in imposing restrictions. So the nativist strand, which has come to the fore again now, is also a distinctively American thing. It’s not exclusive to America. The constitutions of Australia, for instance, are explicitly written with a mandate allowing the Australian population to determine its own self-determined, in other words, to exclude Japanese and Chinese. But very powerfully driven by the U.S. because it’s the largest magnet of global migration. And so the closing of the American migration window in the ’20s defines a pattern which is typical then for much of the rest of the world in the ’30s and ’40s, it produces a chain reaction.

And then when America reopens in the 1960s, it’s in the mode which is quite different from previously, which is closer to kind of the guest worker, migrant worker model that is being used in Western Europe at the time as well. It’s essentially short-range migration from Mexico and then increasingly from the rest of Latin America, which shapes a new pattern, which is much less heterogeneous, much less complex than is typical of, say, Britain and France at the same time.

And then from the 20th century, we see another wave of migration in the U.S., which is different again, which is very heavily Asian, Chinese, and South Asian, and recently, latterly, African as well. So new patterns coming. And so rather than seeing America as its own self-image would describe, I would see it as a patchwork of patterns which we see around the world all overlapping in the U.S. and of course taking a scale in the U.S. Not in proportional terms or in the intensity, but a simple scale which is unique, and due to the proximity of the United States to Mexico and to Central America, of course, deeply shaped by that particular flow, and increasingly distinct from Europe in the sense that Europe’s flows are from Western Asia and Africa, whereas America’s flows are increasingly also trans-Pacific and from South Asia. But in terms of share of people with migrant background, at the current moment, Germany, I think, has a larger share of first- and second-generation migrants than the United States does. So it’s no longer in any way unique in that respect, but shaped path-dependently by this long history.