Amazon and American Slavery in the 1660s

General | Apr 20, 2020 | Carlos Castillo

Saw a prediction that Amazon would have a $2 trillion market capitalization by the end of 2020. By happenstance, I’m also studying up on the Civil War, emancipation and slavery in the United States.

I didn’t realize those subjects would cross, but they did.

African slaves arrived in Virginia in 1619. But because lifetime slavery wasn’t codified into law, over the years, some of these slaves found their way out of servitude and gained their freedom. But blacks were a relatively small part of the servant population in Virginia, only 300 by 1650.

At this time, most of the servants involved in agricultural work were white, having come over from England. The white colonialists wanted people familiar to them to populate the colonies. They also preferred English-speaking whites over Africans as laborers. To this end, colonists began to specifically give white servants certain rights under the law to keep them crossing the Atlantic. A specific limit to servitude was one such right.

The black servants were not included in the legislation for the aforementioned reasons. On the contrary; black servants not only didn’t gain more rights, they went backward. In 1663, Maryland passed a law fixing servitude for blacks for life. And their offspring would be born slaves. Virginia had also adopted this stance.

What was the catalyst for this change? The changing face of commerce. Tobacco was Virginia’s cash crop. It used to be a small farmer could earn a living raising tobacco and selling it. Then over in England, the restoration of the Stuart monarchy led to economic upheaval in the colonies.

The Navigation Acts of 1660 and 1661 served to stifle profitable trade with the Dutch.

This is where in the story I began to think of Amazon and its emergence not only as a retail powerhouse but as an economic behemoth given all the money currently at its disposal.

As the trade restrictions killed the price of tobacco in the colonies, the little farmers perished. Now you needed to produce massive quantities at a lower cost to survive on the slim profit margins. Producing tobacco became a major enterprise requiring major investment in land (plantations), equipment and labor and the use of credit.

Fast forward to modern times.

In Amazon’s case, it used the efficiencies of the Internet to achieve what is called “creative destruction”—laying waste to bricks-and-mortar retailers, including mom-and-pop businesses. It then employed the concept of scale by growing its market share.

Amazon needed to get big fast—and it did by using venture capital and credit (including the float between when the company sold a product and when it paid its supplier, a very ingenious aspect of its operation).

It’s not surprising that slavery became codified into law in the 1660s—slaves provided cheap labor to the plantations. Harvesting tobacco was labor intensive in 1660. Fulfilling orders in Amazon’s warehouses is also labor intensive. Amazon can’t enslave people (at least not yet) but it can pay subsistence wages to its workers to keep costs down, a key component in its more “efficient” model.

Silicon Valley has done a great job of spinning the concept of “efficiency” to mean something good, when in actuality it’s reduced headcount and depressed wages for many workers. Good for the plantation owner, not so good for the workers.

I worked in a chain bookstore during college. That store had a manager, assistant managers and clerks. It was in a mall, so it paid rent to the owners of the mall, who in turn paid security guards, janitors, building engineers and other workers to run the operation. I could keep going on how business from that one, little bookstore radiated and helped sustain jobs in the community at large.

Amazon’s notorious efficiencies helped do away with a lot of that “fat.”

The question becomes when does capitalism cross the line? When do we factor in the human toll of those actions? Back in the 1660s, businessmen found justification to enslave people for capitalistic purposes. Laws were created to put people and their offspring into bondage to keep labor costs low!

Amazon needs to keep its costs low. That’s why it will increase its investment in ways to replace humans with machines. Machines don’t require maternity leave, sick days, healthcare or other costs associated with a living, breathing workforce.

If there’s one thing I’ve learned from the Coronavirus epidemic it’s the power of the consumer. By sheltering-in-place, millions of people have stopped the economy in its tracks. That’s the power of the dollars in our wallet.

We have the power to curb capitalistic excesses that threaten to undermine our society. In many cases, the damage has already been done. But if we can educate ourselves to deploy our dollars in ways that don’t destroy jobs for the sake of efficiency, market share and enrichment of a relatively few people (who probably have more than enough money as it is), then maybe we build a more sustainable economy for more folks.

Money is power, so to allow Amazon and its ilk to dominate commerce by its sheer size and breadth will hasten the same self-destructive practices that nearly destroyed the country in the Civil War.

At one point in the war, there was a fear that England would side with the secessionists. Why? King Cotton! Only when Lincoln pivoted to emancipation did England rethink its strategy.

We have the economic power to change the course of history. Problem is will our selfish interests (cheap goods and services) as consumers override our best interests as a society?

 

Keywords: Amazon, slavery, wealth disparity, monopoly, Jeff Bezos

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