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Why Management History Needs to Reckon with Slavery
Caitlin Rosenthal, assistant professor of history at UC Berkeley, argues there are strong parallels between the accounting practices used by slaveholders and modern business...
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Caitlin Rosenthal, assistant professor of history at UC Berkeley, argues there are strong parallels between the accounting practices used by slaveholders and modern business practices. While we know slavery’s economic impact on the United States, Rosenthal says we need to look closer at the details — down to accounting ledgers – to truly understand what abolitionists and slaves were up against, and how those practices still influence business and management today. She’s the author of the book, Accounting for Slavery: Masters and Management.
SARAH GREEN CARMICHAEL: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Sarah Green Carmichael.
Most accounts of U.S. business history start with the Industrial Revolution, the railroads, New England factories. Slavery doesn’t usually come into it. Our guest today, Caitlin Rosenthal, says we need to take a much closer look at the part slavery has played in business and management.
In her research, she’s found examples of modern management practices buried in the ledgers of plantation owners. She says we won’t really understand what enslaved people were up against until we reckon with how sophisticated those management systems were. And we can’t have a full understanding of modern management unless we’re willing to look deeper at some of the painful aspects of its history.
CAITLIN ROSENTHAL: There’s just huge numbers of books about famous entrepreneurs, about steam engines and railroads and computers, about things where it’s relatively easy to tell a triumphant story. And by contrast, this makes people really, really uncomfortable. In some cases, innovation and violence went together and built on each other, and that’s totally contrary to most narratives of innovation. In Germany after the Holocaust and really up to today, there continued to be huge numbers of business histories grappling with these uncomfortable legacies and we don’t have anywhere near the same thing grappling with the history of American business and slavery.
SARAH GREEN CARMICHAEL: Caitlin Rosenthal is a professor at the University of California at Berkeley. She’s the author of the book “Accounting for Slavery: Masters and Management.” Caitlin, thank you for speaking with us.
CAITLIN ROSENTHAL: Thank you. I’m excited to have this conversation.
SARAH GREEN CARMICHAEL: So how did you come to focus on this topic in the first place?
CAITLIN ROSENTHAL: Well, I sometimes say that I’m probably the only person to write a history of slavery by accident. Right out of undergrad, I went to work for McKinsey & Company as a management consultant and I spent three years as a business analyst – you know, the person at the bottom of the team who has the spreadsheet.
And while I was there I got really interested in the emergence of scale in American businesses. So what happens when businesses get so big that managers and owners continue to know about them through data, but they actually don’t know the workers themselves? So when I applied to graduate school in history, I was interested in studying the emergence of scale and in my first semester of research I dug into the archives for where I assumed that story would start – Northern factories that employ free labor, especially textiles and iron mills.
But in the middle of that research, an economic historian handed me an example of a plantation account book and it was just much, much more sophisticated than the average practices that I had seen in Northern factories. As I began to follow it, I found other examples that showed slaveholders using many of the same practices that are usually considered to be milestones in the emergence of modern business.
So the question I had was: “What would the history of American business practices look like if we fully considered slavery? How could we write slavery back into that history?”
SARAH GREEN CARMICHAEL: I’m curious to know more about kind of these records and, and how you saw them sort of differently than other scholars because they were being used in some cases by social historians or you know, people sort of looking at other aspects of this. But you really came along and said, “Oh, there’s a business story to be told here.” Why is it important to get that economic aspect back on the table when we talk about the system of slavery?
CAITLIN ROSENTHAL: So I don’t think I would’ve been able to see it if I hadn’t been coming to the records as someone who’d just been keeping data myself. I think coming to it as someone who had been doing business practices put me in the position of the planter, which is a really uncomfortable position to be in. And it was partly my discomfort relating so easily to the planter and what the planter was able to do that made me want to work on the project.
And the fact that I could see this economic story I think is especially important because it can help us to acknowledge how massive the slave experience was. And kind of what a important thing we have to grapple with. I mean, if we’re thinking about where did our economy come from, this is a huge part of the American economy during the period. Even – you know, I mentioned those textile industries is where the records didn’t look quite as good, but of course they were spinning cotton that was grown by enslaved people.
If you look at the banking industry – this is not my own research – but there are scholars studying the mortgages and the amount of liquidity that enslaved people provided because they could be collateralized in producing loans. So the kind of idea is to take something that people have said,
“Well this was a bad thing, but mostly the story is good,” and say, “Well actually the story is kind of more deeply complicated than that. And if we want to move forward from it, it’s going to take a deeper reckoning.”
SARAH GREEN CARMICHAEL: Why is slavery so often left out of business history?
CAITLIN ROSENTHAL: Well, there’s a number of different reasons. One is, you know, after the American Civil War, all kinds of things conspired to lead people to forget about some of these stories. Both the interests of abolitionists and the interests of Southern planters were to suggest that slavery was backwards and unprofitable – on the one hand to make the slaveholders feel better about what they’d been doing, and on the other hand, the abolitionists wanted us to think we were doing away with an institution that was inefficient.
But since then there have been lots of moments where business historians and other scholars have actually tried to remind us of the relevance of slavery to the history of management. So much so that in 2002, there was an article – or I think it’s 2003 – by a management scholar where he said, “You know, actually, we’re in denial about the relevance of slavery to the history of American business practices, because if you read secondary sources on American business and American slavery, you can immediately see that planters are doing some of the same things that business people did.”
SARAH GREEN CARMICHAEL: I’d like to hear specifically some of the parallels you found because I think in the details, some of these disturbing parallels do start to come to life. What are some of the sort of surprising things you discovered about practices that planters were using, even if it’s uncomfortable to think of it as management?
CAITLIN ROSENTHAL: So one thing that’s interesting is the complexity of the management organizations that plantations had to rely on. These were huge enterprises. The large ones were hundreds, but the very large ones where thousands of enslaved people. And to manage an enterprise of that scale, you need not only an owner and an overseer, but you need numbers of middle managers.
Alfred Chandler, who’s probably the most renowned American business historian, wrote in his book “The Visible Hand,” which is the most prominent business history, that plantation overseers were in many ways the first salaried managers in the country. He didn’t conclude then that that made plantations particularly modern. But as I continued to pour through plantation records, I found that not only do we have overseers, but we have under them white managers sometimes called bookkeepers, and beneath them you have enslaved managers – head drivers, head watchman, head smiths and carpenters – each of whom are responsible for managing different aspects of plantation production.
Another thing that’s really interesting is the way plantations and planters did cost accounting. So one of the key developments in the emergence of modern business is the idea that you should analyze your products to see exactly how much everything costs. And related to this is the analysis of depreciation – so thinking about how a large fixed cost like a railroad train might change in value over time, and how you should account for that.
In one of the most prominent accounting guides for planters, Thomas Affleck’s “Plantation Record and Account Book,” he gives advice on how to appreciate and depreciate enslaved people. For him, these are long-lived, complex, capital assets. They are human capital. He doesn’t call them that, but he gives instructions on how to account for their growth and value as they get older, as they learn new skills and how to account for their depreciation as they age or if they’re injured or even if they attempt to escape.
SARAH GREEN CARMICHAEL: Wow. When you say something like a finding like that is interesting – interesting is one of those words that can contain a multitude of meanings. You know, sometimes it’s like, “Oh, that’s so interesting!” and it kind of means that your ears perk up and other times you’re like, it’s like a gift that you don’t want. You’re like, “Oh, thank you for the sweater. It’s very interesting.” So I’m just – when you as a scholar say that you find something interesting, what is behind that? What’s in there?
CAITLIN ROSENTHAL: Well, depreciation is something that I’d gotten used to seeing as a sign of remarkable sophistication. It doesn’t show up in accounting textbooks until the late 19th century and here we are half a century earlier, and we have a Southern planter instructing people how to appreciate and depreciate enslaved people. So that means that he was well ahead of his time in a setting that I had gotten used to thinking about as being one that was relatively backwards, one that wasn’t sophisticated.
So it changed the way I saw the records that plantations were producing. I started to think about these records as the kind of proto-spreadsheet. There are remarkable records – records that I never would have expected to find – that show how much cotton every enslaved person who was working on a plantation picked every single day.
West Indian plantations actually produced these monthly reports that summarized all of the data from the plantation onto a single sheet. And as I went, I started to think about these monthly abstracts as if they were kind of dashboards of productivity. And they were folded up and they were shipped back across the Atlantic Ocean to absentee planters who could peruse these from the comfort of their desk and really think about managing their plantation without having to confront a lot of the really problematic and terrible, terrible things that were actually happening on the ground.
SARAH GREEN CARMICHAEL: Something about that is very eerie to me to hear that because you know, I keep a spreadsheet where I have kind of the weekly output of Hbr.org and how much content are you producing. How does it kind of change how you think about some of these management techniques to know that they were being used in this context that is unexpected for people who are still using some of these techniques like depreciation or productivity measures today?
CAITLIN ROSENTHAL: First, I just want to compound what you said about being careful about the comparisons. I mean the fact that enslaved people couldn’t quit was everything. So the circumstances are quite different. At the same time, I think it should lead people to ask what were these measurements designed to reveal?
If you’re looking at these measurements and the same measurements could be used on a slave plantation, then those measurements aren’t designed to kind of help enslaved people or to help you become a more humane manager. They’re designed to help maximize the value and the surveillance of human capital.
And if you want to use those metrics for different purposes, then it’s going to be a difficult job to do that, because the first thing that pops out of them is about productivity and about profitability. And kind of in a way an uphill battle to turn metrics produced to reveal profit into something that can help us to be more humane.
SARAH GREEN CARMICHAEL: Yeah, there’s something strange about the contrast there. I know some research that I’ve followed in my work is the paperwork of terrorist organizations. You know, Al-Qaeda asks their “employees” to do expense reports. You know, if you buy things for your work in Al-Qaeda, you have to send something back to headquarters saying, “Hey, this is what I spent, pay me back.” And in some ways it is weird and disturbing to hear about the intersection of management and violence in that way.
CAITLIN ROSENTHAL: And on plantations I think there’s something about the fact that people are enslaved that makes them easier to measure and monitor. So I mean it’s not even just that they’re using the same tools. It’s that paperwork was really well adapted to people who couldn’t quit.
I referenced those Northern factory books and sometimes one of the reasons that people weren’t successful at keeping lots of data is that people were quitting all the time. A lot of Northern factories had 100 percent turnover. By contrast, if an enslaved person doesn’t show up to work, usually the planner knows exactly where they are and he knows when he can demand that they returned to work. So the fact that planters have control over people turns them into data much more fluidly – I mean, that’s, that’s not quite the right word – but it makes it easier to keep track of them using paperwork.
SARAH GREEN CARMICHAEL: One of the things you said earlier with that at the time, a lot of the conversation was sort of by abolitionists was trying to convince the slave owners, you know, what you’re doing is not only inhumane, it’s really inefficient, like it’s corrupting you. You know, Frederick Douglass sort of famously talked about how slavery corrupts the slaveholder and turns him into this brutal person.
It strikes me that today when businesses want to change for the better for some kind of moral or social reason, they still feel the need to say, “You know, we’re making this change because it’s actually better for the bottom line.” And that we still make moral arguments on the basis of what’s most efficient or what will maximize profits. And I’m just wondering how those kinds of arguments sound to you with your deep expertise now in this field?
CAITLIN ROSENTHAL: That’s exactly the kind of story I’m hoping to contest. There’s this mythology and I think it really is a mythology that doing good and doing well go together. That if you find the way to profit, you can find a way to do it in a way that’s humane and good. And I’m not saying that that can’t be true, but there’s absolutely no inevitability about it.
It’s not always the case, but it’s often the case that in a business setting the goal is to profit. As Milton Friedman famously wrote, the social responsibility of business is to increase its profits. And there is an underlying assumption that if we simply increase our profits then kind of good things are gonna happen along the way, that the pie is going to get bigger and that the profits are going to be shared.
And slavery made lots of people incredibly rich. People pursued profit relentlessly. Scholars have argued that there are more millionaires in the rich cotton districts of the Deep South there were in New York in 19th century America, and this kind of story shows how that kind of success can go along with have horrible violations of millions of people.
SARAH GREEN CARMICHAEL: One of the things that really struck me about what you observed in these documents was how disconnected plantation owners were from what was happening on their – sort of on the land that they owned and with the people that they owned. Do you think that there is something – kind of a message there for people who are maybe owners of capital or owners of businesses who often are reviewing things, documents or paperwork, that is very disconnecting from the people that they’re actually supposed to be responsible for?
CAITLIN ROSENTHAL: Oh, absolutely. I think data always creates a certain amount of distance. In some ways that can be positive. We can see more because of what we can do with data. We can see trends, we can see even human costs. But at the same time, if you’re always dealing with the numbers and especially if you’re dealing with those numbers at a distance the way absentee planters are, and to a great extent, you know, modern entrepreneurs who are dealing with production overseas or at a great distance. It’s really easy to overlook human costs.
This is something that abolitionists were really well aware of. There’s a passage that I keep coming back to written by someone who is advocating against the slave trade. And he warned that apprentices who are employed in the writing of invoices and instructions would be, and this is a quote: accustomed to note in the ledger under the head of profit and loss, a number of men, women and children purchase in Africa, of whom so many were thrown overboard and so many were found unsaleable.
And his warning is that through daily calculations like these people become inurd to the horrors of the system. They become desensitized to what they’re doing. And as he concludes: they might feel no more remorse in fitting out a ship for the purpose of trading in human flesh than they would have done in sending her to catch whales or seals.”
One of the striking parallels between plantation account books from lots of different contexts I’ve seen is they often account for humans and livestock in near identical ways. And I think people just get used to doing it and you get used to the numbers. It’s really easy to ignore what the numbers represent. I think it’s a constant danger of scale and of distance.
SARAH GREEN CARMICHAEL: How can understanding all of this, all that we’ve been talking about, really help us gain a deeper understanding of the abolition movement, of the movement to end slavery, even of the causes of the Civil War?
CAITLIN ROSENTHAL: So one of the most important recent reinterpretations of the American Civil War has been that enslaved people fought for their own freedom, that they were really critical in taking the system apart. And I think understanding these systems can help us to understand how that came to be. Because one skeptical perspective might say, “Look, you know, enslaved people in many cases vastly outnumbered the people who they worked for and they continued to be enslaved for a long time.” You think of this like, Kanye West’s totally ill-informed comments about how enslaved people should have revolted.
And first of all, people did revolt and rebel and resist in lots of ways, but it’s true that for a long time they’re not able to really undermine the system. And if you take a look at these records, you can see that as plantation slavery was expanding throughout the cotton South, it was also modernizing. It was becoming a system that had surveillance, that had data. It was becoming a system that was much, much harder for enslaved people to break out of. But also one that as it began to erode, began to collapse.
The other thing that I think is interesting there is a famous essay by a scholar named David Brion Davis, who’s a renowned historian of abolition, and he’s asked what were the abolitionists up against? And the answer is a lot. And if you ask that same question about enslaved people, the answer is even more. What were unsafe people up against? They were up against a system that mixed the brutality of slavery with the kind of sophistication of modern business.
SARAH GREEN CARMICHAEL: Wow. That is a lot. You know, one of the things that also strikes me about reading this material during our current moment is just that we’re very much still grappling with how to think about the Civil War in America. You know, there’s still a debate that happens on the Internet and in people’s living rooms about whether it was states’ rights or whether it was about slavery. Or you know, whether you know, it, there’s parts of the South where it’s still called the War of Northern Aggression. You know, this is very much a living debate and there’s been a huge and intense debate over whether to even fly the Confederate battle flag. And, you know, it’s just something that I think would surprise people maybe who aren’t from the United States to kind of say what you guys are still litigating this thing? You know, I’m just wondering like how do you kind of think about our current conversation about the ending of slavery given what you now know?
CAITLIN ROSENTHAL: Well, I think this is a conversation that we’re having now and we’re going to have it again and again. I get different reactions about my own work. Some people are totally shocked by it, where other people say, “Oh, you know, knowing what I know about slavery, this is absolutely what I’d expect.” And it’s a sign of the distance between how much people understand about the slave system.
But I would also add, you know, if you go back to arguments for secession, you can find calculations of enslaved property there. You know, one of the chapters in my book is called “Human Capital” and it’s about the many different ways slaveholders and slave traders estimated the value of people who were enslaved.
One of the places you find calculations of the value of that capital is in arguments for secession. People say, you know, this is so millions of dollars in capital and emancipation would endanger that capital. So you can tear, you know, put some of those arguments into kind of a state’s rights interpretation. But I think it requires a lot of twisting and turning once you go look at why planters were actually saying they were seceding.
SARAH GREEN CARMICHAEL: Yeah, it’s interesting. There was a part of your, sort of, the preface to your book where you were writing that from the perspective this is, I’m quoting now “From the perspective of slave holders and other free whites, the freedom to enslave was an economic freedom.” Reading that kind of blew my mind.
CAITLIN ROSENTHAL: Yeah. People are used to thinking about a system with slavery as being one where there wasn’t a free market and of course there wasn’t a free market from the perspective of enslaved people. But from the perspective of slave owners, this was their property and they experienced it as an economic freedom to own that property, to trade that property, to treat that property as they desired. I mean, it’s interesting if you look across the hemisphere more broadly than U.S. emancipation, most cases of emancipation of slaves are paid emancipation where people who are giving up their slaves are actually paid for them because they experienced emancipation as a loss of property.
SARAH GREEN CARMICHAEL: So I’m wondering, you know, what is it that you hope people will kind of do with this information? You mentioned that when you teach a class on this, you know, students all look sad at the end. Is looking sad kind of the appropriate response? Can we go further? What is it that you want people to do with this information?
CAITLIN ROSENTHAL: Well, part of me just wants people to pick up the book and feel sad, I guess, to read it as a cautionary tale, to add it to their stack of biographies of Carnegie and Rockefeller and kind of people who you want to emulate to a more problematic story. So I kind of hope it can be a cautionary tale, but at the same time, that’s a useful individual implication, but it’s just not enough.
If I look at these examples taken together, to me, the story they tell is of exactly how far people will go in the pursuit of profit. And the answer is often up to the boundary of what the law allows and sometimes even a bit beyond. So if the law allows people to be brutally mistreated, to be bought and sold, you get a system of slavery. And if the law allows people to mistreat workers, I mean, that’s what’s going to happen. So I feel like it’s a defense of kind of needing to put constraints on profit seeking.
SARAH GREEN CARMICHAEL: Okay. Well, I think we’re just about out of time, which I am sorry about, But Caitlin, thank you so much for talking with us today.
CAITLIN ROSENTHAL: Thank you Sarah.
SARAH GREEN CARMICHAEL: That’s Caitlin Rosenthal, professor at the University of California at Berkeley. She’s a historian and the author of accounting for slavery, masters and management. This episode was produced by Mary Dooe and Curt Nickisch. We got technical and production help from Rob Eckhardt. Adam Buchholz is our audio product manager.
Thanks for listening to the HBR IdeaCast, I’m Sarah Green Carmichael.