John Hope Bryant (19:48)
so welcome back to Money and Wealth, everybody. And today I'm going to talk to you about something that most Americans were never taught, not because it isn't important, but because it's uncomfortable. Today, we're going to talk about the economics of slavery. Now, let me be clear before we get into this. This episode is not about blame. I've said this a half dozen times. I want to underscore it in case people are clipping this in segments. Is not about blame. That's a distraction. This is not about making anybody feel guilty even. It's not about victimhood. I'm no victim. I'm a victor. And so are you. This episode, and certainly my forefathers and foremothers, my family, who were enslaved themselves, my second great grandmother left slavery, left escaped slavery and went on to buy a house. Didn't have a mortgage on it, had a border renter, which means she turned into a capitalist. It's such an inspiring story. My second great grandfather, George Young, on my father's side, that was my mother's side, the lady on my father's side went on to answer Abraham Lincoln's call for the Emancipation Proclamation and went on to protect the people of Memphis, Tennessee, in the black regiment, one of 7,000 black officers. He was protecting people who were not really all that thrilled about protecting him. So there's my social media justice bones and my capitalist bones all in one story. So this episode's about Understanding the economics of America. Because if you want to understand wealth in America today, you have to understand how wealth was built yesterday. And once you understand this story, we can talk about how to build wealth going forward. Let me start with a statistic that shocks me and will shock you the first time you hear it. In 1860, just before the Civil War, the single largest financial asset in the United States of America was enslaved people. And the wealthiest city in America was Noxious Mississippi. I'll repeat that. The wealthiest city in America and some would say the wealthiest city in the world at that time was noxious Mississippi. Small footnote, part of Wall street started in Montgomery, Alabama. That's where some very well known investment houses, including names you, you would know today, began there, because that's where the money was being made. So the single largest asset was not railroads. It was not banks or land or factories or even even just sort of talented human capital, human beings. It was enslaved. Historians estimate nearly 4 million enslaved people in America had a combined market value of about $3 billion in 1860. Now, that number might not sound enormous today. We mentioned a billion. It doesn't sound enormous. We're living in strange times, by the way. But when economists compare it to the size of the economy at that time, it would have been somewhere between 10 and $15 trillion a day, conservatively due to, and to give you some context for that, the U.S. economy is about 30 trillion. We're the largest economy in the world. The market value of the stock market, let's just say 50 trillion plus. Yeah, it's a big number, right? And this is, you know, let's just say half of the US GDP. So the largest concentration of wealth in America in 1860 was an asset class, if you want to call it that, quotation marks, worth the equivalent of, say, $15 trillion today. That means enslaved people represented more wealth than all the railroads, all the factories, all the banks in the country combined. And here's the part that most people don't know. Enslaved people were treated not just as labor, but as a capital asset. They could be mortgaged, insured, used as loan collateral, bought and sold in financial markets. Basically a form of what we call today securitization. This is why historians today say something important. Slavery wasn't just a social system. It was an economic system. And I'll go one step further and tell you that the Civil War was an economic dispute. It was the south resisting Northern economic domination. The north was moving to industrialization, factories and all that stuff. And the immigrants of that day, the left Behinds and the thrown aways of that day who came in America, the Polish, the Italians, the Jews, whoever you want to think about of that day, who were not considered sort of the upper class. They were coming in and trying to strive and grow and build things, but they're heading north along with industrialization. So those economies were growing and the Homestead act gave land away, heading west. And so the west and the north were growing. And the south was stuck in an old model of slavery, even though it was where half of all millionaires, more than half of all millionaires lived in the South. Specifically, Mississippi. Do you know Mississippi was the wealthiest state in America before the Civil War? It's a poorest state in America today, and I've got family there. So I want them to come up from where they are now. And that's why, again written this book, Capitalism for All is coming out soon. That hopefully is a business plan for all of us. Now, let's talk about cotton, because cotton was the engine of that economic system. By 1860, cotton made up about 60% of all U.S. exports. Think about that. More than half of everything sold to the world came from one product, cotton. And almost all of that cotton was grown and processed by enslaved labor. In fact, the United states produced roughly 3/4 of the world's cotton supply, which means the global textile industry, the biggest manufacturing industry on earth at that time, depended on American cotton. They call it king Cotton. Actually, it was the gold of that time, the platinum of that time, the AI of that time, if you want to call it that, artificial intelligence, the capital market king or queen. And that cotton came primarily from places like Mississippi, where my family's from, Alabama, where my family's from, Louisiana, where Ambassador Andrew Young's family is from, and Georgia, where, again, my family is from. This is why people at the time called cotton, again, King Cotton. Cotton wasn't just agriculture. Cotton was the energy source of the global economy. It was the oil of the 19th century. And that cotton economy created enormous wealth, which leads to another surprising fact. Most Americans today think of Mississippi as one of the poorest state states in the south, and. And really, it's the poorest state, arguably in America, in the country. But this fact is worth underscoring. Again. In 1860, Mississippi was actually the richest state in America per capita. Let that sink in. The richest state, why? Because the Mississippi Delta produced some of the most profitable cotton plantations in the world. Some plantation owners controlled thousands of acres of land and hundreds of enslaved workers. They were even a town called, as I mentioned earlier, but I'm going to underscore here. Natchez, Mississippi. N, A T, C, H, E, Z. If you'd like to look it up for yourself. At that time, Natchez was one of the highest concentration of millionaires in the United States of America, the richest city in America. But there is something important to understand here. That wealth was extremely concentrated. Only a small percentage of white southerners actually owned enslaved people, as I mentioned earlier. And an even smaller percentage owned large plantations. So it's no different than the uber wealth you see today. It's just the uber wealth we see today, I believe is more responsible, more authentic, more. I mean, for what you ever think about it, they're not engaging in slavery, at least not the folks I do business with and not out in public. It's not a mainstream industry. No legitimate business person of any ilk is doing that today. So we have made progress from immoral ends to at least neutral ends, if not moral ends. I'm trying to move us into a moral economy. Good capitalism. How capitalism can serve all of God's children and take the bottom third and lift them up and put the ladder to the bottom and so you can climb their top so that folks don't resent rich people. They want to become one. Back to the story. So when we talk about Southern wealth in 1860, we're really talking about the wealth of a very small elite class. But that elite class controlled massive economic power. Now here's where the story gets even more interesting. Because the cotton economy wasn't just southern, it was global. Let me explain how the system worked. Cotton grown on plantations in Mississippi or Alabama would be shipped down the Mississippi river again in New Orleans as an example. From New Orleans, it would be exported to Liverpool, England. Liverpool was the financial center of the global cotton trade. If you didn't know that, by the way, did you know that Birmingham, Alabama was named after Birmingham, England, because it was an industrial center in the world of Birmingham, England for cotton. And Birmingham, Alabama was an industrial center in America for slavery. And cotton and railroads ran through it, just like in Birmingham, England. Anyway, how interesting. Today the mayor of Birmingham is a black man who is doing. Actually Mayor Woodfin, who's a very good man and doing a very good job. I think he just won his third re election, which is unprecedented in a very diverse place like Birmingham and Operation Hope. I don't think he would mind me saying this is responsible. Well, he's responsible for him becoming a homeowner. But we facilitated it through our Hope Inside program that Mayor Randall Woodfin partnered with in the. For the employees of the city of Birmingham full circle and through and and with a mortgage through Regions bank, our partner in that area for hope inside good capitalism. Doing well by doing good. I think he's the first homeowner homeowner in his family and now a father. So we can have rainbows after storms. In fact, as a scientific fact, you cannot have a rainbow without a storm first. So it would be exported to Liverpool, England. Liverpool was the financial center of the global cotton trade. And from Liverpool, cotton went to textile mills in Manchester and other industrial cities in Britain. Those mills turned cotton into fabric. Okay. And that fabric was sold all over the world. But there was another piece in the system. Finance banks in New York financed the cotton trade. Investment banks in places like Montgomery, Alabama facilitated portions of that financing activity. Specifically as it relates to cotton banks in New York financed the cotton trade. Insurance companies insured shipments. Shipping companies transported goods. Merchants issued credit. Some of the early financial firms that later became part of Wall street actually began in the cotton economy. Let's give you some examples. Lehman Brothers. Lehman Brothers started in Montgomery, Alabama as a cotton trading business. Cotton was so valuable that in some cases it actually functioned like currency. So when we talk about slavery, we're also talking about global capitalism. Cotton plantations, New York finance, British factories, global markets, all connected. Now here's another economic reality that rarely gets discussed. When slavery ended in 1865, the wait was worth it.
