Which property matters

I finally picked up The half has never been told, by Edward E. Baptist, which I'd been meaning to read since it came out in 2014. The subtitle is, "Slavery and the making of American capitalism," and it's a strongly argued case that slavery was integral to the growth of the country's territory and economy.

That position is probably not a surprise to everyone, but as Baptist points out, there are ways in which we're still stuck in "the half that has ever been told" (p. xx, emphasis added), about how "American slavery was fundamentally different from the rest of the modern economy and separate from it. Stories about industrialization emphasize white immigrants and clever inventors, but they leave out cotton fields and slave labor." (p. xx)

I'm only barely into chapter 2, but the book is repeatedly thought provoking, including the economic and legal history around "the Yazoo."

Like other east-coast colonies-turned-states, Georgia laid claim to lands pretty far west, in what is now Alabama and Mississippi, an area popularly known as the Yazoo, after a local river. In 1795 some land speculators bribed the Georgia legislature into selling them a bunch of the Yazoo at an incredibly cheap price. The titles were sold to other companies, "especially the Boston-based New England-Mississippi Land Company. That company, well provided with venture capital, broke up land into smaller parcels, which it then sold in the form of paper shares to investors." (p. 21).

In 1796 a newly elected Georgia legislature tried to overturn the 1795 sale, on the grounds that it had been the result of bribery. The U.S. Congress stepped in to block Georgia. "Together with northern advocates for financial capital, such as Jefferson's nemesis Alexander Hamilton, [Robert Goodloe] Harper insisted that a contract was a contract, and a sale was final. Both investors and the cause of developing the southwestern United States should be protected from a legislature elected by popular demagoguery and out to overturn a legal transaction." (p. 29)

The case made its way to the U.S. Supreme Court, which upheld the original sale.

The technical issue before the court was whether the Georgia state legislature could overturn a contract of sale into which a previous session had entered. Marshall and the Court ruled that the people of Georgia could not overturn the sale. The contract might have been accomplished by bribery. It may have contravened the will of the majority of white Georgians. But the sale to the investors' land company was a sale of property all the same, and property rights, by the chief justice's interpretation of the contract clause of the Constitution, were absolute. The who invested in the company - mostly New England money-market types and bankers - should be repaid from the sale of the land, which was now held by the federal government. (pp. 32-33)

At some level this is a necessary decision. Ownership has to be relatively predictable, or it else it becomes nearly impossible to transact anything. Should I buy these bonds from you? They're backed by this sale of land down in the Yazoo. If the sale gets invalidated, then the bonds' value evaporates.

Of course, not every sale is inviolate: "if you unknowingly bought stolen goods, you will probably have to return them to the rightful owner. The thief (or thieves) will then owe you the purchase price in restitution." And if you knowingly bought stolen goods, you're guilty of a crime.

Which is also as it should be. Imagine a situation where receipt of stolen goods is not a crime and where such property doesn't have to be returned. I steal something from you and then sell it to someone else. You go claim your property, but they accurately state that they paid me fair and square. Ownership now means nothing. (And who's to say I won't steal the thing from them and then sell it back to you? What's to stop me - other than my fear of one or both of you bashing in my skull?)

But all of this would be more convincing if the early republic had applied the same law to people as to property.

If I steal your land and sell it to my neighbor, my neighbor has to give it back to you.

But if I still your liberty by making you a slave, and then sell that liberty to my neighbor, the government treated that as an inviolable sale.

And not only did my neighbor now irrevocably own your liberty. His heirs also owned the liberty of your descendants, until such time as they saw fit to sell them or (less likely) give them their liberty back by freeing them.

A truly consistent application of property law would have made American slavery a legal impossibility. But the law has often been a tool for the powerful to accomplish what they want. It is a continual struggle to make the law better coincide with justice.