Perhaps the most durable myth about slavery is that it was utterly incompatible with capitalism. Well before historians in the twentieth century began legitimating the idea, abolitionists suggested the disconnect themselves. In Uncle Tom’s Cabin, Harriet Beecher Stowe portrayed slave-traders as underfinanced, disreputable fools—the furthest thing from competent, successful businessmen. Even Karl Marx, no friend of capitalism, believed that wage labor would destroy slavery. But in recent years, scholars have begun to demolish this myth, arguing not only that slavery was compatible with capitalism, but that the emergence of modern capitalism made slavery’s growth possible.

The Business of Slavery and the Rise of American Capitalism, 1815-1860 establishes its author, Calvin Schermerhorn, as among the best practitioners within this new group of historians. While Walter Johnson, Seth Rockman, Edward Baptist, and Sven Beckert have recently made the same core argument, Schermerhorn exposes the links between capitalism and slavery with remarkable clarity, economy, and force. By focusing on the most successful firms involved in the domestic slave trade, Schermerhorn shows how the building blocks of modern capitalism—from innovations in marketing and technology, to the development of sophisticated financial instruments—fueled slavery’s expansion throughout the South. The possibility of bloodless abstraction is saved by his emphasis on the devastating human cost.

The closing of the African slave trade in 1807 posed a major challenge to slavery’s expansion. Yet it wasn’t a challenge that creative entrepreneurs could not overcome. Schermerhorn shows how one slave trader, Austin Woolfolk, turned this setback into an opportunity, becoming extraordinarily rich in the process. Based in Baltimore, Woolfolk saw that slaveholders in Maryland and bordering states were desperate to get rid of excess slaves. He also knew that would-be planters in the lower South—Louisiana, especially—were hungry for them. But sellers and buyers had no way of communicating with each other; there was no Craigslist.

Woolfolk’s genius was to build such an exchange, using the newspaper advertisement business as his medium. Woolfolk’s particular gift was in creating eye-grabbing ads: by the 1820s, seemingly every newspaper in the South featured a clear, simple, all-caps ad written by Woolfolk: “CASH FOR NEGROES.” Schermerhorn argues that the actual market for slave sales may have been far smaller than the ubiquity of Woolfolk’s ads suggests. Yet in simply printing his ads over and over, Woolfolk conjured a market into being. In the wake of his advertisement scheme, everyone seemed to want a hand in the slave-owning business.

But the paper money needed to buy and sell slaves was in short supply in the early nineteenth century. Woolfolk’s slave-trading business might have ended with him had not forward-thinking southern bankers devised a way for potential slave owners to access credit markets. How southern bankers devised new financial instruments that enabled would-be slave owners to access credit was recently described in Edward Baptist’s much-discussed book, The Half Has Never Been Told. But Schermerhorn brings this process to life through detailed portraits of a few men—“slavery’s bankers,” he calls them—who were instrumental in financing slavery’s expansion.

In order for cotton and sugar production to expand, planters just starting out needed loans to buy slaves and land. To get planters credit, Louisiana bankers Hugues Lavergne and Edmond Jean Forstall allowed slaveholders to use what few slaves they had as collateral for loans. Lavergne and Forstall then repackaged these loans into financial instruments that their banks sold to creditors in New York and Europe. Working with powerful bankers like the London-based firm Baring Brothers and Company, they pressured the Louisiana state government to “secure” these financial instruments with public money, in effect committing taxpayer dollars to pay off these loans in case slaveholders defaulted.

Once secured with public money, European financiers confidently bought these slave-based securities, which in turn pumped dependable European currency into America’s economy. Schermerhorn presents Lavergne and Forstall’s as financial innovators, their era’s equivalent of the recent bankers who sliced up sub-prime mortgages, repackaged them into complicated financial instruments, and made themselves phenomenally rich in the process.

But slavery’s bankers chose to ignore the effects their financial schemes were having on slaves. The story of Sam Watts illustrates them perfectly. The increased flow of capital enabled the slave-trading firm Franklin and Armfield to purchase the twenty-two year old Watts from his Virginia owner in the summer of 1831. The firm paid $450 for Watts using credit drawn from banks in New York, and then resold him to Forstall in New Orleans for $950—a remarkable but fairly common profit of more than one hundred percent.

Before being sold to Forstall, however, Watts was jailed in Norfolk, Virginia for six weeks as Franklin and Armfield’s agents bought enough slaves to fill a ship headed for New Orleans. To cut costs, the firm needed to fill every last inch of the ships they used for transport. By October, agents collected the 135 slaves needed, included Watts, to make the three-week journey to New Orleans profitable. Watts was then crammed into a space roughly “the dimensions of a coffin” and set out to sea.

After being shipped down the eastern seaboard and around the Florida isthmus, Watts landed in the port of New Orleans. There, James Franklin, a nephew employed by the firm’s owner, Isaac Franklin, jailed Watts for a few more days before selling him to Forstall for a handsome profit. In turn, Forstall used Watts as labor in the Louisiana Sugar Refinery he owned. At the same time, Forstall’s bank bundled the mortgage used to purchase Watts into a security, which it then sold to bankers in New York and London. The extra profits Forstall made were reinvested into new steam technology that made his sugar refinery even more productive.

Everyone was getting rich off Watts’ body—everyone but Watts. The price he paid, Schermerhorn emphasizes, is best measured in the family he lost after he was sold out of Virginia; the months spent languishing in disease-infested jails and ships; and the life he spent being beaten, scorned and whipped so that Forstall could profit from the sugar refined in his factory. Ultimately, we don’t know what happened to Watts, yet Schermerhorn tells us that “his mortgage probably outlasted his life.”

Schermerhorn is excellent on several other ways in which entrepreneurial creativity turned the slave trading business into a lucrative enterprise. Some are intended to show how modern business concepts like “vertical integration” and “start-up costs” existed at least as early as the slave trade. Firms like Franklin and Armfield saved money by gaining control of many aspects of the domestic slave trade: they not only owned the jail cells used to house slaves in transit, they also created an internal financial firm, akin to what General Motors had done a century later. Other traders cut start-up costs by cheating: John Craig Marsh, a struggling New York dry goods merchant, entered the slave trading business in the 1820s by smuggling slaves from New Jersey to Louisiana, despite laws in New Jersey that made out of state slave sales illegal.

Another dominant theme in the new books on slavery and capitalism is the extent to which slavery’s capitalists depended on government aid. Despite capitalist proselytizers who insist that government only gets in the way of free enterprise—a refrain perhaps as common in the nineteenth century as it is today—slavery’s most successful entrepreneurs knew that government, when working in their favor, was their greatest ally.

Schermerhorn describes how exclusive government contracts catapulted the New York-based steamship owner Charles Morgan beyond his competition. During the U.S.-Mexican War of 1846-48, Morgan’s Gulf Coast steamship line won an exclusive contract to transport troops, supplies and mail to the Texan frontier. The contract not only helped Morgan put his competitors out of business; the war itself opened new lands for cotton cultivation. Nearly 100,000 slaves were sold to Texan cotton planters in the 1850s, forty percent of them from out of state. Morgan’s ships became the dominant carrier for those slaves, his only competition coming from a rising young capitalist emerging on the scene: Cornelius Vanderbilt.

Yet Schermerhorn’s book raises a question that isn’t sufficiently answered. If capitalism was so entwined with slavery, why was slavery destroyed yet capitalism continued to flourish? Schermerhorn sometimes gives the impression that capitalism depended on slavery, which would make that outcome seem unlikely. Schermerhorn gestures toward an answer in the last few pages of his book, suggesting that part of the reason slavery died, in the American context at least, has to do with the poor decisions made by the short-lived Confederate government: They tried to punish British officials for not recognizing their government by withholding cotton exports. Little did they know that the British had stockpiled cotton just before the Civil War, and could wait out the fighting. In addition, he argues that abolitionist writers won the ideological battle, turning slavery into a moral evil that most northerners believed they could do without.

Yet if the northern economy was so entwined with southern slavery, wouldn’t northern capitalists put up a stronger fight—perhaps financing a public campaign at least as strong as the one by the abolitionists? We can’t know the what-ifs. And it’s likely that most northerners didn’t quite grasp how much their economy depended on slavery, as Schermerhorn suggests.

But I suspect that a more convincing answer requires that historians get the nature of relationship between slavery and capitalism right. Perhaps slavery needed capitalism to survive in a way that capitalism didn’t need slavery. After all, Charles Morgan’s steamship line, once so dependent on the slave shipping business, did just fine once the war was over. And as Beckert has argued, cotton production continued to thrive long after slavery was abolished. British capitalists found a way to exploit peasant labor in new colonial lands like India, Asia and the Middle East, without raising a similar public outrage. The marriage between capitalism and slavery, in short, doesn’t seem to have been an equal one. Capitalism found slave labor useful for a time, but could easily move on without looking back.