In the December issue of The Atlantic, I wrote about how the yearning for reconciliation and an end to conflict between northern and southern whites after the Civil War paved the way for a retreat from the all too brief attempt to create a multiracial democracy known as Reconstruction. After the Republicans abandoned their black constituency in the South, it would be another century before America committed to equal rights for all. As the historian David Blight has documented, a bipartisan commitment to white supremacy would cement sectional reunion.

But if white supremacy provided the adhesive, economic factors would provide the incentive. At the close of the Civil War, the Republican Party functioned as an uneasy multiracial coalition among moderates and conservatives committed to a pro-capitalist, free-labor ideology; proto-progressives such as Thaddeus Stevens, who sought an activist state to even the playing field between the haves and have-nots; and black workers in the South who understood that implacable white opposition to their rights could not be ameliorated without government intervention.

By 1872, many conservatives and moderates had already turned against Reconstruction, concluding that it had mistakenly placed ignorant freedmen with no understanding of liberty and self-government at the helm of corrupt southern governments. These Republicans backed the Liberal Republican Horace Greeley’s candidacy for president against incumbent Republican President Ulysses S. Grant, having come to believe that, as the historian Heather Cox Richardson put it in The Death of Reconstruction, “disaffected African-American workers were trying to control the government in order to gain through legislation what others had earned through hard work.”

The Panic of 1873 would only exacerbate those fears. Although Grant prevailed in 1872, the Liberal Republican case against Reconstruction had gravely weakened northern white support for the project. And although slavery was anathema to the free-labor ideal, so too were northern workers’ ever louder demands for income redistribution and economic regulation. That growing fear of, and contempt for, northern workers fit neatly with the belief that Reconstruction had gone too far. “Class and racial prejudices reinforced one another,” the historian Eric Foner wrote in Reconstruction, “as the reformers’ concern with distancing themselves from the lower orders at home went hand in hand with a growing insensitivity to the egalitarian aspirations of the former slaves.”

The Panic of 1873 and the subsequent economic collapse not only led to the Democrats seizing the House for the first time since the Civil War; it produced a growing labor radicalism that confirmed moderate and conservative Republicans’ fear that democracy itself was threatened by the unwashed masses using government to take what their betters had earned.