In the late 18th through the mid-19th Centuries, what distinguished the United States economically from the European powers was the prominence of human slavery.
In 1800, slavery represented nearly 20% of the population of the United States: roughly 1 million slaves out of a total population of 5 million. In the South, where nearly all slaves were held, the proportion reached 40%: 1 million slaves and 1.5 million whites for a total population of 2.5 million…By 180s, the overall proportion of slaves in the overall population had fallen to around 15% (about 4 million slaves in a total population of 30 million), owing to rapid population growth in the North and West. In the South, however, the proportion remained at 40%. (Page 159)
“If we include slaves along with other components of wealth, we find the Total American Wealth has remained relatively stable from the colonial era to the present.” Thomas Piketty naturally adds how it’s morally wrong to count people as property, but it gives us an insight as to how people thought at the time.
This reminds me of a terrific article in the Nation Magazine by Christopher Hayes (now a MSNBC news host), The New Abolitionism, about how the movement to avoid climate disaster resembles, in a large way, the movement to end slavery–it involves wiping off the books a large amount of what is/was considered wealth. Slaves represented about half of all wealth in the South.
As one can see, the United States was really two economics, an egalitarian north, and a South whose wealth was roughly half slaves, which, when that was counted, was roughly on par with aristocratic Europe. (Note that while the European countries had colonies with slaves, slaves represented under 2% of their total wealth.)
Thomas Piketty then discusses the market value of a slave, which was around 20 years the value of the average wage of someone doing similar work. In theory, given a rate of return of 5%, this value should have equalled 20 years of income, but there are reasons why it could be considered less–the cost of supervision, the possibility that a slave may work less hard (or well) than a free laborer, and perhaps a ‘risk premium” — an implicit acknowledgement of the risk of slavery being abolished or slaves rebelling.