One of our attendees, a well connected social sector consultant in economic development in Memphis, who is attending, said she wanted to talk about why her city would be a great fit for a local economy meets economic justice conference like Neighborhood Economics.
Thinking of Memphis made me think of cotton and the Delta, and the way Mississippi was treated like a colony by those places which processed her raw materials, from the cotton exchanges and dealers in Memphis, to the mills creating community wealth in North Carolina from those raw materials.
And that, obviously led me to think about the Panic of 1837, a financial catastrophe deemed more harmful than the great depression. Think 2008 with no federal reserve to help keep things afloat. And it all happened because collateralized debt derivatives based on slave futures, based in Natchez, the banking capital of the slave bubble were finally deemed by British banks to be no longer be plausible. The background of this is the compendium articles and essays, Slavery’s Capitalism. The Bankers based in London could not agree with the view of the future those derivatives projected anymore. The millionaires of Natchez were instantly pennyless, and so was the system based on unrealistic growth projections that essentially had hologram like models, being sold as if they were actually real assets. And the first derivative’s perhaps emblematic of this new tool’s ability to dehumanize and commodify all things of real value, those first derivatives, were bets on the work product of people in chains.
And a decade of a nearly shattered national economy was the result.
But the bubble of 1837 that led to the panic when it popped was also the first time that derivatives that complex were created. That is the moment when financial markets created the instrument that would let them victimize the world in search of higher profits; the Frankenstein monster arrises from the workshop. The derivatives that create a future that people believe in that let sophisticated investors take strategies for short term profit at long term ecosystem or social system damage were born in Natchez by gentleman bankers in waist coats.
Eliminating externalities, the bad things a business does, the consequences of its pollution, or other bad practices, were born like the Alien coming out of someone’s chest at that moment, it is possible to suggest.
The derivative was able to bewitch people into not looking at the consequences of what they were doing to the resources we all share.
And then we would look at cotton exchanges in Memphis and the mills in North Carolina which captured the wealth of Mississippi’s raw materials.
Building an interdependent economy 