Voodoo, jazz, and creole cuisine: cultural historians have long been fascinated by nineteenth-century century New Orleans. By contrast, there has not been a major economic history of the Crescent City for more than four decades—and even John Garretson Clark's New Orleans, 1718–1812: An Economic History (Baton Rouge: Louisiana State University Press, 1970) ended at the point of Louisiana statehood. This is odd considering New Orleans was the unquestioned financial and commercial capital of the Old South, one of the fastest growing cities in the United States before 1860, and, according to no less an authority than Thomas Jefferson, the “one single spot” in North America whose privileged position at the mouth of the Mississippi made it the key to the whole continent's future.

Scott Marler's The Merchants' Capital more than makes up for past neglect. Spanning the rapid growth of the antebellum period, the violent dislocations of secession and Civil War, and the stagnation and decline of the postwar decades, it provides as detailed an account as we are ever likely to get of the Crescent City's commercial fortunes, and will doubtless prove useful to scholars seeking economic and social context for a wide variety of Louisiana topics. But The Merchants' Capital is also far more than simply a business chronicle. It is a determinedly, even defiantly materialist history in the traditional Marxist vein, deftly using the tools of political economy to challenge longstanding assumptions and ask important new questions about the American South.

The anchoring analytic concept is the idea of “merchant capital,” which Karl Marx analyzed as a pre-capitalist system of “primitive accumulation,” and which Elizabeth Fox-Genovese and Eugene Genovese updated in their Fruits of Merchant Capital (New York: Oxford University Press, 1983). In Marler's analysis (which refines and expands on the ideas of both Marx and the Genoveses) merchant capital is “a qualitatively distinct form of wealth and investment” which, in contrast to industrial capital's continuous search for productive investment and growth, seeks only “the extraction of profit from exchange differentials”—that is, to buy low and sell high (pp. 2, 9). New Orleans, whose tight-knit clique of cotton merchants bought, sold, financed, and exported over half the cotton produced in the entire South for the better part of the nineteenth century, was fundamentally a center of merchant capital; and understanding the dominance of this “far older and less dynamic form of wealth” is, for Marler, the key to understanding much of the region's history, including both its virulent attachment to plantation slavery and its failure to thrive after emancipation. (The book's clever title thus plays on both meanings of the word “capital,” referring both to the city of New Orleans and the particular nature of the commercial wealth generated there.)

By setting his story before, during, and after the Civil War—a chronological framing that is all too rare in Louisiana history—Marler gives it both a narrative arc and an explanatory framework. Before 1860, an overestimation of the permanence of the Crescent City's “natural advantages” led to an overreliance on river-based transport, an underestimation of rail's importance, and a general disinclination to aggressively seek competitive advantages. Then, early in the Civil War, New Orleans merchants shared the general misplaced Southern faith in King Cotton as a tool of diplomatic coercion, even organizing an international embargo in defiance of the Confederate government. After 1862, during the Union occupation, alienated by General Ben Butler, the merchant community by and large chose resistance over accommodation, thereby ceding the mercantile playing field to aggressive Northern newcomers—an abdication that only accelerated during the Reconstruction period. Finally, by the century's last two decades, chronic regional shortages of both capital and cash had become self-perpetuating, and cultural factors (like a paternalist disdain for systems of free wage labor) further compounded the stagnation.

Forcefully rejecting a longstanding American scholarly synthesis positing the rapid emergence of a bourgeois capitalist “New South” after the Civil War, Marler instead opts for the sober global Marxist perspective of Eric Hobsbawm, whose Age of Capital (London: Weidenfeld & Nicolson, 1962) described the South as remaining “agrarian poor, backward, and resentful” well into the twentieth century (quoted on p. 257). A plethora of related factors hindered postbellum capitalist development in New Orleans and its environs. The most famous of these was emancipation itself, which confiscated a vast chunk of the South's human “capital” and returned it to its rightful (but dispersed) owners. But there was also a long decline in cotton prices, along with increased competition from other global cotton suppliers; a sharp decrease in New Orleans bank capitalization; a conservative reluctance to invest in rail transportation; a culture of corruption surrounding New Orleans's federal Custom-house; sharp competition from renascent Atlantic seaboard cities with rail connections; and finally, the notorious violence and instability that plagued New Orleans in the Reconstruction period (pp. 221, 225, 228).

Concluding that “no first-rank American city's fortunes have ever collapsed as quickly” as those of post-1860 New Orleans, Marler moves on to the emergence of the sharecropping system—which more closely resembled early modern European “putting out” systems of domestic industry than a modern regime of free wage labor. And just as it had in early modern Europe, this change required an adaptation in the shape of merchant capital, as the antebellum urban factorage system in which New Orleans merchants played the starring role gave way to a dispersed blanket of undercapitalized rural stores. These new rural stores, moreover, represented not the emergence of a shopkeeping bourgeoisie as the New South thesis might have it, but a descent to a lower rung on capitalism's evolutionary ladder, “merchant capital in its most primitive guise,” a reactionary non-system that ultimately “helped perpetuate regional poverty and inequality for decades to come” (pp. 255, 256).

Why did New Orleans merchants, once the South's most dynamic business class, allow their wealth and power to be thus decimated? Both their myopic resistance to railroad investment before the war, and their self-defeating dalliances with racist vigilantism after it, severely damaged their own long-term interests. Marler suggests the outlines of an explanation when he alludes to the fundamentally “conservative” nature of merchant capital and the merchants' urge to “re-feudalize” themselves—that is, to spend profits on status-enhancing conspicuous consumption and gentry-emulating real estate acquisition (pp. 275–276). A fuller exploration of this question might necessitate a return to cultural history and an entirely different sort of book. Simply providing a solid basis for this discussion, though, is the sort of invaluable contribution that can only be made by materialist economic history in the best and most rigorous sense—which The Merchants' Capital most assuredly is.