"This comparison of the United States with Canada is interesting, because it is difficult to find purely economic reasons why these two North American trajectories should differ so profoundly. Clearly, political factors played a central role. Although the United States has always been quite open to foreign investment, it is fairly difficult to imagine that nineteenth-century US citizens would have tolerated a situation in which one-quarter of the country was owned by its former colonizer."
In effect, in this passage Piketty projects a 20th century anti-colonialism back onto the Americans of the late 18th and early 19th centuries, assuming that there was an expropriative drive after independence that accounts for the comparatively low net position of foreign capital in the U.S. In reality, to the extent that there were expropriations, these were actions of plebeian masses with which the American ruling elite of the time was quite uncomfortable. Hence it is little surprise that the fifth and sixth articles of the Treaty of Paris of 1783, in which Britain recognized the independence of the States and ended hostilities, provided for recognition of the rightful owners of all confiscated lands and "provide for the restitution of all estates, rights, and properties, which have been confiscated belonging to real British subjects," and the prevention of future confiscations. To the extent that Britons after 1783 divested themselves of their remaining U.S. holdings, it had less to do with risk of expropriation by the Americans, and more to do with the costs and risks associated with maintaining a business interest across the ocean, in a newly independent country whose institutions were still notoriously unsettled.
He also overlooks a key aspect of the growth of the United States, which is that in the early days of the republic, any white European (especially northern European) could be naturalized as a U.S. citizen almost immediately. This was especially the case for those individuals who arrived in possession of some form of portable capital--e.g. metallic currency or letters of credit from reputable European banks. For any foreign investor who wanted to make a buck in the early U.S., the barriers to being considered American were low, and for those who would prefer to retain their old world comforts while investing from abroad, that was a riskier proposition in those days due to the state of transport and communications.
Piketty is at his most flagrantly ideological in his evasion of the role of chattel slavery in the rise of capitalism. He in effect uses it as a polemical bludgeon against contemporary theorizations of "human capital": "Attributing a monetary value to the stock of human capital makes sense only in societies where it is actually possible to own other individuals fully and entirely--societies that at first sight have definitely ceased to exist." (163) That may well be a fair argument against conceiving of waged labor as "human capital"--though forced labor is hardly a thing of the past--but it says nothing about how capital valued slave labor in the years of its birth, when it was a major "asset class." In a bizarre endnote, he attempts to argue against counting slave ownership as capital at all: "If each person is treated as an individual subject, then slavery (which can be seen as an extreme form of debt between individuals) does not increase national wealth, like any other private or public debt...." (592-3n15) But the whole point is that slavery existed precisely because enslaved Africans and their descendants were not conceived of as "individual subjects". It is not an extreme form of debt, since even if a slave managed to accumulate enough money-capital to buy his freedom, the decision to sell or not was entirely up to the master's whim, and the "debt" continued indefinitely to all future generations. Unlike debt peonage in Latin America and, after 1848, the southwestern U.S., slavery was infinite and eternal.
Piketty tries to justify his refusal by arguing that, among today's advanced capitalist nations, slavery was only significant in the U.S. The value of slaves in the West Indies to the British and French Empires is masked in aggregate figures of capital invested abroad: "Since total foreign assets did not exceed 10 percent of national income in these two countries at the beginning of the nineteenth century, the share of slaves in total wealth was obviously smaller than in the United States." This completely factors out the value of money-capital and other forms of domestic capital that had been accumulated through the participation of British and French merchants in the transatlantic slave trade over centuries, not to mention the growth of related industries (e.g. maritime insurance) around the slave trade. Another historically illiterate endnote informs us that "The number of slaves in French colonies emancipated in 1848 has been estimated at 250,000 (or less than 10 percent of the number of slaves in the United States)." (593n16) Yes, and the reason that there were so few slaves in French overseas territories by that time is that when Napoleon tried to re-impose slavery in 1803, the Haitians under the leadership of Toussaint l'Ouverture and Jean-Jacques Dessalines staged the largest act of self-emancipation in world history.
It is only in the U.S. that he is forced, reluctantly, to reckon with the value of slaves as capital, and here we have a curious finding: "If we include slaves along with other components of wealth, we find that total American wealth has remained relatively stable from the colonial era to the present, at around four and a half years of national income." (159) And indeed, his Figure 4.10 appears to confirm it. But here's the peculiar thing about that figure: The chart is plotted in 30 year increments. Indeed, from 1850 to 1880, there is a slight decline in Piketty's all-important β, but only a slight one, and this is at first blush surprising to anyone familiar with U.S. history, coinciding as it does not only with a tremendously destructive civil war, but with a major expropriation of capital, through emancipation of the slaves.
Somehow, U.S. capital managed to mostly recover from the largest expropriation in its history in the span of only 15 years between 1865 and 1880. For those of us who know the history of Reconstruction, this unfortunately comes as no surprised: The former slaves, increasingly stripped of their civil rights and subject to a reign of terror, were with few exceptions forced into a form of debt peonage under the guise of the sharecropping system. Those who urbanized were kept as a subcaste that could be paid wages much lower than average. Chattel slavery ended, but in these forms the lost slave capital could be fiscalized, black labor returned to a state where it could produce reliable rents for a portion of the U.S. ruling class.
Nor is this unique to the U.S.: In 1825 the Bourbon monarchy extorted 150 million gold francs from Haiti as "compensation" for the expropriation of French slaveholders, a debt that Haiti was not able to pay off until 1947--a 122-year span during which many a French rentier clipped coupons from the hides of Haitian peasants and workers.
Such a major blindspot in Piketty's description of capital in the 18th and 19th centuries (with effects that continued well into the 20th and even until today), leaves one alert to similar gaps in his description of capital today.