What is anything worth? Whatever someone will pay for it.
This seems like common sense, but the connection between an item’s price and its value in early America was truly established by auctions.
“One of the things we don't realize is how central auctions were to the development of American capitalism and American economic culture,” said Ellen Hartigan-O’Connor, professor of history in the College of Letters and Science at UC Davis.
Hartigan-O’Connor’s book America Under the Hammer (UPenn, 2024) is the first book-length study of auctions in early America. In it, she details how auctions created the foundations for our modern economic system as it made and unmade people and communities by collectively setting a price on anything for sale.
The rise of auctions in colonial America
Auctions were everywhere in colonial and early America, but they weren’t new. They had long existed as a means to value and distribute war plunder, old ships and dead men’s estates. Organized fairs and face-to-face negotiations were also used to establish an object’s price. Governments set prices for basic needs like a loaf of bread.
In the 17th century, European imperial projects around the world created the conditions for the spread of auctions. Colonial settlements were too dispersed to sustain fairs. Chartered companies circulated new kinds of goods from global trade that included enslaved people. In North America, Europeans wanted to claim and distribute Indigenous land among themselves.
“How do you figure out a price for all of these?” said Hartigan-O’Connor. “That's where the collective part of auctions becomes really important. The whole idea of an auction is that competition will lead to public agreement or disagreement on the price.”
Through the give-and-take of calling out numbers in a competition to buy, auctions established a hard link between the price a person paid and an item’s value. Just like now, a bidding war could leave a buyer wondering if they got taken for a ride.
Buying class status and connection in early American auctions
An auction was a social event as much a means to buy and sell. They were open to the public and people from across society would attend. Some came to bid and buy. Others who had no money to buy anything would come simply to see people who did and what they paid when the gavel struck. Everyone witnessed the sales. By being there, everyone endorsed the prices paid.
What’s known about an object has always affected its value. Information creates an object’s provenance, which is its history and how it came to be for sale. In early American auctions, as is true today, an object’s prior owner had a powerful effect on its value.
Owning something previously owned by a notable person was one way a person could remake themselves at the auction block. They could also buy items, like clothing or furniture, that let them pass as someone in a higher rung of society.
People could show their politics by what they bought. During the American Revolution, state governments seized and sold the property of those who were loyal to the English crown to raise money for the war.
“Being able to acquire these goods, people felt like they were buying into the United States while reinforcing themselves as part of this group of bidders instead of the people whose lives the auction tore apart,” said Hartigan-O’Connor.
Unmade by the gavel in colonial and early America
Hartigan-O’Connor points out that early auctions included goods of all kinds all at once. This meant that furniture and fabric could be sold at the same auction as seized Indigenous lands and enslaved families. Auctions were central to converting land and people into property.
Auctions and pricing were one way that the colonial governments and powerful people brought Indigenous land and even human beings into a commercial understanding as property. If a grandfather can be priced at the same time that a chair is priced, then this is the commercial takeover of social relations that tore people apart.”
— Ellen Hartigan-O’Connor, Professor of History
Auctioneers routinely separated families in order to gain a better price, which also raised impossible questions about human value. Did a mother’s love and care for her child make the pair worth more or less than if they were sold apart? Could human affection be monetized?
The image of a family on the auction block became a rallying point later for abolitionists who defined the practice of family separation as the sin that exemplified the evil of slavery.
What early auctions mean about American capitalism today
Auctions continue to capture Americans’ imagination. When Hartigan-O’Connor began work on her book, her own father was obsessed with buying brass instruments on eBay. He got really interested in the same dynamics she found in early American auctions, like who to trust and the information available about goods for sale.
Hartigan-O’Connor said that it’s also important to remember that the rules of auctions — and therefore the rules of modern capitalism — were made up by human beings. People back then decided who could bid and who could not. As remains true now, people decided what could be bought and sold and what, ultimately, anything is worth.
Because humans and not nature set modern capitalism into motion, she said, humans can also change the rules. By connecting financial, social and symbolic forms of exchange, auctions established the idea that value itself can be expressed by a price.
Auctions also established the idea that competition is the best signal of economic fairness.
“The logic of the auction block still shapes the way people understand the justice or injustice of economic systems, and conceals what we might do to change them,” said Hartigan-O’Connor. “Understanding the complex human history behind our taken-for-granted rules opens up new opportunities.”
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