In his second inaugural, Abraham Lincoln declared that "if God wills that [the Civil War] continue until all the wealth piled by the bondsman's 250 years of unrequited toil shall be sunk…as was said 3,000 years ago, so still it must be said, 'the judgments of the Lord are true and righteous altogether.'"

It is a noble sentiment. Yet the economic idea implied—that exploitation made us rich—is mistaken. Slavery made a few Southerners rich; a few Northerners, too. But it was ingenuity and innovation that enriched Americans generally, including at last the descendants of the slaves.

It's hard to dispel the idea embedded in Lincoln's poetry. assumes "that northern finance made the Cotton Kingdom possible" because "northern factories required that cotton." The idea underlies recent books of a new King Cotton school of history: Walter Johnson's River of Dark Dreams (Harvard University Press), Sven Beckert's Empire of Cotton: A Global History (Knopf), and Edward Baptist's The Half Has Never Been Told: Slavery and the Making of American Capitalism (Basic Books).

The rise of capitalism depended, the King Cottoners claim, on the making of cotton cloth in Manchester, England, and Manchester, New Hampshire. The raw cotton, they say, could come only from the South. The growing of cotton, in turn, is said to have depended on slavery. The conclusion—just as our good friends on the left have been saying all these years—is that capitalism was conceived in sin, the sin of slavery.

Yet each step in the logic of the King Cotton historians is mistaken. The enrichment of the modern world did not depend on cotton textiles. Cotton mills, true, were pioneers of some industrial techniques, techniques applied to wool and linen as well. And many other techniques, in iron making and engineering and mining and farming, had nothing to do with cotton. Britain in 1790 and the U.S. in 1860 were not nation-sized cotton mills.

Nor is it true that if a supply chain is interrupted there are no possible substitutes. Such is the theory behind strategic bombing, as of the Ho Chi Minh trail. Yet only in the short run is it "necessary" for a good to come from a particular region by a particular route. A missing link can be replaced, as in fact it was during the blockade of raw cotton from the South during the war. British and other European manufacturers turned to Egypt to provide some of what the South could not.

Growing cotton, further, unlike sugar or rice, never required slavery. By 1870, freedmen and whites produced as much cotton as the South produced in the slave time of 1860. Cotton was not a slave crop in India or in southwest China, where it was grown in bulk anciently. And many whites in the South grew it, too, before the war and after. That slaves produced cotton does not imply that they were essential or causal in the production.

Economists have been thinking about such issues for half a century. You wouldn't know it from the King Cottoners. They assert, for example, that a slave was "cheap labor." Mistaken again. After all, slaves ate, and they didn't produce until they grew up. Stanley Engerman and the late Nobel Prize winner Robert Fogel confirmed in 1974 what economic common sense would suggest: that productivity was incorporated into the market price of a slave. It's how any capital market works. If you bought a slave, you faced the cost of alternative uses of the capital. No supernormal profits accrued from the purchase. Slave labor was not a free lunch. The wealth was not piled up.

The King Cotton school has been devastated recently in detail by two economic historians, Alan Olmstead of the University of California at Davis and Paul Rhode of the University of Michigan. They point out, for example, that the influential and leftish economist Thomas Piketty grossly exaggerated the share of slaves in U.S. wealth, yet Edward Baptist uses Piketty's estimates to put slavery at the center of the country's economic history. Olmstead and Rhode note, too, from their research on the cotton economy that the price of slaves increased from 1820 to 1860 not because of institutional change (more whippings) or the demand for cotton, but because of an astonishing rise in the productivity of the cotton plant, achieved by selective breeding. Ingenuity, not capital accumulation or exploitation, made cotton a little king.

Slavery was of course appalling, a plain theft of labor. The war to end it was righteous altogether—though had the South been coldly rational, the ending could have been achieved as in the British Empire in 1833 or Brazil in 1888 without 600,000 deaths. But prosperity did not depend on slavery. The United States and the United Kingdom and the rest would have become just as rich without the 250 years of unrequited toil. They have remained rich, observe, even after the peculiar institution was abolished, because their riches did not depend on its sinfulness.

The virtue of liberty did matter. The magic world is liberalism, the liberalism of Adam Smith and Mary Wollstonecraft and Henry David Thoreau. The explosion of ingenuity after 1800 came from the gradual inspiriting of millions of liberated people to have a go. Thoreau ran his father's pencil factory, and made it flourish. Liberalism liberated first poor white men, then, yes, former slaves, then women, then immigrants, then colonial people, then gays. Liberation and innovation dance together.

To cast enslavement of some as requisite for the wealth of others is bad economics, then, and bad history. But it is also a toxic ideology. The left has long regarded any employment as slavish exploitation. The phrase wage slave is defined coolly by The Concise Oxford Dictionary of Current English as "a person who is wholly dependent on income from employment," with the notation "informal"—but not "ironic" or "jocular" or, better, "economically illiterate." By such a definition, you and I are slaves, even though we are paid the traded value of goods and services we produce at the margin for others.

The other Marx, Groucho, at the height of his success in movies during the hungry 1930s, was approached by an old friend, whom Groucho knew to be a communist. As the perhaps apocryphal story goes, the friend said, "I desperately need a job. You have contacts." Groucho, whose sense of humor was often cruel, replied, "Harry, I can't. You're my dear, dear communist friend. I don't want to exploit you." Ha, ha. But no employee in a capitalist economy owes coerced or unpaid service to any boss.

Well, except for our boss the state, through taxation by payment or draft or eminent domain. Taxation is a slavery admired by most of the left and much of the right. Its defenses echo Southern rhetoric in 1860. "Citizens are children who need to be protected, yet forced to work." "Liberty is dangerous." "The defense of property depends on a big government." "God ordained it."

We need to stop using the history of slavery to bolster anti-capitalist ideology. Ingenuity, not exploitation by slavery or imperialism or finance, is the story of the modern world.