The legacy of slavery in America is once again becoming a hotly discussed topic. The New York Times has launched The 1619 Project, commemorating the 400th anniversary of the first African slaves brought to the colony of Virginia. The project “aims to reframe the country’s history, understanding 1619 as our true founding, and placing the consequences of slavery and the contributions of black Americans at the very center of the story we tell ourselves about who we are.” One of the lead essays informs us that “in order to understand the brutality of American capitalism, you have to start on the plantation.” And over at Vox, an interview with historian Edward E. Baptist teaches us that slavery was a remarkably modern and efficient business practice, which helped the U.S. transform from a colonial economy into “the second biggest industrial power in the world.”
There are rhetorical and ideological concerns on both sides of this sensitive topic. The case for systematic reparations collapses, for example, if it turned out that slavery was an inefficient system that made blacks and whites—with a few notable exceptions—poorer. On the other hand, if the vision of The 1619 Project is correct, and modern America was built on slavery, then it would be silly for MAGA-wearing patriots to try to downplay the peculiar institution as an unfortunate footnote in the story of liberty.
In the present post, I am not going to weigh the historical evidence. For critiques of the “New History of Capitalism” (with its alleged reliance on slavery), see this article from Olmstead and Rhode, or this essay by Phil Magness.
Instead, I want to clarify the logical framework to show what it would mean to actually argue or demonstrate that slavery was an economically efficient method of production, which not only enriched those directly involved in the slave trade and labor sites, but also showered material benefits on the rest of (free) society at large. As we will see, in his Vox interview the historian Baptist doesn’t even attempt to make such a case.
Once we clarify the actual issue, it should be clear that slavery is like war: Yes, a few privileged elites can benefit financially from it, but it’s not “good for the economy.” Slavery, like war, is a destructive institution that reduces the welfare of most people in society, though a few beneficiaries can profit from the insidious system and thus have an incentive to sing its blessings.
Framing the Issue
To understand if slavery is an “efficient” method of economic organization, we have to ask the standard economist question: Compared to what?
There is no doubt that a healthy adult slave in a region with adequate natural resources can produce more than a subsistence amount of output, allowing for the owner to keep the slave alive and keep the surplus for himself, living up to the Marxist vision of how labor markets work in general. So if the question is, “Was US output higher with millions of productive slaves working, than it would be if those slaves suddenly disappeared?” then the answer is, “Yes, of course, slavery was ‘productive’ in this sense.”
But that’s not really the question. The question is, if all of the plantation owners in (say) the year 1850 had suddenly freed all of their slaves and turned them into free laborers, what would that have done to the course of US economic development? Is it really true that this change would have made the country as a whole poorer?
The issue isn’t whether cotton was an important export, or whether the expected future flow of labor of the slaves was a valuable financial asset (codified in the market price received in auctions). The issue is whether had the slaves all been freed, would that change have made cotton exports grow more slowly over the 19th century, and would it have made the productivity of the (former) slaves’ labor grow more slowly? Those are the types of questions we need to answer, if we want to know whether slavery was a boon for American capitalism rather than a blight that was not only immoral, but also inefficient.
Continue reading…
From Mises.org, here.
