Chattel slavery involves the ownership by one person of another. This entry focusses on the operation of that labor system in the United States. Although chattel slavery dates back to the dawn of civilization, in the area that became the United States it first emerged after the importation of Africans to the Virginia colony in 1619. Prior to the American Revolution, all British colonies in the New World legally or informally sanctioned the practice. Nearly every colony counted enslaved Africans among its population. Only during and after the Revolution did the northern states abolish the institution or begin to implement gradual emancipation. But slavery was more economically entrenched in the southern states and became more so over time. By the outbreak of the Civil War in 1861, slaves constituted one-third of the total slave-state population of 12.3 million.
Slavery has captured the attention of economists since at least the eighteenth century. Two basic questions have remained intertwined throughout the history of economic thought regarding this ancient institution. First, was slavery profitable? And second, was slavery efficient? Was it profitable to individual slaveholders, in the sense of offering a reasonable prospect of monetary return (or some other material reward) comparable to what they could earn from other enterprises? Efficiency refers to overall economic gains. Did the exploitation of slave labor allocate and use resources in ways that fostered aggregate wealth and welfare, regardless of how unfairly it distributed wealth? Did it produce goods and services as abundant and valuable as alternative labor arrangements could have? Often economists and historians have reached identical answers to both questions, concluding that either slavery was both unprofitable and inefficient or both profitable and efficient.
These are the opening paragraphs of Jeffrey Rogers Hummel, “U.S. Slavery and Economic Thought,” in David R. Henderson, ed. The Concise Encyclopedia of Economics. It’s the latest addition to the on-line encyclopedia. It’s very long but well worth reading.
Another excerpt:
Strictly speaking, economists usually and most broadly employ the term “efficiency” as a measure of welfare rather than of output. Thus, while economic historians now agree that antebellum slavery marginally increased the output of cotton and other products, it still could have diminished total welfare. In measuring efficiency, economists have no precise unit to compare the subjective gains and losses from involuntary transfers. But because most coercive transfers in the Old South were from poor slaves to rich slaveholders, to assume unrealistically that such transfers were a wash in which slaveholder gains equaled slave losses is to bias the analysis in favor of slavery. Thus, if welfare losses still exceed gains, even with this bias present, one can be certain that slavery was inefficient. Hummel, in his dissertation, “Deadweight Loss and the American Civil War” (2001, updated 2012), integrated previous work into a systematic challenge to slavery’s efficiency.[9] He identified three sources of deadweight loss: output inefficiency, classical inefficiency, and enforcement inefficiency.
And an excerpt on the New History of Capitalism:
By the twenty-first century the slavery debates among economists had become quiescent. One major subsequent contribution is Olmstead and Rhode’s “Biological Innovation and Productivity Growth in the Antebellum Cotton Economy” (2008). They found that average daily cotton-picking rates quadrupled between 1801 and 1862, mainly due to new cotton varieties. But among historians, those describing their own work as part of a “New History of Capitalism” now claim that slavery was the primary source of overall U.S. economic growth in the antebellum period. Two of their major works are Beckert’s Empire of Cotton (2014) and Baptist’s The Half Has Never Been Told(2014). [15] While embracing the finding that slavery was productive, these historians otherwise largely ignore all previous work of economists. Yet the idea that slavery was essential for cotton production, which drove national growth, is belied by the fact that just five years after the Civil War’s end the physical amount of cotton produced was approaching its prewar peak, mainly because of increased acreage devoted to cotton cultivation, despite the fall in southern real income.
Baptist went so far as to ignore Olmstead and Rhode’s explanation for the increase in cotton-picking rates, attributing it instead to a whipping regime of calibrated torture, steadily increasing over sixty years. Horrendous as torture is, the claim that it could account for productivity continually increasing for more than half a century is implausible on its face. Ignorance of national income accounting and Baptist’s double counting led him to attribute almost half of U.S. economic activity in 1836 to cotton production. Although cotton was the largest U.S. export, it never exceeded 5 percent of GDP. Olmstead and Rhode (2018) offers a comprehensive and scathing critique of the New History of Capitalism’s works on slavery.[16]
READER COMMENTS
Peter
Dec 26 2022 at 1:31pm
I always find this discussion to be one of waters wet. Is slavery profitable and economically beneficial? Of course hence why it’s been around since time immemorial and still practiced today.
Jon Murphy
Dec 26 2022 at 2:44pm
Except that the justification for slavery has almost never been on economic grounds. Indeed, arguments against slavery are made on economic grounds. Slavery tends to be justified on military, social, political, or religious grounds.
Brandon
Dec 28 2022 at 5:27pm
@Jon Murphy
That strikes me as wrong. I think many, if not most, justifications for slavery were based on economics. These might have been bad economics (“we don’t have to pay people to do this work”), but they were still economic justifications.
JFA
Dec 28 2022 at 9:03pm
Slavery, when it was being justified (throughout history it was often just an assumed state of affairs), was mostly justified on moral grounds… slaves were losers in a war and were therefore the spoils of the victor or they were inferior beings and were therefore just like livestock or they were inferior beings and had to be taken care of by a master (this was a big justification in the 1800s) (plus many more non-economic justifications).
Brandon
Dec 29 2022 at 12:14am
@JFA
Well of course there were non-economic justifications for slavery, but Jon’s argument that these justifications were “almost never […] on economic grounds” is a little too confirmation bias-y for me.
Jon Murphy
Dec 29 2022 at 10:36am
My statement is a positive one and I am referring to Peter’s initial dismissal of the whole question.
JFA
Dec 29 2022 at 2:33pm
Brandon: I don’t think Jon was incorrect in his statement that most justifications for slavery were non-economic. You both are making counter claims without much evidence. I’m not here to provide links or anything (I don’t have the time), but having studied the economics of slavery and read several books and articles about slavery, my read on the situation is that non-economic arguments dominate the pro-slavery side (which is not to say there weren’t economic justifications… they just didn’t make up the bulk of the pro-slavery repertoire). In fact, it was a non-economic argument (somewhat couched in economic speak) for slavery that gave economics it’s nickname of “dismal science”, when Thomas Carlyle was chastising the argument from economists of letting men alone and allowing personal freedom rather than compelling labor out of “the idle Black man in the West Indies”, which was the natural order of things (according to Carlyle). It was Carlyle’s view of the inferiority of Africans that drove his argument.
Thomas Lee Hutcheson
Dec 28 2022 at 10:40pm
I think there is a racist, empirically incorrect but “economic” argument for slavery. It would be that the salve cannot manage their affairs in choosing how much labor to supply as well as the owner. So both the slave and the owner are better off if the owner manages the slave’s affairs. This is similar to Aristotle’s notion of the natural slave or to the justification of coverture in marriage.
Brandon
Dec 29 2022 at 8:34pm
@JFA (and @Jon Murphy)
I don’t think we disagree on much, and I think we’re all in the same boat (“I’m not here to provide links or anything [I don’t have the time]”).
So, what do you think Google’s Scholar would turn up for us if we Googled “economic justifications for slavery”?
JFA
Dec 30 2022 at 7:43am
Brandon: The first page of links (mostly gated… many with free previews) include discussions of “natural law” justifications for slavery, Adam Smith’s economic argument against slavery, Christian arguments for slavery using biblical passages and “moral” reasoning, and some economic justifications. Nearly all discussed the “religious, moral, and economic justifications” of slavery. One noted (as I did in my first comment) that it wasn’t until the late Renaissance/early modern period that people actually thought they needed to justify slavery as it was just a thing that was done.
I will note that most of the early “economic” arguments against slavery were not in fact primarily economic as they were using moral reasoning to suggest an equality of men as a foundational assumption of their models of economics. But this is also similar to “economic” arguments for slavery: the assumptions (to some degree) bake in the conclusion, with many assuming slaves having the moral (and intellectual) value of livestock. If you think slaves are no more or less than livestock, then of course your economic model would show a negative outcome from abolishing slavery. All that is a long-winded way of saying that the economic arguments for and against slavery were downstream of assumptions that were made via moral reasoning.
Jon Murphy
Dec 30 2022 at 9:59am
JFA has the right of it. You’ll also find that many scholarly economic justifications for slavery as post hoc (eg the New History folks) rather than primary sources.
Mark Brady
Dec 26 2022 at 2:49pm
Slavery, including chattel slavery, can be profitable to the slaveowners without being economically efficient. It depends on whom you want to include in the calculus.
john hare
Dec 26 2022 at 3:15pm
One could substitute corruption or crime in your reasoning just as well. Along with drug cartels and military aggression. That something has always happened and continues is not a good argument for it being profitable and beneficial.
Or would you put rapists and arsonists in the same category as well? Always has and continues.
Mark Brophy
Dec 27 2022 at 10:53am
If slavery had been profitable, the South would’ve won the Civil War. The South should’ve invested their capital as the North had.
Ahmed Fares
Dec 26 2022 at 7:21pm
A quote from Brad DeLong:
Philo
Dec 27 2022 at 1:25am
DeLong says that consumers of machine-made cotton textiles benefited mightily from North American slavery, but I wonder about the “mightily.” Of course, consumers benefit from lower costs of production of the products they buy, and evidently cotton producers found buying slaves for labor less costly than renting labor from free laborers (or buying labor-saving machinery). But what was the magnitude of the savings; i.e., how much more expensive would consumer products, including principally cotton, have been if cotton producers had had to employ free labor? I suspect the margin is not enough to justify the adverb ‘mightily’.
Andrew_FL
Dec 27 2022 at 11:21am
I believe this is a mistake (I think it was intended to be 1619) but wrong in any case, as the Spanish certainly brought slaves to Florida around a century before that.
Amy WIllis
Dec 27 2022 at 4:57pm
Thanks, Andrew!
Indeed a typo, which we have corrected.
Jeff Hummel
Dec 28 2022 at 12:09pm
Yes, Andrew, thanks for catching that embarrassing typo.
And you are absolutely right. A Spanish expedition brought the first African slave to Florida in 1528. Although he later was taken with the expedition to Texas, more African slaves arrived in Florida in 1539. But not only were there very few slaves in Spanish Florida, but also they were treated differently from those in the British colonies. They could marry, own property, and purchase their own freedom, and no one was born into slavery, so they were not fully chattel. Indeed, one of the major motivations for U.S. annexation of Spanish Florida in 1821 (which had been temporarily a British colony from 1763 to1783) was that Florida was a haven for fugitive slaves, given that the Spanish gave freedom to runaway slaves that converted to Catholicism.
Of course, many of the indigenous peoples within the territory that became part of the United States also practiced slavery. And there is still some debate among colonial historians about whether the Africans first sold in Virginia became life-time slaves and were initially only indentured servants. That is why I framed the first sentence as stating that chattel slavery in the territory that became the United States “first emerged after the importation of Africans to the Virginia colony,” although it probably would have been more precise to drop the “first.” But given that the entry’s focus is the economics of slavery as practiced in the U.S., I was simplifying.
Chris lee
Dec 27 2022 at 9:40pm
Thanks for the excellent article. Is there any way to project the cost of cotton using free labor at the time? Were there cotton farms using paid labor? Or maybe small family owned farms with no slaves, like sharecroppers, that also farmed cotton? Could we have cotton without slavery?
2nd. At some point we are going to have to do the impossible and account for the social welfare loss of slaves. Lost leisure, opportunity costs and pain and suffering. I will leave that to the political scientists, and sociologists.
But we have to square the full ledger.
JFA
Dec 28 2022 at 9:10pm
There is some research on the productivity of German cotton farmers (in Texas?) who didn’t use slaves that shows equivalent productivity per acre. The counterfactual of cotton with no slaves is hard just because of the sheer scale of slavery. Perhaps labor saving devices would have been invented sooner in the absence of chattel slavery in the US or the patterns of immigration would have been different.
Jeff Hummel
Dec 29 2022 at 1:45pm
Could we have cotton without slavery?
Short answer, yes. As pointed out in a section of my entry quoted above in David’s post: “Yet the idea that slavery was essential for cotton production, which drove national growth, is belied by the fact that just five years after the Civil War’s end the physical amount of cotton produced was approaching its prewar peak.” In the postwar period, many poorer white farmers had shifted into cotton production.
Warren Platts
Dec 28 2022 at 12:55pm
This doesn’t make sense to me. Maybe someone can explain it. It seems to me that an economy with a relatively high productivity is an efficient economy. And productivity is commonly measured in real output per person. Thus, how can an economy whose real output per person be 20% lower than it was 20 years previous be considered a more efficient economy?
Jon Murphy
Dec 28 2022 at 1:08pm
As Jeff explains in the article, efficiency and productivity are linked but not the same (see the section “Profitability and Efficiency”).
Warren Platts
Dec 28 2022 at 5:57pm
I guess what’s bugging me is the concept of “efficiency” as deployed in Jeffrey’s encyclopedia entry is that it may be too squishy to be of objective use:
I get it that “Slaves were being pushed off their preferred labor-leisure trade off, forcing them to work harder and/or longer than they otherwise would have chosen.” And that “This increased labor input caused output to increase but welfare (economic well-being) to decrease [for the slaves!]
But what about the slaveholders? Couldn’t it be equally argued that the gain in economic well-being exceeded the losses of well-being to the enslaved? The Southern planter class was the closest thing the USA ever had to a European-style aristocracy. Natchez Mississippi in 1860 had the highest percentage of millionaires (who would be worth at least $33 million in today’s dollars) of any town or city in the United States. Could not one argue that such a level of opulence enabled a qualitatively higher, refined lifestyle that far exceeded the welfare losses of the slaves? And that after emancipation, the slaveholders were pushed off their preferred labor-leisure tradeoff and that their loss may have exceeded the gain to the formerly enslaved persons?
If one wanted to put a dollar figure on the gain to economic welfare to the planter class that could perhaps be approximated by the risk and the cost of the war itself. One website says the direct costs to the South were around $3.25 billion. Then of course there was the loss of the value of the slaves themselves. So we’re talking around $7 billion, that would have been worth 100 years of the net economic losses estimated by F&E that only took into account the gain to planters of the extra cotton production, or around 10 years worth of the entire Southern regional income. (Imagine the United States of today expending $230 trillion in a risky & ultimately vain attempt to preserve the current status quo.)
Now, don’t get me wrong: I am not trying to make a case for slavery. I get it that slavery is superbad. But slavery can be sufficiently condemned on moral grounds with no need for economics to bend over backwards to show that the Southern planters were not only immoral but were also stupid. Certainly, Thomas Jefferson was immoral as judged by our 21st century morality; but to say he was stupid? That’s a stretch.
Jon Murphy
Dec 29 2022 at 9:57am
It could. Thus why the decline in output post-war indicates that slavery was inefficient. If the gains to the (former) slaveholders exceeded the losses to the (former) slaves, then the former slaveholders would have been able to pay the slaves to accept the same conditions and still come out ahead. They could not (and substantially so). Thus, the claim that slavery was efficient does not hold up to scruitany.
Phil H
Dec 28 2022 at 11:58pm
The debate above seems to be confusing two separate issues: motivation and justification.
As Peter suggests, one of the motivations for slavery has always been the assumption that it brings economic benefit to the owner.
However, in many moral regimes, self-interest is regarded as a non-moral factor, so when asked for a justification of slavery, the slave owner cannot say: these slaves make me money. Therefore you get a lot of racist/sociological/sexist/political claims put forward as justification.
The key to this debate is remembering that the fact that there is an opposition between these two things (motivation and justification) does *not* mean that one is right and the other wrong. These days, I imagine everyone on this website agrees that all of the *justifications* of slavery are incorrect. The question is whether that underlying *motivation* was also incorrect.
Peter suggests that the fact that slavery has persisted so long as an institution suggests that slavery is in fact economically beneficial. This is certainly a relevant piece of evidence, but we also know that there are lots of bad economic practices that have been equally persistent (e.g. excluding women from the workforce).
I want to suggest that most slaveowners believed implicitly that slavery was benefiting them economically; but it is entirely possible that they were incorrect. This kind of assumption radically affects the kinds of evidence that you’d adduce. For example: if you find historical records of a slaveowner saying that they benefit from slavery, under my assumptions, this is evidence for the implicit belief, but not evidence about the actual economic impact of slavery.
Phil H
Dec 28 2022 at 11:59pm
Sorry, the paragraph breaks seem to have got lost in that post.
Jon Murphy
Dec 29 2022 at 10:00am
That’s possible, but requires a lot of assumptions. Whenever possible, one should not play the game of “They said X, but I know what they really meant,” at least not without substantial evidence.
Comments are closed.