Why slavery should come to an end:

Brad, I know you teach economics, but I hope you at least mention in passing that there were non-economic reasons why slavery was wrong.

Just sayin'...

Here's a question for economists:

Is it possbile to have an economy that does not rest on groups of very low paid laborers?

What legal, moral, economic structures are needed to provide a minimal floor of wages sufficient to maintain an acceptable quality of life?

It is bitter fruit to think this of ourselves, but it is often easier to appeal to one's economic self-interest than to use all the moral arguments in the world.

pragmatic realist -- essentially every developed economy has a large, well paid labor force.

It is the under developed countries that have large scale poorly paid workers.

Aaron: That was Smith's reasons, not Prof. DeLong's. Stop skimming.

Aren't there significant social reasons why slavery continued in the South until 1865 - the social standing and power of the planter class, for instance.

IIRC, MacPherson's Battle Cry of Freedom treats this side of the subject concisely and well.

Brad on control:

In addition, many plantations were isolated areas with no development outside of the "tobacco roads" and so forth.

Since there was often literally no where else to go, monitoring was easy.

Ah, Slavery: The BIG ($3 billion worth) 'property rights' question of the 19th Century.

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"The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson."

--Franklin Roosevelt

http://www.talkaboutgovernment.com/group/alt.politics.harry-browne/messages/3595.html
A letter written by FDR to Colonel House, November
21st, l933

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Georgia's political/economic argument:

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(from Georgia's Declaration of Secession)

"...While the subordination and the political and social inequality of the African race was fully conceded by all, [during the 'mark-up of the Constitution] it was plainly apparent that slavery would soon disappear from what are now the non-slave-holding States of the original thirteen. The opposition to slavery was then, as now, general in those States and the Constitution was made with direct reference to that fact. But a distinct abolition party was not formed in the United States for more than half a century after the Government went into operation. The main reason was that the North, even if united, could not control both branches of the Legislature during any portion of that time. Therefore such an organization must have resulted either in utter failure or in the total overthrow of the Government. The material prosperity of the North was greatly dependent on the Federal Government; that of the the South not at all. In the first years of the Republic the navigating, commercial, and manufacturing interests of the North began to seek profit and aggrandizement at the expense of the agricultural interests. Even the owners of fishing smacks sought and obtained bounties for pursuing their own business (which yet continue), and $500,000 is now paid them annually out of the Treasury. The navigating interests begged for protection against foreign shipbuilders and against competition in the coasting trade. Congress granted both requests, and by prohibitory acts gave an absolute monopoly of this business to each of their interests, which they enjoy without diminution to this day. Not content with these great and unjust advantages, they have sought to throw the legitimate burden of their business as much as possible upon the public; they have succeeded in throwing the cost of light-houses, buoys, and the maintenance of their seamen upon the Treasury, and the Government now pays above $2,000,000 annually for the support of these objects. Theses interests, in connection with the commercial and manufacturing classes, have also succeeded, by means of subventions to mail steamers and the reduction in postage, in relieving their business from the payment of about $7,000,000 annually, throwing it upon the public Treasury under the name of postal deficiency. The manufacturing interests entered into the same struggle early, and has clamored steadily for Government bounties and special favors. This interest was confined mainly to the Eastern and Middle non-slave-holding States. Wielding these great States it held great power and influence, and its demands were in full proportion to its power. The manufacturers and miners wisely based their demands upon special facts and reasons rather than upon general principles, and thereby mollified much of the opposition of the opposing interest. They pleaded in their favor the infancy of their business in this country, the scarcity of labor and capital, the hostile legislation of other countries toward them, the great necessity of their fabrics in the time of war, and the necessity of high duties to pay the debt incurred in our war for independence. These reasons prevailed, and they received for many years enormous bounties by the general acquiescence of the whole country.

But when these reasons ceased they were no less clamorous for Government protection, but their clamors were less heeded-- the country had put the principle of protection upon trial and condemned it. After having enjoyed protection to the extent of from 15 to 200 per cent. upon their entire business for above thirty years, the act of 1846 was passed. It avoided sudden change, but the principle was settled, and free trade, low duties, and economy in public expenditures was the verdict of the American people. The South and the Northwestern States sustained this policy. There was but small hope of its reversal; upon the direct issue, none at all.

All these classes saw this and felt it and cast about for new allies. The anti-slavery sentiment of the North offered the best chance for success. An anti-slavery party must necessarily look to the North alone for support, but a united North was now strong enough to control the Government in all of its departments, and a sectional party was therefore determined upon...

...Such are the opinions and such are the practices of the Republican party, who have been called by their own votes to administer the Federal Government under the Constitution of the United States. We know their treachery; we know the shallow pretenses under which they daily disregard its plainest obligations. If we submit to them it will be our fault and not theirs. The people of Georgia have ever been willing to stand by this bargain, this contract; they have never sought to evade any of its obligations; they have never hitherto sought to establish any new government; they have struggled to maintain the ancient right of themselves and the human race through and by that Constitution. But they know the value of parchment rights in treacherous hands, and therefore they refuse to commit their own to the rulers whom the North offers us. Why? Because by their declared principles and policy they have outlawed $3,000,000,000 of our property in the common territories of the Union; put it under the ban of the Republic in the States where it exists and out of the protection of Federal law everywhere..."

http://www.yale.edu/lawweb/avalon/csa/geosec.htm

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'Course everybody knows how it turned out.

Being kissing cousins and all, eventually (after the killing was done) the righteous Southern gentlemen who remained saw the light at the end of the tunnel and proceeded to kiss and make up with their great, prim and proper, Northern (above ground) railroadin' relations...

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"Hayes-Tilden Election 1876"

"...The Electoral College controversy would drag on for months, not reaching resolution until almost the eve of the scheduled inauguration on March 5, 1877. To break the deadlock, Congress appointed an Electoral Commission, made up of five Senators, five members of the House of Representatives, and five Supreme Court justices. Congress originally hoped to have seven Republican members of the Commission, seven Democrats, and one independent. As it turned out, however, the actual membership turned out to consist of eight Republicans and seven Democrats. The Commission voted along straight party lines 8 to 7 to accept all of Hayes' electoral votes and reject the Democrat's claims. The night before President Grant's term expired, the Senate announced Hayes had been elected President. The deadlock was broken behind closed doors when Southern Democrats agreed to support Hayes' claim for the Presidency if he would support increased funding for Southern internal improvements and agree to end Reconstruction, thus guaranteeing home rule -- meaning white control -- in the South. Hayes became President and the Southern Democrats could reverse with impunity the gains that blacks had made during Reconstruction."

"The Rise and Fall of Jim Crow"
http://www.pbs.org/wnet/jimcrow/stories_events_election.html

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The rest, as they say, is great--robber baron, trust bustin', empire buildin', (hot and cold) world warrin'--depressin' history....

Man, I really would have loved this class!

My thoughts, though they are pretty unformed right now...

Anyways, Adam Smith was pretty much right...
He's looking at industry across the channel and at home and sees alot of the problems with slavery.

Another thing though, slavery in the south was highly economically incompatible with the rest of the country, basically for value added reasons. Southerners could not compete with competing countries's agricultural exports through many of the tools available to the state. No full control on tarrifs, no subsidies, no nothing. Great Britain and others had extensive leverage, especially after the cotton gin.

The primary motivation for keeping the rather crippling economic implications of slavery was essentially (If I may be a bit marxist) class warfare. The upper class in the south were highly sensitive to labor costs of free society, and they wanted to maintain their social status. Having control of slaves, who had to vote 3/5 for whoever their masters told them to vote, meant that the southern elite had extensive control of the washington debate. Not only could free whites in the south not choose alternative politicians, free whites in other parts of the country had much less say over the direction of the country than they should have. As a response there was alot of polarization of the populace with slavery and tariffs and other concerns being a part or proxy of the debate. Even after the direct economic utility of slavery passed the political and pork utility of slavery continued, and the internal southern economic contradictions forced the southern elites to use it more and more and embed slavery as an essential part of the South.

Brad,

I am curious as to why you post these short notes on your lectures? For your Faithful Readers outside the University? To give diligent students something to think about before the lecture?

Curious how slavery persisted in a country where labor became valuable because land was so abundant. There is a labor/whatnot flexibility argument in here someplace.

[Indeed yes. I think the argument was best made by Evsey Domar...]

Thanks for posting these outlines.

Brad: These outlines are great!

I have a friend who wasn't able to go to college after high school and she's always felt that those of us who went there and beyond somehow walk on water.

I directed her here and she enjoys seeing that, even though she never got the paper, she understands what is being said and can actually make arguments for and against things discussed here.

I sometimes forget how lucky some of us have been.

Again, thanks.

[You're welcome]

"The American South . . . Quick end of indentured servitude"

An academic nit--indentured servitude burgeoned in VA in the 1620s, and didn't give way fully to slavery until the end of the 17th century--How is that "quick"?

And while I'm at it--What's your take on Fogel and Engerman?

[I'm an economic historian. A decade is a blink of an eye. A hundred years is quick. And my take on Fogel and Engerman is... complex...]

I read Hinton Rowan Helpers "The coming crisis of the south" or whatever it was called. He said that tariff revenues from the south were so meager that it was ridiculous to accuse the north of profiting from them. He also said slavery was bad for property values and all 'true' southerners should snub slave owners as their parasitic neighbors, which is why the plantation owners hated him so much.
I also noticed that it wasn't until the south had the constitutional convention in Montgomery (before Virginia joined up) and nationalised all the northern mortgages on southern plantations, that the north switched from "go in peace, wayward sisters" to "the union must be preserved!". Northern abolitionists were willing to fight, but it was northern bankers who paid the bill for that war.

$50(US)...

http://www.css.edu/usgrant/granthist4.html

...says I forgot to mention "gold diggin' and injun fightin'"...

http://www.pbs.org/wgbh/amex/grant/peopleevents/p_custer.html

...in MY 'reconstruction' of American 'economic' history.

Please pardon the oversight.

In hindsight too, $20 (US) says, in a free, democratic, constitutional, republic like ours, historical 'economic' insight OUGHT to be readily available.

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"I hope that we shall crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country."

Thomas Jefferson

http://www.talkaboutgovernment.com/group/alt.politics.harry-browne/messages/3595.html

The cost of the political failure to agree the abolition of slavery in the US was enormous: your Civil War. Was consideration given to the way the British Empire did it? (The slaves were freed and their owners given compensation for their loss of property rights.)

Having control of slaves, who had to vote 3/5 for whoever their masters told them to vote,...

This reflects a misunderstanding of the process. The census collected numbers for free and slave. In apportioning the House of Representatives and the Electoral College the population for the slave states was calculated as number of free plus 3/5 number of slaves. This had a huge effect, deciding some Presidential elections (beginning with 1800). But it was an institutional distortion. Slaves were for most purposes not legal persons and never voted.

"An academic nit--indentured servitude burgeoned in VA in the 1620s, and didn't give way fully to slavery until the end of the 17th century--How is that "quick"?"

Around 1675, Governor Berkeley estimated the population of Virginia as 40,000 of whom 8,000 were indentured servants and 4,000 slaves. This was Berkeley, a promoter and something of a jerk. But it may be in the ballpark.

There was also a change in land tenure patterns. Land ownership and wealth was relatively equal in the early colony, and there was a social policy of handing out land grants to each settler or sponsor of a settler. Between 1640 and 1675 the immigrant founders of the First Families showed up. A tax roll from around 1680 for an area below Richmond shows something like 50 landowners, with a couple of large holders (Byrd, Randolph). But toward 1700 the gentry gamed the process of land grants and in
1704 William Randolph was payng taxes on 20,000 acres. Robert Carter had 300,000. Slavery insulated them from the vagaries of the market for indentured servants, who turned over every 7 years at best. And the supply of indentured servants was declining.

If you were a (white) Virginian in 1675, you could work your own land, live in a small community with similar people and be solidly middle class. Or you could get rich quick growing tobacco for export, own slaves and live in relative isolation from other gentry, whom you saw when you went to Williamsburg on legal and legislative business.

One downside was that slaves represented a large fixed cost, and slave owners were more highly leveraged to the price of tobacco. By 1820 or so, the founding families had lost most of the large plantations in Tidewater Virginia.

Brad,
Far be it for me to say that you got some economic history wrong. But I believe you got some economic history wrong. From what I've heard, slaves were not all that inefficient. The rental rate for slaves in antebellum New Orleans was higher than the wage for free labor, because the slaves were more skilled and more valued. (It could be racism--the competing free labor was Irish, who were not highly regarded at the time.)

Slavery is wrong because it is wrong. I don't see where incentive compatibility is any sharper for market-clearing-rate free labor. If you get canned at Wal-Mart, you can go elsewhere pretty easily, at the same wage. Same shirking problems present themselves. (BTW, skilled slaves were often paid.)

One of the puzzles of Southern history is support for the Confederacy among white people who didn't hold slaves. This is approachable as an economic problem. The view out my window is alluvial Red River terrain that was covered with plantations in 1860. Away from the river, the terrain is forested hills, with scattered patches suitable for cultivation. The lore I have always heard is that the population of the backwoods was less supportive of the Confederacy, but I have seen few sources. There should be census and military service data to address this point.

[The hill country of eastern Tennessee, western Virgina, and Arkansas where there were few slaves sent very few soldiers to the southern ranks]

Another consideration may be the enormous dislocation caused by newly freed slaves. They would be able to vote. They could buy guns. They could organize themselves. This is probably what Jefferson meant when he said that slavery was like holding a wolf by the ears. There's no way to do an economic analysis of this issue.

[Very true]

There was an article in the American Historical Review somewhere between 10 and 20 years ago that showed that many who did not own slaves leased them, so that non-slaveowners still were involved in the dominant slave-owning economy.