American Negro Slavery
01/29/15Greg Pratt, Mesa Community College
Slavery is the ubiquitous
institution in human history
Stanley Engerman
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
Formal Institution Informal institution
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
Greg Pratt, Mesa Community College 01/29/15
Greg Pratt, Mesa Community College 01/29/15
Command/centralized
Greg Pratt, Mesa Community College 01/29/15
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
Economic Decision Making
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
Greg Pratt, Mesa Community College 01/29/15
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
Trans Atlantic 25%
North
Africa/Europe and
Asia
25%
Intra Africa 50%
New World Europe Africa
1600 25 100 50
1700 3 120 45
Today 310 500 1 Billion
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
Negro males listed in the 1850 census
were engaged in fifty-four different
occupations; only 9.9 percent of them
were uns...
01/29/15Greg Pratt, Mesa Community College
draymen,
porters,
carpenters,
masons,
bricklayers,
painters,
plasterers,
tinners,
coopers,
wheelwrights,
cabine...
Tobacco per pound 0.50
Corn per bushel 0.969
Sweet potatoes per bushel 3.02
Wheat per bushel 3.24
Cotton per bale 271.00
0...
Demand for labor is a derived demand
Price of output
Productivity of labor
Free labor
Indentured servants
Redeeption...
Greg Pratt, Mesa Community College 01/29/15
Greg Pratt, Mesa Community College 01/29/15
Liberty
Individualism
Laissez faire
Egalitarianism
Populism
Except for slaves – their position was
increasingly subj...
The major
expansive force in
the US economy
from 1800 -1850:
Douglas North
01/29/15Greg Pratt, Mesa Community College
01/29/15Greg Pratt, Mesa Community College
Time on the Cross Fogel and Engerman
01/29/15Greg Pratt, Mesa Community College
To this point it might be useful to pause and consider
this nascent slavery in the United States along the
lines of econo...
antebellum Southern farms were 35
percent more efficient overall than
Northern ones and that slave farms in
the New South ...
This would mean that a slave farm
that is otherwise identical to a free
farm (in terms of the amount of
land, livestock, m...
“Economic history is about the performance of
economies through time.” North
01/29/15Greg Pratt, Mesa Community College
Are you better off today, than . . .
Braudel – material life
Examples
Live longer
Live “better”
reduction in average work ...
01/29/15Greg Pratt, Mesa Community College
Adam Smith – system of natural liberty
emergent and evolutionary – a spontaneous order that
allows participants in society...
Contra to Smith’s system of natural liberty
Centralized
Coercive
Planned
Adaptively inefficient
01/29/15Greg Pratt, Mesa C...
Flexible
Error and Trial
Receptive to change
It is adaptive rather than allocative efficiency which is
the key to long ...
Successful political/economic
systems have evolved flexible
institutional structures that can
survive the shocks and chan...
Voluntary
Involuntary
01/29/15Greg Pratt, Mesa Community College
Buy and Sell
Life time
Inherited through the
mother
01/29/15Greg Pratt, Mesa Community College
Nature of man – angels or humans?
Theory of Moral Sentiments – impartial spectator as a
mechanism to address humanity
Slav...
Was Adam Smith correct?
Who benefited?
What was the nature of the
institution?
01/29/15Greg Pratt, Mesa Community College
Slave auction records
Estate inventories
Plantation records
Slave narratives
Abolitionist materials
Church records
01/29/1...
Slaves worked more intensively
Methods of production – gang system
Plantation v diversify farm
Slaves responded to incenti...
01/29/15Greg Pratt, Mesa Community College
Negative – Simon Legree
Reduced Rations
Prevent marriage
Sell family
Whippi...
Sundays off
Bonuses in cash or in kind, or
Quit early if they finished tasks
quickly.
Keep part of the harvest
Own small p...
In antebellum Louisiana, slaves even had under their
control a sum of money called a peculium. This served
as a sort of wo...
because slaves constituted a
considerable portion of individual
wealth, masters fed and treated
their slaves reasonably we...
US South - slaves West Indian
Slaves
Africans White workers in
the US
102.0 88.0 89.0 100.0
01/29/15Greg Pratt, Mesa Commu...
Calories – potatoes v sweet potatoes
Living conditions – city v rural
Type of work – indoors v outdoors
Impact
Health
Chil...
The entire US and world – cotton was the grease for the
Industrial Evolution – textile industry
Textile manufacturers – in...
Banking and finance
Consumers (greater access to and much cheaper
clothing)
In short, . . . the south benefited and, to a ...
1800 – 1860
Prices secular decline
Increasing output per acre and in total
Expansion of the activity
Profits
Adaptively ef...
• Founding fathers in the late 18th
century believed slavery would die
out within 50 years
• What happened . . .
• The Cot...
The immenent economist Abe Lincoln, in 1858 said
that, with his plan, slavery would die out?
Steve Douglas said, ok, lets ...
Some would argue that the American
Negro slavery was so adaptively efficient
. . .
New areas for cotton growth
Increasin...
AN ADAPTIVELY
EFFICIENT
INSTITUTION
01/29/15Greg Pratt, Mesa Community College
Leads to economic growth
Does not necessarily lead to an
increase in individual welfare
Cannot persist with coercive
econo...
UN – official end 1970
China - 1910
Thailand - 1905
Brazil - 1888
Cuba - 1886
US - 1863
Haiti - 1804
01/29/15Greg P...
1860 4 million slaves with a value of 4 billion dollars
This was the size of the US economy (estimated GDP)
This was 40...
600,000 dead (over 50% to disease)
600,000 injured
In 1863 Union estimated daily cost was 2.5
million
10 billion in di...
NET DIRECT COSTS OF THE CIVIL WAR
in millions of $1860 discounted to June 1861 @ 6%
Category Union Confederacy
Government
...
The Costs of the Civil War (Millions of 1860 Dollars)
South North Total
Direct Costs:
Government Expenditures 1,032 2,302 ...
Government borrowing
Loss of economic growth during the period
1861-1865 (never to be recovered)
Expansion of the doctr...
Doomed to failure due to the coercive nature of the
institution, not due to the moral reprehension of the
practice.
Adap...
Institutions that are adaptively
efficient and coercive can be very,
very difficult to change peacefully.
01/29/15Greg Pra...
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Economics of coercion2

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Economics of coercion2

  1. 1. American Negro Slavery 01/29/15Greg Pratt, Mesa Community College
  2. 2. Slavery is the ubiquitous institution in human history Stanley Engerman 01/29/15Greg Pratt, Mesa Community College
  3. 3. 01/29/15Greg Pratt, Mesa Community College
  4. 4. 01/29/15Greg Pratt, Mesa Community College
  5. 5. Formal Institution Informal institution 01/29/15Greg Pratt, Mesa Community College
  6. 6. 01/29/15Greg Pratt, Mesa Community College
  7. 7. Greg Pratt, Mesa Community College 01/29/15
  8. 8. Greg Pratt, Mesa Community College 01/29/15
  9. 9. Command/centralized Greg Pratt, Mesa Community College 01/29/15
  10. 10. 01/29/15Greg Pratt, Mesa Community College
  11. 11. 01/29/15Greg Pratt, Mesa Community College
  12. 12. 01/29/15Greg Pratt, Mesa Community College
  13. 13. 01/29/15Greg Pratt, Mesa Community College Economic Decision Making
  14. 14. 01/29/15Greg Pratt, Mesa Community College
  15. 15. 01/29/15Greg Pratt, Mesa Community College
  16. 16. Greg Pratt, Mesa Community College 01/29/15
  17. 17. 01/29/15Greg Pratt, Mesa Community College
  18. 18. 01/29/15Greg Pratt, Mesa Community College
  19. 19. 01/29/15Greg Pratt, Mesa Community College
  20. 20. 01/29/15Greg Pratt, Mesa Community College
  21. 21. 01/29/15Greg Pratt, Mesa Community College
  22. 22. 01/29/15Greg Pratt, Mesa Community College
  23. 23. 01/29/15Greg Pratt, Mesa Community College
  24. 24. 01/29/15Greg Pratt, Mesa Community College Trans Atlantic 25% North Africa/Europe and Asia 25% Intra Africa 50%
  25. 25. New World Europe Africa 1600 25 100 50 1700 3 120 45 Today 310 500 1 Billion 01/29/15Greg Pratt, Mesa Community College
  26. 26. 01/29/15Greg Pratt, Mesa Community College
  27. 27. 01/29/15Greg Pratt, Mesa Community College
  28. 28. 01/29/15Greg Pratt, Mesa Community College
  29. 29. 01/29/15Greg Pratt, Mesa Community College
  30. 30. 01/29/15Greg Pratt, Mesa Community College
  31. 31. Negro males listed in the 1850 census were engaged in fifty-four different occupations; only 9.9 percent of them were unskilled laborers. Some of them even held jobs as architects, bookbinders, brokers, engineers, jewelers, merchants, and musicians. 01/29/15Greg Pratt, Mesa Community College
  32. 32. 01/29/15Greg Pratt, Mesa Community College
  33. 33. draymen, porters, carpenters, masons, bricklayers, painters, plasterers, tinners, coopers, wheelwrights, cabinetmakers, blacksmiths, shoemakers, millers, bakers, and barbers 01/29/15Greg Pratt, Mesa Community College
  34. 34. Tobacco per pound 0.50 Corn per bushel 0.969 Sweet potatoes per bushel 3.02 Wheat per bushel 3.24 Cotton per bale 271.00 01/29/15Greg Pratt, Mesa Community College
  35. 35. Demand for labor is a derived demand Price of output Productivity of labor Free labor Indentured servants Redeeptioners Debt peonage Slavery 01/29/15Greg Pratt, Mesa Community College
  36. 36. Greg Pratt, Mesa Community College 01/29/15
  37. 37. Greg Pratt, Mesa Community College 01/29/15
  38. 38. Liberty Individualism Laissez faire Egalitarianism Populism Except for slaves – their position was increasingly subject to greater coercion 01/29/15Greg Pratt, Mesa Community College
  39. 39. The major expansive force in the US economy from 1800 -1850: Douglas North 01/29/15Greg Pratt, Mesa Community College
  40. 40. 01/29/15Greg Pratt, Mesa Community College
  41. 41. Time on the Cross Fogel and Engerman 01/29/15Greg Pratt, Mesa Community College
  42. 42. To this point it might be useful to pause and consider this nascent slavery in the United States along the lines of economic growth, welfare and decision making. Economic growth – hazy Economic welfare – general improvement for society – slave welfare evolving – much less free – we’ll see what Fogel has to say in a minute Decision making – evolution overall 01/29/15Greg Pratt, Mesa Community College
  43. 43. antebellum Southern farms were 35 percent more efficient overall than Northern ones and that slave farms in the New South were 53 percent more efficient than free farms in either North or South. 01/29/15Greg Pratt, Mesa Community College
  44. 44. This would mean that a slave farm that is otherwise identical to a free farm (in terms of the amount of land, livestock, machinery and labor used) would produce output worth 53 percent more than the free. 01/29/15Greg Pratt, Mesa Community College
  45. 45. “Economic history is about the performance of economies through time.” North 01/29/15Greg Pratt, Mesa Community College
  46. 46. Are you better off today, than . . . Braudel – material life Examples Live longer Live “better” reduction in average work week from 68 to 36 – seems to be a preference for leisure over work 01/29/15Greg Pratt, Mesa Community College
  47. 47. 01/29/15Greg Pratt, Mesa Community College
  48. 48. Adam Smith – system of natural liberty emergent and evolutionary – a spontaneous order that allows participants in society to use their own knowledge for their own aims without coercion Hayek 01/29/15Greg Pratt, Mesa Community College
  49. 49. Contra to Smith’s system of natural liberty Centralized Coercive Planned Adaptively inefficient 01/29/15Greg Pratt, Mesa Community College
  50. 50. Flexible Error and Trial Receptive to change It is adaptive rather than allocative efficiency which is the key to long run growth. 01/29/15Greg Pratt, Mesa Community College
  51. 51. Successful political/economic systems have evolved flexible institutional structures that can survive the shocks and changes that are a part of successful evolution. 01/29/15Greg Pratt, Mesa Community College
  52. 52. Voluntary Involuntary 01/29/15Greg Pratt, Mesa Community College
  53. 53. Buy and Sell Life time Inherited through the mother 01/29/15Greg Pratt, Mesa Community College
  54. 54. Nature of man – angels or humans? Theory of Moral Sentiments – impartial spectator as a mechanism to address humanity Slavery inefficient The Wealth of Nations – pursuit of self love will guide society to ends that no one could either anticipate or intend 01/29/15Greg Pratt, Mesa Community College
  55. 55. Was Adam Smith correct? Who benefited? What was the nature of the institution? 01/29/15Greg Pratt, Mesa Community College
  56. 56. Slave auction records Estate inventories Plantation records Slave narratives Abolitionist materials Church records 01/29/15Greg Pratt, Mesa Community College
  57. 57. Slaves worked more intensively Methods of production – gang system Plantation v diversify farm Slaves responded to incentives? 01/29/15Greg Pratt, Mesa Community College
  58. 58. 01/29/15Greg Pratt, Mesa Community College Negative – Simon Legree Reduced Rations Prevent marriage Sell family Whippings Mutilation Death Positive – Inducements Days off Private plots Cabins Marriage Pay Manumission
  59. 59. Sundays off Bonuses in cash or in kind, or Quit early if they finished tasks quickly. Keep part of the harvest Own small plots Sell their own crops. 01/29/15Greg Pratt, Mesa Community College
  60. 60. In antebellum Louisiana, slaves even had under their control a sum of money called a peculium. This served as a sort of working capital, enabling slaves to establish thriving businesses that often benefited their masters as well. 01/29/15Greg Pratt, Mesa Community College
  61. 61. because slaves constituted a considerable portion of individual wealth, masters fed and treated their slaves reasonably well. . . , teenaged and adult slaves lived in conditions similar to -- sometimes better than -- those enjoyed by many free laborers of the same period. 01/29/15Greg Pratt, Mesa Community College
  62. 62. US South - slaves West Indian Slaves Africans White workers in the US 102.0 88.0 89.0 100.0 01/29/15Greg Pratt, Mesa Community College
  63. 63. Calories – potatoes v sweet potatoes Living conditions – city v rural Type of work – indoors v outdoors Impact Health Child mortality Height 01/29/15Greg Pratt, Mesa Community College
  64. 64. The entire US and world – cotton was the grease for the Industrial Evolution – textile industry Textile manufacturers – increasingly inexpensive input Merchant capitalists – financing and shipping raw materials and finished goods Transportation 01/29/15Greg Pratt, Mesa Community College
  65. 65. Banking and finance Consumers (greater access to and much cheaper clothing) In short, . . . the south benefited and, to a greater extent THE NORTH 01/29/15Greg Pratt, Mesa Community College
  66. 66. 1800 – 1860 Prices secular decline Increasing output per acre and in total Expansion of the activity Profits Adaptively efficient? 01/29/15Greg Pratt, Mesa Community College
  67. 67. • Founding fathers in the late 18th century believed slavery would die out within 50 years • What happened . . . • The Cotton Gin 01/29/15Greg Pratt, Mesa Community College
  68. 68. The immenent economist Abe Lincoln, in 1858 said that, with his plan, slavery would die out? Steve Douglas said, ok, lets accept your assertion . . . When? Abe said . . . 100 years 01/29/15Greg Pratt, Mesa Community College
  69. 69. Some would argue that the American Negro slavery was so adaptively efficient . . . New areas for cotton growth Increasing innovation and productivity Expansion of types of activity Increasing complexity of activity 01/29/15Greg Pratt, Mesa Community College
  70. 70. AN ADAPTIVELY EFFICIENT INSTITUTION 01/29/15Greg Pratt, Mesa Community College
  71. 71. Leads to economic growth Does not necessarily lead to an increase in individual welfare Cannot persist with coercive economic decision making . . . in the long run. 01/29/15Greg Pratt, Mesa Community College
  72. 72. UN – official end 1970 China - 1910 Thailand - 1905 Brazil - 1888 Cuba - 1886 US - 1863 Haiti - 1804 01/29/15Greg Pratt, Mesa Community College
  73. 73. 1860 4 million slaves with a value of 4 billion dollars This was the size of the US economy (estimated GDP) This was 40 per cent of total bank assets in the US 01/29/15Greg Pratt, Mesa Community College
  74. 74. 600,000 dead (over 50% to disease) 600,000 injured In 1863 Union estimated daily cost was 2.5 million 10 billion in direct costs by both sides 14 billion in pensions to surviving soldiers Inflation Coercion and loss of liberty 01/29/15Greg Pratt, Mesa Community College
  75. 75. NET DIRECT COSTS OF THE CIVIL WAR in millions of $1860 discounted to June 1861 @ 6% Category Union Confederacy Government expenditures 2,291 1,011 Labor Costs Undercounted Because of Draft 11 20 less Labor Costs Overcounted Because of Risk Premium -256 -178 Net Cost of Resources Destruction of Physical Capital 0 1,487 Destruction of Human Capital Killed 955 684 Wounded 365 261 Total 3,366 3,286 Source: Claudia Goldin and Frank Lewis, "The Economic Costs of the American Civil War: Estimates and Implications," Journal of Economic History 01/29/15Greg Pratt, Mesa Community College
  76. 76. The Costs of the Civil War (Millions of 1860 Dollars) South North Total Direct Costs: Government Expenditures 1,032 2,302 3,334 Physical Destruction 1,487 1,487 Loss of Human Capital 767 1,064 1,831 Total Direct Costs of the War 3,286 3,366 6,652 Per capita 376 148 212 Indirect Costs: Total Decline in Consumption 6,190 1,149 7,339 Less: Effect of Emancipation 1,960 Effect of Cotton Prices 1,670 Total Indirect Costs of The War 2,560 1,149 3,709 Per capita 293 51 118 Total Costs of the War 5,846 4,515 10,361 Source: Ransom, (1998: 51, Table 3-1); Goldin and Lewis. (1975; 1978) 01/29/15Greg Pratt, Mesa Community College
  77. 77. Government borrowing Loss of economic growth during the period 1861-1865 (never to be recovered) Expansion of the doctrine of Total War Given the cost to eventually eliminate, this institution had deep economic underpinings, was productive and, in aggregate, stimulative to growth and 01/29/15Greg Pratt, Mesa Community College
  78. 78. Doomed to failure due to the coercive nature of the institution, not due to the moral reprehension of the practice. Adaptively efficient institutions persist (Adam Smith was wrong) Slavery is a moral vice (Adam Smith was right) 01/29/15Greg Pratt, Mesa Community College
  79. 79. Institutions that are adaptively efficient and coercive can be very, very difficult to change peacefully. 01/29/15Greg Pratt, Mesa Community College

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