15A046 The Slave Trade by Jim Davies, 7/29/2015    

At the start of the recent ZGBlog Why Nine Died, I suggested that government and enslavement share the same root: a denial of the self-ownership axiom, and that the former is merely a milder (and probably smarter) form of the latter. That still leaves us with a bit of a puzzle: why did slave owners, prior to 1865, set out to own slaves?

The reason government people like to rule is clear enough: they like to rule. Governing is how they get their kicks. The purpose of power is power. But surely this was not why the plantation owners chose to buy slaves? - they were only farmers and businessmen, even though some may have enjoyed prestige from the size of their enslaved plantations.

So I got to wonder about the economics of slavery, and came across a Steven Taylor article which says their value, around 1800, was a huge portion of the national wealth and for that reason it is clear that preservation of slavery was the primary reason for secession and hence for the "Civil" war. I think Taylor has it wrong. Counting slaves as assets is not the way a plantation owner would do his math (and the War had a quite different cause, as brilliantly analyzed by Thomas DiLorenzo in The Real Lincoln and elsewhere.) But why did these farmer-businessmen from Christian Europe buy and sell human beings like chattels?

I found there are two opposite views - each of which deplores the immorality of the institution. One, like Taylor's, holds that slavery yielded more profit than hiring free workers, while the other reasons that these farmers were simply mistaken; that they were using a system that was less profitable than hiring free workers, but had not done their sums right. If the latter is correct (and I think it is) the tragedy of it all is doubled.

The first and prevalent view appears in Time on the Cross, a book by Robert Fogel and Stanley Engerman. Their argument is that slave plantations were efficient, made good use of economies of scale, produced more per worker than Northern farms, and let to very considerable weath for the owners and the community - except of course for the slaves. They conclude that slavery would not have disappeared had there been no Civil War.

It's a powerful case. An addition to it might be that while some owners might be mistaken about whether slave labor was cheaper (per unit of output) than hired labor, it's improbable that all of them were. Another is that the South was very prosperous with slavery before 1861, but became dreadfully poor after 1865, without it; one has to try to discount the enormous cost to the Southern economy of waging the war, but the fact is there and the poverty went on and on, well into the 20th Century.

The second view is the opposite, that enslavement was less efficient than hiring labor for wages, and Thomas Sowell is among those said to hold that opinion, as did Ulrich Phillips, who has been accused of racial bias. Among the arguments for this view is that if slavery were so superior and efficient a way of farming, Brazil would have become immensely wealthy during the 19th Century; because nearly five million African slaves were taken to that country over time, or six times the number taken to what became the USA. Clearly, Brazil didn't succeed quite that well. A further argument is that in 1833, slavery was abolished throughout the British Empire (peacefully) without any ill effect.

To me, it seems rather simple: people work best when they are motivated best. If their motivation is to work only hard enough to avoid a whipping, that's what they will do; the minimum amount necessary. That is the essence of slave work; nothing is to be gained by working any harder; the very opposite of the "Protestant work ethic" and something that has hindered progress by succeeding generations of slaves' descendants. Contrast that with being paid and having the possibility of career progress; one then works hard enough to impress the boss, make sure he sees the labor as worth more than its cost, and give him reason to promote. Contrast it further with piece work, where output hits its highest possible level (the more work done, the more the pay.)

Evidently, it cost the owner less to keep the slave fed, sheltered and healthy than he produced as output even with that poor motivation; presumably also, it would cost the owner more to hire free labor than to maintain the slave. But the output of a well motivated hired worker would more than compensate; that is, the net gain to the owner would rise.

Nonetheless, holding that second view leaves me with the task of explaining why all the plantation owners got their sums wrong. I suggest the reason was as follows.

When the plantations began, in the 17th Century, there was an obvious labor shortage. The owners would look for some to hire, and finding none would hear the offer of the slave trader: pay me a single up-front price, and this man will labor for you free, for the rest of his life. His wife will too, and their children will be yours also. You can get the legislature to write laws to make escape impossible, and to refuse access to courts for which any reluctant slave may apply. You've got it made!

And so it took place. The alternative, of importing paid labor from Europe or Mexico, did not seem attractive; and Ephesians 6:5 told them slavery was not forbidden by their religion. With time, master and slave alike became used to the arrangement. Slaves often adopted Christianity themselves. After one or two generations of being born into slavery, it seemed like nature's way. It was how things were. World markets for cotton and tobacco were plentiful, profits were good, so why rock the boat? Productivity was higher than on Northern farms, so it didn't seem likely that labor costs could be reduced by changing to a wage basis.

I think the North-South comparison was false. Northern farms were much smaller, so economies of scale gave the plantations a big advantage; and Northern climate and soils did not suit the growing of highly profitable crops like cotton and tobacco. But at the time, that was not something to worry the slave owners - so their mistake persisted. It would have become apparent eventually, for competition (with piece-work hired labor from the flood of new European immigrants, for example) would have exposed it, within a very few years. That much time, alas, was denied them - by Lincoln, for reasons unconnected with slavery.

So, will this awful mistake be repeated in the coming zero government society? No way! Reasons:

1. Enforcement of slavery will be impossible without government to prevent escapes and monopolize "justice."

2. Every member of that society will have learned that each human being owns himself, and therefore nobody else. Hence, ears would be closed to any slave-trader's tempting offer; Christian ethics may not forbid slavery, but a rational ethic most certainly does.

3. Tradition ("this is how it's always been done") will count for something, but not much. Everyone including farmers will have learned always to think rationally, and hence to do the sums correctly, taking worker motivation very much into account. Self-interest will then lead to a non-slave solution.

4. Initially at least, there will be no shortage of labor, such as triggered the introduction of slavery 350 years ago. There will be 40 million former government employees looking for work, so anyone in need of help on a farm or elsewhere will have no problem. Later, when that one-time transition is complete, demand and supply of labor will rise and fall, and there will be plenty of freedom-seekers worldwide whose governments have not yet vanished, who will be only too eager to make up any supply shortfall.

5. The discipline of a competitive market, in the absence of government to shore up firms that are inefficient but influential in the lobbies, will quickly weed out managers who fail to innovate and constantly adjust to maximize profits.

Slavery - full and partial - is a product of government. When the latter disappears, so will the former.