Lecture5 - Antebellum South Economics of Slavery Slave...

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Unformatted text preview: Antebellum South Economics of Slavery Slave Lives Slave trade The peculiar institution: The South and slavery American Economic History University of California, Berkeley Department of Economics September 14, 2010 Econ 113 (UC Berkeley) Lecture 5 9/14/2010 0 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Today's Agenda: Overturning Myths on Slavery Myth 1: The South was a poor region both before and after the Civil War Myth 2: Slavery was unprofitable and not economically efficient. It was a dying institution and would have ended without the Civil War. Puzzle: If slavery was efficient, why didn't it spread outside of the South to the North? Econ 113 (UC Berkeley) Lecture 5 9/14/2010 1 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Slavery in U.S. eve of Civil War, concentrated in Southeast Econ 113 (UC Berkeley) Lecture 5 9/14/2010 2 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Slavery set the border for the Civil War Econ 113 (UC Berkeley) Lecture 5 9/14/2010 3 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Myth 1: The South was poor before the Civil War Abolitionists argued that the South was impoverished: "The South, at one time the superior of the North in almost all the ennobling pursuits and conditions of life, has fallen far behind her competitor, and now ranks more as the dependency of a mother country than as the equal confederate of free and independent States." In fact, "if either the North or the South had the advantage, it was the latter." Some "...have the unparalleled audacity to tell us that the South is the greatest agricultural country in the world...how preposterously false all such babble is." -Hinton Rowan Helper, The Impending Crisis 1860 Econ 113 (UC Berkeley) Lecture 5 9/14/2010 4 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Antebellum income in South compared to North Per capita income by region: 1840, 1860 (1860 prices) 1840 Total Population 1860 Annual Growth Free Population 1840 1860 National Average North Northeast North Central South South Atlantic East South Central West South Central 96 109 129 65 74 66 69 151 128 141 181 89 103 84 89 184 1.4% 1.3% 1.7% 1.6% 1.7% 1.2% 1.3% 1.0 109 110 130 66 105 96 92 238 144 142 183 90 180 125 125 274 Source: Fogel and Engerman (1974). South growing faster than North leading up to Civil War For freed population, Southern per capita income was higher than North Econ 113 (UC Berkeley) Lecture 5 9/14/2010 5 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Southern income was large by international standards Per capita income, 1860 (U.S. South = 100) Index Australia U.S. North Great Britain U.S. South Switzerland Canada Mexico 144 140 126 100 100 96 10 Source: Fogel and Engerman (1974). South richer than all countries other than Australia and Great Britain Already richer than slave-owning countries like Brazil (Lecture 1) Econ 113 (UC Berkeley) Lecture 5 9/14/2010 6 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Replacing Myth 1: South poorer long after Civil War Econ 113 (UC Berkeley) Lecture 5 9/14/2010 7 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Myth 2: Slavery was unprofitable Many abolitionists made moral and religious appeals to end slavery Anti-slavery southerners argued that slavery was inefficient "Here in the South are three millions of slaves, doing only about one-half of the effective work of the same number of whites in the North because they are not so skillful, so energetic, and above all, have not the stimulus of self-interest, as the whites." -Cassius Marcellus Clay, 1848 Econ 113 (UC Berkeley) Lecture 5 9/14/2010 8 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Time on the Cross (1974): Economics of Slavery Authors: Robert Fogel and Stanley Engerman Fogel shared Nobel Prize in Economics (only one for economic history) Most controversial book in economic history, perhaps all of economics Extended research for many years afterwards in response to controversy One reviewer said: "It is a rare monograph in economic history that gets reviewed in magazines and newspapers such as Newsweek, The New York Times, and The Washington Post among others; or whose authors appear on television talk shows. Robert Fogel and Stanley Engerman's Time on the Cross was one such book perhaps the only one." Econ 113 (UC Berkeley) Lecture 5 9/14/2010 9 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Fogel and Engerman's New View Was slavery efficient? Why even ask this question? Stop. Slavery is immoral and over. Full stop. What is meant by efficiency? What does slavery imply about capitalism and ethics? New view: Slavery was profitable, efficient, and economically "rational" NOT moral, just, or ethical It is the result of a profit-maximizing outcome, which can be unethical Econ 113 (UC Berkeley) Lecture 5 9/14/2010 10 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade TFP shows whether slavery was efficient form of production Total factor productivity (A) in growth accounting measures efficiency Fogel and Engerman estimate and compare Aslave and Anoslave Compares farms with and without slaves Data on farm outputs (e.g. cotton yield) and inputs (e.g., labor) Computes estimate for same point in time: 1860 Implicitly assumes same production function for both groups Econ 113 (UC Berkeley) Lecture 5 9/14/2010 11 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Calculating whether slavery was relatively efficient 1. Efficiency of production: Y = A K L T A = a. Efficiency of slave farms (s): As = Ys Ks Ls Ts Yn Kn Ln Tn Y K L T b. Efficiency of non-slave farms (n): An = Non-slave was North, but non-slave cotton farms would be ideal Ys Yn Ks Ls Ts ( Kn ) ( Ln ) ( Tn ) 2. Relative efficiency of slavery: As An = Slavery was relatively efficient to non-slave farms if As An > 1 As > An Econ 113 (UC Berkeley) Lecture 5 9/14/2010 12 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Total Factory Productivity Estimates Relative to North (100) North normalized to 100. Old South not more efficient than North Econ 113 (UC Berkeley) Lecture 5 9/14/2010 13 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Just a few of the economic controversies... TFP: traditionally used to compare efficiency of an economy over time Or, two economies engaged in similar choices of crops Can the South be compared to the North if the North did not grow cotton? How representative is 1860 TFP calculation of antebellum South? 1860 was a particularly good year for cotton Econ 113 (UC Berkeley) Lecture 5 9/14/2010 14 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade ...and the list continues How should each variable be measured? Should labor be measured by hours, days, year? Could length of work day and season vary by region due to climate? Land is also not obvious What are the consequences of these concerns? Suppose L should be measured in hours and not just workers What is slave-workers worked more hours? L would be relatively greater in slave farm than free farm of same size Denominator increases so relative efficiency of slavery would decrease Perhaps decrease so large that slavery would no longer be efficient? Econ 113 (UC Berkeley) Lecture 5 9/14/2010 15 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Slavery was a relatively efficient form of production Normalize TFP on cotton farms (Parker-Gallman sample) to 100: Slavery (in cotton) was more efficient: 128.5 > 100.0 Econ 113 (UC Berkeley) Lecture 5 9/14/2010 16 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Plantations were most efficient but increasingly less so Plantation-style farms: 16 or more slaves Farms with few slaves were not substantially more efficient: 107.7 > 100 Plantations were most efficient, but less so with 51+ slaves: 133.5 < 144.7 Econ 113 (UC Berkeley) Lecture 5 9/14/2010 17 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Summary of Findings 1. Southern farms with no slaves were as efficient as Northern farms. 2. Southern farms with slaves were more efficient than Southern farms without slaves. 3. Plantations were more efficient than farms with few slaves. Econ 113 (UC Berkeley) Lecture 5 9/14/2010 18 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Why was slavery efficient? Econ 113 (UC Berkeley) Lecture 5 9/14/2010 19 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Did slaves work more? Slave work-year: 281 days per year (Sundays were routinely given off) approximately 2,798 hours per year, with less work during winter North work-year: approximately 3,130 hours per year Slaves did not likely work more, but Fogel and Engerman argue more intensely Econ 113 (UC Berkeley) Lecture 5 9/14/2010 20 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Gang labor improves efficiency on plantations Gang labor: labor organized into gangs based on effort Teams overseen by managers, who would discipline workers out of line Division of labor likened to factory Performance dependent on the actions of the others in the gang Example: Cotton hoe gangs chopped weeds, plow gangs toss soil back Cotton planting: competing gangs with bonuses for performance Slave jobs: assigned based on age, sex, and physical ability Hoeing was less labor-intensive, so used women and younger men Women hardly reduced cotton picking rates during childbirth Econ 113 (UC Berkeley) Lecture 5 9/14/2010 21 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Average accumulated discounted value of slaves Age 9: owners began to get more back than they put into slaves Mid-20s: slave owner breaks even on the investment Econ 113 (UC Berkeley) Lecture 5 9/14/2010 22 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Slaves were increasingly productive in cotton Panel B: Cotton Picked Per Day by Age and Gender, 1800-62 Source: Olmstead and Rhode (2010). Econ 113 (UC Berkeley) Lecture 5 52 9/14/2010 23 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Reward v. Punishment occasionally Replacing Myth 2: Whipped but only Econ 113 (UC Berkeley) Lecture 5 9/14/2010 24 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Replacing Myth 2: Slaves received ample diet Econ 113 (UC Berkeley) Lecture 5 9/14/2010 25 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade "Ample comparable to other slave and free populations Slave heights but adequate?" Height is a proxy for health. Econ 113 (UC Berkeley) Lecture 5 9/14/2010 26 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Life expectancy for slaves comparable to free population Econ 113 (UC Berkeley) Lecture 5 9/14/2010 27 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Slave children not taken care of until they were productive Econ 113 (UC Berkeley) Lecture 5 9/14/2010 28 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Puzzle: Why not in the North? If slavery was so efficient, why didn't it spread to the North? Were Southerners just fundamentally different? Sokoloff/Engerman: factor endowments differed North engaged in smaller-scale farming Efficiency advantage only for plantations Econ 113 (UC Berkeley) Lecture 5 9/14/2010 29 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Slaves largely imported to sugar-growing regions Econ 113 (UC Berkeley) Lecture 5 9/14/2010 30 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Cotton spread West with discovery of suitable land Source: Fogel (1989). Econ 113 (UC Berkeley) Lecture 5 1801 1859 9/14/2010 31 / 33 Antebellum South Slavery spreads with cotton Economics of Slavery Slave Lives Slave trade Slavery spread West with discovery of cotton Source: Fogel (1989). 1800 Econ 113 (UC Berkeley) Lecture 5 1860 9/14/2010 32 / 33 Antebellum South Economics of Slavery Slave Lives Slave trade Conclusion 1. Old South equivalent to Midwest in per capita income before Civil War South growing faster than North before the War Per capita income drops when slavery ends 2. Slavery was efficient mode of production for crops like sugar and cotton Enabled highly monitored, gang system of labor on plantations Perhaps wages would have been too high for gang labor on small farms 3. Slaves were amply though not adequately taken care of Econ 113 (UC Berkeley) Lecture 5 9/14/2010 33 / 33 ...
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