Lecture 15

Lecture 15

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Unformatted text preview: stagnating, the economy of the antebellum South grew quite rapidly .. By 1860 the South attained a level of per-capita GDP which was high by the standards of the time. Indeed, a country as advanced as Italy did not achieve the same level ... until the eve of World War II.” James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis November 2, 2008 5 / 18 Perspectives Though the South was poorer than the North, Fogel and Engerman are correct about the comparative facts. I’ give two explanations d which can reconcile this with the backwardness of the slave economy: 1 2 The South had the advantage of being embedded in a system of functioning institutions that was formed before the development of the slave economy. We know that prior to the industrial revolution the places in the world with the highest income per-capita were Haiti and sugar plantation islands. But such a society was not well equipped to industrialize. On the TFP calculations showing the relative e¢ ciency of di¤erent farms, Fogel and Engerman’ work is completely unidenti…ed, actually s tell us nothing about whether or not slavery led to more of less e¢ ciency. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis November 2, 2008 6 / 18 Privately Pro…table Fogel and Engerman went to great length to show that investment in slave plantations was as pro…table, e.g. p. 70 “On average, slaveholders earned about 10% on the market price of their bondsmen ... average rates of return equal to or in excess of the averages which obtained in a variety of nonagricultural enterprises. For example the average rate of return earned by 9 of the most successful New England textile …rms over the period 1844-1853 was 10.1%. And a group of 12 southern railroads averaged 8.5% for the decade 1850-1806.” These arguments have not survived well. Fred Bateman and Thomas Weiss (1981) in their seminal book, A Deplorable Scarcity, showed that manufacturing was very pro…table in the South and more generally, but Southern planters were not inv...
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This document was uploaded on 02/28/2014 for the course ECON 2328 at Harvard.

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