Lecture 15

Why is an open issue james a robinson harvard the

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Unformatted text preview: ested in industry. Why is an open issue. James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis November 2, 2008 7 / 18 Externalities Even if slavery was privately pro…table this does not tell us anything about its general e¤ects on development because there could have been huge negative externalities. Gavin Wright has argued that the mobility of slaves created no incentive to invest in crucial public goods or complementary inputs. Railroad and canal mileage was far behind the North. Fogel and Engerman do concede that the exclusion of slaves from profession such as law, politics and education (p. 40) and the fact that they could not own property did sap entrepreneurship. Data on patents shows that the South was also un-dynamic, even with respect to the crops that they grew (cotton). James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis November 2, 2008 8 / 18 The Rate of Exploitation Fogel and Engerman (pp. 5-6) “Slaves were exploited in the sense that part of the income which they produced was expropriated by their owners. However, the rate of exploitation was much lower than has generally been presumed. Over the course of his lifetime, the typical slave …eld hand received about 90% of the income he produced.” I never researched these numbers but I have never thought they passed the ‘ reality check’! James A. Robinson (Harvard) The Emergence of Modern Economic Growth: A Comparative and Historical Analysis November 2, 2008 9 / 18 Institutional Change? The abolition of slavery appears to be a dramatic and signi…cant example of institutional change, yet the basic features that characterized the Southern economy before 1865 persisted for almost another century. Economic catch-up to the North began only in the 1940s. The abolition of slavery changed many things (freed slaves worked much less) and labor market institutions changed, but they did so within a political economy equilibrium which endu...
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