Economics of Slavery

There is a little bit of research on slavery that is buried in the back of some inequality research by Thomas Piketty and Gabriel Zucman (pdf) that just floors me. Check out this graph of the total wealth of different regions:

In the US South, slaves accounted for almost half of the total wealth!  Stephen Taylor explains why the US had a civil war to end slavery whereas most countries ended legal slavery through peaceful means.

[Piketty and Zucman] noted that a great deal of wealth in the United States in the pre-Civil War period was possess in the form of slaves:

By putting together the best available estimates of slave prices and the number of slaves, we have come to the conclusion that the market value of slaves was between 1 and 2 years of national income for the entire U.S., and up to 3 years of income in Southern states.

[…]

Needless to say, this peculiar form of wealth has little to do with “national” wealth and is better analyzed in terms of appropriation and power relationship than in terms of saving and accumulation. We view these “augmented” national balance sheets as a way to illustrate the ambiguous relationship of the New world with wealth and inequality. To some extent, America is the land of equal opportunity, i.e. the place where wealth accumulated in the past does not matter too much. But at the same time, America is also the place where a new form of wealth and class structure – arguably more extreme and violent than the class structure prevailing in Europe – flourished, whereby part of the population owned another part (35).

Here is the graphical representation of the findings:

As Yglesias notes:

The “human capital” consisting of black men and women held as chattel in the states of the south was more valuable than all the industrial and transportation capital (“other domestic capital”) of the country in the first half of the nineteenth century. When you consider that the institution of slavery was limited to specific subset of the country, you can see that in the region where it held sway slave wealth was wealth.

For those who understand that the core reason for southern secession and therefore for the Civil War itself was slavery, then this information is less illuminating as it confirming.  However, I am constantly running into people who want to claim that the Civil War was caused by other factors, with the most popular being tariffs as well as the ever-popular “states’ rights” argument.

The above figure blows the tariff argument out of the water insofar as if the Southern states were willing to secede and risk war over the economic impact of a tariff (so the argument goes) then how much more so would they have been willing to secede and risk war over the wealth represented by their collective slave holdings.  [The economic impact of tariffs was negligible compared with the impact of slavery.]

As I keep trying to tell any number of persons…:  the Civil War was very much driven by economic forces and slavery was the main variable in the discussion.

As …Alex Knapp noted on Facebook:

In 1860, slaves were worth more than than all all the industrial and transportation capital in the United States. This is why a war in the U.S. to end slavery was inevitable – in other countries where slavery ended peacefully, it was only a tiny fraction of their wealth. But for the South, slavery was their wealth.

So yes, it can properly be said that the Civil War was about states’ rights, but only if one acknowledges that the “right” in question was the right to maintain the institution of chattel slavery.

Slavery is so bad for slaves that it should be banned even if it did have a beneficial impact upon the median income.  Medianism is not a fundamentalist ideology that sees the median income as the sole overriding criteria for determining ‘the good.’  Median income is simply a better indicator than GDP and medianism seeks to break the hegemony of GDP.  But the example of slavery reinforces usefulness of median income as a measure of prosperity because slavery creates so much inequality that it seems to hurt the median too.   As I alluded to in an earlier post, the slave states still have higher inequality and worse off median than regions of the US that were never corrupted by slavery.