Economic impact of Slavery and Emancipation in America

Pre-Emancipation South

It is very simple to say how slavery has affected the agriculture in the United States, but how was the labor of slaves important to the growing crop of the United States. The south was notorious for its amazing production of tobacco, rice, sugar and, cotton, but besides that production their involvement in other general agriculture was large as well. The population of the south was around 30% the population of the north, and in 1860 they were able to produce over one third of the corn one sixth of the wheat and more than four fifths of the peas and beans, almost nine tenths of the sweet potatoes over half of the tobacco and around 40 percent of the working and nonworking livestock with around only a quarter of the area. Though there was a notable amount of production in the southern slaves states but there was still problems with the labor that the south was using. This system that the plantation workers followed was very efficient because of the way that it was run. By making days of work so routine and dividing every task to certain people, while keeping close strict supervision on all workers, and providing healthcare for these workers, slave labor was a cheap effective way to produce products in the south.

American Production of Raw Cotton, 1790-1860 (bales) Year Production Year Production Year Production 1790 3,135 1815 208,986 1840 1,346,232 1795 16,719 1820 334,378 1845 1,804,223 1800 73,145 1825 532,915 1850 2,133,851 1805 146,290 1830 731,452 1855 3,217,417 1810 177,638 1835 1,060,711 1860 3,837,402

Costs of Slave Labor

Besides the cost of food Clothing and shelter for the slaves, their expenses for any period of time were made of several elements. The interest upon the capital invested in the slaves. The economic insurance against their 1)death 2) illness 3) flight from service. The diminishing value of each of these slaves was important to note as well. And the taxation put on the capitalized value of the slaves.

Cost of Slaves and Production of Slave Labor

Was the use of slavery beneficial to the south as a whole. In Richard F. America’s “The Wealth of Races” there is a chart discussing the costs of slaves and the production that they constructed. In 1790 the prime slaves in the upper south went for $200 and they would continue to cost $200 until 1820. In those 30 years the slaves earned $385,400,000. If there were 697,889 slaves and they were all a variety of ages and sex they would be sold for an average of $200. If you multiply that by the amount of slaves in 1790 you come up with $139,557,000 that was spent on slaves and in 1790 the owners made $87,700,000 from the slaves labor. The owners of the slaves combined lost around 60 million more dollars on the slaves than they paid for them. Now of course this doesn’t concern the amount the owners spent on food and clothes for the slaves, but in 1790 paying only 60 million dollars was a great price for infinite labor. And this was a one time fee so the slave owners would not have to pay next year for this labor. The owners would make lose combined 60 million dollars if all of the slaves were purchased at the same time this is disregarding what they have to pay to maintain them. In 1800 the number of slaves increased by 195,150, and the price to purchase them stayed the same. This year the price to purchase all of the slaves for the owners was $16,099,875 and their production this year was $117,900,000. That’s around $100 million in profit for the slave owners, excluding holding and feeding of the slaves. These slaves produced on average $122.80 a year in revenue and they were worth on average $200 in 1790. This is only a rough estimate assuming that all slaves are paid the same amount, which is not true because the males at prime age were worth the most. It seems that the south had good economic reasons to want to keep the slaves. Prices for slave labor increased substantially between over the years. From 1790 to 1815 the average slave price jumped to $250, then in 1840 the price rose again to $500. Twenty years later the average price for a slave rose again to around $1,400 to $2,000 per slave.

Profitable for many or few?

There are many arguments states by economists that slavery was not a profitable organization unless the slave owners possessed very fertile land. Lewis Gray found reason to believe that slave labor was just as efficient that the labor of the white man. He believed that with training their work would be similar to that of the white man. Lewis Gray makes the statement that the abundance of fertile land combined with expanding markets led the labor force to produce a surplus. Because the labor force was composed of slaves the surplus was legally not the slaves’ property but the slaveholders’ property. Some of this surplus needed to be spent on equipment and supervision, the rest of this surplus was income for the slave owners. Because of the market for cotton and the surplus of cotton provided by the rich land, slavery was an optimal source of labor for southern staple crops. Gray’s thoughts on slave labor as being more efficient than free labor raises the question as to why did slave labor have certain advantages over free labor? The idea that slave labor was more efficient came from three characteristics that plantations needed to possess to make slave labor efficient. First the one-crop system needed to be put into effect. With only one crop that was being produced, owners could keep their system more routine, thus making it easier for the slaves to adapt and produce. Second it would be necessary for the owners to produce a crop the required year round attention. This production of a year-round crop required slaves to produce them because the owners would not lose money when during the idleness of free labor. The last characteristic is the production of crops needing large amount of labor on small amounts of land. This made supervision of the slaves easier and production increase.

Contending Arguments of Slave Labor Vs. Free Labor

In his essay “The Political Economy of Slaves” he defends slavery on many aspects. Ruffin argues that in any society free labor is important to gain personal wealth. He states “the introduction and establishment of domestic slavery is necessarily an improvement of the condition and wealth and well-being of the community in general, and also of the comfort of the enslaved class.”(Finkleman, 64) Ruffin plainly states that slavery is good without providing a shred of legitimate evidence from studies or statistics. In his writings he also argues the theory of supply and demand: “even the laboring class are remarkable for indolence, and work no more than compelled by necessity. The greater the demand, and the higher the rewards, for labor, the less wages will be performed, as a general rule, by each individual laborer. If the wages of work for one day will support the laborer or mechanic and his family for three, it will be very likely that he will be idle two-thirds of his time.” In this excerpt Ruffin argues his notion of wages by saying that the less you pay one worker the more they will be willing to work because they need to sustain themselves. If you pay someone more than they need to spend then they will continue to not work hard, and keep their current standard of living. Ruffin also make the example that free laborers work harder than slave workers based on rewards and motivation. Free laborers know that the more work he can do in a short period of time the greater his earnings will be. This is contrary to that of a slave laborer, no matter how he performs he will still make the same amount, in food and clothing that he would if he works extremely hard. So the free laborer has more incentive to work hard because he is motivated by the rewards of his work, there is little motivation for the slave laborers. Ruffin comes to the conclusion that because the free laborer is more productive than the slave laborer, given the same cost to the employer, the free laborer is actually cheaper to the employer because he produces more goods. Then he makes the simple statement that “Suppose it is admitted that labor of slaves, for each hour or day, will amount to but two-thirds of what hired free laborers would perform in the same time. But the slave labor is continuous and every day at least it returns to the employers and to the community, this two-thirds of full labor.” He realizes that although the slave labor is not as productive because they are forced to work they will inevitably produce more than the free laborers, because the free workers will take more leisure time. He states that the idea that free labor is cheaper is made on the assumption that the free laborers will work continuously and regularly, and he thinks that that is not the case.

Gradual Emancipation Alternatives

In Clauadia Dale Goldin’s article “The Economics of Emancipation,” she argues the different gradual emancipation processes that were put into effect for many of the northern states. The article argues the idea that because slaves were considered property, that a complete emancipation without compensation was considered illegal. One of the gradual emancipation ideas was the thought that because slavery was believed to only last one more generation that male slaves would be considered free when they turn 28 and females would be considered free at 25. The idea that the females would be emancipated earlier than males was that the females were more productive than their male counterparts during their teenage years. This form of gradual emancipation also made the demand for female slaves decrease because their value from breeding capabilities has become zero because the next generation of children are considered free. Another form of gradual emancipation was that along with the gradual freeing of slaves the slave owners would pay the children of slaves $3.50 per month for public care of children that would otherwise be orphaned. These form of gradual emancipation had both positive and negative effects. One of the positive factors of gradual emancipation is that it was not only helping free the slaves, but it was not too costly to the slave owners. This lack of cost would make these ideas of gradual emancipation more enticing to slave owners. One of the main problems with this gradual emancipation is that if it was expected that gradual emancipating was happening, slave owners would attempt to sell their slaves while they still had them. This happened many times in New York for example. In 1799 when the slave owners expected the gradual emancipation to happen 12,000 slaves were freed by emancipation, but some 24,000 were sold to the south. The slave owners were not willing to just free their slaves, they needed to be compensated in some fashion so they sold their slaves to the south.(Goldin, 70) In addition to the problem of smuggling, if these gradual abolition laws were passed this would encourage more rigorous use of the slaves while they were still available. For example if they would require one more generation to work, then that generation would be worked harder than before. Now the question begs why didn’t the south want to attempt to input a gradual emancipation? One reason is that the south could not sell their slaves if they were expecting the emancipation of the slaves to happen Some would argue that the use of slavery was “an important duty for the south, part of their ‘unending task of race discipline.” Many economists like Lewis Gray and Kenneth Stampp have contested this view saying that the southern plantation argriculture was just as much a economic active product of the United States as any other business.

Slave Trade

The internal trade of slaves was also a very important source of income for many people in the north and south. The north had the need to trade slaves because as stated before slavery was abolished in the north and the northern slave owners would need to sell their slaves when they noticed the thoughts of gradual emancipation because if they had not they would not get reimbursed for the slave labor. So these northern states would sell their slaves to southern slave plantations to make money. It was also believed that others would sell their slaves because their labor was only profitable with really fertile land. Southern states required the internal trade of slaves because the importation of slavery was prohibited as of 1808 and punishable by the death penalty after 1820. With this death rate of slaves on plantations being high and the rise of the need for the production of cotton and tobacco the internal slave trade was a important source of income and the labor supply of agriculture in the south. There were many people trying to take advantage of the inability to import slaves by breeding and selling slaves.

Problems with Slave Labor

The south made statements that slavery would end in the next generation because of the lack of production coming from the slaves. Another reason that slavery would be ending in the next generation heading into the civil war is that they were not reproducing parallel to the growth of the surrounding America. It was stated by Robert William Fogel and Stanley Engerman that the material living conditions of the slaves were better than those of the free man.(David,739) This was contested by the writings of David and Temin stating that very few of the slaves that came to America were put in great working conditions, and their poor working conditions reflected in their drop in population. The south knew that the slave population was not growing as highly as anticipated, and therefore would die out on its own without the purchase of more slaves. Because of the poor treatment of the slaves, African Americans had an alternative approach to a traditional revolt against the slave owners. Instead of revolting against the slave owners directly the slaves would attack them in other ways. The slaves would show their discontent by “shirking their duties, injuring the crops, feigning illness, and disrupting the routine.”(David, 741) This disruptive work environment definitely showed that slave labor had many negative effects to go with it obvious efficient profits. With the working conditions being as poor as they were the slaves would be less productive and more destructive.

Rising from Poverty After the Civil War

Gavin Wright's View on Post War Poverty

Besides the war itself the southern states had many difficulties obtaining its prosperity after the Civil war. Some would say that the slaves were the main reason for this, other would say that they spent too much money on the war. Gavin Wright tries to figure out why the south had problems regaining its wealth after the Civil War. He came to argue that the cotton demand was much slower growing during the aftermath of the Civil War than it was before the Civil War, and being that cotton was one of the main forms of revenue in the south this had a strong impact on the south’s ability to be successful in production. This change in demand also caused the relative poverty in the south as well. In Gavin Wright’s article on the he draws from his knowledge that income is a function of supply and demand to show that the decrease in demand for cotton is the reason for the post war struggles in the south. However he discounts the use of supply in affecting the economics after the war. Temin argues against Wright stating “This econometric assumption appears to lead Wright to neglect the supply side. Because it is not important in the estimation of demand curves, his argument seems to imply that it is not important historically.” (Temin,899) Temin believes that to understand why the GDP of the country as a whole was not as strong as it was pre-Civil War you must look at both the determinants of supply and demand.

Views of Claudia Golden Frank Lewis, and Peter Temin

In an article by Claudia Golden and Frank Lewis they examine the cost of the Civil War itself and find that the reasons for the slow antebellum growth was due to the war itself and its effect on the southern economy. Peter Temin’s article on the cost of the Civil War he states that the reasons that the south had such problems financially after the Civil War. Some may argue that the reason that there were problems economically after the Civil War was the lack of slave production in the south. Temin argues against this thought in his article by stating a different theory. These reasons for the financial problems after the Civil War was a combination of supply and demand shifts and an underestimation of the cost of the war that led the south to be so poor after the conflict. The view of Temin combines that of Golden, Lewis, Ransom and Sutch. Temin believed that it was not only the decrease in demand for cotton, and not only the decrease in the labor force because of the free men and women, but it was both with an underestimation of the potential cost of the Civil War. With the underestimation of the cost of the war America came into huge debt after the war ended. Also the decrease in the labor force lead to less production because there are not as many workers in the labor force so this is one reason why production slowed. The decrease demands for cotton is another reason stated as to why the post war production was so low. Because of the decrease in demand for cotton the southern agricultural business was hurting because cotton is one of, if not the most important good that the south produced. Temin also talks about the importance of the price of cotton in determining why cotton sales were not as high as they were ante-bellum. The supply and the demand curve both shifted to the left to show an increase in price and a decrease in the demand for cotton. Had the supply shift and the demand stay the same we would see how the prices would have drastically increased.

Possibility to Avoid Civil War

In Claudia Dale Goldin’s article “The Economics of Emancipation she argues the thoughts on whether the civil war should have been fought or should there of been alternative thoughts to end slavery. The north knew that gradual emancipation would not work unless there was considerable money spent to reimburse the southern owners for the slaves that they have purchased. She also argued that had the north and south correctly assessed the costs of the Civil War then there was a strong possibility that the war would have not been fought and there would have been discussions on how to buy the slaves back. Her article states that “In all probability, the major reason that the war was fought instead of there being a political settlement was that its costs were incorrectly anticipated. The north was obviously surprised by the tenacity of the south… neither side thought the war would last more than 2 years….As the war dragged on, Lincoln expressed opinion that the costs of the war were dreadfully and surprisingly high that slavery could be ‘bought out’ at a cheaper price….less than one half days cost of this war would pay for all of the slaves in Delaware…Less than 87 days cost of war would pay for all in Delaware, Maryland, D.C., Kentucky, and Missouri”(Goldin, 83). It is obvious that neither side was ready to enter war and neither side anticipated that it would cost so much. The south hoped that Great Britain would have helped pay for the war and the north believed that this would be a short war that would not last very long. It seemed that although the north had many ideas of gradual emancipation and abolition ideas of slavery none of these were seriously considered until 1861.The Union did not look to other former slavocracies to help them with their slave problem.