Slavery - Economics

Economics

Economists have attempted to model the circumstances under which slavery (and variants such as serfdom) appear and disappear. One observation is that slavery becomes more desirable for landowners where land is abundant but labour is scarce, such that rent is depressed and paid workers can demand high wages. If the opposite holds true, then it becomes more costly for landowners to have guards for the slaves than to employ paid workers who can only demand low wages due to the amount of competition. Thus, first slavery and then serfdom gradually decreased in Europe as the population grew, but were reintroduced in the Americas and in Russia as large areas of new land with few people became available. In his books, Time on the Cross and Without Consent or Contract: the Rise and Fall of American Slavery, Robert Fogel maintains that slavery was in fact a profitable method of production, especially on bigger plantations growing cotton that fetched high prices in the world market. It gave whites in the South higher average incomes than those in the North, but most of the money was spent on buying slaves and plantations.

Slavery is more common when the labour done is relatively simple and thus easy to supervise, such as large scale growing of a single crop. It is much more difficult and costly to check that slaves are doing their best and with good quality when they are doing complex tasks. Therefore, slavery was seen as the most efficient method of production for large scale crops like sugar and cotton, whose output was based on economies of scale. This enabled a gang system of labor to be prominent on large plantations where field hands were monitored and worked with factory-like precision. Each work gang was based on an internal division of labor that not only assigned every member of the gang to a precise task but simultaneously made his or her performance dependent on the actions of the others. The hoe hands chopped out the weeds that surrounded the cotton plants as well as excessive sprouts. The plow gangs followed behind, stirring the soil near the rows of cotton plants and tossing it back around the plants. Thus, the gang system worked like an early version of the assembly line later to be found in factories.

Critics since the 18th century have argued that slavery tends to retard technological advancement, since the focus is on increasing the number of slaves doing simple tasks rather than upgrading the efficiency of labour. Because of this, theoretical knowledge and learning in Greece—and later in Rome—was not applied to ease physical labour or improve manufacturing.

Adam Smith made the argument that free labor was economically better than slave labor, and argued further that slavery in Europe ended during the Middle Ages, and then only after both the church and state were separate, independent and strong institutions, that it is nearly impossible to end slavery in a free, democratic and republican forms of governments since many of its legislators or political figures were slave owners, and would not punish themselves, and that slaves would be better able to gain their freedom when there was centralized government, or a central authority like a king or the church. Similar arguments appear later in the works of Auguste Comte, especially when it comes to Adam Smith's belief in the separation of powers or what Comte called the "separation of the spiritual and the temporal" during the Middle Ages and the end of slavery, and Smith's criticism of masters, past and present. As Smith stated in the Lectures on Jurisprudence, "The great power of the clergy thus concurring with that of the king set the slaves at liberty. But it was absolutely necessary both that the authority of the king and of the clergy should be great. Where ever any one of these was wanting, slavery still continues. "

The weighted average global sales price of a slave is calculated to be approximately $340, with a high of $1,895 for the average trafficked sex slave, and a low of $40 to $50 for debt bondage slaves in part of Asia and Africa. Worldwide slavery is a criminal offense but slave owners can get very high returns for their risk. According to researcher Siddharth Kara, the profits generated worldwide by all forms of slavery in 2007 were $91.2 billion. That is second only to drug trafficking in terms of global criminal enterprises. The weighted average annual profits generated by a slave in 2007 was $3,175, with a low of an average $950 for bonded labor and $29,210 for a trafficked sex slave. Approximately forty percent of all slave profits each year are generated by trafficked sex slaves, representing slightly more than 4 percent of the world's 29 million slaves.

Robert E. Wright has developed a model that helps to predict when firms (individuals, companies) will be more likely to use slaves rather than wage workers, indentured servants, family members, or other types of laborers.