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The Economics of Bondage

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Ta-Nehisi Coates, after watching one of David Blight’s free online seminars on slavery and the Civil War, wonders about the economics of bondage. In particular, he asks his readers to explain why Southerners believed, before the war, that slavery would die if it weren’t allowed to expand into new U.S. territories.

My basic read is that it’s a supply and demand problem. If slavery can’t expand, and slaves keep reproducing (as they were in the South) you’ll end up with a glut of slaves in a small area, thus causing the price of slaves to fall. I have two questions. 1.) Does my read sound right? 2.) Why would the falling price of slaves be bad for the South? Wouldn’t that be good, in that it would require even less investment in labor?

For a fascinating lesson in economics and history, read through the comments. Here are some highlights:

He must be talking about the price to slaveowners of keeping slaves. If you have a finite plantation that can only grow X plants, then you only need Y able-bodied slaves at any given time. If your slaves keep reproducing and do so at a faster rate than they die, and you can’t sell them to other plantations because they’re no longer needed, then you could definitely reach the point where you were losing money on your farm . . .
. . . When local markets collapsed, slave owners lost wealth and the ability to access capital (by selling a few slaves). Slaves had to be kept at a slight supply shortage to retain value . . .
. . . Is the basic idea that you need to be able to sell slaves to generate cash if, say, you have a bad crop one year? And if slaves are cheap, you can’t really do that? It almost sounds like they were labor and insurance . . .
. . . To some extent, that’s right. Slaves were both labor and capital. That makes modeling the economics extremely difficult.

But the idea is that you spent $x for a slave, but if the resale value was $(x-n), then you lost money on your investment unless the added value of their labor was greater than $n. If the resale value dropped further, faster, then it was impossible to recoup the lost value through labor . . .

. . . A lot of plantations actually made more money selling slaves than they did selling the crops they produced, particularly in the old Confederacy (Virginia and the Carolinas) that were not particularly suited to growing cotton. (Wise old Ben Franklin even suspected that Jefferson’s opposition to the trans-Atlantic slave trade was motivated by a desire to increase the value of the slaves that were already here, thereby enhancing the wealth of the slaveowners). So it was very important to maintain a growing demand for slaves in order to keep their value up . . .

IMAGE: Slaves Waiting for Sale; Richmond, Virginia, 1861 by the English artist Eyre Crowe. Published in Hugh Honour, The Image of the Black in Western Art (Menil Foundation, Harvard University Press, 1989), vol. 4, pt. 1, p. 205, fig. 127; original painting is held privately. Reprinted courtesy of www.slaveryimages.org, sponsored by the Virginia Foundation for the Humanities and the University of Virginia Library.

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