Slavery and Southern Agriculture
Southern Agriculture
• Similarities with other regions
– Both South and West have a large percentage of
population in Agriculture before the Civil War.
– Emphasis is on production for market even when
farms are “self-sufficient”
Southern Agriculture
• Differences
– Crops- Cotton, Tobacco, Sugar and Rice
– Use of slave labor
– Larger Size
• Both in terms of acres and labor
– Small farms did exist but did not specialize in cash
crops (exception is tobacco)
Why was Southern
Agriculture different?
• Factor Endowment made it possible to grow
crops with a production function with
economics of scale and where slave labor was
more efficient(lower cost) than hired labor
• Sugar is grown with slave labor regardless of
where it is grown
Efficiency-What does it mean?
• Least cost way of production
– Slave labor less costly when cost of maintaining and
monitoring labor for the same output is less than the
wage payment to free labor
• Pareto –optimality or allocative efficiency
– Cannot make someone better off without making
another worse off
– Slavery is not efficient in the this way
– Payment necessary to get free labor to work as hard
as a slave is greater than the benefit to owner of using
slave rather than free labor
• Slave trade explained by the movement of
productive inputs from low to high marginal valued
uses.
– In the US, there was plenty of land and few
people. In Europe, there were more people and
less land.
– The marginal product of labor was higher in the
New World.
– Slave labor was used in some crops but not others
Slave Trade
Slave Imports
1451-1600
1601-1700
1701-1810
1811-1870
total
275,000
1,362,000
6,200,000
1,898,000
9,735,000
1701-1810-Height of the slave trade.
Sugar was the crop that drove the slave trade. As the
next slide shows most of the slaves brought to the
Americas went to the sugar producing regions.
The Distribution of Slaves Brought into the
New World, 1500–1870
Regional Differences
• Percentage of slaves in general population much lower in U.S. compared
to Caribbean.
– Economies of scale plus climate meant that sugar colonies were heavily black.
• Sugar plantations were some of the largest economic organizations of
their times.
– Many plantations had 100s of slaves.
• Nature of sugar production required heavy labor-cutting the cane and
squeezing the sugar out in large presses.
– Little productive work for women-led to a lower percentage of female slaves
imported.
Regional Differences
• In the Caribbean, the death rate was so high and the birthrate was so low,
the slave populations were not self sustaining.
– The Caribbean experienced a 2-5% rate of natural decrease among the
slave population .
– The negative net present value of children in sugar culture provided the slave
owner in sugar societies no incentive to promote the birth of children.
• In many sugar colonies, whites comprised less than 20% of the
population sometimes less than 10% of the population.
• Most of the slaves in the Caribbean are African-born
Regional Differences
• Natural Increase was the main cause of the increase in the US
slave population.
– Difference between US and Caribbean slave experiences.
– US population was self sustaining from the beginning.
– Native born blacks comprised the majority of US slaves as early as
1680.
– The U.S. was a minor player in the slave trade (destination for only 6%
of total slaves traded) , but by 1825 36% of all slaves were in the
United States, making it the largest user of Slave labor in the world.
The Distribution of Slaves in the
Western Hemisphere, 1825
Emancipation Outside US
• Slavery abolished in British Caribbean and South America
mostly before 1850. (See Chronology in text.)
– Emancipation accomplished largely through non-violent
methods which included payments to slave owners to
compensate them for their financial investments in slaves.
• In 1860, America and Brazil are the only major slave-owning
states left.
US Slavery and Cotton
• Whitney’s Cotton Gin (1793) enabled short staple cotton to be
separated on a competitive commercial basis by mechanical
means
• From 1820 to 1860, cotton output rose by a factor of 11.5, the
slave population by 2.5, and output per slave by a factor of
4.6.
• Ownership of slaves became more concentrated by the
1850’s. Southern families owning slaves fell from 36% in 1830
to 25% in 1860.
Questions about Southern Agriculture
• What was the effect of Slavery on Southern
Economic Growth?
• Were Slave Owners Rational? Was the
purchase of a slave a rational decision on the
part of the planter?
• Were slave plantations efficient , using the
least cost way of producing cotton. Would
slavery have ended without the Civil War?
Political Motivated
• Abolitionists argued that freeing slaves would
increase economic growth because free labor
would work harder than slave labor
• Historians argued that slavery would have
ended on its own because of its inefficiency.
What effect did Slavery have on Southern Economic
Growth?
Per Capita Income 1840-1860 by region
1840
1860
Growth rate
National Average
$96
$128
1.4
North
109
141
1.3
North East
129
181
1.7
North Central
65
89
1.6
South*
74
103
1.7
South Atlantic*
66
84
1.2
East South Central*
69
89
1.3
184
2.0
West South
151
Central*
* Includes slaves
Although per capita income is lower than North, growth rate of income is higher
especially in west
Slave Prices
• If slave owners were rational what should the
price of a slave be?
• Value of what he produces- cost of
maintenance
• Pc=price of cotton
• MPs= marginal product of slave (how much
cotton he produces in year)
• Maintenance costs
• Use Present Value formula
• I r is the rate of return or interest rate
• N = number of years the slave lives
N
Ps=∑
t)
(Pc
*
MPs-maintenance
cost/(1
+
r)
t=1
Conrad and Meyer Data
• Age price profiles.
• Collected data from slave markets.
• Detailed information about prices and
characteristics of slaves recorded and published.
• Hire rates
• Know Pc, MPs, N, solve for r
Net Income by Sex and Age
Shows the net income a slave
owner could expect from a
typical slave at different ages.
Slaves began to cover their cost
of maintenance at an early age—
late adolescence.
Prior to age 15, women earned
more than men—
Rate of Return
• Conrad and Meyers found rates of return that
varied from 2.2 to 5.4 % on poor quality land
in South Atlantic area to 10-13 % in South
West
• Comparable to what could have earned on RR
bonds
• Slaves were not highly speculative
investments
Price of a Prime Male Slave, New Orleans,
1800–1860
If slavery were becoming unprofitable, what would happen to
slave prices in the year’s leading up to the Civil War?
Evidence shows that slavery was profitable, was getting more
profitable, and was expected to continue to be profitable after
the Civil War years.
Were Slave Plantations efficient?
• Fogel and Engerman, Time on the Cross
– Robert Fogel (and Douglas North) won the Nobel
Prize in 1993
• Time on the Cross changed they way people
thought about slavery and also was one of the
first high profile uses of New Economic History
How to measure efficiency?
• Survivorship- number of large plantations
increases
• Total Factor Productivity
• Q=LaKbTc
• TFP=Q/LaKbTc
• Used to compare Northern Agriculture to
Southern Agriculture and to look at
productivity differences between slave
plantations of different types
Economies of Scale
• Data is from the Parker-Gallman Sample of the
1860 Census
• North= 100
Farm size(#slaves)
Old South
New South
0
98.4
112.7
1-15
103.3
127.2
16-50
124.9
176.1
51 or more
135.1
154.7
All slave farms
118.9
153.1
All Farms
116.2
144.7
Sources of Economics of Scale
• Specialization- Team production
• Gang Labor System
• How much is more intense labor due to
economics of scale in coercion as opposed to
economies of scale in the production process?
– Revisit this question after the Civil War
Treatment of slaves
• Both positive incentives and punishments were used
to motivate slaves
– Gang vs task system
• Slave diets were higher in calories than northern
labor which was necessary to maintain intense work
– Average height of slaves was inch less than northern born
whites
– More than laborers in Europe
– Slaves in sugar colonies
– Slave children< 7 were smaller
Treatment of Slaves
• Slave families were kept together when it was
in the interest of planters to do so
– Slave families that were sold together brought a
higher price than would have been received if
individual were sold separately
– Families were not always kept together
• Slave owners did not take into account the
slaves’ preferences or value of their time.
Domestic Slave Trade
• Domestic Slave trade remains in place until
the Civil War
• States in South Atlantic exported slaves to
South west
• Were plantation owners deliberately breeding
slaves to be sold west?
– Not clear
Would slavery have collapsed on its
own?
• Slavery was profitable and the least cost way
of producing cotton
• Slavery was not the least cost way of
producing other crops and was not profitable
in manufacturing
• Not clear it would have ended anytime soon,
but it is also not clear it would have expanded.