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The Poverty of Slavery: How Unfree Labor Pollutes the Economy

Author(s):Wright, Robert E.
Reviewer(s):Geloso, Vincent

Published by EH.Net (May 2018)

Robert E. Wright, The Poverty of Slavery: How Unfree Labor Pollutes the Economy. New York: Palgrave Macmillan, 2017. vii + 302 pp. $45 (paperback), ISBN: 978-3-319-48967-4.

Reviewed for EH.Net by Vincent Geloso, Department of Economics, Bates College.
There are three analytical traditions regarding the consequences of slavery on the broader economy. These traditions are best illustrated in the context of the debates regarding slavery in the United States. The first is best labelled as the “cliometric” tradition initiated by Robert Fogel and Stanley Engerman. It is not the results of this group which define it but its resolute adhesion to methodological individualism as a scientific philosophy. This is what sets it apart from the second tradition whose modern representatives, Sven Beckert and Edward Baptist, play the role of antiheroes to Fogel and Engerman (the term “antiheroes” is selected to divulge the present writer’s biases and priors). They adhere to a more holistic approach where the analysis begins at the level of collectivities and then moves down to the individual. Unlike the “cliometric” group, this latter tradition is more unified in its core conclusions — that slavery established political and economic structures which still last to this day. While there are overlaps between both traditions, the third tradition overlaps both. This tradition, relying nearly universally on methodological individualism, emphasizes a broad political economy approach to the topic arguing that slavery is a form of rent-seeking which can spill over into spheres of societies in ways that impose long-term costs in excess of the private returns. This tradition is less unified than the other two.[1] In The Poverty of Slavery, Robert Wright synthesizes and expands on many key points of this tradition.

In fact, Wright’s greatest service to this underappreciated tradition is to simplify a complex body of ideas into a simple sentence: slavery is pollution. If pollution is the form that externalities take when they divorce social cost from private, then slavery was pollution. It polluted other social, economic and political institutions.

Consider the case of the infamous slave patrols in antebellum America. Slaveowners need to police their slaves who might run away if the option presents itself. Policing slaves is not inexpensive and the costs reduce the returns from owning said slaves. As such, the cost of policing is a deterrent to slavery, which is why thinkers as far back as Adam Smith considered that slaves would unavoidably be less efficient than free workers. However, slaveowners have large concentrated interests, which is in itself a strong incentive for them to organize. If they organize successfully, they can convince the state to spread the cost of policing onto the broader population. If the population that bears the cost is sufficiently large, the costly policy may be small enough on a per capita basis for those burdened to not care or not even know. Yet, slave patrols entailed a large social cost. Economic historian Jeffrey R. Hummel (2012: 123) places the annual subsidy (because that is what it was) at $4.5 million in 1850 which was a little more than fifty cents per capita (including slaves – closer to $1 per person when slaves excluded) in the U.S. South – about 0.3% of annual per capita income. And this does not include the deadweight loss of reallocating workers to tracking down slaves. For such a “small” (for lack of a better term) policy, these are heavy costs. They are also an illustration of slavery as pollution – the slaveowners polluted other institutions by co-opting them to their bidding.

Wright provides a very long list (especially in chapters 6 and 7) of channels through which this pollution materializes (beyond scarring the lives of slaves and coerced workers in many direct and indirect ways). All of these amount to the same core point, those who reap the private benefits of slavery are content with their gains even though they come at a larger social cost and they will work to find ways to drive a wider wedge between the two by shifting costs onto other parties. Hence, slavery as pollution.

Wright argues (in chapter 2) that we ought not to use his synthesis only for the purposes of analyzing slavery. Rather, it should extend to analyzing “unfree labor” on a spectrum going from “free labor” on one end to “chattel slavery” on the other end. Indeed, Wright correctly points out that there were many instances of unfree labor markets that were not as extreme as slavery but which polluted institutions in ways that hindered economic development. As relevant illustrations, one can think of the work of Melissa Dell (2010) on the mita system in colonial Peru, Sheilagh Ogilvie (2011) on feudal systems in Central Europe and Marlous van Waijenburg (2018) on the corvée system of forced labor in French colonial Africa. Wright’s synthesis provides tools to analyze the wider economic costs imposed by less extreme forms of labor coercion.

However, Wright needs to pay more attention to the role of ideas. He only spends two pages on “public perceptions.” Yet, slaveowners not only rent-seek through convincing legislators to support their interest, they also rent-seek by shaping narratives as Grynaviski and Munger (2017) point out. One ought to remember that, in the early days of the American Republic, slavery was seen as a necessary evil which would have, eventually, to be eradicated. However, this view gradually changed to one where slaves were considered lesser human beings which were not responsible enough to be free. This became the leitmotiv not only of slaveowners but also of non-slaveholding southerners. As slaveowners had the ability to shape laws, they had the ability to set the parameters of any discussion and, as such, possessed a strong advantage in imposing their preferred explanation and propositions. In a way, they increased the costs of holding an egalitarian ideology in ways which still persisted into the Reconstruction, Jim Crow and contemporary eras. This form of “intellectual” pollution was caused by unfree institutions.

Given the enormity of the stack of articles and books to be read on the topic of slavery in antebellum America alone, adding an additional volume on the pile appears futile, since it will most likely be ignored. It is likely that Robert Wright’s The Poverty of Slavery will not be an exception to this rule. This is unfortunate. Wright’s book ought to be considered as the synthesis of an underappreciated analytical tradition regarding the broader economic consequences of slavery.

Note:

1. I would place Thomas Sowell (1981) in this tradition alongside Gordon Tullock (1967) and Grynaviski and Munger (2014; 2017). Jeffrey R. Hummel also places the eighteenth-century French physiocrat Anne-Robert Jacques Turgot, the early nineteenth century French economist Jean-Baptiste Say and British political philosopher John Stuart Mill into this tradition (2012: 4-6).

References:

Dell, Melissa. “The Persistent Effects of Peru’s Mining Mita.” Econometrica 78, 6, 2010, pp. 1863-1903.

Grynaviski, Jeffrey D., and Michael Munger. “Did Southerners Favor Slavery? Inferences from an Analysis of Prices in New Orleans, 1805–1860.” Public Choice 159, 3-4, 2014, pp. 341-361.

Grynaviski, Jeffrey D., and Michael C. Munger. “Reconstructing Racism: Transforming Racial Hierarchy from ‘Necessary Evil’ into ‘Positive Good’.” Social Philosophy and Policy 34, 1, 2017, pp. 144-163.

Hummel, Jeffrey Rogers. Deadweight Loss and the American Civil War: The Political Economy of Slavery. Ph.D. dissertation, University of Texas at Austin, 2001 [2012].

Ogilvie, Sheilagh. Institutions and European Trade: Merchant Guilds, 1000–1800. Cambridge University Press, 2011.

Sowell, Thomas. Markets and Minorities. New York: Basic Books, 1981.

Tullock, Gordon. “The Economics of Slavery,” Left and Right, 3, 2, Spring-Summer 1967, pp. 5-16.

van Waijenburg, Marlous. “Financing the African Colonial State: The Revenue Imperative and Forced Labor,” Journal of Economic History 78, 1, 2018, pp. 40-80.

 

Vincent Geloso is the author of Rethinking Canadian Economic Growth and Development since 1900: The Quebec Case (Palgrave Macmillan, 2017).

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Subject(s):Servitude and Slavery
Geographic Area(s):North America
Time Period(s):18th Century
19th Century