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

1451-1600 275,0001601-1700 1,362,0001701-1810 6,200,0001811-1870 1,898,000

total 9,735,000

Slave Imports

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?

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

West South Central*

151 184 2.0

Per Capita Income 1840-1860 by region

* 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

Ps=∑Nt=1 (Pc * MPs-maintenance cost/(1 + r)t)

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 AgeShows 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= 100Farm 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.