political economy of emancipation

Economic Forces in American History

Political Economy of Emancipation


What was Slavery?

Legally: PropertyMorally: absence of freedom Unrestrained personal control of one group over

another Denial of economic opportunity Denial of citizenship, basic rights Denial of cultural self-identification


U.S Slavery in Perspective

U.S. imported 7% of the total 10 million slaves imported to the Western HemisphereBrazil 36%; Caribbean 40%; Spanish America 17%Sugar drove the world slave tradeTobacco drove the U.S. market for slaves in the 18th centuryCotton drove the U.S. market for slaves following the cotton gin – 1793U.S. Cotton output: 100,000 bales (1801) to 5,400,000 bales (1859).


Profitability of Slavery

Calculating profitability- Revenues minus costsUnprofitable if value of children sufficiently negative or if maintenance exceeds the value of output

A.Return on Capital = Profit/CapitalB.Returns were consistently greater than 10% per

annum and therefore profitable and economically viable.

C.Future Profitability: the ratio of slave prices to rental rates was increasing on the eve of the Civil War – analogous to a Price/Earnings Ratio


Cotton

The key to Southern Agriculture and the continuation of slavery is cotton.Unlike northern agriculture, which was dominated by small family farms, southern agriculture was dominated by a relatively small number of very large farms, growing cotton, and using slave labor.


Cotton

Cotton output (thousands of bales):

1790 - 31800 - 731810 - 1781820 - 3351830 - 7321840 - 13481850 - 21361860 - 3841


Farm size

Improved acres Mean Median

South 135.9 70.6alluvial 209.7 70.0

North 64.5 49.3Ohio 72.2 64.8

The key here is, there was very little difference between the median farm in the north and south, it was the presence of a few large plantations that make the difference.


Wealth and Land distribution

In the cotton south, there was a relative small number very large farms.The most valuable 10% of farms in the south accounted for roughly 60% of total farm value, in the north the most valuable 10% of farms accounted for about 40% of total farm value.


Profitability of Slavery (cont.)

Profitability of Slavery:A. Profitability depended on the owners’

ability to coercively extract greater revenues or lower costs from slavery relative to free market agriculture.

B. More profitable on larger farms –economies of supervision in operating gangs – shorter hours but greater intensity than free labor


30-Year Amortization Costs of Emancipation in 1860

Plan

Total Cost (million $)

All FreePersons Northerner

sAll Persons

Immediate emancipation 2,700 $7.25 $9.66 $6.30

Immediate emancipation +

resettlement in Africa 3,084 8.00 10.70 6.90

Emancipation in next generation 210 0.56 0.75 0.49

Abolition in 30 years 550 1.50 2.00 1.30

Source: Goldin, “The Economics of Emancipation,” in Atack and Passell, A New Economic View, p. 359.


Direct Costs of the Civil War

Total – North $3,366 million dollars - South $3,286 million dollars

Compensated emancipation less than half the cost of the war4 times the total G expenditures from 1789-1860 Includes: G expenditures; undercounted labor costs of draft; human capital lost; and less risk premium of soldier pay.600,000 deaths, 500,000 casualties; 9% of male population between the ages of 15 and 391870 - ¼ of the Mississippi budget was spent on artificial limbs



Northwest Ordinance (1787) - Slavery was banned above the Ohio River.Missouri Compromise (1820)– Missouri-slave state– Maine-free state– Established “the Balance Rule” states admitted

in pairs; guaranteed veto in the Senate– AR (36); MI (37); FL, TX (45);IA, WI (46,48)– Slavery outlawed, “hereby forever prohibited”,

above 31’ 30” in the Louisiana PurchaseNote the role of Congress in the territories… the Dred Scott decision would overturn this role!



Wilmot Proviso (1846)- No slavery in any territory acquired from Mexico –implementation would have made “balance” difficultCompromise of 1850-– California admitted as a free state– New Mexico territory organized with no

mention of slavery– Credible commitment to restore balance:

KS/NB Act in the works– A new, more rigorous, fugitive slave law

passed; and slave trade abolished in D.C.



The Kansas-Nebraska Act (1854): The Kansas and Nebraska territories would be organized under “popular sovereignty”

- overturned latitude provision of the MO compromise1858 – Democrats sought to admit KS as a slave state

-steeped in controversy, fraud and blood- Congress did not allow its admission

Democrats did prevent passage of Homestead Act



Dred Scott Case (1857) - Court ruled:– Scott was not free– Free blacks are not citizens– Congress could not legislate slavery in the

territoriesKS/NE Act; Scott Decision and Democratic Push to Admit KS as a slave state led to the fall of the Whig party and the rise of the Republican PartyRepublican constituents: Immigrants and Eastern Industrialists not willing to compromise on slavery

political economy of emancipation

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