Profitability versus Efficiency.



As late as 1918 in American Negro Slavery, U. B. Phillips, a historian (and open racist), used trends in slave and cotton prices in the pre-Civil War United States to support his assertion that slavery had become unprofitable. The earliest scholarly challenges to the view that slavery was unprofitable and inefficient came from historians, notably L. C. Gray (1933) and Stampp (1955).

But it was the practitioners of the “new economic history” or “cliometrics” who most forcefully contended that slave labor was profitable and efficient. Conrad and Meyer in the Journal of Political Economy (“The Economics of Slavery in the Ante Bellum South,” 1958) touched off the cliometric revolution, with its sophisticated and rigorous quantitative methods. They concluded that slavery was in fact remunerative for the average slaveowner. After much back-and-forth debate, within over thirty published items in the technical literature, that finding at least was firmly established. Slave labor produced an income stream equal to a slave’s output minus the cost of the slave’s subsistence, maintenance, and management. Market competition drove slave prices to the present value of this expected future income stream, discounted at prevailing interest rates. The average return on slaves in the American South, therefore, hovered between 8 and 10 percent, comparable to the antebellum return on capital throughout the U.S. 

By the mid-1850s, prices of prime field hands were upwards of $1,200, or about $40,000 in 2020 dollars, and the figure was sensitive to anything that could affect the slave’s future labor: health, skills, gender, reliability—with age the most important. Prices generally peaked when a slave reached his or her mid-to-late twenties, and then fell off along with the expected number of remaining productive years. A skilled blacksmith commanded a 55 percent premium over the price of a prime field hand, whereas a disabled or unreliable slave would sell at a discount of up to 65 percent. Prices of twenty-seven-year-old females averaged 80 percent of the prices of male slaves of the same age.

The most influential work arguing that slavery was also efficient is Robert Fogel and Stanley Engerman’s Time on the Cross (1974). Fogel and Engerman (hereafter F&E) synthesized and refined previous work. They went much further in their conclusions, however, claiming that slave plantations had been 40 percent more efficient than northern free farms; that planters had relied less on coercion than previously supposed; that the material well-being of American slaves compared favorably with that of urban free laborers in the North and Europe; and that generally antebellum slavery had been a model of economic rationality. Such claims raised objections from both historians and economists, and an avalanche of subsequent literature resulted in a rich, interdisciplinary debate, including three new volumes: Gutman, Slavery and the Numbers Game (1975); P. David et al., Reckoning with Slavery (1976); and Wright, The Political Economy of the Cotton South (1978). The objections did not always perfectly coincide with each other. But with respect to the slavery’s efficiency and the treatment of slaves, the dissenters at least dampened F&E’s bolder assertions. This debate culminated in Fogel’s Without Consent or Contract (1989), reinforced by no less than three volumes of supporting articles and evidence from a range of authors.

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