Cost/efficiency of slavery?

This question has probably been asked before but i didn’t find anything searching.

Anyway, i just saw the movie “12 Years a Slave” and I was thinking, wouldn’t it be a lot cheaper and more efficient to not have slaves and just pay people a really crappy wage? Like they do in China at the Foxconn factory. Slaves were expensive and you had to house them, feed them, hire overseers to make sure they didn’t run away, pay slavecatchers when they did run away, invest in shackles, whips, chains, etc. Plus slaves are going to hate you and are going to work as little as possible. You can beat them for not picking a certain quota of cotton and thus harm your own “property” but it likely won’t increase work output very much. Not as much as someone wanting to work hard to keep their job and the 20 cents per hour they get paid knowing there are other poor starving people who would gladly take their job to get at that 20 cents (see Foxconn). If they freed the slaves, they would have still been dependent on white property owners for pay. That’s the way things were after slavery. Poor field laborers and sharecroppers with absolutely zero economic power.

Putting aside the unfairness and cruelty, labor-oriented slavery seems very inefficient to me. Am I wrong? If not, why did the south fight so hard to keep an inefficient system?

In the long run, yeah, paying people, educating them, empowering them, and respecting them is a lot better. That’s how we create modern industrial economies: the workers are also consumers.

In the short run, and especially in the early 1800’s, where there was a huge supply of slaves at low prices – you just work them to death and buy more – it was profitable. Profitable enough. The slaves do the work, you reap the profit, the costs are very low, and you also have the advantage of victims to work out your anger or lust upon. Psychologically empowering…for the master.

It’s all about the unwisdom of taking immediate and short-term gains at the cost of long-term investment.

From what i’ve read slaves were pretty expensive chattel. A good slave would be $1000 or more, and in today’s money that’s a LOT. And you still have to watch them, take care of them (even if you treat them like shit it behooves you to feed your property, buying a slave and starving him/her to death makes no financial sense).

To be clear i’m only talking about slaves in a labor-slave sense. Using slaves as sex slaves or for other purposes aside from doing manual labor/field work may be a different issue. If you want a wife who can’t answer back, can’t do anything, that you can keep locked up all day long then sure I guess slavery makes sense for that (not talking about the morality of it just the economics… of course i agree it’s morally wrong).

It was very short sighted, economically.

Antebellum travelers were astonished by the differences between the north and south side of the Ohio river. On the north, bustling, growing cities with a lot of activity, goods being shipped around. On the south, sparse signs of economic activity.

The north was a great draw for immigrants. In the south, immigrants had to compete with slaves economically, and for a lot of jobs that wasn’t going to work.

Slave: expensive to obtain, cheap to keep. Very slow to expand the labor pool. Didn’t buy many consumer goods. Etc.

Immigrant: Virtually free to obtain, not quite as cheap to maintain. Rapidly expanding labor pool. Did buy consumer goods.

So, non-farming immigrants stayed in the north, became a key resource for businesses, and in turn became key customers. (A large fraction went into farming in areas with homestead lands available. But still became good consumers.)

As industrialization and mechanization progressed, the differences became so great that something had to happen to keep the country from splitting further economically.

But slaves represented a lot of wealth. Not something owners wanted to give up. So a lot of inertia there. In the north, generally slavery was going away via rules limiting new slaves (esp. children of slaves). And that seemed to work out a lot better than what happened in the south. So that when full abolition happened for the whole country, the remaining slaves in the north going free didn’t mess up the economy so bad.

(And that’s just the economics. The other slavery issues are another topic.)

Most slaves were bought on credit, which delayed or softened the cash outlay. By the time a slave was paid for, he or she had hopefully, from the mater’s perspective, produced more than the purchase price either in labor or reproduction. And the plantation economy was almost overwhelmingly a debtor economy.

Two healthy young slaves, male and female, could produce enough children to not only multiply the original investment but also ensure ongoing wealth for you and your heirs. Free labor does not do that.

As for slave prices, even a cheap slave cost more than an average farm. In most states you could buy undeveloped land for three or four dollars an acre as late as the start of the Civil War; even expensive river land rarely sold for more than a few hundred dollars per acre, and most cleared and developed land was under $50 per acre. A middle-aged slave was still several hundred dollars, and a young healthy slave well over a thousand. On any plantation, no matter how successful the plantation was, the slaves were worth A LOT more than the land, house, livestock, furniture, and everything else put together…
It was frequently remarked during the Civil War that masters were very willing to donate their sons to the war effort, but almost never their slaves. Some masters literally took up arms to prevent their slaves from being conscripted into the service of the Confederacy.

Slavery is almost never preferable to paying a wage when there is an available supply of labor. But almost everywhere slavery (or forms of it like serfdom) have been in heavy usage there were labor shortages.

The assumption is that you can just always replace slaves with minimally paid persons because there are so many people desperate for a minimal wage that you can just pull them out of a hat. That just isn’t the case. The Roman Empire needed slaves working in agriculture for example because the Romans demanded a large assortment of luxury agricultural products beyond just baseline subsistence.

Many people who lived under Roman rule lived in the same semi-autonomous tribes/communities as they always had. They had ways to basically feed and clothe themselves despite not having much capital. So it is highly unlikely they’d quit doing whatever it was they were doing to work for minimal wages in some far off province growing grains to feed the Roman war machine.

The New World was no different. If a huge portion of the natives hadn’t died off due to disease, they still would have little incentive to work for a pauper’s wages. These people got along fine doing their own small scale agriculture, hunting, fishing, trapping etc. What reason would they have to abandon all that to work for a minimal wage growing a cash crop for a wealth land owner? None.

So what about all the poor non-Natives that came to the colonies willingly? Well, under the law of the time most of them became property owners. In fact that is the only reason most of these people were willing to risk a dangerous Atlantic crossing into a much less civilized world than they had known in Europe. Because unlike in Europe where land was heavily concentrated in the hands of the few, land in America was plentiful. The dream was you staked out a claim and worked that land on your own. Some were trade craftsmen or merchants obviously and went other directions, but those people obviously had no interest in working for a menial wage in a balmy Southern climate so someone else could grow a cash crop.

Here in modern America it’s hard to understand, but there were lots of real options in colonial America other than “work for someone else” and “starve.” Most colonists were either property owners, tradesmen, merchants, or were “up and comers” like indentured servants or apprentices working their way to being something better. Now, some of these property owners lived on meager plots in squalor, but they still had their options in life.

When land and individual opportunities are so freely available, people will not go work horrible wages in terrible conditions. Let’s say here in America, you could generate say, $30,000 a year off the land you live on and that most Americans could do that. Not too realistic these days, and some people don’t own land, but in colonial America that was fairly realistic a concept.

If you can do that, would you go work at McDonald’s for $7.25/hr and get cussed at by rude customers and treated like shit by a petty tyrant franchisee? The answer is no, no one would. The only people who’d work at McDonald’s would be teenagers and others with no property (which again, in colonial America most who wanted property and weren’t indebted or indentured in some way could go out and get it.)

If not for slaves tending tobacco, indigo, and other early cash crops the reality is they never would have been grown in large scale. Small holding farmers would have grown what they could, but they’d all be growing it for themselves.

After the Revolution when the primary cash crop became cotton, it was basically the same deal. The cotton boom simply wouldn’t have happened in the 19th century if not for black slaves. Take all of them away ( or free them all) and the labor just isn’t there, period. People could go out and homestead until like 1890, or go up north and work in a textile mill or etc for a certain wage. So any wage that would attract people to the cotton plantations would most likely make them unprofitable.

A question someone might pose me would be, “if people were not so willing to work a shitty wage, how did early factories keep labor?” The answer is similar to what’s going on with places like Foxconn. As shitty as it’s made out to be, for many people in China working at Foxconn is actually better than staying in the rural countryside where they are from. Subsistence agriculture is not actually a great life for most people and doesn’t produce great income.

Many of the earliest factory workers (and I’m talking really old school textile mills and such, not gilded age area more industrialized factories) probably lived in the house of a property owner or were related to a property owner but didn’t have property themselves. Younger sons of a land holder, or daughters of a land holder (lots of young women worked in textile mills, as an example) and such. Many of them were not making a career out of it but doing it to generate money in between what they were doing before and what they ultimately ended up doing. [So for a woman for example it would be a way to bring in money until getting married. For a young man it would be a way of accumulating capital until they could go off and buy their own land.]

Poor immigrants who came here also needed to work somewhere initially because even with homestead land you need a lot of money to get to the land and build on the land etc. Being able to go out and stake a claim is meaningless without money to actually transport yourself there, money for tools and equipment to work the land, money for seeds and etc for your first planting. Land is just one part of the expense of starting a farm, then and now, so penniless people could not productively go clear out and stake a claim and start a profitable small farm.

Later of course in the latter 19th century working in factories was an end in itself and the factory workers were not aspiring land owners. But that’s when society had already started to change such that people had started to leave ancestral farms to move to the cities and work–and that happened because the wages in those factories were not nearly as bad as you might think when compared to alternatives.

All that is to say, American cotton worked because slavery (an already extant institution created during colonial times due to a desire to grow large harvests of cash crops and a dearth of laborers willing to work someone else’s fields) was already present and the market was just right for it with some technological innovation thrown in. It was perfect timing for Mid-Atlantic slave holders, who started selling slaves en masse deeper south to aspiring cotton plantation owners, because the Mid-Atlantic slaves were increasingly not as wanted and had outgrown in number the needs of tobacco farmers. It was highly fortuitous to slave owners in Virginia and Maryland who sold huge numbers of unneeded slaves to parts further South where cotton was being grown.

But to have farmed that cotton for a wage, and compete with the factories, most likely the cotton would be more expensive than that being produced in Egypt and India where standards of living were so much lower.

The problem with replacing slaves with low-paid free labor is you couldn’t make free labor work for you. You had to not only offer them enough money to get them to work but you also had to compete against all of the other employers. So you couldn’t get away with paying your workers rock bottom wages because there would always be some guy willing to pay a few pennies more. With slaves, there was no competition - slaves worked for their owner and they had no choice.

Slaves also had another economic advantage over free labor - slaves could produce more slaves and the owner of the parents owned the children as well.

Martin: But in the south it would have to be expected that they would have laws preventing black people (or more generally “freed slaves”) from owning land, owning businesses, etc. So in that case you WOULD have a very cheap labor source because those former slaves wouldn’t be allowed to do anything else except be manual labor and get paid a pittance.
Little Nemo: wages for unskilled, uneducated manual land workers (cotton picking etc) is always going to be cheap. Even if a plantation 100 miles down the road is paying half a cent more per day, it probably wouldn’t be feasible for most newly freed slaves who own nothing to travel that far. I doubt there would be much disparity in price for such unskilled and hated labor. 10 cents a day, something like that (1800’s value). There were millions of slaves in the south so it’s not like there would be a labor shortage if they were all freed and allowed to work for a pittance.

I think this part of your analysis is wrong. The argument against buy is largely the same as the argument you make against rent.

Except this part, which sounds correct.

But what would prevent the freed slaves from moving north or west and thus becoming unavailable to you as a cheap labor force?

I’m not an economist, but slaves seem mostly self sufficient. They grow their own food, make their own houses, probably make their own clothes.

So I have no idea what amount of labor a slave had to devote to his own upkeep, but whatever productivity he has above that is pure profit for the owner.

If railworkers made about $1/day in the late 19th century I’m assuming wages for a slave in the early 19th century would be closer to 20-30 cents a day. That works out to less than $100 a year. Granted you have to care for your slaves, but they could pay for themselves in a decade or so.

Plus slaves create new slaves, you don’t get to own the kids of your employees.

I suppose the same thing that kept so many freed slaves in the south. It never ceases to surprise and amaze me how many people will stay in the worst possible place on earth solely “because it’s my home.”

The economics of it are completely irrelevant because being a slave owner appears to provide crude, addictive psychosexual thrills (something which people can pay big bucks for, of course)

Wages for backbreaking labor with appalling mortality rates ( even the white owners sometimes died like flies early on ) like on Caribbean sugar plantations were not. In fact it was going to be hard to get anybody to do that sort of work for any non-ridiculous wage. Ditto galley slaves. People aren’t quite that stupid - working for cheap wages and then dropping dead after 18 months of staggeringly difficult work just isn’t an attractive career proposition.

The thing is, you can’t compare the economics of slavery across time and space except in the very broadest of senses. Slavery was quite economical is some times and places and rather uneconomical in others. But in 18th century Brazil for example it was always cheaper to buy slaves and replace them as they died. Even cheaper than raising new slaves by the way, hence a heavy demand for sturdy young males and not much for women. Slave mortality was 5-10% per annum, but a sugar slave in Brazil earned back his purchase price in profits in a little over a year.

By the mid-19th century in the Antebellum South, slavery may have in fact been less economic ( maybe ). But it had made economic sense when there had been severe labor shortages in earlier centuries in the colonies and of course by the 19th century it was almost a cultural imperative. And cultural imperatives tend to die hard.

There might not have been a shortage of general labor but there probably was a shortage of people willing to pick cotton. Not only is picking cotton stoop labor in the August sun of the deep south, but in addition to the prickliness of the cotton bolls themselves the plants frequently host stinging caterpillars. You ever hear the phrase “cotton-pickin’ hands”? If you picked cotton regularly, it showed. In the song “I Never Picked Cotton”, the protagonist is about to be hanged for murder after a life of crime- but he still considers that better than being a cotton picker. After the Civil War the southern states found it necessary to pass vagrancy laws that virtually made it a crime to be homeless and unemployed, because being a tramp was better than picking cotton. No one did it who had any other choice. So it was primarily done by blacks who were slaves before the Civil War and sharecroppers who were serfs in all but name afterward.

In addition, the South was so cash strapped that as mentioned upthread its economy was virtually based on incurring debt and working it off rather than payment of cash wages. Occasionally poor landless whites who had sunk into debt to a planter would pay off the debt in labor, which was considered as low as a white man could sink.

I thought southern plantation owners were quite wealthy. Of course that was like 1% of the population.

I don’t see it being much different than it is with unlawful immigrant migrant mexicans here in the US. They do the hard manual labor that nobody else wants to do, and they often do it for less than minimum wage since they can’t go to the law to complain about it.

But the demand for unskilled manual labor was also always present. And history shows that farm workers will just walk to another farm if it’s a better opportunity - they’re a lot less tied to a location than a land owner is. I’m not saying you had to pay them a lot but you had to pay them something. This was the same reality that factory owners faced in the north.

This brings to mind a former slave’s response to his former master when he was offered his old job back at the plantation:

That letter is fascinating, never read that before. I wonder if the ol’ master ever replied (i’m sure he didn’t send the back wages).

This Anderson was lucky enough to make it up to Ohio and get out of the south. Not everyone was so lucky. Thus you had the poor southern sharecroppers.

At the time, few in the South could even if they wanted to. :smiley: The only people with ten thousand dollars in cash were probably busy running off to Mexico.

Actually, many black Americans did quite well in the post-Civil War era in the South. Many who were never slaves, or were freedmen, had been doing quite well all along. New Orleans hosted a considerable free black population that was considered quite prosperous. Jim Crow came about later, partly due to the wartime economic breakdown and postwar collapse. It’s also somewhat important that Jim Crow came after what may fairly be described a populist revolution in the South.