20080915 Econ 113 Lecture: Slavery

Slavery:

• The Slave Trade
  

• Adam Smith expected slavery to come to a rapid end after 1776.

  • Inefficient--slave has no incentive
    • An incentive-compatible system produces a larger economic pie
    • And people can decide on a system better for everyone--a system that's still unequal, but not as brutal and vicious
  • Adam Smith was wrong. Why?

• Household slavery vs. plantation slavery
  

• What maintains slavery?

  • Extreme cheapness of slaves--makes vicious discipline credible
  • Extreme control--slaves cannot run away
  • Extreme monitoring--easy to see if slaves are working hard
  • Extreme value of what the slaves make

• Slavery in history: Caesar; classical Roman slavery; Arabic slavery; Mamelukes...

• The American South

  • Quick end of indentured servitude
  • The assumption that everyone black was a slave makes control easy
  • Plantation staple crops make monitoring easy?
  • Cheapness? That ended after 1807
  • Still slavery persisted: why?

• The persistence of southern slavery

  • Evsey Domar's argument: free land made it impossible to strike the emancipatory bargain (Marx: Swann River Colony)
  • Cotton gin (which gives you another staple crop you can grow for which monitoring is easy)
  • Geographical distribution of slavery:
    
    • Plantation south--slavery
    • Mountain south--not much slavery
    • North--little slavery
    • Border state antislavery--Cassius Clay--get rid of the "Peculiar Institution"--no desire to free African Americans
    • The northern desire to see slavery set on the "course of ultimate extinction"

• But why a Civil War?

  • John C Calhoun: concurrent majorities
  • Slavery in the territories
    • Bleeding Kansas

---

Abraham Lincoln and the Republican Party:

Abraham Lincoln, 1858:

I am not, nor ever have been, in favor of bringing about in any way the social and political equality of the white and black races, that I am not nor ever have been in favor of making voters or jurors of negroes, nor of qualifying them to hold office, nor to intermarry with white people... I as much as any other man am in favor of having the superior position assigned to the white race. I say upon this occasion I do not perceive that because the white man is to have the superior position the negro should be denied every thing. I do not understand that because I do not want a negro woman for a slave I must necessarily want her for a wife. My understanding is that I can just let her alone...

Abraham Lincoln, 1858:

I agree with Judge [Stephen] Douglas [that the Negro] is not my equal in many respects-certainly not in color, perhaps not in moral or intellectual endowment. But in the right to eat the bread, without the leave of anybody else, which his own hand earns, he is my equal and the equal of Judge Douglas, and the equal of every living man... http://en.wikipedia.org/wiki/Lincoln-Douglas_debates_of_1858

Frederick Douglass, 1876:

We are here to express, as best we may, by appropriate forms and ceremonies, our grateful sense of the vast, high, and preeminent services rendered to ourselves, to our race, to our country, and to the whole world by Abraham Lincoln.... He was preeminently the white man’s President, entirely devoted to the welfare of white men. He was ready and willing at any time during the first years of his administration to deny, postpone, and sacrifice the rights of humanity in the colored people to promote the welfare of the white people of this country.... I concede to you, my white fellow-citizens, a pre-eminence in this worship at once full and supreme. First, midst, and last, you and yours were the objects of his deepest affection and his most earnest solicitude. You are the children of Abraham Lincoln. We are at best only his step-children; children by adoption, children by forces of circumstances and necessity.... His great mission was to accomplish two things: first, to save his country from dismemberment and ruin; and, second, to free his country from the great crime of slavery. To do one or the other, or both, he must have the earnest sympathy and the powerful cooperation of his loyal fellow-countrymen. Without this primary and essential condition to success his efforts must have been vain and utterly fruitless. Had he put the abolition of slavery before the salvation of the Union, he would have inevitably driven from him a powerful class of the American people and rendered resistance to rebellion impossible. Viewed from the genuine abolition ground, Mr. Lincoln seemed tardy, cold, dull, and indifferent; but measuring him by the sentiment of his country, a sentiment he was bound as a statesman to consult, he was swift, zealous, radical, and determined... http://www.teachingamericanhistory.org/library/index.asp?documentprint=39

• The military history of the Civil War

  • Two ways to look at it:
  • Way #1: Bull Run, General Jackson, Shiloh, General Grant, First Valley Campaign, Seven Days, General Lee, New Orleans, Second Bull Run, General Longstreet, Antietam, General McClellan, Fredericksburg, Chancellorsville, Stone's River, Vicksburg, Gettysburg, General Longstreet, Chickamagua, General Thomas, Chattanooga, Wilderness, Spottsylvania, Second Valley Campaign, General Sheridan, Cold Harbor, General Sherman, Atlanta, Siege of Richmond, March to the Sea, Nashville, Appomatox Courthouse, John Wilkes Booth
    
  • Way #2:
    • Union 22 million; Confederacy 5 million whites, 4 million Blacks
    • Union 2.5 million soldiers; Confederacy 900,000 soldiers
    • Union 300,000 dead, 300,000 maimed; Confederacy 300,000 dead, 300,000 maimed
    • Union 500,000 discharged; Confederacy 200,000 deserted
    • April 1865: Union 1.5 million; Confederacy 100,000

• The Civil War started out as the War for the Union

  • From the War for the Union to the War Against Slavery
  • The march south and the radicalization of northern opinion

• Reconstruction:

  • 40 acres and a mule
  • The terrorists win in the end
  • Jim Crow and one kind of freedom

• Effect on American politics:

  • Since Andrew Jackson, two great parties
    • The party of property (and opportunity)
    • The party of solidarity (and safety nets)
  • Both useful (usually); tension healthy (usually)
  • After 1865, for 65 years lots of white northerners who vote Republican because Lincoln freed the slaves
  • After 1865, for 130 years lots of white southerners who vote Democratic because Lincoln freed the slaves
  • Now over, but a strange wild ride while it was going on

---

Claudia D. Goldin and Frank D. Lewis (1975), "The Economic Cost of the American Civil War: Estimates and Implications," Journal of Economic History, Vol. 35, No. 2. (Jun., 1975), pp. 299-326

---

Who Benefited Most?

http://www.scribd.com/doc/5472870/null

null - Upload a Document to Scribd

Read this document on Scribd: null

Problem Set:

null - Upload a Document to Scribd

Read this document on Scribd: null

Comments

[Joy Peng]

Hi,

I think the most interesting thing on "The Economic Cost of the American Civil War: Estimates and Implications" the enormous cost the Civil War cost the South and the lack of gains the North experienced despite some people's claim that the Civil War increased North's growth rate.

[Kelley Cox]

It's interesting how the article determines the economical cost of human life based solely on their hypothetical consumption if they did not die or become injured. Normally when we consider the value of life it is more so based on the personal loss to family and community as opposed to monetary loss to the economy.

[Andrew Wang (18181323)]

Thank you professor for the lecture. This comment is regarding the Goldin and Lewis article that you've assigned.

I was very interested in the way they were able to reason and approximate the costs of the Civil War! While I had originally thought it would just be a matter of weaponry, food, and other commodities being totaled, Goldin and Lewis even spoke about using human capital approaches to estimating the cost of lost economic activity, in direct cost.
In indirect cost, I found it interesting that they applied the PPF to compare the costs with a war and without, assuming a hypothetical pre-war GDP growth.

However, I also thought that the Civil War probably brought some significant industrial growth due to the unification of people into jobs and to machinery creation.

Andrew Wang (18181323)

[Nicole Danna]

I found the method in which the authors went about the estimation of various cost interesting, especially their decision to include the value of human life lost through the war and the methodology behind the indirect cost estimates. It was interesting to see how the authors constructed a hypothetical economy. While necessary for the simplicity of the model, the assumption that in the absence of the war the economy would have continued to grow at its pre- war rate seems a bit problematic.

[Matthew Atkins]

I appreciate the research that was done to estimate the indirect costs of the Civil War, because it is very true that the out-of-pocket cost is only one piece of the puzzle; it is essential that opportunity costs, etc. are considered as well. However, I couldn't help noticing as I read that the "difficulty in assigning value to a human life" is an understatement. There seems to be no analysis of the contribution of slaves to the war effort. African Americans fought in the Civil War for both sides, and this fact does not seem to have been considered by the study. For example, former slaves that fought for the Union cannot be viewed as residents of the hypothetical non-war north because they would not have been there. Yet are they included in the casualty numbers? Additionally, the authors make the assumption that the value for a human life in both the north and south was the same, because free per capita income in the south was about the same as in the north, but if slaves died fighting on the Confederate side, this is not an appropriate value. At this time, there was a very high level of inequality in the south, with few wealthy slaveholders and many living in poverty, both black and white. Thus, the overall per capita income in the south, if slaves were counted in the population, would have been much lower. These are all interesting points that I wish the authors had considered in their analysis.

[Daley Kutzman]

I thought the concept of calculating the opportunity cost of the Civil War in the Goldin Lewis article was pretty interesting. However, the number of assumptions they made to calculate the costs so discretely was what really impressed me. I'd previously been so intimidated by the numerous, necessary assumptions that I thought any attempt to tally up costs on such a large scale would be extremely imprecise. Now that I've seen it done, however, it seems much more plausible a task.
The interpretation that the Civil War actually benefited the US as a whole (or maybe just the North) through industrialization was surprising, but after seeing the actual numbers of direct/indirect costs to each side, it seems unlikely.

[Tim Shnell]

I thought it was very interesting that there is even a legitimate academic debate about whether or not the Civil War benefited America economically. Given the scale of destruction, especially in the South, it seems odd that people argue about whether it was beneficial on an economic basis. Of course, there were many other benefits from the Civil War in terms of fairness and prevention of crimes against humanity, but the economic impact, to me, always seemed to be indisputably negative.

[Eric Huynh]

It is interesting that the Civil War provided no short-term or long-term benefits to the United States. I always thought it helped industrial growth.

[Eric Huynh]

It is interesting that the Civil War provided no short-term or long-term benefits to the United States. I always thought it helped industrial growth.

[Tyler Le]

This article was interesting in its methodology of putting a monetary value on the Civil War to do a cost-benefit analysis. Goldin and Lewis calculated the costs for both the North and South in terms of direct—costs of expenditures, costs due to the draft, and various costs due to human loss—and indirect costs—costs to the economy in terms of consumption or the amount that would have been consumed if a war did not happen. After adjusting for the benefits from industrialization as a result of the war and for political changes that promoted rate of growth per capita consumption, Goldin and Lewis still concluded that the Civil War did not result in an economic benefit for the North or U.S.

[Shanna Liu]

Hi Professor!

I found it kind of weird that they made an assumption that those injured in the Civil War were only half as effective as if they hadn't been injured. While it's true that many wounds that are now minor required amputation in those days, it also seems likely that there would be a lot of wounds that didn't really impact their ability to work in the future. It would be interesting to see how "wounded" was defined in their statistics.

-Shanna

[Tina Phu]

I found the Goldin and Lewis article "The Economic Cost of the American Civil War: Estimates and Implications" very informative. However, the article was dense and at times I felt the data mentioned in the article was difficult to process.

[Jason Lee SID: 18048004]

It was interesting to see how large the indirect costs of the war were to the North considering that most of the war was fought on Southern grounds. The fact that an indirect cost of nearly 36% (1.86/5.23) of total costs to the North was quite surprising.

[Ayo Camara SID: 20361778]

I found it very interesting that the author does not attribute the growth that the US faced after the war with the war per se. In fact, what I noticed was that the article wanted to disprove any correlation that one might assume between the war and the growth within the US economy following the war.
To some extent, I am inclined to disagree with the author, and attribute the industrialization of the US to the war. Had the Southern states continued their plantations, I don't think that the innovation that eventually led to the mechanization of work would have been as successful as we see today. In general, people are very conservative when it comes to unknowns and would have continued with slave labor (as opposed to mechanized labor) for as long as it was tolerated and "allowed."
I also found the statistics interesting, in that they give a clearer painting of the losses that the entire US faced due to the war. Also related to this is the disparity between the direct and indirect methods of approach and the significance in the information that the disparity represent. The intangible losses that the US felt were given a clearer depiction through ingenious and admirable forecasting methods appropriated by the authors.

[Elliott Bosnick Farrell]

What surprised me most was the calculations of the value of a human life. How exactly can you put a value on a life? If the figure is computed from, say, the contribution to society an average man yields in his lifetime, what's to say that there wasn't a significant figure in the losses. E.g., what would the American (or world) economy look like if Warren Buffet had died in the Korean War? What if Bill Gates had died in the Vietnam Conflict? How many Warren Bufffet's or Bill Gates's did the world lose in the American Civil War? How many are lost in any war?

[Casey Jue]

Casey Jue
18807482
Thurs 1-2

I thought it was interesting on how much weight the article gave to "war deaths". I agree that more people would lead to increased work/income, however, "war deaths" most likely created another variable that mediates the lost of work/income. For example, a family, that has lost a father, may have a son work earlier (than if the father was still alive). Therefore, the cost of the "war deaths" may not be as large as the article suggests.

[Agnes Zau 17875730]

Today's lecture touched upon the inefficiency of slavery, as slaves have no motivation to increase productivity and efficiency on land. In Claudia Goldin and Frank Lewis' reading, I was surprised at the staggering $4.23 billion difference between the direct and indirect measures. I find it difficult to understand how factors such as political instability would be quantified when calculating the cost of the Civil War. Contrary to what I have learned before, I was also surprised to see that the Civil War did not benefit the North or South in any way, but rather taxed both sides a great amount.

[Lauren Stallard]

I thought it was very interesting that Abraham Lincoln did not just care very little about black rights, but actually considered them the inferior race.

[Namita Bhasin]

First, I take issue with their assumptions of the trajectory the US would have taken if the Civil War never happened. There is no way to accurately assume that. I also noted how all possible inaccuracies were written off as "not significantly impacting the overall figures" anyway.

I also don't understand why it's puzzling that the South reconstructed so slowly. They had an entire economic infrastructure to rebuild and a lot of crap from the Union to deal with while doing it.

What about the fact that freedmen began consuming after the war? Is that factored in anywhere? Perhaps it balances out with the decreased consumption by white Southerners, but that does not appear to be discussed. Does post-bellum 'per capita' include freedmen?

Are changing birthrate numbers taken into account? Usually post-war birthrates shoot up a bit.

- Namita Bhasin

[Megan MacDonald]

I found the Goldin and Lewis article compelling for a few reasons. First, although the article mainly discussed the costs, direct and indirect, of the Civil War I found the section about the War altering America's path to industrialization most interesting. Despite the fact that I have heard both sides of the argument about whether the Civil War accelerated the United State's growth, Goldin and Lewis' conviction that the War did not radically alter America's path toward industrialization was convincing. They asserted that, in actuality, there was no real break in production and the post-war industrialization of America was just a continuation of pre-war changes. This article was informative and provided me with a new perspective on the implications of the war in terms of its costs to human and physical capital and its consequences for the post-war economy.

[Andreas Gross (SID: 18454047)]

This article is actually my favorite article so far because I think its very interesting to look at the costs of the war. The things you mentioned in class today were the first things I heard about the civil war so I don’t have any background knowledge. However one thing that seemed strange to me in is the fact that the winning North lost more as the losing south. Even the new estimate predicts the lost in the South to be lower with 3.285 billion vs 3.365 billion in the North. That kind of surprised me. But on the other hand looking at the per capita cost helped me understand this. The fact that the south was so much smaller when the north meant there was way more distraction in the south then where was in the north. This ties in with what the article mentions that most destruction was in the South. On the expenditure side I am not very surprised that the North spend about twice as much as the south considering their respective size and the strength of the armies.
The questions that arise while I was reading is the effect of a war on innovation and great individuals. What if Bill Gates died before he made all his innovations. How is a person like that accounted for in this calculation and how is his social effect estimated.

[Chiao-En Ip (GSI:Matt)]

I was particularly drawn to the way in which the author discusses quantifying the human cost of war. Though it seems straightforward and practical to calculate loss in human capital which then affects total GDP, it is difficult for me to view human life from such a purely economic standpoint. The author is correct in stating that the costs of war are difficult to account more. In my view, it is because it is difficult to determine the actual significance of qualitative data, such as the psychological costs of the Confederacy losing a large portion of its men during the Civil War.

[Felicia Liang]

I found the argument that the Civil War wasn't the actual cause of industrialization to be the most interesting. America was already undergoing changes in industrialization and shifts towards becoming a manufacturing industry. The Civil War undoubtedly stimulated the economy and its growth rate, but didn't have the huge impact on production as previous historians have claimed. Many costs of the war were actually offset by the growing industrialization. America was already growing as an economy before the Civil War started, and the war simply perpetuated its growth.

[Jinghao]

Hello Professor,

This is Jinghao Yan, an undergraduate majoring in EECS/Econ/Business.

What I found most interesting about today's lecture is the economic reasons for why slavery must fail as a, I guess, legal institution. What I wonder though is why slaveholders wanted others to own slaves too, since more slaves means more cotton production, which means more competition for the lucrative English market, which means less income for the original slaveholders. Was it because they wanted more political representation at the national level? If it weren't for that, wouldn't slave-owners be better off if their contemporaries did NOT own slaves?

[William Grover]

I thought it was interesting how the south financed the war partially by robbing their people. What I almost never like about these historical analyses is that it's difficult to judge the impact of the war in terms of how it would affect us today.