Southern Agriculture

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					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
                     Slave Imports
            1451-1600                     275,000
            1601-1700                    1,362,000
            1701-1810                    6,200,000
            1811-1870                    1,898,000
               total                     9,735,000
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?
         Per Capita Income 1840-1860 by region

                      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           151                   184                   2.0
Central*
   * 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

      N
  Ps=∑ t=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 Age
               Shows 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= 100
  Farm 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.

				
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