Slavery and 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”
– 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
• 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
– In the US, there was plenty of land and few
people. In Europe, there were more people and
– The marginal product of labor was higher in the
– Slave labor was used in some crops but not others
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
• Percentage of slaves in general population much lower in U.S. compared
– Economies of scale plus climate meant that sugar colonies were heavily black.
• Sugar plantations were some of the largest economic organizations of
– 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
• 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
• Natural Increase was the main cause of the increase in the US
– 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
– 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
US Slavery and Cotton
• Whitney’s Cotton Gin (1793) enabled short staple cotton to be
separated on a competitive commercial basis by mechanical
• 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
• 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
• 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?
• 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
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
* Includes slaves
Although per capita income is lower than North, growth rate of income is higher
especially in west
• If slave owners were rational what should the
price of a slave be?
• Value of what he produces- cost of
• 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
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—
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
• Comparable to what could have earned on RR
• Slaves were not highly speculative
Price of a Prime Male Slave, New Orleans,
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
• Total Factor Productivity
• 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
• 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
– 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
• Were plantation owners deliberately breeding
slaves to be sold west?
– Not clear
Would slavery have collapsed on its
• 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
• Not clear it would have ended anytime soon,
but it is also not clear it would have expanded.