The Poverty of Slavery

This chapter defines slavery and other forms of unfree labor with a 20-point scale of freedom. It discusses the evolution of legal, official, and scholarly definitions of slavery, peonage, indentured labor, and other forms of bound and unfree labor, and concludes that the economic effects of slavery are best understood if enslavement is considered on a 20-point scale ranging from zero (chattel slave) to 20 (modern CEO). Wright argues that the less freedom that workers have (the lower their score on the freedom scale), the more negative externalities that they create, and vice versa. The chapter explains why members of relatively well-off groups complain of putative enslavement and suggests that the goal of economic policymakers eager to promote economic growth and economic development should be to help all workers enjoy more workplace and societal freedom.

Slavery is a ubiquitous and almost universal form of labor across the globe from prehistory to the nineteenth century. This chapter surveys legal forms slavery across the globe from prehistory to the great emancipations of the nineteenth century. It notes the ubiquity of the institution since the formation of complex societies, if not before, and suggests that most humans alive today are descended from both slaves and enslavers. Finally, the chapter questions the notion that some forms of slavery are benign.

In response to the great emancipations of the nineteenth century, slavery transmogrified into various forms of bound or unfree labor. In this chapter, Wright surveys the splintering of slavery into various forms of bonded or coerced labor, including debt peonage, indentured servitude, and convict labor, across the globe since the great emancipations of the nineteenth century until today. He describes how chattel slaves were in many instances replaced by forms of labor nearly as unfree and how that led to the “white slavery” of the early twentieth century as well as the “new slavery” of the early Third Millennium.

Enslaving others is profitable, but that does not mean that it benefits the overall economy. Picking up the metaphor of Frederic Bastiat’s parable of the window from Chap. 1, this chapter discusses the most obvious economic impact of slavery, the creation of wealth for enslavers. This chapter surveys the historiography of the profitability of slavery as well as of the negative externalities or pollution created by the enslavement of others, through discussion of the work of Daron Acemoglu, Edward Atkinson, Kevin Bales, Jean Bodin, Henry Brougham, John E. Cairnes, William Channing, Augustin Cochin, Joseph Conder, Frederich Engels, Stanley Engerman, Robert Fogel, Benjamin Franklin, Lewis C. Gray, Alexander Hamilton, Hinton Helper, Johann Herder, Siddarth Kara, John Majewski, John Millar, Ulrich Phillips, Arthur Pigou, Malachy Postlethwayt, Carl Schurz, Samuel Sewall, Adam Smith, and Gavin Wright, among others. Wright critiques the economic models of historians of capitalism, including Ed Baptist.

Slavery creates large amounts of pollution, or negative externalities, that greatly exceed in value the marginal economic benefits of enslaver profitability. In this chapter, Wright examines the hidden costs of slavery, the pollution that enslaving others causes to the slaves themselves and their immediate families, to slaves’ places of origin, and, ironically, to enslavers themselves. Chapter 6 also examines the negative effects of slavery on population growth, non-slave laborers and businesses, and economic development, including education, infrastructure, and technology levels, agricultural productivity, and the environment. Finally, it examines the negative effects of slavery on the distribution of wealth and income and the quality of political governance and institutions.

Slaves do not want to be enslaved, so they resist, which creates large control costs that enslavers try to foist off onto taxpayers and others. This chapter examines the considerable costs to society of protecting slaves, non-slaves, and enslavers from themselves and each other, as well as other public control costs and the costs of interdicting slave trading and restoring freed slaves to productive economic roles. It also sums up all the costs surveyed in Chaps. 6 and 7 and argues that they greatly outweigh the economic benefits generated by the profitability of slavery (Chap. 5), especially when considered as a marginal analysis. In other words, only a small part of enslavers’ profits are attributable to slavery as enslavers would earn profits almost as high had they used a freer form of labor.

Truly abolishing slavery will require imposing higher costs on enslavers than the benefits they receive from enslaving others. Here, Wright argues that slavery creates negative externalities that swamp the marginal benefits of enslaver profitability. Policymakers should try to reduce slavery for economic as well as moral reasons. Slavery persists despite being illegal because antislavery laws are not strenuously enforced in most countries. Buying slaves will not end slavery. Reducing poverty can help by reducing supply. Consumer boycotts can also have a positive impact in specific situations. The most effective antislavery policy imposes heavy costs on enslavers, most of the proceeds of which are invested in freed slaves so that they become productive members of the economy and hence less vulnerable to further exploitation. Finally, new technologies may help reduce demand for certain types of slaves, even sex slaves.