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What if you subtracted the wealth created by slavery?

rayiner 6y ago
You usually compare countries in terms of GDP or GDP per capita, which is a measure of production and not “wealth.” By 1820, the US was producing more per person than Western Europe: https://warwick.ac.uk/fac/soc/economics/seminars/seminars/conferences/econchange/programme/maddison.pdf https://warwick.ac.uk/fac/soc/economics/seminars/seminars/co... That measure inherently excludes the “wealth” represented by ownership of enslaved people. It includes what those people produce, but the “per capita” measure also includes enslaved people in the denominator. The production of enslaved people represented a small fraction of the economy—about 5% of GDP during the peak of the cotton boom: https://fee.org/articles/no-slavery-did-not-make-america-rich; https://fee.org/articles/no-slavery-did-not-make-america-ric... see also https://jacobinmag.com/2019/08/how-slavery-shaped-american-capitalism https://jacobinmag.com/2019/08/how-slavery-shaped-american-c... More importantly, you can’t increase a country’s overall level of production by enslaving people. Its basic economics—unfree labor misallocates labor resources to industries controlled by slave owners. Slavery obviously redistributes wealth from enslaved people to a slaveholding aristocracy, but that comes at the expense of economic growth for the country overall. This is true both theoretically and empirically. As shown in the GDP chart linked above, the end of slavery didn’t produce an economic collapse, as you would expect of it really was responsible for America’s productivity. There was not even a dip. In fact, ending slavery made America richer, exactly as economic theory would predict: https://www.econlib.org/archives/2014/09/ending_slavery.html https://www.econlib.org/archives/2014/09/ending_slavery.html
- watwut 6y ago
  It does not inherently exclude wealth from slavery. Historical sources I had seen has slavery to be wastly profitable, that is why they did it. It was not just reallocation of wealth like tax, it completely changed his money were made.
  - xyzzyz 6y ago
    Slavery is very profitable for slave owners, it’s just not very productive. Think about it this way: imagine you run a business, and suddenly one day you no longer have to pay wages to your employees. This obviously makes your profit margin shoot through the roof. However, it doesn’t make your company produce more stuff. That’s the point: slavery was indeed profitable for slave owners, but it did not produce any more wealth than in an alternative scenario, where the slaves were free wage labor instead. Thus, while slavery surely made some slave owners wealthy, it did not make America wealthy, and in fact, it did quite the opposite.
    - watwut 6y ago
      When people say richest country per capita, they dont mean "including native Americans and slaves". Those were not citizens. It is profit and wealth of whites that count. You are however averaging production to slaves too. So in countries where blacks outnumber whites you get much smaller wealth then what contemporaries commented on. The alternative scenario is north in any case. The kind of society and production south was is plain impossible without slavery. It just did not exist.
      - rayiner 6y ago
        The GDP per capita statistics include everybody.
    - skohan 6y ago
      > Think about it this way: imagine you run a business, and suddenly one day you no longer have to pay wages to your employees... it doesn’t make your company produce more stuff I don't really understand this argument. Surely reducing one of the operating costs of doing business to zero leads to economic growth right? In your hypothetical scenario, wouldn't the business owner just invest some of that profit into growing the business, thereby increasing productivity? Alternatively, they can lower their prices in order to beat competitors. If they're producing a commodity, this can have the knock-on effect of lowering the price of finished goods using that commodity. Another point of comparison is, in places where they discover "free resources" like petrochemicals, like Norway, that does lead to prosperity, doesn't it?

You usually compare countries in terms of GDP or GDP per capita, which is a measure of production and not “wealth.” By 1820, the US was producing more per person than Western Europe: https://warwick.ac.uk/fac/soc/economics/seminars/seminars/conferences/econchange/programme/maddison.pdf https://warwick.ac.uk/fac/soc/economics/seminars/seminars/co... That measure inherently excludes the “wealth” represented by ownership of enslaved people. It includes what those people produce, but the “per capita” measure also includes enslaved people in the denominator. The production of enslaved people represented a small fraction of the economy—about 5% of GDP during the peak of the cotton boom: https://fee.org/articles/no-slavery-did-not-make-america-rich; https://fee.org/articles/no-slavery-did-not-make-america-ric... see also https://jacobinmag.com/2019/08/how-slavery-shaped-american-capitalism https://jacobinmag.com/2019/08/how-slavery-shaped-american-c... More importantly, you can’t increase a country’s overall level of production by enslaving people. Its basic economics—unfree labor misallocates labor resources to industries controlled by slave owners. Slavery obviously redistributes wealth from enslaved people to a slaveholding aristocracy, but that comes at the expense of economic growth for the country overall. This is true both theoretically and empirically. As shown in the GDP chart linked above, the end of slavery didn’t produce an economic collapse, as you would expect of it really was responsible for America’s productivity. There was not even a dip. In fact, ending slavery made America richer, exactly as economic theory would predict: https://www.econlib.org/archives/2014/09/ending_slavery.html https://www.econlib.org/archives/2014/09/ending_slavery.html

watwut 6y ago
It does not inherently exclude wealth from slavery. Historical sources I had seen has slavery to be wastly profitable, that is why they did it. It was not just reallocation of wealth like tax, it completely changed his money were made.
- xyzzyz 6y ago
  Slavery is very profitable for slave owners, it’s just not very productive. Think about it this way: imagine you run a business, and suddenly one day you no longer have to pay wages to your employees. This obviously makes your profit margin shoot through the roof. However, it doesn’t make your company produce more stuff. That’s the point: slavery was indeed profitable for slave owners, but it did not produce any more wealth than in an alternative scenario, where the slaves were free wage labor instead. Thus, while slavery surely made some slave owners wealthy, it did not make America wealthy, and in fact, it did quite the opposite.
  - watwut 6y ago
    When people say richest country per capita, they dont mean "including native Americans and slaves". Those were not citizens. It is profit and wealth of whites that count. You are however averaging production to slaves too. So in countries where blacks outnumber whites you get much smaller wealth then what contemporaries commented on. The alternative scenario is north in any case. The kind of society and production south was is plain impossible without slavery. It just did not exist.
    - rayiner 6y ago
      The GDP per capita statistics include everybody.
  - skohan 6y ago
    > Think about it this way: imagine you run a business, and suddenly one day you no longer have to pay wages to your employees... it doesn’t make your company produce more stuff I don't really understand this argument. Surely reducing one of the operating costs of doing business to zero leads to economic growth right? In your hypothetical scenario, wouldn't the business owner just invest some of that profit into growing the business, thereby increasing productivity? Alternatively, they can lower their prices in order to beat competitors. If they're producing a commodity, this can have the knock-on effect of lowering the price of finished goods using that commodity. Another point of comparison is, in places where they discover "free resources" like petrochemicals, like Norway, that does lead to prosperity, doesn't it?