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April 27, 2008


Andrew Reeves

I can't find the cite off-hand, but there were a lot of industrial institutions in the CSA that used slavery just as well as plantations did. The argument that industrialization would have ended slavery seems to be wishful thinking more than anything else.


Indeed. As many Nazi profiteers (like Oskar Schindler) realized, a skilled slave set to work, say, manufacturing precision machine parts or Swiss style luxury watches, would be even more profitable to his/her owner than an unskilled one set to work picking cotton in the fields: in fact, the more skilled the work a slave can be made to do, the bigger the potential differential between potential vs. actual wages, a surplus the slave owner stands to expropriate outright.


"not only did the Nazi regime make slavery pay, but it paid on a truly colossal scale"

It's clear that the companies who used slave labour profited, but did the regime as a whole do so? After all it wasn't the companies involved who paid for the police state required to prevent escape or any of the other externalities.


"It's clear that the companies who used slave labour profited, but did the regime as a whole do so?"

Given the rigorous accounting done by the Nazis on this very issue, there is absolutely no reason to assume otherwise. In any case, it is a huge mistake to assume that the extra costs involved in keeping large numbers of foreigners in slave camps must be correspondingly massive: we aren't talking about Club Fed here, just spending the bare minimum required to keep your slaves alive - and even that minimum amount of care only came later, when the German victories and seemingly unceasing flow of new helots evaporated.

Additionally, it must be kept in mind that a course of action need not be beneficial to "the state" for it to pay massive rewards to individuals who have a lot more incentive to lobby for it than the great mass of others have to lobby against it; cotton and ethanol subsidies are obviously value-destroying to American society as a whole, but do you think for a second that they'll ever be abolished?

This is public choice theory in action: even if one makes the assumption that the net opportunity costs* of slavery are positive - and this is an assumption that actually strikes me as quite sound, given how much more productive free, educated people engaged in voluntary transactions can be - it does not at all follow that "society" will therefore decide to abolish slavery, especially when the mere knowledge of the existence of an even lower slave class also provides certain psychic rewards to those at the bottom of "free" society, be they German "volksgenossen" or poor Southern whites who can say to themselves "at least I ain't a n*gger" ...

*I originally used the phrase "net social costs", but that is inaccurate. Opportunity cost better captures my real drift, which is that a policy can look profitable by accounting yardstacks without necessarily being pareto-optimal.



You might be interested in this one from the archives:

Appiah disposes of Sowell's ridiculous argument in a flash. That is to say, one need not even establish the absolute profitablity of slavery to recognize its significance - hence the analogy of batteries as goods by themselves and batteries as crucial elements of a larger system - something, that you have again, pointed out above.
Its amazing how many times this argument comes up: Slavery was economically insignificant, its abolition was economically irrational.
The same fallacy bedevils those who like to claim that slavery was abolished by industrial society - hence points for those who birthed the industrial society, and yet fail to recognize that industrial society itself was built on the back of slaves.

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