2 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”
3 Southern Agriculture Differences Crops- Cotton, Tobacco, Sugar and RiceUse of slave laborLarger SizeBoth in terms of acres and laborSmall farms did exist but did not specialize in cash crops (exception is tobacco)
4 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 laborSugar is grown with slave labor regardless of where it is grown
5 Efficiency-What does it mean? Least cost way of productionSlave labor less costly when cost of maintaining and monitoring labor for the same output is less than the wage payment to free laborPareto –optimality or allocative efficiencyCannot make someone better off without making another worse offSlavery is not efficient in the this wayPayment 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
6 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
7 Slave Trade 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.
8 The Distribution of Slaves Brought into the New World, 1500–1870
9 Regional DifferencesPercentage 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.
10 Regional DifferencesIn 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
11 Regional DifferencesNatural 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 % of all slaves were in the United States, making it the largest user of Slave labor in the world.
12 The Distribution of Slaves in the Western Hemisphere, 1825
13 Emancipation Outside US Slavery abolished in British Caribbean and South America mostly before (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.
14 US Slavery and CottonWhitney’s Cotton Gin (1793) enabled short staple cotton to be separated on a competitive commercial basis by mechanical meansFrom 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.
15 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?
16 Political MotivatedAbolitionists argued that freeing slaves would increase economic growth because free labor would work harder than slave laborHistorians argued that slavery would have ended on its own because of its inefficiency.
17 What effect did Slavery have on Southern Economic Growth? Per Capita Income by region18401860Growth rateNational Average$96$1281.4North1091411.3North East1291811.7North Central65891.6South*74103South Atlantic*66841.2East South Central*69West South Central*1511842.0* Includes slavesAlthough per capita income is lower than North, growth rate of income is higher especially in west
18 Slave PricesIf slave owners were rational what should the price of a slave be?Value of what he produces- cost of maintenancePc=price of cottonMPs= marginal product of slave (how much cotton he produces in year)Maintenance costs
19 Ps=∑Nt=1 (Pc * MPs-maintenance cost/(1 + r)t) Use Present Value formulaI r is the rate of return or interest rateN = number of years the slave livesPs=∑Nt=1 (Pc * MPs-maintenance cost/(1 + r)t)
20 Conrad and Meyer Data Age price profiles. Collected data from slave markets.Detailed information about prices and characteristics of slaves recorded and published.Hire ratesKnow Pc, MPs, N, solve for r
21 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—
22 Rate of ReturnConrad and Meyers found rates of return that varied from 2.2 to 5.4 % on poor quality land in South Atlantic area to % in South WestComparable to what could have earned on RR bondsSlaves were not highly speculative investments
23 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.
24 Were Slave Plantations efficient? Fogel and Engerman, Time on the CrossRobert Fogel (and Douglas North) won the Nobel Prize in 1993Time on the Cross changed they way people thought about slavery and also was one of the first high profile uses of New Economic History
25 How to measure efficiency? Survivorship- number of large plantations increasesTotal Factor ProductivityQ=LaKbTcTFP=Q/LaKbTcUsed to compare Northern Agriculture to Southern Agriculture and to look at productivity differences between slave plantations of different types
26 Economies of ScaleData is from the Parker-Gallman Sample of the 1860 CensusNorth= 100Farm size(#slaves)Old SouthNew South98.4112.71-15103.3127.216-50124.9176.151 or more135.1154.7All slave farms118.9153.1All Farms116.2144.7
27 Sources of Economics of Scale Specialization- Team productionGang Labor SystemHow 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
28 Treatment of slavesBoth positive incentives and punishments were used to motivate slavesGang vs task systemSlave diets were higher in calories than northern labor which was necessary to maintain intense workAverage height of slaves was inch less than northern born whitesMore than laborers in EuropeSlaves in sugar coloniesSlave children< 7 were smaller
29 Treatment of SlavesSlave families were kept together when it was in the interest of planters to do soSlave families that were sold together brought a higher price than would have been received if individual were sold separatelyFamilies were not always kept togetherSlave owners did not take into account the slaves’ preferences or value of their time.
30 Domestic Slave TradeDomestic Slave trade remains in place until the Civil WarStates in South Atlantic exported slaves to South westWere plantation owners deliberately breeding slaves to be sold west?Not clear
31 Would slavery have collapsed on its own? Slavery was profitable and the least cost way of producing cottonSlavery was not the least cost way of producing other crops and was not profitable in manufacturingNot clear it would have ended anytime soon, but it is also not clear it would have expanded.