Slavery

There has been some controversy over whether slavery was efficient.  The immediate question we need to consider is efficient for whom.  Efficiency involves a comparison of costs to benefits.  If the benefits exceed the costs, then we have efficiency.  Few believe that slavery was efficient for the slaves.  Why bother holding someone against there will and forcing them to do what they would willingly do anyway?  Likewise few would argue that it was inefficient for the masters.  Why then, would they go to the trouble of owning slaves.

In the most extensive slave societies up to one third of households owned slaves.  It follows that two thirds did not.  It is my suspicion that this is likely to be the poorest third, who depended on wages for their livelihood.  Thus a great deal of what it meant for them that slavery was an efficient institution, was the impact that slavery would have on the labor market.

First slaves competed with capital as a form of investment.  The availability of slave labor would thus tend to discourage the formation of capital.  That is, instead of using resources to make machinery, rich people would tend to invest in the production of slaves.  Slaves are made by kidnapping people who were previously free or by allowing or forcing them to breed.

It is noteworthy that slavery has never existed in societies where women had the right to vote.  If women had the power to change it, would they tolerate an institution that enabled men to own other women as property?  I'm skeptical.  Such a system was not conducive to fidelity on the part of their husbands.

Now, as for the men who were free laborers, I suspect that the institution was not efficient for them.  It would have the impact of depressing their wages.  I think that what kept it alive in the southern U.S. was a classic public choice problem.  The benefits of slavery were concentrated and the costs were diffuse.  In addition, the wealthier households, who tended to benefit from slavery, could use the political institutions to buy influence.  I don't think that slavery was efficient for most of the people who lived in societies that had slavery.