Slavery Can’t Last in an Otherwise Free Market?? Maybe it can.


I think the conclusion below that slavery would always go away is wrong.

The suggestion is that labor is most valuable  when free because incentives are a much more cost-effective  way of  inducing  production that force.  So:  slaves could borrow and buy their  freedom; be more  productive; pay off the  loans; and enjoy their  more productive freedom.  Alternatively, other  capitalists could buy  the  slaves and put them to  work as free laborers driven by incentive not the whip.  The assumption being that the free state is  when labor is  most  valuable and markets put  resources  to their highest  and most valued use.

The problem  is I  think that perhaps the  wealth  distribution is different  with slavery.  Slave  owners are wealthier and may  have a ‘taste’ for  slaves.  Outside of  theory:  Slavery has a long history; and much research suggests  that  US  slavery would  have gone  on  for  a much  longer period, but for the  civil  war.

 

My latest at Mises Canada. To entice you, I’ll just quote the concluding paragraphs:

The above story is just to get the logic across. I am trying to show why, IF we agree with Mises that slavery is unproductive relative to free labor, that it could not last in an otherwise free market economy. Over time, incremental moves such as the above would transform the slaves into self-owners, because that would be the most efficient outcome, setting aside moral considerations.

Think of it like this: Imagine if, during the night, gnomes took all of the cartons of cigarettes from the homes of smokers, and deposited them in the homes of non-smokers. The legal system now said that the non-smokers were the owners. Wouldn’t market forces soon move the cigarettes back into the possession of the smokers?

By the same token, under a free market economy, if for some reason the property titles to particular human beings initially started out in the hands of other people, market forces would soon return everyone to a state of self-ownership.

Slavery Can’t Last in an Otherwise Free Market
Bob Murphy
Sat, 01 Mar 2014 19:54:07 GMT

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