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
Sat, 01 Mar 2014 19:54:07 GMT