The visible hand in economics

Slavery and growth

Posted on: September 18, 2007

Many writers have noted that colonisation contribute to the sad state of many African economies today. Now Nathan Nunn claims that the slave trade may also have had a long-term impact on economies. The author

…find[s] a robust negative relationship between the number of slaves exported from a country and current economic performance. To better understand if the relationship is causal, I examine the historical evidence on selection into the slave trades, and use instrumental variables.

This analysis indicates that “…it was actually the most developed areas of Africa that tended to select into the slave trades”, which points to a causal relationship running from slavery to poor economiic performance. The author suggests that the reason might be that “…procurement of slaves through internal warfare, raiding, and kidnapping resulted in subsequent state collapse and ethnic fractionalization.”

Yet another reason why the West is morally required to help African nations out of their current strife?

About these ads

5 Responses to "Slavery and growth"

What, are you some kind of a hippie? Best thing we ever did for them making them slaves!

Kidding. Agreed James.

The West is not to blame for slavery, which was acceptable pretty much everywhere and in every time throughout human history. In fact, Africans sold eachother into slavery. The aversion to slavery is very much a recent thing, but it was this aversion which grew in the West that was the leading force in ceasing the practice.

Slavery impacted on three groups, those that used the slaves, those that were taken as slaves, and those that were left in the country that slaves were being taken from.

We have (some) evidence that those left in the country are worse off than they would have been. Now, the people that took the slaves are also assumed to be better off as a result. But are the people who are descended slaves better or worse off as a result of the slavery businesses?

I think this is an important question, as if people that were taken as slaves benefited the most from the slave trade, then in equity terms they should have to provide the most compensation to those left in the other country.

To do that could we compare the economic performance of those who are descended from slaves to the economic performance of an African country that was untouched by the slave trade (the counterfactual). Then also compare states in the US who took slaves to ones that did not, and work out the economic benefit to the Americans who took slaves. If we find the descendants of slaves received the greatest economic benefit, then maybe the burden of compensation should be passed on to them!

I’m not saying that this will be the case, but if it is then isn’t that the logical conclusion?

Brad Delong on who benefitted from slavery. Apparently not slave-owners (in general).

http://delong.typepad.com/delong_economics_only/2007/09/who-benefited-f.html

According to Brads argument, the West in general should pay compensation as they benefited from lower taxes and cheaper consumption. Brads says that implicitly having slaves gives you low wage labour, so the cost of production is lower, and furthermore as we have perfect competition this surplus is passed onto consumers. He also says that since production was higher (as the supply curve shifted down), more tax receipts were gained lowering american taxes.

Ok thats cool, that covers the benefit for the peoples who would have been in the west in the counterfactual example. However, it doesn’t cover the generations of those brought over as slaves. What happens if the implicit wage that slaves received was higher than they would have received by staying in the original country? Have the desendents of slaves had some economic benefit from being made into slaves?

If we can figure that out we can work out what the appropriate (in equity terms) compensation should be.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Add to Google
Follow

Get every new post delivered to your Inbox.

%d bloggers like this: