Tuesday, December 23, 2014

Cotton, Slavery and Economic Growth

Recently, several historians (Edward Baptist and Sven Beckert) have attempted to make slavery and cotton the driving force behind American economic growth in the nineteenth century. I believe that they present a misleading view of economic growth and the relationship between slavery and economic growth.

1.       Slavery was predominately associated with one product: cotton. Cotton was a very important crop. It is true, as Beckert points out, that cotton accounted for over half of U.S. exports on the eve of the Civil War. But exports were only about 9 % of GDP. Similarly, cotton accounted for about 23 % of income in the South, but the South accounted for only 26% of U.S. income. See D. A. Irwin, “The Optimal Tax on Antebellum U.S. cotton Exports,” Journal of International Economics 60(2003):287) Ultimately, the value of cotton production was equal to about 6% of GDP. The attempts to make cotton the driving force of the American economy misses one of the most important finding of economic historians: do not get too focused on a single sector of an economy (see Fogel on the railroads and McCloskey on the textile industry in England). There is no Rostovian engine of growth.  

2.       Baptist’s attempts to enlarge the impact of cotton on GDP are nonsensical.

3.       Slavery appears to have had a negative effect on long run trends in per capita GDP. The more a region depended on slave labor in the past the lower its per capita income now.




These figures are from the working paper by Nathan Nunn “Slavery, Inequality and Economic Development in the Americas: An Examination of the Engerman-Sokoloff Argument (October 2007). There is no question that slaveholders benefited from slavery, but that does not mean that the economy as a whole was better off as a result of slavery. Arguments and evidence presented by Gavin Wright, Sokoloff and Engerman, and David Meyer also suggest that slavery had long term negative effects on economic growth.

4.       The abolition of slavery did not have a negative effect on per capita GDP in the United States or its rate of growth.
You can go to measuringworth.com and graph the log of per capita GDP from 1800 to 1900. Does it appear to you that the rate of growh declined after 1865?



No comments: