Department of Economics

A famous paper by Conrad and Meyer calculates that on the eve of the American Civil War, slave prices were about equal to the present values of the slaves' labor services. They argue that this is evidence for the proposition that ordinary economic forces, without political intervention were not likely to put an end to slavery.

I wrote this paper when pretty much the only economics that I knew was 1) how to prove the existence of competitive general equilibrium. 2) how to calculate present values. So the paper does two things. It shows how to apply Arrow-Debreu type existence theory to an economy with slavery. (this involved some technical wrinkles that were not in the existing existence literature.) More importantly, it argues that the calculations of Conrad and Meyer showed only that capital markets for slaves were working pretty well, but were not direcly relevant to the question of whether slavery as an institution was economically viable. To answer the latter question, we need to calculate two things. 1) Does an infant slave have positive present value? [If not, reproduction would be discouraged.] 2) Would a freed adult slave, perhaps because of the better incentives and opportunities for free people, be able to earn more than enough on the labor market to repay his or her market price to a slaveowner. I investigate the latter two questions empirically. The answer to the first question is "Yes". Spotty evidence suggests that the answer to the second question was also often "Yes."