The Economic Effects of American Slavery, Redux: Tests at the Border

Paul Rhode, Economics--University of Michigan
Hoyt Bleakley, Economics, Univ. of Michigan

A half century ago, economists elbowed their way into the historical literature on antebellum slavery with evidence that slave owners ran their plantations like profit-maximizing businesses. This contradicted earlier assertions by historians that plantations were unprofitable, a conclusion that suggested slavery was destined to collapse under the weight of its own red ink. However, because capital is mobile, a finding of profitability says little about the effect of the institution on productivity. Instead, we propose an examination of land use and value. Land, as an inelastic factor, should ultimately bear the costs and benefits of local policy choices. We use antebellum census data to test for statistical differences at the 1860 free/slave border (the Mason-Dixon line; the Ohio River from Pennsylvania to Cairo, Illinois; the Mississippi River from Cairo to the Iowa Border; and the Missouri/Iowa state border). We find evidence of lower land use and land value on the slave side of this border. This does not support the view that abolition was a costly constraint for land owners. Indeed, the lower use of land that was cheaper presents a prima facie puzzle: why wouldn't the yeomen farmers cross the border to fill up empty land in slave states, as was happening in the free states of the Old Northwest? More puzzling still is that we find evidence of higher wages on the slave side of the border. We then discuss channels of institutional spillovers associated with maintaining slavery.

No extended abstract or paper available

 Presented in Session 247. Land Prices in the Antebellum Mississippi and Missouri Valleys