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The Relative Efficiency of Slavery: A Comparison of Northern and Southern Agriculture in 1860

Economics 334 Economic History of the US

Warren Kao

on 9 January 2013

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Transcript of The Relative Efficiency of Slavery: A Comparison of Northern and Southern Agriculture in 1860

The Relative Efficiency of Slavery:
A Comparison of Northern and Southern Agriculture in 1860 "The Crude Index" Did the use of slavery have any factor in determining the efficiency of the South? Was the North or the South more efficient during the time before the Civil War? After adjustments Main sources of measurement error with respect to inputs
Conclusion and relevance to our course The crude index based off of
Estimates of income originating from agriculture for the year 1860, constructed by Towne and Rasmussen
1860 Census of Agriculture
Estimates by historians (Wages, total output, etc.) The efficiency of the South Total factor productivity was 9.2% higher in the South
Unsymmetrical way in which the labor of women and children are treated in the two regions

Conclusively, the South was more efficient mostly due to the economies of scale and the effectiveness of the work, especially of the slaves.

In the South, manufacturing output was not as pronounced as stated in the index; this was done at the home and not taken into account.

Ultimately, the South was certainly more productive and this was due to the larger farms. Larger farms had utilized the labor of slaves, making the effective use of slaves as a large factor to the South’s success (although it may not necessarily be the only factor.) Fogel and Engermen An index of total factor productivity for Southern agriculture relative to that of Northern agriculture Supposedly the economy of the South was stagnant and this was assumed to be the fault of slavery.

The North hypothesized that the use of slavery adversely affected free labor and reduced the quality of entrepreneurship.

Was this true?
The North argued that there were potential measurement errors, which resulted in a recount Potentially important measurement errors:
Manufacturing may have been under counted in the census (Southern outputs were omitted )
Available evidence suggests that the products omitted from the southern output index probably exceeded those omitted from the Northern one. E.g.
Food processing
Alcohol distillation
Various animal by-product industries They assumed that average weight of each category of livestock in the South equaled that of the corresponding type in the North (Southern farm animals were lighter?) More crop output in the South were fed to people Needed uniform national prices in constructing the regional indexes of total output (Variable dependent on goods) The failure to adjust for differences in quality of land
Errors in the estimates of factor shares
South was even more productive than they thought they were, as seen by the “Index of Total Factor Productivity”
Large farms are more efficient
Produced more food per capita, more cotton
Higher output per labor and acres land
Labor employed more intensely because of slavery, whereas free workers had less quantity of work per year
Calculated by work per year; not necessarily accurate due to free workers not employed 100% of the time
Scale economy Costs of slavery under-calculated
Some costs of maintaining the slaves may have been forced upon the local government, making the index for the South too low
Was labor and capital used to head off or repress resistance by slaves and not provided by the plantations?
Was expenditure on police greater in the South because of slavery? More people working in the North than originally thought, because the existence of women and children were not calculated in the total labor. They initially did not calculate women and children factor workers, which had consisted of a good 20-30% In the South, nearly all females and children aged 10 or over who lived in rural areas were assumed to be fully employed in agriculture. There were less people working in the South than originally thought because not all the slaves who were assumed to work had actually worked.
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