Quotation of the Day…

by Don Boudreaux on September 4, 2011

in Civil Society, History, Law, Myths and Fallacies

… is from page 126 of David Freeman Hawke’s 1988 book Everyday Life in Early America; here Hawke is writing about the 17th century:

Peter H. Wood found little discrimination in early South Carolina.  “Common hardships and the continuing shortage of hands,” he writes [in 1974], “put the different races, as well as separate sexes, upon a more equal footing than they would see in subsequent generations.”  Many scholars now conclude that discrimination set in only during the last quarter of the century when a “series of court decisions and statutes began closing the gates of freedom along racial lines,” changes that finally became codified in Virginia’s slave code of 1705.

Other scholars who’ve contributed important research along these lines include Robert Higgs – especially his 1976 book Competition and Coercion: Blacks in the American Economy, 1865-1914 – and my former GMU Econ colleage Jennifer Roback-Morse.

Sovereign-state power and legislation can be very dangerous institutions.

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Invisible Backhand September 4, 2011 at 1:50 pm

I found the Jennifer Morse piece on restrictive labor laws to keep wages low interesting, and relevant to laws whose effect is to drive down wages today.

Gil September 5, 2011 at 12:09 am

Since wages are a cost to business then this would be a good thing.

Ken September 5, 2011 at 12:20 am

So along the same lines the way to lower gas prices is to restrict oil production? Can you explain to me how restricting access to X, whatever X is (including labor), REDUCES the price?


Invisible Backhand September 5, 2011 at 1:13 am

Sure, but after you read the linked article.

Ken September 7, 2011 at 10:21 pm

I’m on vacation so haven’t responded to this, but a key point you’ve missed in the vagrant laws was that “blacks who were not working – that is, who were out of the labor force – were often rounded up as vagrants and put to work on local public works projects or farms.” This doesn’t quite fit with the whole “restricting labor” law, if the law rounds up non-working people (people not a part of the work force) and, you know, puts them to work for free!

This doesn’t really indicate any sort of labor restricting law at all. It just means that law enforcement rounded up blacks they considered not working hard enough and made them forcibly work. Since the labor was forced as a result of a law, the cost was very low, which does? That’s right, drives down wages.

The law didn’t prevent any black from working. It prevented blacks from being unemployed. The very opposite of labor restriction!


robert_o September 5, 2011 at 3:51 am

This must be opposite day. I agree with IB! Ken, you should read the paper. Your oil analogy doesn’t quite fit in this case.

Stone Glasgow September 5, 2011 at 3:14 pm

It’s a great article you should read it Ken. The restrictions were designed to stop employers from competing for labor by raising wages, and restricted the information available to laborers and restricted their ability to move from a low paying job to a higher paying job.

Stone Glasgow September 4, 2011 at 2:25 pm

Dude, c’mon. How am I suppossed to feel properly ashamed of my Western Privilege, guilty about my own latent racism and sexism, and atone for the violent theft and imperialism of my ancestors if it’s all the fault of government?

You must be a racist if you’re promulgating this nonsense, which has obviously been fed to you by the Koch brothers or Milton Freidman. Naomi Klein said he was an evil man who enjoyed destroying the third world, and she was in a movie once, and wrote a few books, and is a woman, so we know we can trust her.

hayseed September 4, 2011 at 3:04 pm

Unfettered private discrimination is a moral and good thing.

Josh September 4, 2011 at 5:00 pm
Ron H September 4, 2011 at 7:24 pm

Your linked article does quite well up to this paragraph –

We have here a clue as to why Hayek lost his great battle with Keynes in the 1930’s. It was not just that the policy of liquidating excesses was politically catastrophic: in Germany, it brought Hitler to power. As Keynes pointed out, if everyone – households, firms, and governments – all started trying to increase their saving simultaneously, there would be no way to stop the economy from running down until people became too poor to save.

– at which point if falls completely apart. While Keynes included this Paradox of Thrift in his “General Theory” in 1936, it wasn’t his original insight, but that of Foster and Catchings a decade earlier. Hayek had already debunked the theory in 1929, in an article titled The Paradox of Savings

Hayak carefully explained the paradox as outlined by Foster and Catchings, then proceeded to explain why it was flawed. The authors had failed to realize that the additional savings must be used to increase the amount of capital in the system , so the price of consumer goods would drop, thus providing the additional purchasing power needed to take advantage of the additional savings.

Keynes failed on this point, as people continue to do even today.

I believe Hayek lost that battle in public opinion to those who call for more spending, because it seems so much better, especially for politicians with their hands in my pocket, to “do something”, rather than to do nothing, and let the market correct the mal-investments.

It appears that nothing has changed since that time.

jjoxman September 4, 2011 at 9:40 pm

Hayek lost because he didn’t want to waste his time with another critique of Keynes. He wrote a magnificent critique of Keynes’ earlier monetary theory book, only to have Keynes tell him he didn’t believe any of that stuff anymore.

Hayek critiques Keynes = no Keynesian revolution.

Ron H September 5, 2011 at 3:16 am

Hazlitt also did a magnificent job of demolishing Keynes in “The Failure of the New Economics”. He is unrelentingly takes the General Theory apart almost line by line.

vikingvista September 5, 2011 at 4:01 pm

That’s what Hayek says, but he lived many years beyond that decision while keynesianism took the world by storm. He had plenty of opportunity to rectify his oversight. Not that his work during that time was not relevant, but a direct peer reviewed reply to The General Theory, rather than an excuse for why one was never produced, would’ve been more convincing that one was possible.

BonnieBlueFlag September 4, 2011 at 8:15 pm

“Sovereign-state power and legislation can be very dangerous institutions.”

Less dangerous than centralized power and legislation…

McBrideR September 4, 2011 at 9:30 pm

I don’t understand your post. Sovereign-state power is centralized power.

BonnieBlueFlag September 4, 2011 at 10:58 pm

Misunderstanding. I meant “state” in the federalist sense, as in states versus the federal government.

steve September 5, 2011 at 12:17 am

“Peter H. Wood found little discrimination in early South Carolina. ”

Yet, he found slavery. Yes, the early conditions were so bad that both blacks and whites lived poorly. As conditions improved and the numbers of blacks exceeded whites, they needed laws to make sure the blacks did not safely escape, which they were trying to do (even though there was no discrimination.) I never finished this book. Did women vote in that era?


Ken September 5, 2011 at 12:26 am

“Yet, he found slavery.”

And indentured servitude, a practice as hideous and more dangerous than slavery.

“(even though there was no discrimination.)”

You seem to not understand that the laws resulted in discrimination.

“Did women vote in that era?”



steve September 5, 2011 at 9:12 am

Owning someone is not discrimination? Why were slaves trying to escape if there was no discrimination? Heck, how do you define discrimination? Was there no possibility of observation bias, ie, what color was Mr. Wood? Did the laws result in what you call discrimination, or did they codify existing practice? This was not big, distant government. This was locally passed law made by and for a few thousand people.


Ken September 5, 2011 at 1:38 pm


“Owning someone is not discrimination? ”

No. The discrimination that Peter Hood investigated was racial discrimination. I tried to give you some direction by giving the example of indentured servitude, the victims of which were NOT African. In fact, African slaves were treated much better than indentured servants. Indentured servants had very few rights, performed the most dangerous tasks, and died much faster than slaves due to the hardships of their life.

“Why were slaves trying to escape if there was no discrimination?”

Because being a slave sucks.

“Heck, how do you define discrimination?”

How do you define discrimination? As mentioned above the discrimination Hood was investigating was racial. Many slaves throughout history were viewed as equals or even better than their owners. The slaves just happen to be in the unfortunate circumstance of being owned and not having the rights that many others have. Slaves were treated the way they were because they were slaves, not because of anything inherently wrong with them racially. The process of claiming people were slaves due to something inherent about them didn’t come about in the US till the last quarter century of the 1600′s due to a “series of court decisions and statutes”.


Jacobite September 5, 2011 at 2:02 pm

Women did not vote until the Constitution was amended in the early 20th Century (along with equally excellent ideas like direct election of Senators, the income tax, and Prohibition). Undoubtedly slaves were treated better than indentured servants. But free labor was treated worse than either. In 1860, a good slave was worth $1500. Irish day-laborers could be hired for 25 cents a day. Guess who did the worst, most dangerous jobs, like clearing canebreaks?

Ken September 5, 2011 at 3:59 pm


“Women did not vote until the Constitution was amended in the early 20th Century”

Wrong. The amendment guaranteed the constitutional right to vote, but women have been voting in elections throughout the entire history of the US. Do you really think that people can do things only when the constitution explicitly guarantees it as a right?

“Undoubtedly slaves were treated better than indentured servants”

Wrong. See below.

“But free labor was treated worse than either.”

What free labor? All labor costs money.

“Irish day-laborers could be hired for 25 cents a day”

That’s exactly why indentured servants were treated worse than slaves. They cost less and their indentured servitude was only a period of years, not a lifetime. As you rightly point out people protect their valuable property more than their less valuable property. Since slaves were more valuable than indentured servants, they were protected and treated better.


The Engineer September 12, 2011 at 1:05 pm

Great post, I laughed so hard I nearly fell off my chair, keep em’ coming!

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