- Cafe Hayek - https://cafehayek.com -

Gin’s the Tonic

Tweet [1]

Here’s the bulk of an e-mail from my treasured and insightful friend Yevdokiya Zagumenova (original emphasis); it’s part of the on-going on-line conversation [2] now about whether or not slavery was a necessary spur to the advent of modern, industrial capitalism:

Thing is, slave labour was always employed in the production of cotton in the United States.  Yet, until Whitney’s invention of the cotton gin large-scale cotton production was uneconomic here.

Until 1793, producing a bale of cotton required 600 hours of human labour.  The gin reduced the number of human labour hours required to produce a bale of cotton to roughly 12.  That’s a 98% reduction in the [labor] cost of cotton processing.  Even if we concede that slave labour was cheaper (and it might have been so in the Antebellum South because of externalized enforcement costs) than free labour, the savings in labour costs from slavery pales into insignificance compared to the cost savings resulting from the invention of the cotton gin.

Moreover, American cotton was also in demand in Britain because of the particular characteristic of the American crop itself – a native American species characterized by longer and stronger fibers, making it superior to cottons grown elsewhere in the world.  Obviously this means that British textile manufacturers viewed American cotton as a differentiated product and not as an undifferentiated commodity.  Anyone who passed econ 101 should know what this means for the price British weavers were willing to pay for American cotton.

For these reasons alone I argue that if every slave were manumitted, the industrial revolution would have continued apace, modern Capitalism would have emerged more strongly and the American South would  not only have been the Land of Cotton (with now free blacks employed on those plantations), but it would have been a stronger, richer and better place.

Comments