Property Rights and Growth: Lessons from Slavery

I’m running this video because I like it and I hope you do too. I happen to know Suresh; he’s a member of the Alternative Banking Group of Occupy Wall Street. He discusses a clever and potentially important bit of research he is conducting on slavery in the US (the brutal 1800s kind, not our modern watered down debtcropper version). This clip also separately demonstrates that economists are not necessarily beyond redemption.

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  1. tawal

    So interestingly (to me at least) your *status* 6 score and 30 some odd years ago was dependent on how many people you controlled; now it’s based on how many you don’t need to generate a $ of income.

  2. purple

    Equating the slavery of Black Americans with the situation today is morally offensive and wrong. Stop living in a world of numbers and get in touch with your humanity. The suffering and murder of millions of Black people, the theft from their homeland, the forceable splitting of families, is not some play story to make a shallow political score.

    1. tawal

      If you were replying to my thought: What you profess continues to this day, witness Somalia, South Sudan, Kenya, Uganda, Democratic Republic of Congo, Nigeria, Cote D’Ivoire, Libya, etc. Sorry if I offended; it was not meant.

    2. Yves Smith Post author

      I suggest you familiarize yourself with what debtors prisons of the 17th and 18th century were like. We are not far from those being reinstituted. I’ve linked to stories where people have been jailed for failing to pay consumer debts.

      1. Joseph Yaroch

        Additionally, we should be concerned that the end of cheap energy, as represented by Peak Oil, could lead to increased pressure to reinstitute some form of slavery.

        1. Jim Sterling

          According to the work of Evsey Domar, a reduction in assets/resources relative to population should lead to the opposite of slavery, with employers declining to own coerced workers and preferring to pay “free” workers a pittance instead. This sucks too, but it’s not the same as slavery, the legal compulsion to work for someone else who allegedly has the “right” to your labor.

          For Domar, enslavement becomes a temptation for the rich in times when assets and resources are plentiful and labor is scarce. This model works for the beginning and end of American enslavement of kidnapped Africans, and for the beginning and end of Russian serfdom during approximately the same time frame. Admittedly, it has problems explaining the existence of thralldom in England during a time of peak population just before the Black Death, and its disappearance after the plague made labor scarce. The usual explanation there is that slavery laws were hard to enforce when anonymous workers could not easily be tracked down from their new employment and taken back to their old masters: no police, poor records, poor travel and labor-hungry employers with an incentive to keep quiet. Slavery needs law to work, what the libertarians call “respect for property rights”.

          Still, it’s an interesting model that suggests we shouldn’t lazily call cruelly low wages “just like slavery”. In many ways they are opposite strategies to one end, the rich benefiting from workers labor, paying less than the labor deserves. They appear globally in opposite circumstances, one where labor is in demand, and the other where it is plentiful.

      2. Masonboro

        To learn about debtors prisons and be entertained at the same time, read Dicken’s “Little Dorrit”. Although serialized in a magazine for popular consumption (1855-1857), the educational level of Dicken’s writing is much higher than contemporary fiction. He expected his audience to be good readers.


    3. indio007


      I’m sure your shedding tears for all the white slaves from that time period.

      Contrary to popular belief slavery has little or nothing to do with the color of one’s skin. It has to do with birth right or lack thereof.

      The analog is dead on because slavery is a legal status based on a covenant as opposed to a contract.

      America went from status to contract in order to determine duties and obligations.
      Open your eyes . We have going back to status.

    4. TK421

      People weren’t enslaved just for the heck of it, but because there was great economic benefit for the enslavers. So clearly economics is not so far removed from slavery as you think.

      Yes, slaves suffered and died. But think of all the people suffering and dying today because our economic system keeps them from having health care, or because they labor in an unsafe environment, or because a bank stole their home. Dead is dead.

  3. Richard Kline

    Slavery has a (odious) moral dimension—when seen from within and in the context of modern thought and cultural expectations. I would say that that moral dimension has an absolute quality, but that is a very modern understanding. As a practice, slavery has had an extremely broad application in many, though not all, human societies over long periods of time. One has to look at that experience fully to understand our society and what we may want it, or any society to be. That’s not navel-gazing, any more than studying, say, infanticide, would be, a practice at least as odious by any rational evaluation if at times pragmatic in a triage of needs.

    There has been a moderately large body of literature investigating the economics of slavery. The conclusions are not settled, in part because the debate became a forum for political agendas more than evaluations. I have no special expertise in that, but those interested wouldn’t find it difficult to persue the subject.

    There is a deeper level, however. There is a strong argument, which I happen to accept, that the rebirth of international trade in Europe from 600 AD, both in the North and in the Mediterranean, was essentially leveraged upon the slave trade—by Europeans, of near neighbors and even cultural affines, to non-Europeans for the most part. Because _people_ were the most valuable commodity which could be extracted, by force of course, from the environment. While the economic literature on a related point is less developed, the argument could readily be exteneded to much of the Muslim economy of the Near East 600-1500 CE, and to the economies of Central Asia of the same time. And there have been economic studies of Classical Antiquity suggesting that the slave trade was the fulcrum of trade qua trade; it’s maximum was the maximum of concentrated wealth, and it’s progressive decline led and perhaps significantly precipitated economic decline overall.

    I mention this because the implication is that slavery as a commodity trade has been a principal component of the structure of wealth and economic interaction in urban societies since, well, forever, and shaped may social institutions and cultural values. What changed that dynamic was exactly _and only_ the Industrial Revolution. There is then an hypothesis, not explored but put before us now in some respects, that a _post-_Industrial society might in some respects see a resurgence in ‘slavery in all but name,’ or the at the very least of the legal equivalent of serfdom. People, more specifically the result of their labor, become more of a commodity the less that industry generates more valuable commodities. Economic interaction and wealth concentration largely drive this outcome is how I read the history; racism and objectivication only _follow_ the status, since it justifies, cements, and obscures the crimes of chattelization and greed involved pursued with the most profound sociopathy. Prejudice doesn’t make slavery, slavery makes prejudice—and trade has tended to make slavery where other commodities are few.

    Of course slavery and serfdome, quasi or actual, should and must be opposed. But that will take organization if the bias in society is to devolve to commodification human beings in situations of productive decline. And both that opposition and the organization involved will be better if done with eyes wide open on the human history and potentials for slavery as a practice than done from a stance of moral repugnance alone. We, in countries and skins or relative privilege, have the privilege of moral repugnance whereas landless peasants in Colombia or Mauritania or India who have more direct experience with slavery-in-all-but-name need more than moral repugnance to end slavery. No power makes one vulnerable; ergo, power distribution needs to be changed. We all know that that takes . . . a whole lot more than repugnance.

  4. craazyman

    Oy Vey!

    This dude seems like a nice kid, very intelligent and with a good moral compass.

    But facts? haha. There’s a chicken, egg and an infinite series of rhetorical strategies. which achieve victories that are then called “facts”.

    Yves your best defense against all the nonsense is you never went to one of these graduate programs, where you’d have been sucked in like a leaf in a whirlpool, worshipping all the intellectual glamour. I actually did get accepted at an Ivy League grad econ grad program years ago and I said f–ck it, I’m gonna stay in New York and hit the nightclubs while I work a day job and try to get my sanity under control. In hindsight, I think it was a good decision.

    1. Knut

      The essential (short) book on this topic is Gavin Wright, Slavery and Economic Development (2006). Unlike most writers on the subject, who focus on the labour-relation aspect of slavery, Wright puts property rights in human beings front and center. Slave-owners were as a class the richest group in ante-bellum America. Also, slavery was not confined to cotton and tobacco for technological reasons, but because (and it was a close call), the northwest territories were closed to it by the ordinance of 1787. Even there, there were attempts in Ohio, Indiana, and Illinois to legalize slavery. This is a truly great book.

      1. craazyman

        Indeed, it’s not surprising to me that individuals seek to perpetuate the social cooperation structures that have priviledged them.

        They see such structures as essential for group survival (even the survival of the victims) and then deify the structures as embodiments of a divine justice. This is hilarious, almost. But people are crazy, basically.

        When Jefferson changed the Declaration to read “life, liberty and the pursuit of happiness” from “life, liberty and property” we clearly see the ideational relationship between these two elemental concepts.

        To pursue your own happiness is impossible without possessing yourself. And the notion of property is impossible without the notion of possession.

        So to pursue happiness you must possess yourself, and since a possession cannot be simultaneously owned by two individuals (or it would violate property laws), you cannot pursue happiness unless you are the sole owner of yourself. This clearly is the ideational power behind abolition of slavery.

        The idea of property becomes a complex accelerant of individuation and a form of liberation rather than one of domination. It has a strange dual identity, as do most things.

  5. LAS

    The exciting thing about the proposed research is potentially to establish the temporal order of how slavery ownership evolves. I think it puts the spotlight on those who assert ownership rights and how such right that nature has not in fact bestowed is actually wangled. This research is not disrespectful of minorities, as one respondent suggests.

    Taxing low-wage people who labor at a much greater rate than high-wage capitalists to enforce policies that benefit the high-wage capitalists more than the low-wage laborer is manifest slavery of a sort. This is not just applicable to African American history, but ongoing social policies.

    1. ArmchairRevolutionary

      “Taxing low-wage people who labor at a much greater rate than high-wage capitalists to enforce policies that benefit the high-wage capitalists more than the low-wage laborer is manifest slavery of a sort”

      Call it “Slavery Lite”.

  6. Carla

    I commend to all Douglas Blackmon’s remarkable Pulitizer Prize winning work, “Slavery by Another Name,” subtitled “The Re-Enslavement of Back Americans from the Civil War to World War II.” It is a profoundly important book that taught me more about my country than any other single volume I have ever read.

    The New York Times said of it: “Shocking…Eviscerates one of our schoolchildren’s most basic assumptions: that slavery in America ended with the Civil War.”

    Publisher’s Weekly noted: “Wall Street Journal Bureau Chief Blackmon gives a groundbreaking and disturbing account of a sordid chapter in American history — the lease (essentially the sale) of convicts to ‘commercial interests’ between the end of the nineteenth century and well into the twentieth.”

    Read it NOW, because we are gearing up to do this again.

    1. CMike

      Here’s Blackmon introducing his thesis in a ten minute YouTube clip.

      Blackmon begins reading a passage from his book shortly after the 7:10 mark here in his BookTV presentation from ’08. What’s described at that point is as brutal as any large scale operation that went on in the 1800s.

  7. Farmstead

    Suggest an inquiry into one of the biggest slave importing families in America and the New World.

    Kicked out of Spain by Ferdinand and Isabella, off to Portugal where an expensive Papal indulgence gave them time to set up a large African slave buying empire, slaves traded in the Caribbean for rum, rum to New England,
    buying post Civil War land for centimes on the dollar as carpetbaggers, selling cotton, then agricultural chemicals, then pesticides, now owning seed patents and controlling more and more of our food supply.

    Guess who?

  8. zeev

    this is ludicrous. common sense doesn’t need to be dressed up in a ph.d. or dressed down in tattered hobo rags.

    comparisons to slavery? ARE YOU KIDDING ME? i’m not saying things arent horribly bad for americans and for our chinese vassal slave laborers . but why make a historically invalid comparison that , far worse, will obvious risk alientating MANY people because it is deliberately provocative. you think occupy is benefiting from this? occupy is over. why? as i’ve started saying recently . occupy is over. they had the mantle. it used to be occupy ‘wall street’; meaning they were supposed to be focussed on financial corruption. now it’s just occupy ‘your imagination’ with phd and hippy crap. and occupy this and that. total hogwash. populists do not stand with occupy and i get so tired of the ideologues out there who believe everyone who is populist supports the occupy movement. they don’t.

    eventually a FOCUSSED group with leadership will find a way to grab some power and bring a common sense approach towards punishing the bankers, the war profiteers and the influence peddlers that have destroyed the ability of government to effectively make decisions for the collective good ( socialism at its best ) and to stay out of the market first and foremost by ceasing to dominate the debt markets ( libertarianism at its best).

    both of these are simple focussed common sense approaches to government will be pursued successfully by a populist group that takes up where occupy lost its head.

    1. Richard Kline

      zeev: ” . . . [A] FOCUSSED group with leadership will find a way to grab some power and—” zeev, buddy: the fascist anti-intellectual propertarians are meeting down the hall, you just got the door numbers mixed up. And thanx for letting us know how the inside of your head _really_ works where politics and society are concerned. Power-grabbers want to get [whomever] up against the wall, whereas share-the-wealthers want to knock that wall down. . . . Just in case you were confusing yourself or something. Oh and btw, calling anybody you don’t like a ‘hippie’ isn’t just a prejudicial cop-out, it’s passe. Get yourself some accurate invective if you’re wanting to sling mud—but I’m not worried, you couldn’t hit a standing target by all indications tonight.

  9. F. Beard

    The rich rules over the poor, and the borrower becomes the lender’s slave. Proverbs 22:7

    The biting irony is that we have been enslaved by borrowing our own stolen purchasing power – so-called “credit”.

  10. LeonovaBalletRusse

    The claim to the *right* to private property is a .01% *Blood and Soil* Imperial Specialty, at which the Victorian and Holy Roman Empires excelled. Absolute conquest through genocide was a particularly *British* design in the Americas. Wars and Financial Lebensraum are designed for the expropriation and absolute possession (by *law* of the winners) of property. The *right* to private property is the soul of Feudalism and its derivative, *Bourgeois Capitalism*.

    Now that We the People the 99% are *all serfs now*, shall we think for ourselves, as AGENTS for ourselves, toward a better world in America?

    “THE COURSE OF EMPIRE” by Bernard De Voto, with maps by Erwin Raisz;

    “FRUITS OF MERCHANT CAPITAL: Slavery and Bourgeois Property in the Rise and Expansion of Capitalism” by Elizabeth Fox-Genovese and Eugene D. Genovese;

    “THE MIND OF THE MASTER CLASS: History and Faith in the Southern Slaveholders’ World View” by Elizabeth Fox-Genovese and Eugene D. Genovese;

    “CHIEF JOSEPH of the NEZ PERCE: Who Called Themselves ‘The Real People’ – a poem by Robert Penn Warren;

    “Chief Joseph & the Flight of the Nez Perce: The Untold Story of an American Tragedy” by Kent Nerburn.

    “SONG OF SOLOMON” by Toni Morrison.

    Native Americans, the *Indigenous Peoples* speak in our time:

    “John Trudell, I’m crazy?” (czarwright on Dec 12, 2010);
    “Trudell Documentary” (czarwright on Dec 14, 2010).

    A line of my French ancestors who immigrated to what is now French Canada intermarried with the Micmac tribe of the Algonquin Nation. I carry the mitochondrial DNA of my female Micmac direct ancestor. Our “peaceable kingdom” was destroyed by the murderous *Anglo British Empire* in Canada in the 18th Century, and by Anglo-American Empire in the 20th Century. So I have a very deep stake in the outcome of the Second American Revolution.

    Nevertheless, my Louisiana Colonial ancestors were not innocent of Capitalist Crimes. Become the privileged caste of French Mississippi River Plantation districts, my ancestors depended upon slave labor and indentured servitude to produce cash crops, from indigo to sugar. Although they later left the Plantation Country for New Orleans, they preserved their caste status, in keeping with their Christian Religion (Roman Catholic/Episcopalian, even though a goodly part of our DNA was of the Children of Israel, cryptos and conversos). Growing up in Jim Crow, experiencing the deep goodness of People of Color, I lived in confusion. A voice scholarship to Oberlin Conservatory brought me to reality: my religious convictions vanished, and I came to grips with a lifetime of *genteel racism*. I changed.

    Decades later, I read Toni Morrison’s work, and met her personally. I have read her other works since. She became my model for human dignity.

    In 1997, I felt called to my French Colonial Ancestral homeland, then populated largely by the descendants of slaves from an old family plantation. I felt called to find a way to harmony between the descendants of slave owners and the descendants of slaves. A River Road house there was waiting for me, along with a gated tomb that had not been visited for more than a hundred years. I delved into the community, and ancient family connections that still resided there. I delved into history and genealogy, and saw that they were one and the same. I came to comprehend the power of the Roman Catholic Church to *justify* hypocrisy and self-forgiveness for sins of the past and of the present. My time in Donaldsonville, LA became a period of atonement for the *sins of my fathers*, and myself, which atonement continues today and drives my work.

    Hurricane Katrina ended my life in my *ancestral homeland* in Louisiana. I was delivered to Savannah, to know Anglo-racism, an entrenched genteel racism of a radically different kind. The Black-White divide here is horrifying. To live here is to suffer shame, reminded every day of The American Way.

    Perhaps I shall be delivered back to the land of the MicMac, where I also, like John Trudell, shall become a Native/Indigenous Voice in America, with deep memory of land and life before the Imperial Conquerors came.

    This confession may serve to explain the passion in my comments. This passion is born of the deepest grief. “O my people.”

    1. aletheia33


      all the difficult work you have done, as reported here, and clarity of moral insight you have won could be of great value if you could simply write your story, elaborating on some of what you say here, in an article or book for general readers. i would encourage you to try. you clearly have an unusual, powerful, and interesting story to tell.

      i would like to hear more specifics on the black-white divide in savannah today, as you see/experience it. it is very hard to get information on this if one is not living there and observing it in daily life, or is not in close communication with people who are.

  11. Benedict@Large

    Some fascinating work on property rights has been done by Peruvian economist Hernando de Soto. de Soto’s argument is that indigenous populations are at an extreme disadvantage when confronted well-financed multinationals who seek the use of their traditions lands for various projects (resource extraction, etc.) precisely because they have no recognized legal titling system establishing their claims. Lacking such legal titles, they are denied access to capital markets (which require legal titles as security to the lien); capital which could then be used to defend their claims. No doubt Mr. Suresh has availed himself of de Soto’s work.

    I was thinking of this as I watched this (wonderful) video, and how all of this relates back to the MERS fiasco. In de Soto’s view, a prime reason for the rise of the US as a world financial power was precisely because quite early on we established a VERY strong titling system, which in turn allowed the creation of a very strong banking system which relied upon these titles for their loan activities; farmers to buy their seed, livestock, and the like, industrialists to purchase lands and materials with which to build their factories, home owner aspirants for their long term mortgages, which required an enduring asset as their underlying basis.

    I don’t for a minute believe our political elders have quite grasped the severity of the damage that MERS has done. Millions of titles, many establishing clean chains of possession going back hundreds of years, have now been clouded, and the value of the legal claims over these lands has been significantly diminished. Every single one of these new “owners” have a bona fide claim for monetary damage to their title against whomever claims to hold their liens, and these damage claims cannot be erased by some ex post facto attempt at crafting laws to nullify them. Hopefully, some bright legal eagles will take up these claims en masse, and they will certainly deserve the rich rewards they will receive should they prevail.

    Which brings me back to Mr. Suresh’s work. Surely one’s own body is the most certain “title” one possesses, and if another reaps the benefit of that title while denying that person the fruits that this title might otherwise produce, some sort of legal monetary claim should be justified against the abuser, and, as with all titles, these claims and obligations should be passed to one’s heirs through the generations until resolved.

    This Land Is Your Land: A Conversation with Hernando de Soto, World Policy Institute, Summer, 2011 –

    1. aletheia33

      “property is theft”

      If I were asked to answer the following question: What is slavery? and I should answer in one word, It is murder!, my meaning would be understood at once. No extended argument would be required . . . Why, then, to this other question: What is property? may I not likewise answer, It is robbery!, without the certainty of being misunderstood; the second proposition being no other than a transformation of the first?
      —Pierre-Joseph Proudhon, What is Property?

      Proudhon further explained his use of this phrase:

      In my first memorandum, in a frontal assault upon the established order, I said things like, Property is theft! The intention was to lodge a protest, to highlight, so to speak, the inanity of our institutions. At the time, that was my sole concern. Also, in the memorandum in which I demonstrated that startling proposition using simple arithmetic, I took care to speak out against any communist conclusion. In the System of Economic Contradictions, having recalled and confirmed my initial formula, I added another quite contrary one rooted in considerations of quite another order—a formula that could neither destroy the first proposition nor be demolished by it: Property is freedom. […] In respect of property, as of all economic factors, harm and abuse cannot be dissevered from the good, any more than debit can from asset in double-entry book-keeping. The one necessarily spawns the other. To seek to do away with the abuses of property, is to destroy the thing itself; just as the striking of a debit from an account is tantamount to striking it from the credit record. –Proudhon

      Jacques Pierre Brissot had previously written: “Exclusive property is a robbery in nature.”

      “Tracing the right of property back to its source, one infallibly arrives at usurpation. However, theft is only punished because it violates the right of property; but this right is itself nothing in origin but theft.”
      –Marquis de Sade

      Superfluum quod tenes tu furaris (the superfluous property which you hold you have stolen).
      –St. Ambrose

      “The first man who, having enclosed a piece of ground, bethought himself of saying ‘This is mine,’ and found people simple enough to believe him, was the real founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this imposter; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody.”
      –Jean-Jacques Rousseau

      Source for all:!

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