Tuesday, August 27, 2002

Babble On: The Ten Percent Solution

It's worth spending a few minutes to consider Horowitz's comments on the economic aspects of slavery, since they appear to have touched off a minor firestorm, both from Scoobie Davis' post below, and Horowitz's response.

I should begin by saying that I don't believe Horowitz is a racist, unless you care to use the expanded CRS definition of racism. I also find no small proportion of his work to be thoughtful and well-done (as well as congenial to my political prejudices, so you may take my opinion with a copious helping of salt). However, he is ideologically, or at least emotionally, blinkered on many issues of race, which can lead, on one hand, to terrible misalliances or, on the other, to a tendency to demonize his opponents, no matter their sincerity (his attacks on Randall Robinson being one example). What made his statement on Crossfire so distasteful to many on the left is that it was offered with no context, no doubt misleading many into believing that Horowitz, as he put it sardonically, thinks "slaves should be grateful because food, housing and clothing were provided to them." I don't doubt that Crossfire is not the place to provide nuance or complexity, but Horowitz tried to condense two and a half pages of argument -- already rather condensed -- from his book Uncivil Wars into a single sound bite; an ill-advised tactic.

As for his response: leaving aside for the moment Horowitz's characterization of the contributors here as "post-modern nitwits" (though I don't find any here to be the latter, and neither Scoobie Davis nor the Rittenhouse Review are in any way the former), I should firstly defend the provenance of the quote. It was taken from the CNN transcript of the Crossfire Mr. Horowitz appeared on, and there is no question that Mr. Davis read the entire exchange between Horowitz and reparations advocate Ron Walters. The quote in question reads,

    [T]wo economotricians[sic] won the Nobel Prize for studying slavery and they came up with the figure of 10 percent of a slave's wages were unpaid labor because the slave, after all, got food, clothing and housing.

Horowitz is referring to Robert Fogel and Stanley Engerman, who wrote Time on the Cross, a controversial study of slavery that concluded that the "peculiar institution" was not, as popularly asserted, an economically moribund tradition, but a very efficient (albeit morally repugnant) enterprise.1

In their afterword to the 1989 edition of the book, Fogel and Engerman said they regretted not providing more than a pro forma moral indictment of slavery in TotC, choosing instead to emphasize the purely econometric aspects of their analyses. Horowitz would do well to heed those words; when we seek to change the frame of a debate, it is incumbent upon us to where our views, and those of our intellectual opponents, lie on the new ground. Else, we leave ourselves open to charges of mendacious ommission.

Fogel and Engerman concluded that ~12% of an enslaved American's "wages" (one of the more controversial aspects of Fogel and Engerman's analysis, as noted by such critics as economist Richard Sutch, is the nature and extent of the underlying data used) were expropriated by the slaveholder, with most of the remainder going to subsidize the costs of slave management, and a small percentage appearing as cash or kind payments to slaves (such as artisans). This amounted to an exploitation of around $750 (2002 dollars) over the life of an individual, on a lifetime "income" of around $9000. Fogel and Engerman's analysis and conclusions are far from universally accepted by their peers, but it does no harm in this context to accept them as settled.

When Horowitz quotes TotC but maintains that "slavery was not a very profitable economic system (this is one of the reasons it is no longer with us)," he is either genuinely mistaken, or is being disingenuous. Pace Horowitz, a 10% margin above the cost of free labor -- especially since, as Fogel and Engerman show, slaves were hard workers with an efficiency well above that of small tenant farmers -- is a huge competitive advantage, large enough to keep the moral nightmare of slavery alive well into the life of a nation that was founded on principles utterly opposed to that practice.2

According to the 1860 census, there were approximately four million enslaved Americans. At an average lifetime exploitation of $36 (1860 dollars) per slave, that comes to a total expropriation of $144,000,000, or $2,727,630,589 in current dollars. Of course, there were far more than four million Americans who lived in slavery, and not all of them were enslaved for all their lives due to Emancipation, but this suggests that the amount of money under discussion is not, as Horowitz seems to suggest, a trivial value. An Economist article from earlier this year provided these numbers:

    Robert Fogel ... estimates that from 1780 to 1860 slaves in America were paid (in food, shelter and other basics) about 10 percent less than free workers got for similar jobs. He calculates that slaves' expropriated wages would have totalled US$24 billion in 1860. Compound interest over 142 years at an interest rate of three percent a year would take the total bill for reparations to US$1.6 trillion. At six percent, the bill would balloon to US$97 trillion, nine times the size of the US economy.

There are many reasons to assume that these figures should be amended over the long term -- for example, roughly half of the value of Southern investments was lost during and immediately after the Civil War -- but no matter how we slice the numbers, there are some very large dollar values at stake. As well, the ~12% figure doesn't take into account other losses, such as the potential economic loss of income suffered by individuals who are unable to receive training, choose their occupation, change locations, or bargain for their wages.

It's not my intention to debate reparations in this space and, were I to do so, I would be arguing against N'COBRA, not Horowitz, but there are certainly some serious objections to be raised against his selective use of TotC.

During Crossfire, Horowitz also went on to say the following:

    Now, you and I ... pay -- 30 percent or 40 percent of our labor is unpaid because it goes to the federal government.

This argument was tendentious and unconvincing when Fogel and Engerman first advanced it, and they did so with qualifications that Horowitz did not provide. Such a statement implies a moral equivalence between the economic exploitation of slavery and the tax system of a free nation. There are two primary arguments against this statement.

First, taxes are not appropriated for personal use by government agents, but for provision of public services, including, of course, the common defense. The ~12% expropriation over free wages suffered by enslaved Americans went to subsidize the European consumers of Southern cotton and tobacco and, to a lesser degree, the lifestyles of slaveowning planters.3

Second, though none of us enjoy paying taxes, and virtually everyone disagrees with at least some small part of government expenditures, the point remains that, as a democracy, we have recourse to the polls to lower our taxes and change our national spending. Taxes are, at a very high level, a voluntary enterprise. Slaves had no such freedom, of course, and one doubts that anyone would take slavery with a 10% expropriation over freedom with a 30% tax rate.

1 Fogel was awarded the Nobel Prize with Douglass North; Engerman is not a Nobel laureate. This does not in any way minimize Engerman's contributions; he is a respected and prolific member of the Academy, most recently co-editing a sourcebook on slavery for Oxford University Press.
2 This is in stark contrast to the British slave system in the West Indies, which was an economic failure by the British emancipation in the 1830s. The British system suffered from extremely high slave mortality rates, necessitating constant importation of slaves from Africa (unlike the American system -- most enslaved Americans were, in fact, Americans, not forced immigrants). The production of sugar cane in the Louisiana Purchase states also drove down the import of sugar, molassas, and rum from the islands, crippling the plantations' export revenues. Slaveholders and their investors were losing money, and emancipation was seen as a way to recoup some of their investments.

One point that I have never seen brought up by either side in the reparations debate is that America, unlike other nations, did not compensate slaveowners for their freed "property." Indeed, had the debate in America gone the way it had in Britain, it's possible that Emancipation would have been held a violation of the takings clause.
3 The Southern commodities trade was a competitive business, and any lowered margin due to slavery primarily went to benefit the consumers. In a sense, the long history of slavery was a coordination game; no slaveowner could free his slaves without suffering lowered competitiveness in the marketplace but, had emancipation been carried out peacefully, the slaveholders, as primary providers of their products to the world, would have suffered a much slighter dislocation.

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