Session 1Supply and Demand in the Labor Market
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Case Study 5.1e "The Economics of the Slave Trade"

Directions: Complete the following case study and record your answers on a separate sheet of paper.

Topic: The economic motivation for immigration to the United States. A brief history of recent immigration laws is included.

Objective: Understand the reason for and issues around immigration to the United States. Recognize the changes to the immigration laws in the United States.

Key Terms: slavery American Civil War
labor supply curve Industrial Revolution
positive incentive negative incentive
 
Careers: historian economist
 
Web Site Links: http://www.nationalgeographic.com/features/99/railroad/ [this site offers an interactive journey through the history of the Underground Railroad]
http://www.loc.gov/rr/print/082_slave.html
http://www.lib.lsu.edu/cwc/BeyondFaceValue/images/index.htm
 

Case Study:

The transatlantic African slave trade began in the 1440s and became one of the most significant businesses of the 17th and 18th centuries. It is estimated that over 30 million Africans were kidnapped (some estimates are as high as 200 million) and sold or traded as slaves prior to the Congressional ban in 1808. The slave trade was a holocaust of the African people. West and Central Africa suffered the greatest impact. However, the slave trade affected the entire continent.

Domestic slavery occurred in Africa prior to the arrival of the Europeans. Africans were captured or bought by Arabs and transported for use as slave labor in the Mediterranean and Near East. Europeans, specifically the Portuguese, first landed in Africa in the 1440s. In 1441 ten Africans were captured and brought to Portugal as gifts to Prince Henry the Navigator. This was the beginning of the European slave trade. The Portuguese monopoly of the European slave trade ended in the 16th century when England and France became heavily involved.

CS Question #1: How did the European slave trade begin?


African rulers, traders and members of the aristocracy sold slaves for profit. They kidnapped other Africans or sold prisoners of war. The desire for Western goods and technology motivated many traders, while others were motivated by the sheer act of war. The main reason that Africans participated in selling slaves was to acquire money and power; like Europeans, they were motivated by greed.

Prior to 1820, an estimated four to five Africans were brought to the New World for every one European immigrant. Between 1701 and 1810, the estimated import distribution of slaves was as follows:

South America 49 percent
Caribbean Islands 42 percent
British North America 7 percent
Central America 2 percent

By 1860 the slave population of the southern United States was 3.84 million - 53 percent of the entire population of the South. The slave trade was abolished in 1808. But the institution of slavery was still active. Children were born into slavery. By the beginning of the American Revolution, an estimated 20 percent of American slaves were African-born, the other 80 percent were American-born. Slavery was not completely abolished in the United States until after the Civil War. In 1868 the Fourteenth Amendment to the Constitution of the United States made legal the citizenship of former slaves.

CS Question #2: What were some reasons that Africans would have willingly participated in the slave trade?


The growing importance and exploitation of the New World caused a dramatic increase in the demand for slave labor.Christopher Columbus had "discovered" the West Indies for Europe. African slaves were brought to the New World to supplement the forced labor of West Indians who had been conquered by the Spanish conquistadors.This began the triangular trade between Africa, Europe and the New World. It was known as the transatlantic slave trade for the Atlantic Ocean that linked the continents.

The New World (including North America) offered land: a new wealthy supply of natural resources. Europe had the capital to take advantage of the opportunity the New World presented, but it lacked the labor. The slave trade provided the necessary labor to cultivate the agricultural crops of sugar, tobacco and cotton, as well as the mining of gold and other metals . These commodities led to the development of new industries in finance, insurance and the processing of raw materials. The slave trade, new commodities and new industries, combined with the opening up of the Atlantic, allowed Europe to transition into capitalism. It created commercial empires and eventually led to the Industrial Revolution.

The slave trade also provided economic opportunities to immigrants who settled in the New World. Plantation owners and pioneers of new industry achieved financial successes. The United States became wealthy in its own right.

CS Question #3: How did slave labor, as a factor of production, increase profits?


Because slaves were not given an income, slave owners used both positive and negative incentives to get them to work. Positive incentives included extra food rations, managerial positions and emancipation from slavery. Negative incentives included whipping, food deprivation, public humiliation and solitary confinement. For individuals today, their labor supply curve is based on how wage rate affects their trade-off between labor to leisure. For a slave, the labor provided was based on the slave's need to avoid pain and suffering and to work for the small but necessary positive incentives like food and freedom.

Another factor of slave labor is the intensity of work. In a free labor market, the employers' desire to speed up or intensify the work of their employees is usually successful with a positive incentive, whether monetary or non-monetary. Employees will not work harder than they are being paid to. Because employees are part of a competitive market, they have the option to leave an employer who is making unreasonable demands. This is not true of slave labor; there is no option to leave. Therefore, slave labor can be pushed or driven beyond a normal capacity - hence the term "slave-driving". Because of this, the average slave was more efficient and hard-working than his or her free counterpart.

CS Question #4: In terms of the labor supply curve, what is the difference between slave and free labor?


Further Thought:
1. Brainstorm other ways the labor shortage in the New World might have been solved. Provide at least two ideas.
2. Some people feel that the wealth of the United States was built on the backs of slave labor. Write a paragraph in response to that statement.
3. The transatlantic slave trade is an example of a conflict between morality and economic greed. Can you think of a present-day example of this same conflict?

 

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©2000, JELD-WEN, inc. Thinking Economics is a trademark of JELD-WEN, inc. Klamath Falls, OR