Prosperity and tolerance

Of late I’ve seen more discussion on the idea that slavery made America prosperous. That got me to thinking about the link between slavery, intolerance, bigotry in general, and economic prosperity.My conclusion is these vices increase poverty, not prosperity. While some individual slave-owners prospered, most people were harmed, even those who were never slaves. The slave states economically lagged behind non-slave states. In fact, one legacy of slavery is that those regions of America remain economically behind the rest of the country today, a century and a half after the abolition of slavery.

In 1837, the United States had 13 slave states and 13 free states. What is the long term legacy of slavery in those states today? The average poverty rate for the entire country is 12.3% using 2017 data. The 13 slave states have a higher than average poverty rate (15.15%) while the 13 free states have a lower average poverty rate (11.75%).

Slavery didn’t just increase poverty for the enslaved, it did so for non-slave holding whites as well. Slavery, basically, was a transfer of wealth from blacks and poor whites to wealthy slave-holders — who controlled the levers of powers in the American South although they made up a minority of the population. In the slave states—with about one third of the nation’s population—slaves were owned by 4.9% of individuals, including some 20,000 slaves owned by free blacks — Historian Henry Gates Jr. of Harvard found some 3,776 black slave owners owned almost 13,000 slaves in 1830.

Even if slavery was a benefit to some people, it wasn’t to the vast majority of the population and couldn’t be — they lived in areas without slavery. More importantly those regions had higher economic output then and still do. It is no coincidence, even now, that the regions of the world which allow slavery are among the poorest areas on the planet.

Keri Leigh Merritt, author of Masterless Men: Poor Whites and Slavery in the Antebellum South (Cambridge University Press) wrote, “While the consequences were certainly far more severe and sustained for black Americans, it is important to recognize that the economic repercussions of slavery also greatly affected lower-class whites.”

She argues that with increased slave-holding, “…In the 1840s and 1850s, the need for white laborers in the American South was drastically reduced, creating a large underclass who were unemployed or underemployed. These landless poor whites simply could not compete — for jobs or living wages — with profitable slave labor. Though impoverished whites were never subjected to the daily violence and degrading humiliations of racial slavery, they did suffer tangible socio-economic consequences as a result of living in a slave society. These ‘masterless’ men and women threatened the existing Southern hierarchy and ultimately helped push Southern slaveholders toward secession and civil war.”

Slavery is the ultimate form of intolerance which history shows increases poverty. Economic studies show those areas of Europe that suffered anti-Jewish pogroms are, to this day, economically behind areas that didn’t. A study out of Yale, Distrust in Finance Lingers: Jewish Persecution and Households Investments concludes, “the persecution of minorities reduces not only the long-term wealth of the persecuted but of the persecutors as well”.

Treating entire classes of people badly promotes poverty not prosperity. The Williams Institute at the UCLA School of Law published The Relationship between LGBT Inclusion and Economic Development, which indicates a direct link between social tolerance of LGBT individuals and economic development: 

“We do not draw a firm conclusion of the direction of the causal link, that is, whether more rights cause higher levels of development or whether more developed countries tend to have more rights. The theoretical perspectives suggest that both directions are likely at work.”

Sociological Science published a paper by Prof. Devah Pager of Harvard’s Sociology department, Are Firms That Discriminate More Likely to Go out of Business? Ms. Pager wanted to test Gary Becker’s well-known claim that competitive markets tend to reduce discrimination by driving intolerant employers out of business. She concluded “employers who engage in hiring discrimination are less likely to remain in business six years later”. She agreed with the conclusion of economist Kenneth Arrow, “In the long run… only the least discriminatory firms survive”.

This is true in regards to the treatment of women as well, something tackled in “Market Forces and Sex Discrimination”, (Journal of Human Resources). Pager summarised the findings “Using cross-sectional data on manufacturing plants and their workers, the authors find that plants that employ a higher percentage of women are more profitable.”

Prof. Deirdre McCloskey encapsulated the truth about social and economic liberalism — in the classical sense:

“The virtue of liberty did matter. The magic world is liberalism, the liberalism of Adam Smith and Mary Wollstonecraft and Henry David Thoreau. The explosion of ingenuity after 1800 came from the gradual inspiriting of millions of liberated people to have a go. Thoreau ran his father’s pencil factory, and made it flourish. Liberalism liberated first poor white men, then, yes, former slaves, then women, then immigrants, then colonial people, then gays. Liberation and innovation dance together.”

Greater tolerance and economic freedom go hand in hand.

James Peron is the president of the Moorfield Storey Institute and author of several books including Exploding Population Myths and The Liberal Tide. The views expressed in this article are those of the author and not necessarily those of the Free Market Foundation.

Help FMF promote the rule of law, personal liberty, and economic freedom become an individual member / donor HERE ... become a corporate member / donor HERE