Firm Labor Choices in America before the Civil War: A Simple Model

Posted: 15 Apr 2007

See all articles by Robert E. Wright

Robert E. Wright

American Institute for Economic Research

Date Written: April 13, 2007

Abstract

Early American firms ranging from farms to factories compared the relative advantages and disadvantages of each of the major types of laborer - family, wage, indentured, and slave - available to them. Major variables of comparison included the total productivity, liquidity or availability, cost of control, and cost of hypocrisy of each labor type. Outcomes varied over time, place, and context. In general, slaves were preferred in warmer climes, where work could be organized in gangs, or where slavery was already prevalent. Indentured servants were preferred in northern climes, where some skills were required, or where slavery was uncommon or viewed critically. In northern latitudes, where labor markets were liquid, in roles where skill or education requirements were high, or where slavery was uncommon or considered hypocritical, firms preferred wage laborers.

Keywords: slaves, slavery, wage laborers, wage labor, economic history

JEL Classification: N31, J40

Suggested Citation

Wright, Robert Eric, Firm Labor Choices in America before the Civil War: A Simple Model (April 13, 2007). Available at SSRN: https://ssrn.com/abstract=980351

Robert Eric Wright (Contact Author)

American Institute for Economic Research ( email )

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Great Barrington, MA 01230
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