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Ep. 81 Jeffrey Rogers Hummel on the Economics of Slavery and Why the Confederate States Lost the Civil War

Jeffrey Rogers Hummel joins Bob for an in-depth discussion of the economics of slavery, touching on subtleties such as the labor/leisure tradeoff, and the recent claims by some historians that slavery was efficient. Then Bob asks Hummel to explain the provocative claim in his book, that the Confederacy would have done much better militarily if it had used the same guerrilla warfare tactics that the American colonists had used against the British.

Mentioned in the Episode and Other Links of Interest:

The audio production for this episode was provided by Podsworth Media.

About the author, Robert

Christian and economist, Research Assistant Professor with the Free Market Institute at Texas Tech, Senior Fellow with the Mises Institute, and co-host with Tom Woods of the podcast "Contra Krugman."

5 Comments

  1. Ohad Osterreicher on 12/02/2019 at 4:01 PM

    Fantastic episode! Very informative and nuanced. Get that guy on your show more often!

  2. Danan on 12/02/2019 at 8:40 PM

    Regarding the per capita income discussion, I think his point was something like this:

    Northern per capita output was equal to total Southern output per free man.

    If we are to assume Northern and Southern free men were equally as productive, slaves must have produced zero output. That obviously wasn’t the case. Which means Southern whites had lower productivity (but not necessarily income) than Notherners, due to the systematic deadweight-loss of the slave economy.

    For something completely different, is there an Austrian critique to Keen’s Debunking Economics? I’ve seen someone make the curious claim that supply functions are bunk, because (most) companies would sell way more quantity at given market prices. There’s only the demand constraint in that view. Is that at all a justified critique? I have to admit it’s a bit baffling. I suppose the answer is that aggregate supply functions work differently from individual firm concerns.

    • Ohad Osterreicher on 12/05/2019 at 3:44 PM

      I believe Bob wrote a review of that book and it was mostly negative.

    • Bob Murphy on 12/06/2019 at 3:11 AM

      Yep, Gene Callahan and I have a review of that book in the Review of Austrian Economics.

    • LP on 12/07/2019 at 7:58 AM

      Regarding your question on supply functions, it is not the case generally that companies would happily sell “way more” quantity if only there was demand for it. The situation, however, is complex.

      Consider that we normally would expect the worth of the marginal unit of a good to go down as more units are acquired, and to go up as more units are sold. So why do companies offer bulk discounts? That would at first glance seem to disprove the law of decreasing marginal worth, but the answer lies in fixed and marginal costs. I won’t go into detail here, just want to point out the complexities involved in supply chain management. Also note that companies do often charge a higher price for the (N+1)th unit of a good than for the Nth unit. For social, legal, and technical reasons, this is typically done through coupons or “sales”, and the goal is to encourage customers to visit a store without buying more than the supply chain can handle. And now we get to where companies generally don’t want to exceed their sales forecast by too much.

      Transportation and other logistics costs can easily skyrocket under sudden stress, which can substantially reduce the per-unit profit made (even push it negative). Yet faced with increased demand, companies generally must try their best to meet that demand, else their competition will gain market *and mind* share, which can hurt for years into the future. Not to mention the possibility for quality control slipping or bad press from shortages or any of a number of other PR problems.

      Yes, in the abstract, essentially all companies would love higher demand, if they could meet it, and the higher profits that would come with meeting the increased demand. It’s also easy to say “this factory is only running at 80% capacity, if there were more demand it would run at 100%, that 80% is inefficient”. But that neglects the utilization of associated resources, one (or several) of which would likely push the cost higher in a Pareto-like scale.

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