Were slave plantations economically superior or inferior to plantations with paid labor?

Question

According to certain Marxist authors (Mostly Georgi Plekhanov (and some others), but I'm afraid I cannot quote because the text is not in electronic form and not in English.), slavery in US and latter in South America did not disappear because of enlightenment and abolitionist movements ("spiritual" reasons). Instead, there were purely materialistic (technological and economic) causes that made slavery non-profitable and obsolete. This economic pressure resulted not only in abolitionist movement, but also created rift in society, big enough to cause US civil war.

My question is are there any reliable economic data about profitability of slave plantations on one side, and plantations with payed labor on other side, immediately before and after US civil war. Slave plantations certainly had advantage of unpaid labor, but also had to feed, house and clothe slaves. Also, slaves had no incentive to work harder except for fear of physical punishment. On the other hand free paid workers had to earn money to take care of themselves and their families, so they were better motivated to work harder.

EDIT Upon request, I will add some quotes about Marxists perspective on US civil war . This is recurring theme in Marxist literature, it basically says that slavery was obsolete, and that Southern slave owning ruling class tried to protect their vanning influence by secession. On the other hand Northern capitalist ruling class wanted to convert whole US territory to their economic model.

From Marx himself :

The cultivation of the Southern export articles, cotton, tobacco, sugar, etc., carried on by slaves, is only renumerative as long as it is conducted with large gangs of slaves, on a mass scale and on wide expanses of a naturally fertile soil, which requires only simple labor. Intensive cultivation, which depends less on fertility of the soil than on investment of capital, intelligence and energy of labor, is contrary to the nature of slavery.

Also this :

[T]he number of actual slaveholders in the South of the Union does not amount to more than 300,000, a narrow oligarchy that is confronted with many millions of so-called poor whites, whose numbers have been constantly growing through concentration of landed property and whose condition is only to be compared with that of the Roman plebeians in the period of Rome’s extreme decline. Only by acquisition and the prospect of acquisition of new Territories, as well as by filibustering expeditions [i.e. conquests of other lands, such as in Central America—ISR], is it possible to square the interests of these “poor whites” with those of the slaveholders, to give their restless thirst for action a harmless direction and to tame them with the prospect of one day becoming slaveholders themselves.

A strict confinement of slavery within its old terrain, therefore, was bound according to economic law to lead to its gradual extinction, in the political sphere to annihilate the hegemony that the slave states exercised through the Senate, and finally to expose the slaveholding oligarchy within its own states to threatening perils from the “poor whites.” In accordance with the principle that any further extension of slave Territories was to be prohibited by law, the Republicans therefore attacked the rule of the slaveholders at its root. The Republican election victory was accordingly bound to lead to open struggle between North and South. And this election victory, as already mentioned, was itself conditioned by the split in the Democratic camp.

But Marx was also critical about motivations of Northern capitalists

As a slave, the worker has exchange value, a value; as a free wage-worker he has no value; it is rather his power of disposing of his labor, effected by exchange with him which has value. It is not he who stands towards the capitalist as exchange value, but the capitalist towards him. His valuelessness and devaluation is the presupposition of capital precondition of free labor in general.27 In slave-labor, even that part of the working-day in which the slave is only replacing the value of his own means of existence, in which, therefore, in fact, he works for himself alone, appears as labor for his master. All the slave's labor appears as unpaid labor. In wage-labor, on the contrary, even surplus labor, or unpaid labor, appears as paid. There the property-relation conceals the labor of the slave for himself; here the money-relation conceals the unrequited labor of the wage-laborer.28

Finally, even today socialists and left-leaning authors then to hold US civil war as a conflict between ruling classes primarily concerned about profit, not ethics:

From a Marxist perspective, here is the true cause of the main stage of the American Civil War. The Union, or the North, had developed an economy based on wage slavery; whereas, the Confederacy, or the South, had retained chattel slavery. These two economic system were both subdivisions of Capitalist economics, or the private ownership of the means of production. Theoretically, it is impossible for these two subsystems to coexist peacefully in any economy; so, an ultimate conflict to determine the future of capitalist production was inevitable. The remainder of the circumstances are naturally absorbed by this reality.

Answer 1

“My question is are there any reliable economic data about profitability of slave plantations on one side, and plantations with payed labor on other side, immediately before and after US civil war”

I don’t think there are some direct data to compare, because slave plantations ceased to exist immediately after Civil War, and I am not aware of significant number of plantations with payed labor before Civil War . However, I think that in general antebellum South slave plantations were more profitable - otherwise planters would sell or free majority of their slaves and hire laborers (who could be the same former slaves).

Generally speaking, slave labor could be more profitable comparing with other types of labor within some technology level boundaries. It is not profitable to own slaves if they can not produce significantly more than they consume themselves; it could be more profitable to hire skilled worker to operate complicated machinery than invest in training of the slave. In between, slavery could be more profitable than alternative. By the mid-XIX century technology was high enough to make payed labor more profitable. However, the were some loopholes, and the huge one was raw cotton production in US South after cotton gin introduction.

According to “Time on the Cross: The Economics of American Negro Slavery “ by Robert Fogel (Nobel Laureate in economics) and Stanley Engerman, South plantations were about 20-30% more profitable than free labor farms on both North and South (don’t have this book on hand and can not quote exect pages and numbers).

Antebellum plantation slave labor profitability depended on specific crop, on market demand, and on market competition. It is why american raw cotton dominated world market and constituted huge majority of US exports, while american raw sugar was predominantly consumed on the South, could not compete with better and less expensive caribbean sugar on international market, and was barely profitable only due to protectionists 24% tariffs.

“Federal protection was a lifeline for an industry that could not openly compete with its rivals in the Caribbean. The sugar duty guaranteed reasonably good profits of 6 to 12 percent and offset the notoriously heavy cost of cane sugar production” The Fair Trade Fraud, by James Bovard, NY 1991, ISBN 0-312-06193-5, Page 71

It is due to high cotton profitability planters sometimes preferred to buy other agriculture products from North rather than divert slave labor and soil:

“the chief articles imported are bacon and mules from the Northern States. The only article sold is cotton” North America, its agriculture and climate, by Robert Russell, Edinburgh 1857, p. 289-291

It is because cotton profitability due to huge demand by industrial development, Southern morality turned from labeling slavery as necessary evil to praising it as positive good. It is why three biggest US protestant denominations were split on southern and northern branches between cotton gin introduction and secession. “The prevailing ideas entertained by him (Thomas Jefferson) and most of the leading statesmen at the time of the formation of the old constitution, were that the enslavement of the African was in violation of the laws of nature; that it was wrong in principle, socially, morally, and politically. It was an evil they knew not well how to deal with, but the general opinion of the men of that day was that, somehow or other in the order of Providence, the institution would be evanescent and pass away. This idea, though not incorporated in the constitution, was the prevailing idea at that time... Those ideas, however, were fundamentally wrong” Alexander H. Stephens, “Cornerсtone Speech", March 21, 1861

“Finally, even today socialists and left-leaning authors then to hold US civil war as a conflict between ruling classes primarily concerned about profit, not ethics: From a Marxist perspective, here is the true cause of the main stage of the American Civil War. The Union, or the North, had developed an economy based on wage slavery; whereas, the Confederacy, or the South, had retained chattel slavery. These two economic system were both subdivisions of Capitalist economics, or the private ownership of the means of production. Theoretically, it is impossible for these two subsystems to coexist peacefully in any economy; so, an ultimate conflict to determine the future of capitalist production was inevitable”

I don't think this is correct. Conflict was not about profit: slave South and manufacturing North were mutually profitable, and could still profitable until demand on cotton was high and cotton harvesting was not mechanized (both middle of XX century)**. So from economics point of view, they could coexist peacefully for a long time. The problem was political: most ambitious southerners wanted to control not just their plantations, but whole country, and it did not work anymore.

** Table 3, pages 6-8, of following source http://www2.census.gov/prod2/decennial/documents/17862820-1969ch01.pdf https://livinghistoryfarm.org/farminginthe50s/machines_15.html

UPDATE After reading comments, I would like to clarify the last point of my answer, that the immediate problem planters were going to solve by trying to expand slavery and by subsequent secession was not economical but mostly political. In 1787, they did not want to join the Union until 2/3 clause granted them preferential treatment in House and presidential elections. By 1860 all this was lost, so they did not want to stay in the same Union being hopeless minority in all branches of government. It is why they insisted on slavery expantion to territories, hoping that new slave states would give them if not majority, but at least parity in Senate.

Answer 2

In this course taught by David Blight, he explains that slavery was extremely profitable.

EDIT Per comments, Blight explains that slavery was profitable enough to warrant, among other things: 1) a free soil political movement in the North and 2) a willingness, in the South, to secede from from the Union and engage in a brutal civil war.

I don’t remember the micro economics of plantations, but slaves were valuable. This value derived from their economic value (as opposed to simply luxury or status).

https://itunes.apple.com/us/course/the-civil-war-and-reconstruction-era-1845-1877/id733019681

Answer 3

The Romans (well, a few stoic philosophers at least) already knew slavery was economically unsound. A slave needs to be housed, cared for, fed, medicated and supervised. Also during the hours the slave doesn't work. (Being sick, sleeping or whatever.) No matter if you manage them poorly or generously. Nobody likes to be a slave, it's quite common to work as little as possible. Hence the myth of lazy and stupid Africans. They weren't lazy or stupid, but appearing that way saved them a few lashes.

Hiring non slaves is initially more expensive, but you don't have to pay for housing, caring, feeding and medicating. You do have to supervise your employees, but no where near the level you need for slaves. You only pay them for the time you use them. How to keep themselves alive is their problem.

I agree that a lot depends on specific circumstances, but compare it with a modern taxi. Per km driven far more expensive than owning a car. If you consider all costs of a car (parking in a garage, insurance, maintenance, etc.) it's cheaper than owning a car. You only pay per km you actually are driven.

Answer 4

My question is are there any reliable economic data about profitability of slave plantations on one side, and plantations with payed labor on other side, immediately before and after US civil war.

This has been a basic question debated by economic historians of the US for decades. There is a lot of complexity to this literature (including math I do not understand) but the general consensus seems to be that, yes, the production of cotton with chattel slaves was highly profitable in the late antebellum period. See for example Conrad and Meyer (1958), Yasuba (1961), Woodman (1963), Foust and Swan (1970), Vedder and Stockdale (1975), Smith (1999).

Note that this does not contradict Marx's observation that slave-based agriculture was profitable under very specific conditions and not viable for all crops and enterprises. One of these basic conditions was Westward expansion, providing access to large tracts of virgin soil, which was approaching its limit. What the Marxist perspective emphasizes is the totality of material relations--not the relative profitability of individual farms with different production relations. The real question posed there is not whether slave plantations were profitable, but whether slavery as a system was compatible with the larger system of capitalist development which many (e.g. Post 2003) argue it wasn't.

Answer 5

From Democracy in America by Alexis de Tocqueville, 1848.

The first negroes were imported into Virginia about the year 1621. In America, therefore, as well as in the rest of the globe, slavery originated in the south. Thence it spread from one settlement to another; but the number of slaves diminished toward the northern states, and the negro population was always very limited in New England.

A century had scarcely elapsed since the foundation of the colonies, when the attention of the planters was struck by the extraordinary fact, that the provinces which were comparatively destitute of slaves, increased in population, in wealth, and in prosperity, more rapidly than those which contained the greatest number of negroes. In the former, however, the inhabitants were obliged to cultivate the soil themselves, or by hired labourers; in the latter, they were furnished with hands for which they paid no wages; yet, although labour and expense were on the one side, and ease with economy on the other, the former were in possession of the most advantageous system.

This consequence seemed to be the more difficult to explain, since the settlers, who all belonged to the same European race, had the same habits, the same result recurred at every step; and in general, the colonies in which there were no slaves became more populous and more rich than those in which slavery flourished. The more progress was made, the more was it shown that slavery, which is so cruel to the slave, is prejudicial to the master.

But this truth was most satisfactorily demonstrated when civilization reached the banks of the Ohio. The stream which the Indians had distinguished by the name of Ohio, or Beautiful river, waters one of the most magnificent valleys which have ever been made the abode of man. Undulating lands extend upon both shores of the Ohio, whose soil affords inexhaustible treasures to the labourer; on either bank the air is wholesome and the climate mild; and each of them forms the extreme frontier of a vast state: that which follows the numerous windings of the Ohio upon the left is called Kentucky; that upon the right beare the name of the river. These two states only differ in a single respect; Kentucky has admitted slavery, but the state of Ohio has prohibited the existence of slaves within its borders.

Thus the traveller who floats down the current of the Ohio, to the spot where that river falls into the Mississippi, may be said to sail between liberty and servitude; and a transient inspection of the surrounding objects will convince him which of the two is most favourable to mankind.

Upon the left bank of the stream the population is rare; from time to time one descries a troop of slaves loitering in the half-desert fields; the primeval forest recurs at every turn; society seems to be asleep, man to be idle, and nature alone offers a scene of activity and of life.

From the right bank, on the contrary, a confused hum is heard, which proclaims the presence of industry; the fields are covered with abundant harvests; the elegance of the dwellings announces the taste and activity of the labourer; and man appears to be in the enjoyment of that wealth and contentment which are the reward of labour.

The activity of Ohio is not confined to individuals, but the undertakings of the state are surprisingly great: a canal has been established between Lake Erie and the Ohio, by means of which the valley of the Mississippi communicates with the river of the north, and the European commodities with arrive at New York, may be forwarded by water to New Orleans across five hundred leagues of continent.

The state of Kentucky was founded in 1775, the state of Ohio only twelve years later; but twelve years are more in America than half a century in Europe, and, at the present day, the population of Ohio exceeds that of Kentucky by 250,000 souls. These opposite consequences of slavery and freedom may readily be understood; and they suffice to explain many of the differences which we remark between the civilization of antiquity and that of our own time.

Upon the left bank of the Ohio labour is confounded with the idea of slavery, upon the right bank it is identified with that of prosperity and improvement; on the one side it is degraded, on the other it is honoured; on the former territory no white labourers can be found, for they would be afraid of assimilating themselves to the negroes; on the latter no one is idle, for the white population extends its activity and its intelligence to every kind of employment. Thus the men whose task it is to cultivate the rich soil of Kentucky are ignorant and lukewarm; while those who are active and enlightened either do nothing, or pass over into the state of Ohio, where they may work without dishonour.

It is true that in Kentucky the planters are not obliged to pay wages to the slaves whom they employ; but they derive small profits from their labour, while the wages paid to free workmen would be returned with interest in the value of their services. The free workman is paid, but he does his work quicker than the slave; and rapidity of execution is one of the great elements of economy. The white sells his services, but they are only purchased at the times at which they may be useful; the black can claim no remuneration for his toil, but the expense of his maintenance is perpetual; he must be supported in his old age as well as in the prime of manhood, in his profitless infancy as well as in the productive years of youth.

Payment must equally be made in order to obtain the services of either class of men; the free workman receives his wages in money; the slave in education, in food, in care, and in clothing. The money which a master spends in the maintenance of his slaves, goes gradually and in detail, so that it is scarcely perceived; the salary of the free workman is paid in a round sum, which appears only to enrich the individual who receives it; but in the end the slave has cost more than the free servant, and his labour is less productive.

The influence of slavery extends still farther; it affects the character of the master, and imparts a peculiar tendency to his ideas and his tastes. Upon both banks of the Ohio, the character of the inhabitants is enterprising and energetic; but this vigour is very differently exercised in the two states. The white inhabitant of Ohio, who is obliged to subsist by his own exertions, regards temporal prosperity as the principal aim of his existence; and as the country which he occupies presents inexhaustible resources to his industry, and ever-varying lures to his activity, his acquisitive ardour surpasses the ordinary limits of human cupidity: he is tormented by the desire of wealth, and he boldly enters upon every path which fortune opens to him; he becomes a sailor, pioneer, an artisan, or a labourer, with the same indifference, and he supports, with equal constancy, the fatigues and the dangers incidental to these various professions; the resources of his intelligence are astonishing, and his avidity in the pursuit of gain amounts to a species of heroism.

Tocqueville, Alexis de. Democracy in America. Pratt, Woodford. 1848.