Category Archives: Servitude in Modern Times

Slavery as a legitimate economic stage in our primitive past.

Escaping Tax Serfdom

Two things free men from predatory taxation either by feudal lords or the state. First is their mobility, i.e., the unfettered right to move around from job to job, from location to location, from one political jurisdiction to another.

Second is laissez-faire capitalism regarding the employer-"lords," and the smallness and huge number and variety of these jurisdictions regarding the state.

I believe the state is necessary, but local governments are also fully sufficient for practically all the essential public services.

Large states are an abomination and must all be destroyed.

A Path from Slavery to Serfdom

Bush notes that "within Spanish America, large numbers of slaves worked for wages, the result of the common practice of hiring out slave labor, the wages earned being shared between master and slave." (Servitude in Modern Times, 79)

Again, "another escape lay in the capability of slaves to pay the manumission price -- the result of being able to earn money on their own account, thanks to the practice of hiring them out for wages, and because of the high proportion of slaves who were skilled craftsmen." (80)

But this is just another way of saying that such slaves were not slaves at all; instead, they were feudal tax-serfs! The spectacular advantage of this arrangement to the master was that he no longer needed to worry that the slave would conceal his talents, feign stupidity, malinger, or perform only the absolute minimum required. How much better to let the (former) slave take full control of his own advancement and simply tax his wages! The master would earn more money, if technology and even economy had progressed so far that free labor was then inherently more productive than slave labor.

Mises put it this way:

The slave has no interest in exerting himself fully. He works only as much and as zealously as is necessary to escape the punishment attaching to failure to perform the minimum.

The free worker, on the other hand, knows that the more his labor accomplishes, the more he will be paid. He exerts himself to the full in order to raise his income.

One has only to compare the demands placed on the worker by the tending of a modern tractor with the relatively small expenditure of intelligence, strength, and industry that just two generations ago was deemed sufficient for the enthralled ploughmen of Russia.

Only free labor can accomplish what must be demanded of the modern industrial worker.

At some point the serf might accumulate enough wealth to be able to pay a lump sum for his freedom. The lord would be careful to calculate the expected discounted sum of his tax revenues from the serf over the latter's lifetime and set the price of full freedom to that. The serf, on the other hand, might have secret entrepreneurial plans to improve his productivity in the future so that his actual earnings would be higher than the lord believes, which would make paying the entire tax in advance worthwhile.

To be sure, both slavery and tax-serfdom are exploitative and unjust. The Spanish code for the regulation of slavery in Siete Partidas originally issued in 1263 proclaimed slavery to be "the most evil and the most despicable thing which can be found among men," says Bush.

Nevertheless, slavery in the most general sense was a legitimate economic "stage" in the progress of the world. It disappeared when it became apparent how much it retarded development:

If mankind had adhered to the practice of keeping the whole or even a part of the labor force in bondage, the magnificent economic developments of the last hundred and fifty years would not have been possible. We would have no railroads, no automobiles, no airplanes, no steamships, no electric light and power, no chemical industry, just as the ancient Greeks and Romans, with all their genius, were without these things. (Liberalism, 21-22)

The modern welfare-warfare state that eats a great chunk of each (supposedly free) citizen's income and spends it horribly badly was a huge economic and social retrogression from capitalism back to feudal tax-serfdom. And unlike old-time serfs, we can't even pay the government off for our or our children's freedom.

Slavery, Concerning Blacks

In light of the theory proposed in the previous post, let's evaluate Thomas Sowell's assertion that:

Blacks were not enslaved because they were black but because they were available. Slavery has existed in the world for thousands of years.

Whites enslaved other whites in Europe for centuries before the first black was brought to the Western hemisphere. ...

Well, everyone was "available." What kind of an inane explanation is that?

No, blacks were enslaved long after slavery among the whites was abolished, not because they were available, but because their comparatively low IQ, high time preferences, and moral debasement made it more difficult for them to be useful to society as free workers.

They were hard put to prove responsive to the incentives of capitalism to become highly skilled -- and thus highly important factors of production in the economic order, because of their natural racial limitations. Society did not feel for a long time, and rightly so, that free blacks would contribute to it a great deal more than enslaved blacks. Therefore, freeing them took longer to accomplish than freeing non-blacks.

Slavery As an Economic System

Slavery is fundamentally a system of production.

It was humanity's attempt to create wealth long before laissez-faire capitalism was invented.

It's a very inefficient system, but it does not deserve its reputation as some sort of sadistic destruction of the slaves' dignity for its own sake.

Consider the family of the Biblical Jacob. Jacob's sons were not their father's slaves. But do you really think Reuben or Joseph could up and say to him, "Dad, I quit tending the flocks for you. I found a new job with Canaanites, Inc. in the next town. It pays more, and there is less commute. My resignation letter is attached"?

A free worker has a powerful incentive to accumulate human capital: complex skills up to and including unique creativity to use with complex capital and methods of production.

But with the economy at that primitive a stage, there was little individual use in being free, and little social benefit to free labor. Why be free when all the "jobs" out there are almost the same and unskilled? Perhaps the "security" of being a slave and a measure of a personal relationship with the master might be prized more.

This is why slavery had persisted for so long everywhere in the world. Its inefficiency was masked by the fact that free labor was not any more productive than slave labor and for that reason could not command higher incomes than slave labor.

Under capitalism, the employer spends his own money training an employee, but all the benefits accrue to the latter. The employer is particularly averse to providing training, because it makes the worker more valuable to his competitors. Thus, it happens all the time that a worker learns useful new skills at his boss's expense and then unceremoniously dumps him to get a better job elsewhere. Slavery is especially suited to act as a transitional system, because the master has a direct incentive to invest into the slave's training.

The abolition of slavery went hand-in-hand with increasing prosperity and complexity of the economy. The pressure to free the workers intensified as people came to realize the social benefits of this; as more workers were freed, this freedom itself contributed to economic improvement. The virtuous circle eventually led to the complete end of slavery as an economic institution. Slavery was destined to wither away without any violent upheavals.

It may be objected that slavery was often sustained by war, such as when the citizens of the defeated tribe or town were enslaved. However, regarding that, in a war, formerly free people are enslaved. That is a definite economic retrogression. I am arguing rather than in the ancient world, and even not-so-ancient, slavery was the default, unsurprising, and economically neutral condition of almost every worker.

It's true, there existed somewhat skilled artisans even then. But without mass production and accumulation of great amounts of capital, only very few were needed by society.

Some people are further deluded into thinking that today minimum wage jobs are a type of slavery. This is emphatically not so, because in the modern economy, minimum wage workers are upwardly mobile and are made such precisely with the help of the basic skills and work-related virtues they learn on their very temporary minimum wage jobs.

A worker's own professional growth over the course of his career, beginning perhaps indeed with washing the dishes at a fast food joint, is part and parcel of the market process itself.

Of course, no social system, including free-market capitalism, can remedy an individual's lack of natural gifts. A hopelessly dull person may indeed end up working for low wages all his life. The point, however, is again that free workers face enormous incentives to improve their skills and thus their usefulness to society, even if a few people through some disability are unable to respond to this incentive adequately.

Can Slaves “Cost Less”?

Bush pronounces that yes, they can "cost less" than free labor. It's not 100% clear what he means by this. But suppose that there was a large difference between the cost of an average slave and his productivity. Then it would pay current slave owners to sell and resell their slaves at higher prices until equilibrium were reached, and the discounted capitalized value of a slave would equal his productivity over his lifetime.

If, on the other hand, free workers demanded wages than were unjustified by their marginal value product, the competition between them would bid down the prices.

The purchase of a slave would yield no more profit to the owner than the hiring of a free man.

A slave regime might, however, enable the profession of slave hunters who would roam the realm profitably for themselves enslaving and selling free people.

The theoretical inefficiency of slave labor lies in the the lack of incentives to the slave to improve his skills and accumulate his human capital: knowledge and experience with various tech and compatibility with complex capital goods. Bush himself writes that "slaves had their own devices for remedying the gross imbalance of advantage created by the slave-master relationship, notably feigned stupidity, working within limits and only to order, abiding by custom, malingering, petty theft, and so on." (17)

A free man is far more likely to "feign intelligence" than stupidity in order to convince an employer to hire him, as is obvious from every self-glorifying resume!

Bush replies by pointing out that "masters could combat this array of negativity by dispensing rewards..." But insofar as there were rewards, the slave-based economy was no longer pure but blessed with some aspects of tax serfdom, a far superior system.

Thus, Mises argues that we the liberals

attack involuntary servitude, not in spite of the fact that it is advantageous to the "masters," but because we are convinced that, in the last analysis, it hurts the interests of all members of human society, including the "masters."

If mankind had adhered to the practice of keeping the whole or even a part of the labor force in bondage, the magnificent economic developments of the last hundred and fifty years would not have been possible. We would have no railroads, no automobiles, no airplanes, no steamships, no electric light and power, no chemical industry, just as the ancient Greeks and Romans, with all their genius, were without these things. (Liberalism, 22)

Two Types of “Public” Slavery

You know how Trump "serves" as president rather than "rules" as one? Why this expression? It could be to hide the tyrannical nature of the state. But it's equally possible that it's a remnant of the institution of "public" slavery, as described by M.L. Bush:

Among the slaves in service, easily the best treated were the military servitors of the Ottoman Empire, Safavid Persia, and a number of Islamic states situated in North and West Africa.

These slaves comprised a ruling elite in possession of power as well as wealth. Their essential purpose was to give the ruler a means of action independent of his leading subjects and one that he could fully control, although, in reality, he tended to fall under the sway of his slaves. ...

Not surprisingly, public slaves were better treated than private slaves, simply because they tended to be engaged as servitors, many of them as elite soldiers, administrators, or household officials, whereas private slaves were mostly engaged in some form of manual labor. (10-11)

He properly differentiates this meaning of publicness from that attached to "the forced-labor systems developed in the twentieth century by totalitarian regimes where, in contrast to slavery, the acquisition of labor involved no capital outlay and the absence of replacement costs removed all restraint on its maltreatment. In these circumstances, it did not matter much if labor was worked to death. To treat slaves in that manner made no economic sense since it simply destroyed a capital asset." (13-14)