Thursday, December 12, 2013

The Desire to Secure Property - Taken to the Extreme

Originally posted by Life Founder and Author Chris Brady.

God bless, Scott Johnson

I recently came across a very scholarly work regarding slavery in early America and was fascinated by the interesting angle from which it analyzed that horrible institution.  I have chosen a few segments upon which to comment, my remarks in blue following each section.
A New Perspective on Antebellum Slavery: Public Policy and Slave Prices
Yanochihk, Ewing, Thornton
Atlantic Economic Journal, Sept. 2001
Robert Fogel and Stanley Engerman [1974] revolutionized the economics of slavery and established the "capitalistic character" of antebellum slavery. They showed that the price of slaves and the profitability and long-run viability of slavery in the American South were based on economic factors such as the demand for plantation output, capital markets, and the entrepreneurial ability to organize slave labor and increase productivity. Fogel [1989, p. 11] recognized that "the slave economy did not operate in a vacuum. Both its original economic successes and its ultimate collapse were heavily influenced by the legal and political conditions." However, while Fogel [pp. 11, 201-417] places great emphasis on political forces in the destruction of slavery, he maintains that economic conditions were the overriding factors for explaining the success of the institution [pp. 60-80]. Many scholars have recognized the importance of the slave codes for determining the legal character of American slavery and the treatment that slaves received from their owners, but public policy and the slave codes continue to be ignored as a factor in the economics of slavery. [1]Whip
This article posits that one of the over-riding reasons slavery continued to work in the south was because it was carefully established to remain economically viable.  This was done through several factors, but two that are rarely heard about are Public Policy and Slave Codes (using the government and the legal system).  The whole arrangement of slavery was for the "many" (slaves) to do all the work so that the "few" (slave owners) could be prosperous.  I guess it should not be surprising that the large plantation owners of the antebellum south used their clout, wealth, prestige, resources, and influence to bend the local laws to their advantage. 
The relationship between public policy and the profitability of antebellum slavery is explored here with an empirical investigation of the impact of manumission laws and slave patrol statutes on the market value of slaves. Empirical testing confirms that these public policies did have a sta tistically significant relationship with slave prices. These results provide a new perspective [2] on antebellum slavery: the profitability of slavery and the political institutions of slavery--the slave codes--were dependent on public choice. [3]
The more successful the wealthy slave owners were at getting statutes passed and using laws to "trap" slaves into their condition of bondage, the wealthier they became as a result.  In essence, the more trapped the slaves were, the more valuable they were to the wealthy plantation owners who amassed all the resultant wealth of production and shared almost none of it with the slaves.
The Political Economy of Slave Security
Economists John S. Mill [1987] and John Cairnes [1863] identified public policy and other institutions as important constraints on the value of slaves. They also recognized that monitoring slaves was the important variable in determining the efficiency and profitability of slave labor. Combining these insights, this paper investigates the role that public policy played in the monitoring of slaves and, thus, the economicUnderrr2viability of slavery in the Antebellum South.
Monitoring slave labor consists of both supervision and security. Productivity supervision is common to both free and slave labor and is necessary to prevent shirking and increase labor productivity. This type of monitoring includes direct supervision, the threat of punishment, output incentives, and other advanced management techniques. A central contribution of the new economic historians was to identify the supervision of labor in the gang system as the key to the productivity and efficiency of slave labor in the Antebellum South.
Security monitoring or policing was necessary to prevent slave labor from escaping and was unique to slave management. [4] Security monitoring to prevent the loss of slave capital has both internal and external functions. Internal security involved the use of lookouts, armed guards, spies, natural and artificial barriers to escape, as well as intimidation of slaves with guns and whips. External security consisted of resources to track down escaped slaves and discourage escape attempts. Internal security is a private sector function while external security can be both private and public.
Private external security included the use of free labor with guns, horses, and dogs to find and capture escaped slaves. Slave owners also posted reward notices, took out newspaper advertisements, and hired bounty hunters to track, capture, and return escaped slaves. Public external security consisted of laws and public policies that were designed to increase the cost and reduce the likelihood of successful escape. The slave codes were state statutes that provided public external security. [5]
The value of the whole system rested upon the ability to keep the slaves trapped.  To manage this, a complex arrangement of Internal and External controls were erected, over time.  First, there would be direct supervision and tight security provided by the slave owners themselves.  If any slave ever got caught fleeing, he or she would be brutally and publically punished, sometimes unto death.  The purpose of this was to deter the others from "getting notions of freedom."  In effect, Internal Control required a physical example that others who would try to escape could expect the same drastic fate.  External Controls were the contrivances of local laws, statutes, and even the sermons of local preachers, all which combined to ensure an external threat to slaves attempting escape.  Even if they could outrun the restrictions of bondage provided by their direct slave owner, "out there" awaited a system equally constructed to infringe upon their freedom.  In essence, to "get away" was not to escape, it would simply take the slave into the second ring of defense - the public system.
In addition to being the distinguishing feature of slave management, there are several reasons why security was crucial to the management of slave labor. First, the primary concern of any investor is the preservation of capital, and a single slave represented a substantial investment. Second, large-scale slave escapes or rebellions represented a great risk to other property such as homes, barns, and livestock as well as the lives of slave owners and their families. Thus, while the subject of supervision was relegated to agriculture and business journals, security issues such as the slave codes, the Dred Scott decision, and John Brown's Raid were topics of intense political and public debate. Indeed, Franklin [1952, pp. 52-3] has described the South as an "armed camp" and labeled the efforts to subjugBibb45lq0ate the slave population a "cornerstone of Southern civilization."
As is true of many enterprises, it is easier to secure for itself the prizes of its investment, rather than to risk it on the open market of competition.  Business history is full of examples of companies and leaders who, once having secured an asset or market share or whatever, suddenly leaves the realm of capitalism and begins scrambling for whatever means possible to secure their holdings and procure an advantage that doesn't have to continue to be earned in the free market. 
Notice how slave holders were fearful that a successful slave revolt could lead to a large-scale revolt, which would threaten their whole system.  It is a clear understanding of this that explains the barbarity with which a single escaped slave was treated.  In essence, the other slaves had to "see a dead body."  Otherwise, if escape, especially on a large scale, were ever shown to be possible, the remaining masses of slaves just might rise up together and escape en mass.  This, in effect, would topple the whole institution. 
Since the whole economy of the antebellum south was predicated upon extracting value from people against their will, the protection of this entrapment had to have top priority.  In fact, it is quite easy to speculate that more effort was placed on keeping, trapping, and enslaving the slaves than was expended in making them more productive, comfortable, or efficient.  Instead, slave owners placed their focus upon Internal and External means of keeping the slaves in bondage, rather than on becoming more competitive in an open market.
The Antebellum South is generally characterized as a free market, agricultural economy based on slave labor. Slave owners exploited the value of slave labor and benefitted from the rising world demand for cotton generated by the Industrial Revolution. However, slave owners were also in a position to control the political process. It has often been noted that slave owners had political power at the national level, and indeed, the history of the antebellum period centers on the conflicts and compromises between the slave power of the South and the mercantile interests in the North. Slave owners certainly had dominating political influence at the state and local levels.
One of the most effective ways of maintaining the bondage of slaves (and therefore their unfair economic advantage) was for wealthy plantation owners, many of them second and third generation, to use their influence in the public processes to enact laws to their advantage.  The more influence on the political process they could weild, the more External help they would have in keeping their institution protected.
While large-scale slave owners were not a majority, there is little question that they could control the political process. First, restrictive voting laws ensured that white male property owners dominated the electorate. Second, the economic power of slave owners surpassed that of nonowners. Third, the combination of slave owners and aligned interest groups suc h as financiers (bankers and factors), lawyers, brokers, and owners of transportation facilities ensured that slave owners could manipulate the political process to their own advantage. With respect to slave security issues, their power was reinforced by the general population's fear of slave uprisings and racist ideology.Whippedslave
Because of their wealth, large-scale slave owners could muster a disproportionate level of influence on the public policies of their state and local governments.  In effect, they had more power to help shape laws and control the various forms of government than anyone else.  Their wealth also opened doors with other powerful figures in what today would be called "special interest groups." 
Also, the wealthy plantation owners had successfully propagated a common public fear of a general uprising, so that, unwittingly, the non-wealthy local populations inadvertently added to the constraints on the freedoms of the slaves.  As long as an argument could be made to show how what was bad for the wealthy plantation owners was also bad for the "common, little guy," this process of mass exploitation could continue.
Slave patrol statutes were state laws that mandated local police patrols to examine the passes of traveling slaves, monitor slave meetings, enforce other aspects of the slave code, and capture escaped slaves. Naturally, these patrols enhanced the security of slave assets and reduced the private costs of security to slave owners. Public security against escape in effect extended the average work life of a slave at public expense, and this was expected to increase the capital value of slaves. [6]
The longer wealthy plantation owners could keep slaves trapped, the more valuable they were.  The more they could get external forces to work to their advantage, the more complete the encirclement of the individual slave.  The more the wealthy plantation owners could get the forces of government to do their work for them, the cheaper it became for them.  In effect, by employing the forces of public policy, the wealthy plantation owners were getting the government to help them trap slaves, and at a discounted rate!
Manumission laws restricted the right of a slave owner to grant freedom to slaves or to allow someone to purchase a slave's freedom. [11] The purpose of these laws was to prevent the emergence of a large, free black population who could facilitate the escape of slaves or help organize slave rebellions. Most importantly, black slavery in a free white society provided a distinct security advantage because slaves could be identified by the color of their skin. [12] If slave owners were allowed to free their slaves (or to sell them their freedom), then the proportion of free blacks would rise as it had in other slave societies. A large population of free blacks would reduce the security advantage of black-only slavery and drive down the profitability and the price of slaves. Generally, manumission laws did permit owners to free their slaves, but only if the slaves were exported to other states or to Liberia, a fact that emphasizes the security nature of such laws. [13]Flyer
Not only were wealthy plantation owners doing everything in their power to entrap their own slaves, but, in order to keep the whole house of cards standing, they had to infringe upon the rights of other slave owners to free their own slaves!  "Since I'm working so hard to keep mine trapped, you don't have the right to free yours!"  Notice how the motivation for this was how dangerous it would be to have a bunch of "free blacks" walking around.  This could lead to confusion as to who was free, and bring us right back to that old fear again of a general uprising.  The phrase for these genteel plantation owners was, "Once a slave, always a slave."  Notice how it also, once again, is all about profitability.
There is much more in this article by Yanochik, Ewing, and Thornton, but I have culled the main points for our purposes here.  For those interested in digesting the whole thing, you can find it here. 
Why this negative illustration from history?  What can someone on the journey of leadership development learn from all of this?
Benjamin Franklin once said, "Any society that would give up a little liberty to gain a little security deserves neither, and loses both."
This is true in an economic sense, as well.
Leaders must understand that the pursuit of "advantage" is a losing proposition.  What is gained in the battle of free enterprise cannot and should not ever be secured by means other than competition.  A leader must always guard against the tendency to arrive at a place only to "pull up the draw bridge" behind them.  Instead, real leaders must understand the need to stay in the battle, to be willing to continue doing the things that brought them success in the first place, and to resist the temptation to become more concerned about securing what they have than in advancing to new accomplishments.  Whenever "securing property" takes precedence over "fulfilling destiny," leaders are simply not leading anymore.  Worse, they are becoming weak and increasingly succeptable to becoming eclypsed by a new competitor who does not fear the battle of free competition.
African slavery in the Antebellum South is one of history's most glaring examples of what happens when men strive to secure for themselves an unfair advantage at the expense of others.  Protectionism, tariffs, import duties, and the like, in the economic world, weaken those who are "protected" until they no longer are fit to compete.  Their abilities grow so weak under this protected position that they become slaves themselves to the protections they have set up for themselves.  In other categories, the principles are true, as well.  Whenever someone tries to arrange "security" at the expense of competition, weakness results. 
In such cases, as Benjamin Franklin said, BOTH security and liberty are lost.
The wealthy plantation owners not only lost everything they had, including their entire way of life in a bloody civil war, but they will live on in the memories of time as some of the most vile, greedy, mostrous examples of ambition-gone-wrong.  By refusing to compete with the outside world on even terms, by enslaving human beings against their will, by manipulating the public system of laws and security to aid them in their efforts, they corrupted themselves and became one of history's "best" worst examples of leadership.
And those they enslaved, whipped, tortured and killed in an effort to suppress the thoughts of freedom and rebellion in the breasts of all the other slaves?  History remembers them with respect and admiration, for the dignity and perseverence they showed in unbelievable circumstances.  The scars from whips and chains, meant to deter and frighten, instead look to us like badges of courage and honor, and serve as a constant reminder of the evil man is capable of.