British West Indies
This is getting good.
If the free labor system was so superior to slavery, as Adam Smith argued in The Wealth of Nations, then why were the slave societies in the British West Indies so much more valuable and profitable than their free labor counterparts?
“Wealth of Nations was subtle in applying the evidence of European free labor patterns to the Americas. If, in general, “slave cultivation was not so advantageous as free tenants,” the Anglo-American plantation zone (harboring 90 percent of the empires’ slaves in 1775) clearly offered the paradox of combining the dearest labor and greatest profitability. The price of agricultural products for export in the plantations from Maryland to Tobago apparently enabled slaveowners to sustain rates of economic growth and even increased population growth of slaves unmatched in the contemporary free labor zones of Europe. Smith noted that the British West Indian sugar plantations were so profitable they their returns from rum exports, a byproduct of sugar production, paid for the entire overhead expenses of a sugar plantation. As far as Smith was concerned, this was an achievement without parallel in eighteen-century British imperial agriculture. The paradox was inescapable. The most inefficient type of labor system underlay the most profitable and dynamic agricultural activity in the British Empire.”
Reality triumphs over abstract liberal theory. What do we do?
Note: This excerpt comes from Seymour Drescher’s excellent book The Mighty Experiment: Free Labor versus Slavery in British Emancipation.