Revisiting the Profitability of Slavery

Abstract

This article revisits the scholarly debate on the profitability of historical slavery. The article examines the case of the antebellum US South, using slave hire rates as a proxy for the net rent on investments in slavery. It employs empirical data and a more advanced methodological approach to the issue than in previous research. The results suggest that the profitability of slavery was much higher than what most previous research has shown, around 14–15 per cent per year on average after adjusting for mortality risk, but that the return also fluctuated over time. It was on average more profitable for Southern capital owners to invest in slaves than investing in many alternatives such as financial instruments or manufacturing activities in the US South, as long as slavery remained a legal institution.