Center for History and Economics Seminar: "One Giant Leap: Emancipation and Aggregate Economic Gains"

Speaker: Richard Hornbeck (University of Chicago)

Professor Hornbeck will discuss his recent paper with Trevon D. Logan, in which they re-characterize American slavery as inefficient, whereby emancipation generated substantial aggregate economic gains. Coercion distorted labor markets, raising the marginal cost of labor substantially above its marginal benefit. Production came at immense costs imposed on enslaved people that reduced aggregate economic surplus (value of output minus costs). Economic costs of enslavement are inherently difficult to quantify, but they calculate that emancipation generated aggregate economic gains worth a 4%– 35% increase in US aggregate productivity (7–60 years of technological innovation). Emancipation decreased output but decreased costs substantially more, illustrating substantial potential for aggregate economic gains in the presence of severe misallocation.

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