EE Goes to the Movies Ep. 2: Amistad

I'm going with Amistad here instead of Django Unchained, because while the slave revolt aspect is interesting in its appeal to moral intuitions, Amistad more directly incorporates elements of coercive commerce.

The Atlantic slave trade, for those of you who remember your high school history, stood on three legs: the Africa-to-Caribbean chattel run, where most of the horror occurred and where most of the cinema is set; the Caribbean-to-Roanoke sugar run; and the Roanoke-to-Africa rum run. Other triangles, such as with Boston or Lisbon as vertices operated at various times. The details are not particularly salient for the moral questions hinted at by the movie.

We need neither the wisdom of sages nor the patience of ages to know that the forced transportation of captives for bonded labor is immoral. The East-West leg of the triangle was an abomination. Does this also imply that the other legs were as well? One ship, one skipper, three loads of cargo. Is the sugar necessarily soaked in the blood of the men and women pitched overboard upon sight of a British Naval vessel?

I think most people would say "yes" for both consequential and deontological reasons. But how about secondary markets? How about knock-on firms? Does a pastry chef fold the innocent tears of orphaned children into his brioche every time he buys a pound of sugar from his wholesaler? Is that dram of rum spiced with shackle iron? How far does the contagion of immorality spread?

It's not an idle question either, confined to the distant mists of an uncivil past. Violent drug cartels (for example) claim quite a bit of shadow GDP. How many degrees of separation from their money laundering operations do you need to be to claim moral cleanliness? Does the fact that gangsters might by proxy use foreign deposit institutions render these so-called "tax havens" dirty?

And how about across time? The US rail network was subsidized by the non-euvoluntary labor of Chinese immigrants who were treated horridly during and after their work was finished. Is part of the locavore movement underpinned by an aversion to frequenting these artifacts of oppression? I haven't heard this argument forwarded with any seriousness before, but absence of evidence is not evidence of absence and all that, you know.

I admit to being a little ambivalent. I won't intentionally buy stolen goods, but if you put a few more transactions between me and the original thief, and don't make it an express point to tell me about it, I think I would probably be okay with it. Similarly, if I buy a  hamburger made from cows that were fed with hay harvested by farmers who drove tractors assembled by slave labor, I'd be distraught at the idea that there exists slave labor, but my outrage would be entirely disconnected from my meal. Heck, the country I live in used involuntary labor in conduct of war and I don't lose sleep over that. Unless I make the specific effort to reflect on it, of course.

I pretty freely admit that this is my own moral calculus. I also admit that your mileage may vary. Because there's lots of moral elbow room here, I also find myself extremely leery of legislation that tries to hem in the scope of the market based on these sorts of moral contagion threats. If there's a problem with a product or the way it's made, it seems a lot more reasonable to expand the choice set available to the laborers. It's hard for me to imagine a society getting systematically richer by curtailing the extent of its markets. Peace, easy taxes, a tolerable administration of justice. That's what's called for, not embargoes, not boycotts.

Same goes for the current furor over Russia's treatment of homosexuals. You want to help Russian gays? Petition your government to offer them asylum in your home country. Boycotting vodka or the Olympics helps them how, exactly?

Meta-EE and the Constitution Part 10: Thirteenth and Fourteenth Amendments

I won't waste too much time with the meta-EE of the Thirteenth Amendment. It should be obvious to even the most casual observer*. I will say that to the extent that the "right" to enslave undergirded the US Civil War, fighting pitched battles over the issue seems a savage solution to what probably should have been an organized buyout of slaveowning elites. But history's pen fell as it did, there's no sense to scolding the dead.

Manumission

The history of slavery in the Americas is canonical Law of Unintended Consequences. The British banned the Atlantic trade, so slavers took to chaining their cargo together so that if Royal Navy interceptors were spotted, the whole shipment could be kicked overboard before arrests were made. The Haitian revolt may have so soured the island's relationship with France and sent such a hostile signal to the rest of the world that it might be partly responsible for the misery and stagnation found there today (which is not to belittle the efforts of the international aid community, the Duvaliers and the HIV epidemic). Most relevant to what I'd like to consider today, fiat emancipation in the United States may have helped lead to decades of Jim Crow legislation and simmering racial tension that still lingers.

Compare two principal ways of ending slavery institutions: legislative diktat and buyout. In each, the first-order effects are the same: slaves are freed. In the first, the second-order effects may be so large as to upend the efficiency gains of the first-order effects. In a plausible counterfactual history, Congress might have levied a tax or issued debt to purchase the roughly 4 million slaves in the US in 1860. The market price for a slave varied greatly, but the mean price was around $1800 at the time. $7.2 billion is quite a stack, but a hell of a bargain compared to the $6.1 billion plus more than a million war casualties and over a century of seething resentment brought to us by the Civil War (or the War of Northern Aggression for my readers south of the Mason-Dixon Line).

There's nothing at all euvoluntary about slavery. Ending it might be another matter. All else equal, the hidden costs and unintended consequences of abolition are lower when owners are compensated for their loss. I hope that this lesson is not lost of people who want to eliminate, say, Cambodian sex slavery. The US example shows that even with many of the strong institutions of successful economies, policy choices can still lead to needless misfortune. Part of ongoing efforts to combat human trafficking might not want to give short shrift to mollifying legitimate elites when necessary, even if it seems distasteful. The consequences of failing to do so might be even more distasteful.

Now that I think about it, there's an interesting question for euvoluntarists in there: when is it appropriate to uphold moral principles at the expense of expediency? That could be a curious comparative statics problem. I'll give it some thought and get back to you.

Euvoluntary or Not, This Exchange is Unjust

Property rights are arbitrary, but so too it seems are their enforcement. Suresh Naidu is working on research that suggests loose enforcement of property rights over people—that is, slavery—lead to hihger investments in public works and manufacturing, setting the stage for 20th century economic growth. It will be interesting to see how economic growth diverges after the Civil War between districts with strong property-rights enforcement over those with loose enforcement, though it will certainly be difficult to show that this effect is stronger than regional effects.

The hypothesis suggests that institutions are contextual. I doubt this research will lead a chorus of economists to reject the age-old wisdom that strong property rights enforcement is a pre-requisite for growth, but it does give us an interesting example (perhaps the only one) where weak enforcement leads to higher growth.

It also raises the interesting question of how to apply the principles of euvoluntary exchange to the issue of slavery. There is clear coercion by agency over the commodity, even if both legally-privileged parties to the slave transaction feel the transaction was euvoluntary. Whether or not it’s a euvoluntary transaction, we can all agree that this is a transaction that is morally reprehnsible.

In this case, even a euvoluntary transaction isn’t just.