This essay is about slavery, from ancient times to the present day. As background I will provide a brief summary of the conclusions of the first “Invisible Hand” series essay which examined the physical object nature of our money and some of the myriad consequences of that nature.
All money throughout history has been either physical objects or representations of physical objects. Even today, when almost all money is in computer accounts, we still treat that computer account money as if it were composed of physical objects. We still transfer that money from account to account just as if it were currency. We still deposit money into an account or withdraw money from an account. The very words “deposit” and “withdraw” make us picture currency in our minds. Of course money is all in the mind. That which distinguishes a simple metal disk or a rectangular piece of paper from money is in what we think about it. Counterfeit money is real money until you realize that it’s counterfeit. I’ll wager that most people have accepted and passed on counterfeit currency at some time in their lives and never even knew it was counterfeit.
Given that all money has always been a physical object money whether in some commodity form like cows or salt thousands of years ago or in coins hundreds of years ago or in bank notes decades ago or in computer accounts today. Given that, we know that any properties possessed by physical objects will also be possessed by our money. That’s a very important yet always ignored point. You will not, for example, find that point made in any economics textbook or learned paper. Economics as a field of study has ignored that fact. Everybody who uses money knows that money is or represents physical objects but for some reason that property is completely ignored. I’ll bet that you, too, have ignored it despite understanding it all your adult life. But that aspect of money is very important as we shall see.
First, physical objects and money can be taken from their owners against the will of the owner. You can be taxed, robbed, defrauded, swindled, victimized, and otherwise deprived of your money. Your money can even be lost or destroyed. This fact about money makes you need to suspect almost everyone of wanting your money since, if money is not loved by almost everyone, people will not accept it in trade and in that case, it isn’t a functioning money at all.
Second, inanimate physical objects are amoral. Unless an object is a human being, it has no ethical sense and no morality. Therefore physical object money is also amoral. It can be used to motivate almost any human behavior whether that behavior is moral and ethical or not.
Third, the supply of one physical object is independent of the supply of other physical objects. Therefore the supply of money is also independent of the supply of goods and services for sale. Thus, inflation and deflation can be brought about merely by the creation or destruction of money with no corresponding increase or decrease in the supply of things for sale.
Fourth, because money is a physical object or represents a physical object, it falsely simulates a zero-sum game in monetary transactions (like with poker). The money one person gains represents money some other person or persons has lost. That’s how we think about it. This lie that physical object money tells us causes people to treat each other as rivals, opponents, enemies, or competitors. The truth is that a trade can benefit both parties. But our tendency to notice only the money part of a trade makes us feel like opponents.
Fifth, money is nearly impossible to control. For one thing, your money can be taken from you against your will. But besides that, you cannot control the uses other people make of money in their possession and neither can any organization, even the government. That’s why every nation that attempted any regulation of trade at all or collected taxes on trade has had black markets. The U.S. cannot stop the illegal drug trade or prostitution or illegal gambling, for example.
Sixth, money transactions are two party interaction. Two party interaction is inherently unstable in that whichever party gains an advantage can use that advantage to gain still further advantages. Eventually, the weaker party will attempt to end the interaction. With physical object money, wealth tends to become concentrated in the hands of a few. The more money you have the easier it is to gain still more money. If you have the time you might read “Capital in the Twenty-first Century” by Thomas Piketty. He presents just about all the data available, with explanations, since 1800 on the concentration of wealth. When the poor have money, the economy booms. When the poor have no money to spend, the economy collapses in a bust.
If you find yourself in disagreement with any of these six points I recommend that you refer to the” Money Matters” essay to access the first of the “Invisible Hand” essays. It goes into considerably more detail and explanation on each point. Or, if you’re just feeling grumpy today you could just close your mind to any point of view other than your own. That is the typical human way of dealing with new ideas. That will save you time, trouble, and mental effort but it won’t help you to understand the source of your problems. On the other hand, if you’re up for some mental adventure and mind stretching ideas, try following what I have to relate here.
I am sure you are quite aware that the U.S. experienced a Civil War back in the 1860s following which the U.S. changed its Constitution (Amendment XIII) to outlaw slavery. But slavery existed long before any U.S. government existed. In fact, slavery existed long before the existence of history in written form.
It’s easy to find on the internet information about slavery and about slavery’s history as an institution. As examples I have here a few significant points which I am lifting from the Wikipedia article on the history of slavery. I quote “Slavery can be traced back to the earliest records, such as the Code of Hammurabi circa 1760 BCE, which refers to it as an established institution. Slavery is rare among hunter-gatherer populations, as it is developed as a system of social stratification.”
Also from later in the article we find “Evidence of slavery predates written records, the practice of slavery would have proliferated after the development of agriculture during the Neolithic Revolution about 11,000 years ago. Slavery was known in civilizations as old as Sumer, as well as almost every other ancient civilization, including Ancient Egypt, Ancient China, the Akkadian Empire, Assyria, Ancient India, Ancient Greece, the Roman Empire, the Islamic Caliphate, and the pre-Columbian civilizations of the Americas.”
Truth be told it is quite difficult to find any agricultural or later level economy in the world which did not use slavery. It was only with the development of industrialization that slavery suffered a decline in popularity.
You should also be aware that agricultural societies need trade far more than do hunting and gathering societies. Those who live by hunting and gathering are nomadic. They wander to follow the wild game their men hunt and to follow where the berries, nuts, roots and other edibles which the women gather are to be found. So hunting and gathering economies must travel light and can usually go to where the things they need are to be found. That isn’t the case with agriculture. One acquires tools and buildings and fences and has land under cultivation and herds to tend in agriculture. One can’t just travel 100 miles to get some needed resource like salt. Therefore, with agriculture, one is almost forced to develop trade to acquire those things one cannot produce for one’s self. So there’s lots more trade with agriculture. Some of that trade is even between the hunter-gatherers and farmers. But it is with the increase of trade that the social circumstances are right for commodity money to develop. Commodity money has arisen in economies all over the world and many different times. Its development is spontaneous and does not require any great inspiration on the part of the people who, without even realizing it, invent money, that medium of exchange, that standard unit of account, that store of value. So this is the background for our consideration of slavery.
Let’s take a good look at slavery as an institution. One of the first things that one notes is that a slave is abused and badly treated. Slaves have a very high death rate and are injured frequently. Slaves often don’t get enough to eat. If there’s a famine the slaves are likely to starve first. Their bodies even tend to suffer to the point that when their skeletons are found thousands of years after their deaths, the marks of slavery are evident in their bones. So it is readily apparent why slaves don’t like being slaves.
Next we should note that slaves do as little work as they can get away with. It is an almost universal complaint among slave owners that slaves are lazy. Have you seen the play “A Funny Thing Happened on the Way to the Forum”? That laziness aspect of slavery is accurately portrayed there. Slaves are just not very productive. I suppose that’s easy to understand. When hard, creative work gains you nothing, what motivation does one have to work hard or to be creative or to increase production? So using slave labor reduces the amount of work accomplished per man (or woman) hour. It also reduces the quality of the work being done. You can well understand how slave owners would consider slaves to be lazy and incompetent. In the minds of the owners, slaves were contemptible and did not deserve respect as human beings.
Thirdly, we find that slave owners seem to be uneasy about slaves revolting or running away. Quite a bit of labor is involved in forcing the slaves to work and in directing their work (you have to tell them every little thing) and in preventing their escape. Look at the hardware needed to physically restrain slaves. Look at the time and effort required to capture an escaped slave. Look at the financial loss when an escaped slave is killed or otherwise punished (as a lesson to the others). For example, galley slaves were chained to their rowing benches so if the ship went down you lost all those slaves.
It’s an inescapable conclusion that slavery harms the economy by reducing production, by destroying human capital, and by requiring additional labor and resources. In other words, slavery makes the economy, the society, the nation poorer. Slavery reduces the goods and services available to be consumed by that economy. Slavery reduces the average income (to put it in money terms) of the people of that economy. Slavery reduces the ability of an economy to adjust and adapt to changing circumstances. Slavery prevents successful innovation. Slaves will not fight to defend the nation in most cases, either. The only people slavery seems to benefit are the very few wealthy individuals who own most of the slaves. But even for those few wealthy slavery comes at a high price.
I think we can conclude that slavery is a bad thing for any society which practices slavery. I really hope that none of my readers disagrees with that conclusion.
But that conclusion brings up a big question though, doesn’t it? Why does slavery exist at all? If it’s so bad for the economy and makes it more difficult for a society to survive, why does any society use it? More puzzling still is why has slavery been almost universal around the world in almost every society that is agricultural? Why did all societies seem to practice one form of slavery or another? Shouldn’t the societies without slavery have surpassed and eliminated the societies that practiced slavery? Shouldn’t natural selection have destroyed slavery as people realized that they could be richer and more powerful as a nation if slavery were ended?
While we try to answer those questions perhaps it’s would be instructive to consider why slavery was rare among hunter-gatherer populations. It seems that if a group made the transition from hunting-gathering to agriculture it would also start forcing some people to be slaves. I don’t think that’s a coincidence at all. I think that’s an important point.
Remember that every society that was agricultural (that would be after hunting and gathering and before starting to industrialize), every one of those societies also developed commodity money. As time went by, societies began to adopt coins and still later paper currency. The particular commodities used as money might have varied but it was still money and the commodities used as money were physical objects.
Now let’s also remember some of those consequences of the nature of physical object money which we reviewed earlier. First was that money could be taken from you against your will. Second was that money is amoral. Fourth was that money falsely simulates a zero-sum game. And sixth that money transactions are two party interaction and inherently unstable. I think you can see how those four properties of physical object money would tend to promote slavery.
Let’s consider that two party interaction thing first. If I want your labor and I don’t want to have to give you money to get your labor then the more power I can get over you the less I will have to pay you. Since any inequality of wealth between us can be increased to the point that you have nothing and are a slave to me. The fact that such an outcome is unethical or immoral does not prevent my use of my physical object money in unethical ways to gain still greater advantages.
Turning to the zero-sum simulation consequences we note that I will see you as my competitor or enemy so I will believe that I can gain at your expense. And the fact that money can be taken from its owner against the will of its owner allows me to take money from you to the point of making you my slave.
So we consider that early Neolithic village of 10,000 years ago composed of a few hundred farmers with a religious leader and a few of the most successful hunters (yes, they still hunt from time to time) who defend the village from thefts by hunter-gatherers or from raids by other villages. The political / religious leaders have to be supported somehow and barter really doesn’t do the job. So they get paid in commodity money. These are the earliest taxes. This is the source of the Biblical tithe of one tenth of one’s products. The leaders don’t want to have to give up any more money than they have to in buying other things they need. Here we have that competition that the zero-sum game simulation produces. Being only human, those leaders don’t want to have to operate in a free market. They don’t want anyone competing with them. They want to set prices low for what they buy. (Well, wouldn’t you in their place?) And isn’t requiring low prices the first step to slavery? How long do you think it would take before the control of the exercise of legitimate force by the religious and political leaders resulted in impoverishing the ordinary farmers? Isn’t this the way the state always works? How many generations before some stranger was being forced to work on the farm or in the town for no pay and given just enough of the necessities to stay alive? How many more generations before it became traditional to capture people from other towns or other societies to work for no pay?
I think you can see that such an evolution, such a development would be very attractive to those in power. How could they resist the temptation? But let’s say that most of those in power did resist the temptation. Let’s say that only a few of the powerful carried their advantage in wealth to the extreme of requiring labor or other services like sex for no pay. It would not take many cities enslaving captives before the other cities would be doing the same thing in reprisals. It’s so seductive. It’s so tempting. It’s so easy to justify. “Well, they did it to some of our citizens. Why shouldn’t we do it to them?”
And then there’s the convenience of having a serving girl to wash the floors and weave the cloth. There’s lots of women’s work that is boring drudgery. Wouldn’t the wives of the wealthy want some help around the house? Wouldn’t you like a boy to fan you when the weather is too warm or to hold up a parasol to keep the hot sun off your head when you go for a walk? Sure, you could pay for some children from other families to do those chores but if you can get it for free?
And if somebody commits a crime what better punishment than having them work on community service like working on that big irrigation project or building a larger temple. You could save lots of money from the state budget that way. The other wealthy folks don’t like paying taxes so they would fall right in with a plan to keep taxes low by just a touch of involuntary servitude. Why there’s something in this slavery thing for all the best citizens. And if the servants don’t like it then they shouldn’t have become poor or committed that crime or gotten captured in that raid.
You will notice that the justifications for not spending money are easy to come up with. Why don’t these people see that they are reducing production and wasting resources by forcing others to work for them? Could it be that they are only looking at the money and not the goods produced? Could it be that they see these slaves as enemies? Since the physical object money developed everyone has started to suspect others, especially strangers, of wanting to take their money against their will.
Time passes, centuries, millennia, and we get to a later, higher form of agriculture. Now there are large irrigation projects and large civic projects like building defensive walls around the towns and cities and big temples to the gods and armies to defend the wealth these cities have accumulated. We have metals technology now. We have bureaucracy to run the state and the church which are really pretty much the same thing in many ways. We have to pay those bureaucrats since they don’t produce food or clothes or build houses. We also have mines now and some people own so much land that their families cannot possibly farm it all themselves. They have to bring in other labor, perhaps hiring some of the poorer or landless farmers. Wouldn’t it be attractive to one of those wealthy land owners for there to be some slaves one could buy to work those lands so that, after the initial investment, the land owner would not have to pay anything for laborers? And you really can’t allow all your workers to quit whenever they want to. Shouldn’t we have laws (yes the state now has laws) laws setting forth the obligations those serfs have to their land owners.
Now the state needs money and money means either taxes, conquest, or mining since most of the more advanced states are switching over to that wonderful new invention, the coin, for their money. But the wealthy don’t want to pay taxes and they are pretty powerful. Your neighbors seem to resent your attempts to conquer them and take their coins and metals. So you need your mines to be productive. But you don’t want to spend money to pay miners for that dirty and very dangerous work. I guess the only way out is to use the people that have the least power to work the mines because everyone else has more power to resist such a near death sentence.
So the wives of citizens want slaves to work in the home. The land owners want slaves to work in the fields. The state wants slaves to build the defense works and mine the ores and work in the mints creating more coins and to make the weapons of war. The church wants slaves to build and work in the temples to the gods. Everybody with money and power sees slavery as a means of saving money. No one with money sees slavery as inefficient or wasteful or non-productive. They see slavery as a bargain. They see all the work slaves do as very necessary, as something which has to be done, as essential to the survival of the society. They can’t imagine doing it for themselves since that’s beneath their status, their dignity, outside their job description. They have more important, executive level work to do. You just have to have slaves. If you don’t believe me just ask any of the ancient writers.
So let’s move on to more nearly modern times. Slavery did decline with the coming of industrialization. It seems that machines could do the work of slaves better, faster, and without complaining. If you’ve read your Dickens, say Oliver Twist, you have some idea of what it was like to be poor and working for wages rather than as a slave. In some ways slavery was better. At least the slave owner didn’t want you to die since he had an investment in your body. Naturally he might put you in chains, treat you as less than human, beat or whip you, demand that you work to exhaustion but at least he would give you some clothing, some food, and some place to sleep out of the rain and cold. The new factory owners had sufficient labor needing work that they could save on those costs of keeping the slaves alive by just paying enough to keep the laborers alive while there was work for them. Once the job was done, one stopped paying them and sent them on their way. And you evaded those up-front costs of buying the slaves or building housing for them. You had enough capital tied up in the machines. So you were really better off just hiring people for almost nothing only when you needed them. There never seemed to be a shortage of people who would take those jobs. It seemed that poor women were pregnant lots of the time and there were always lots of scrawny kids around. It’s not slavery but other than hope (which is a really big thing) there wasn’t much difference. Physical object money was still doing its thing.
In the twentieth century, the Nazis used slave labor in their factories to make arms for their military. The Soviets used slave labor to populate Siberia and punish politically suspect people. According to the Wikipedia article on the history of slavery, “Although slavery is no longer legal anywhere in the world, human trafficking remains an international problem and an estimated 29.8 million persons are living in illegal slavery today.” One might also consider prostitutes working in slavery to their pimps. One might consider illegal immigrants working in dirty and dangerous jobs for extremely low wages. They can’t complain to the authorities for fear of being arrested by the immigration authorities. Workers in sweatshop conditions in foreign factories are working for barely survival wages in dangerous conditions so we can pay lower prices for our shoes. Yes, slavery may be illegal but it still continues in many forms.
Slavery is only able to continue because we still use physical object money. I think you can see how those aspects of the nature of physical object money lead people to practice slavery even when it is technically illegal. So even though using slavery is so stupid as to verge on insanity, slavery existed in almost all agricultural societies until the development of industrialization when it became slightly modified though it still was practiced. You can now see that money as we know it leads us into self-defeating behavior.
Let’s return to those questions we asked about slavery.
Why does slavery exist at all? Because physical object money makes us think we can benefit at the expense of the slaves.
More puzzling still is why has slavery been almost universal around the world in almost every society that is agricultural? Because all agricultural societies develop some form of physical object money.
Why did all those societies practice slavery? Because they all had a physical object money.
Shouldn’t the societies without slavery have surpassed and eliminated the societies that practiced slavery? There were no agricultural societies without slavery. If a society didn’t start out practicing slavery they were soon coerced / enticed into using slaves.
Shouldn’t natural selection have destroyed slavery as people realized that they could be richer and more powerful as a nation if slavery were ended? Physical object money enabled the wealthy to convince others such as the church to support that “peculiar institution.” You may have been aware that the southern churches said that the Bible supported slavery. The Church usually owned slaves also. Money lies to us about the zero-sum game situation. So people never realize that they can be richer if the poor have plenty of money, too. In fact, I’ll bet you don’t believe that the government giving money to the poor would make everyone richer. I’ll bet that you think, that would be robbing from the rich. But consider slavery once again. The poor are not very productive just as slaves are not very productive. If you examine the situation of the slaves and compare that to the situation of the poor you will find they are strikingly similar. The poor are not very productive because they are poor. It isn’t that they are poor because they are not very productive. A slave is not low in productivity because he cannot produce (lazy, incompetent, and stupid). He produces little because he is a slave.
Thus can we explain the insanity of slavery existing in so many nations. But while we are explaining these things about slavery, how about explaining some other insane things that nations have done. You know about the ancient Egyptian pyramids I am sure. But you may not be aware that there are many nations in history that have created pyramids or other massive, hugely expensive, rather pointless constructions. If we ask ourselves what a nations gains from such monstrous projects we have real trouble coming up with a satisfactory answer. These projects use great amounts of labor and resources. But what good has that pile of rocks done for Egypt in the last 4500 years? The pyramids didn’t increase agricultural production, it reduced production. It took thousands of people out of the labor pool so that they could not farm or maintain and expand roads or irrigation or build ships for fishing. It cost many lives since such projects are very dangerous.
So on the surface it would appear to be insane to expend such effort and so many resources to produce something that might, someday, be something that tourists would gawk at. So what’s up with that? I suggest that building such monuments is a means of demonstrating the power and authority of the top ruler, be he king or priest or both. I suggest that the priests, when the edifice is a religious item, find that such a project increases their own importance and power. In other words, whatever the waste and cost and lost opportunity costs, the powers that be in the nation are doing this for their own personal benefit. They are not doing it because it is needed for the survival or strength of the society. They are not doing it because the gods command it. They are doing it because they want more money and they can use money to gain that additional money. The peasants (ordinary people) will be kept in line and scared to object or revolt by the impressive magnificence of the shrine / temple / monument. Only a god could make such an overwhelming structure.
Producing such monuments requires money as a means. It pays for the labor and resources. In most cases the money was commodity money. In Egypt the money was various kinds of food since the coin had not been invented as yet. In China there’s a huge funeral monument which was recently discovered. It includes some 10,000 clay statues of the ruler’s military guard (each statue is unique and seems to have been modeled from the actual guardsmen) with statues of horses, even. When that monument was made coins were in use so coins would have been used.
We know that the two party interaction aspect of physical object money was crucial in that it allowed a concentration of wealth sufficient to dominate the labor and resources of an entire nation for years. We also know that the zero-sum game aspect of physical object money meant that the peasants could be sacrificed in the production of that monument.
We know that collecting tax money to provide funds for such monuments is possible only because physical object money can be taken from its owner against that owner’s will. So everything in the whole process of creating these monuments from motivation to have them built through assembling the resources of men and materials to construction, all depends on physical object money. No nation would do such a stupid thing were it not for the nature of the money we use.