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Ending Slavery Made America Richer
Ending Slavery Made America Richer
May 8, 2025 9:18 AM

There is a near universal agreement that America’s experience with chattel slavery, where people are treated as the chattel or personal property of an owner and are bought and sold as if they modities, was one of our country’s gravest moral horrors. But some people seem to believe that the despicable institution aided the nation’s prosperity.

That’s not the case, explains economist Scott Sumner, who points out that countries with free labor tend to be more prosperous:

Between 1850 and 1880 the market value of slaves falls by just over 100% of GDP. And that decrease is almost precisely offset by a slightly more than 100% increase in capital (industrial and housing.) The total capital stock declines slightly in the Piketty graph, but that’s only because of a fall in the value of agricultural land, not capital.

Now here’s where mislabeling slaves as es into the equation. At first glance it looks like America’s capital stock was unaffected by the abolition of slavery. But the actual capital stock rose by over 100% of GDP—an industrial revolution. If you insist on treating slaves as “capital” it doesn’t change the basic story. Because in that case a separate ledger of “labor resources” would have soared after 1865. Former slaves would now be classified as “labor,” and hence the labor stock would rise dramatically, even on a per capita basis. Either way, abolishing slavery made America a much more productive, and hence richer country.

Now let me anticipate the “yes buts.” Some Americans were made worse off. Obviously slave-owners, and less obviously those who were closely connected to the slave economy (bankers who financed them, cotton mills, etc.) But as Fogel showed (in a study of railroads), when thinking about any economy we tend to mentally overrate the importance of any one sector, especially big sectors. So despite the very real losses to a sizable group of Americans, the economy overall did much better as a result of the abolition of slavery.

From a Christian perspective this finding shouldn’t be all that surprising. Institutionalized restrictions on labor—of which chattel slavery is an extreme form—are contrary to God’s design for economic justice.

As history has shown, human flourishing is predicated on access to God-given freedoms such as religion, conscience, and labor. Violating God’s model for flourishing is never a long-term plan for prosperity — a lesson it has taken America far too long to learn.

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