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To: Ghost of Philip Marlowe
Would they have remained in the South?

Most likely. That's where the greatest need for Labor would have existed; and, following Compensated Emancipation, the greatest amount of free cash seeking labor.

If so, they would have drawn much higher wages, thus bankrupting the South.

Sorry, but that's not an economically-sensible claim.

Where labor costs are freely-negotiated and dynamic (i.e., not stratified by Union-backed wage laws, etc.), labor supply and demand will meet at the equilibrium, market-clearing price. This price will be lower than a price which would cause any sort of general bankruptcy; because if labor costs are high enough to cause a business to go into bankruptcy, the workers will lose their jobs and have to look for employment in businesses which do NOT pay bankruptcy-inducing high wages (since those will be the businesses still in operation and able to offer employment). If bankruptcy destroys jobs, that puts extra labor on the market, resulting in a drop in labor prices to a level which can be profitably sustained.

Since I don't think that you're an idiot, then you already know that this is basic free-market-capitalist labor economics. And it works.

534 posted on 04/01/2010 7:34:18 AM PDT by Christian_Capitalist (Taxation over 10% is Tyranny -- 1 Samuel 8:17)
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To: Christian_Capitalist

Whether freed slaves would draw a higher wage is the most economically sensible question to ask.

If the South was already running in the black, paying higher wages would have caused greater economic stress.

Again, you are arguing free-market principles. But free-market principles are not at play when there are two systems of slavery in place.

Slavery is a failed economic business model. You simply can’t force people to produce more continually than you can someone who is working by choice. It was doomed to failure. Buying the slaves and then returning them to the same work but with higher wages would have solved nothing. It would have given the North the monopoly that they wanted. And monopoly is not part of the free-market model.


821 posted on 04/01/2010 5:39:36 PM PDT by Ghost of Philip Marlowe (Prepare for survival.)
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