Richard Hornbeck (University of Chicago)


One Giant Leap: Emancipation and Aggregate Economic Gains

African American men and women picking cotton, Savannah, Georgia, between 1867-1890. Library of Congress.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.

This seminar took place on Wednesday April 3 2024 in CGIS S-354 at 12.30 EDT