|Scars of a whipped slave (April 2, 1863, Baton Rouge, Louisiana, USA. Original caption: “Overseer Artayou Carrier whipped me. I was two months in bed sore from the whipping. My master come after I was whipped; he discharged the overseer. The very words of poor Peter, taken as he sat for his picture.” (Photo credit: Wikipedia)|
Slavery was also unprofitable. To be profitable, the cost of capturing and then supervising a slave had exceed the value that a slave could produce beyond its cost. As rational economic agents, primitive people killed or drove off people so they could take their land. Captives might be tortured for entertainment, there being no Internet at the time. But slavery and theft made no economic sense.
Improvements make theft and slavery profitable
As humans developed agriculture and other technologies and learned better ways of organizing themselves, they were able to increase individual productivity. This changed the economic balance. Slavery could now be profitable because individuals could produce substantially more than subsistence. Groups improved their standard of living by taking territory, enslaving the territory’s former occupants, and having those slaves produce wealth which their masters took, leaving the slave just enough to survive.
Over time a robust slavery market emerged. Market participants specialized and specialization led to increased efficiency and increased profits. Some people specialized in changing production processes so that they could efficiently use slaves to generate wealth. Others specialized in capturing people and making them slaves. Others specialized in transporting slaves from places where the supply was plentiful to places where the supply was low and the demand was high.
But markets never sleep, and the market for slavery has developed new, more sophisticated kinds of slavery. One of them is called “wage slavery.” Free people keep all the value produced by their labor. Slaves keep very little–enough for them to survive and continue to work. Like chattel slaves and unlike free people, wage slaves keep little of what they produce, and they must produce or starve. And through the magic of modern marketing, many wage slaves think they are free.
The violence market
Increased productivity let people accumulate portable wealth–in the form of stored food or goods that could be traded. Portable wealth made banditry profitable. Bandits could roam through the countryside looking for groups who had enough wealth to make theft worth considering. Of course no one would simply hand over wealth to bandits on request. Violence was required. Economically efficient banditry required economically efficient violence and this led to a market for violence.
Violence markets, like slavery markets, continue to this day, and have become quite sophisticated, with their own logic and rules. And from them, through the invisible hand of markets, governments have come into being.
Increasing your defensive potential has problems. It makes you less productive. Some of the resources that you would have spent producing wealth must now be spent building a wall and whatever weapons and armaments you will need to defend it. If your neighbors become roughly as effective as you are as resisting violence then your market advantage is gone: rational bandits will see violence transactions you as cost-effective as with your neighbors. So like it or not, you’ll be back in the violence market again.
Talent, temperament and training all make a difference. People who become effective members of a band of bandits start with some talent and temperament for delivering violence. Then undergo a difficult period of apprenticeship to improve the skills they have and to develop new ones. Internal market forces ensure that those who deliver violence most effectively move to the top. External market forces ensure that bands that deliver violence more effectively prosper at the expense of their competitors.
Another counters: “That might be a good idea if we were the only bandits in the local violence market. But we’re in a competitive market for violence and thievery. If we leave something behind, then one of the other bandit groups can steal it. When we come back there will be nothing for us. And it will make them stronger. So we should take it all.”
“That’s right,” the band agrees.
So that’s what they do.
Now given the choice between continuing to participate in a competitive market for theft and violence and making a deal with a group that wants such a monopoly, a rational citizen will ask the following questions: “Would we rather have everything we own stolen, have our women raped and then everyone tortured and killed, or would we rather subject ourselves to tax theft and government?”
…any medium through which two or more parties can engage in an economic transaction, even those that do not necessarily need to involve money. A market transaction may involve goods, services, information, currency or any combination of these things passing from one party to another in exchange for one of these or another combination.
In violence market some parties offer either protection or violence in exchange for other goods, services, or information. I claim it meets the test.
And by one definition of freedom, violence markets (before government monopolies were granted) were the most free of all markets. Any exchange between market participants that is valid on any other market is also valid in a violence market; and many trades that are not valid elsewhere (for example, “buy this service at this price or I will kill you”) are valid only in a violence market.
Violence markets are truly free. I am free to make any offer. You are free to accept my offer or not. And I am free to kill you if I don’t like your answer. Or even if I do like it.
My thinking was recently stimulated by Mancur Olson’s “Dictatorship, Democracy, and Development” and earlier by the logic of the violence market as elaborated by Tony Soprano and company. On Slavery, this Economist Article is a good summary. Others are not so sure about the significance of slavery. The Mises Institute says “Confining our attention to large scale slavery, we find that it is historically quite a rare phenomenon.” They have a longer essay on the subject, but I’m not about to pay for it. Unless they threaten to kill me. Then, yes.