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Title: Conflicts over Land, Labor, and Rent Essays on The Political Economy of Institutional Change

Citation Type: Dissertation/Thesis

Publication Year: 2020

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Abstract: We study changes in economic incentives to slave-ownership by analyzing one of the central aspects of the evolution of slavery in the US South: the Westward territorial expansion. While at the beginning of the nineteenth century, Southern states developed around the Atlantic shore, in the following decades, the Westward expansion shifted the epicenter of production toward the Mississippi valley. At the same time, about one million slaves were forcibly moved throughout the South, profoundly transforming its economic landscape. This paper examines the impact of the Westward expansion on slave relocation and emphasizes a link between economic incentives to slave-ownership, and the political support for the institution of slavery. Our results show how the Westward expansion polarized the productive, political and social system in the US South, eventually determining the geographical distribution of the support for the secession. Our strategy exploits two elements. First, the fact that the Westward expansion, between 1810 and 1860, implied a significant variation in the amount and type of agricultural land, inducing local changes in the incentives to crop production. Second, the fact that no more slaves could be introduced into the US after 1808. The abolition of the Atlantic Slave Trade (1808) implied that any change in the local number of slaves resulted from relocation within the US South.2 We leverage these facts to compute changes in the county-level comparative advantage for the production of cotton relative to wheat and predict slave relocation. To establish a relationship between the comparative advantage in the production of cotton (vs. wheat) and the use of slaves (vs. free labor), we rely on the well-known empirical association in the US South between the intensity of cotton production and the use of slave labor (Wright, 1979; Fogel and Engerman, 1977) and provide evidence in favor of a specialization of slave labor in the production of cotton relative to wheat.3 We measure changes in comparative advantage in the following way. First, we use information on soil characteristics at the county level (FAO-GAEZ, 2002) to estimate the relative productivity of cotton with respect to wheat.4 Second, we compute, for each decade, the changes in each county’s position in the distribution of relative productivity determined by the addition of land due to the Westward expansion. The size of the change in the distribution depends on the relative productivity of each county compared to the newly established counties in the West. These heterogeneous changes capture the level of exposure of a county to the competition generated by the newly available land. We expect a larger drop in the distribution of relative productivity to be associated with larger changes in both the crop mix and the use of slave labor: an increase in wheat and a decrease in cotton production; a reduction in slaves.5 We then show that these changes not only affected crop production decisions and local reliance on slave labor but also caused broader political and ideological transformation. Finally, we provide a quantification of the potential channels and rule out migration as the main mechanism. This shows that our results are at least partially due to changes in preferences and social norms. The key identifying assumption behind our econometric model is the absence of unobservable county-specific and time-varying characteristics that affect the use of slave labor and are correlated with changes in the position of a county in the relative productivity distribution. To ensure and assess the validity of our identification, we take several steps. First, we control for county fixed effects, thereby absorbing all the time-invariant county characteristics that could potentially affect the number of slaves in a county and census year. Second, we include year fixed effects, which capture common changes brought by the Westward expansion. In this way, we only exploit the differential effect that the Westward expansion had on counties with different relative productivity of cotton with respect to wheat. We always control for the distance to the northern border (non-slave states) interacted with year fixed effects, and Census region fixed effect interacted with year fixed effects. Therefore, in our analysis, we always compare counties that are at the same distance from the North and in the same Census region but that differ in the extent to which the Westward expansion affected their agricultural comparative advantage. This specification allows us to net out potential effects derived from the evolution of the cultural and institutional environment that depend on counties’ geographical position. For example, counties closer to the Northern border might be influenced by the changing northern ideological environment more than counties further away. We then estimate a series of alternative specifications. First, we compute changes in comparative advantage by exploiting national changes in the prices of labor inputs (wages and slave price) and agricultural outputs (cotton and wheat prices) as a source of time variation. We show that as the cost of producing cotton increased, counties with lower relative productivity adjusted crop production and decreased their share of slaves. Second, we include sugar, tobacco, and corn in our analysis, the other main cash crop of the Antebellum south. Third, we exploit the fact that the timing of the effect of the Westward expansion was not the same for all crops. We then show that our estimates are robust to restricting the analysis to the sample of counties belonging to the US in 1810 and also only to counties formed during the Westward expansion. Finally, we allow for different trends depending on the share of slaves before the end of the Atlantic slave trade (1808), when the amount of slave labor available was not restricted. In the first set of empirical results, we look at the effect of agricultural shocks on slave relocation and production decisions. We find that when a county loses comparative advantage in the production of cotton, it reduces the use of slave labor. A county that in 1810 had a median relative productivity experienced a substantial loss in comparative advantage between 1810 and 1860. Over this period, almost 1 million squared kilometers of land with higher relative productivity was added. Due to the competition generated by the new land, this county experienced a 10.7 percentage points reduction in the share of the enslaved population. This reduction is substantial when taking into account that the average share of the enslaved population was 28%. Overall, our estimates imply that between 1810 and 1860, almost 800,000 slaves were relocated due to the competitive forces generated by the Westward expansion.

Url: https://e-archivo.uc3m.es/bitstream/handle/10016/31178/Thesis_michele_rosenberg_2020.pdf?sequence=3

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Authors: Rosenberg, Michele

Institution: Universidad Carlos III de Madrid

Department: Economics

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Publisher Location: Madrid, Spain

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Data Collections: IPUMS USA, IPUMS NHGIS

Topics: Labor Force and Occupational Structure, Land Use/Urban Organization, Other

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