Economic Incentives, Institutional and Cultural Change: the Evolution of Slavery in the Us South

Abstract: This paper establishes that, under the same institutional setting, divergent local economic incentives determine divergent patterns in institutional, political and cultural environment. We first show how changes in agricultural incentives shaped the distribution of slave labor in the US South. To do so we propose a theory that links the comparative advantage in the production of different crops to the efficient use of slave labor and free labor. We then use data on land suitability for different crops and changes in the quantity and type of available land, due to the westward expansion, to predict the evolution of the counties’ relative advantage in the production of specific crops. We finally show that changes in economic incentives affected agricultural production decisions and ultimately determined the relocation of slaves across the US South. In the second part of the paper we turn to the exploration of the cultural and political implications of these economic shocks. We use Southern Newspapers and predict pattern of slave manumission to show that economic incentives affected the moral attitudes towards slavery. Finally we examine congressman roll call behavior, presidential and gubernatorial election to study the effects of economic changes on political ideology and political support for the institution of slavery.