Despite common beliefs held my many historians today, slavery was, in fact, profitable. The market value alone of slaves suggests profitability. In 1815, a typical U.S. slave was worth $250; by 1839 the price was $500; and by 1860 it had climbed to $900. Prices of slaves would not have quadrupled if they were not a means of profit for the owner. The average price of slaves quadrupled because the average Southern crop production per slave quadrupled. Slaves increased in value because they produced more in salable crops. Three alternative paths all lead to this same conclusion: slavery was profitable.
First, thousands of planters bought slaves on credit from traders. Few planters would have borrowed to buy those slaves and pay interest on them if they did not think they could earn at least as much money putting them to work in the fields. The average interest rate charged by traders between 1820 and 1860 was eight to ten percent.
Since this rate did not vary much over the years and the slave trade business was booming, it is safe to assume that planters were getting at least ten percent return on their investments.
Second, many slaves were hired out by their owners. This usually happened when a planter had a temporary surplus of field hands. The rent charged for these slaves were proportionate to their investment return that year. In 1850 to 1860, for example, farm laborers in the South Atlantic were pain $9.64 per month. West South Central slaves rented for $13.90. Such slaves sold for about $1,070 and $1,400, respectively. Rented slaves in the South, then, earned about eleven to twelve percent of their value for their owners.
And Third, look at the approach pioneered by Alfred Conrad and John Meyer. It compares rates of return from...