J.B. Say argues that colonial slave labor is really quite profitable for the slave owners at the expense of the slaves and the home consumers (1817)
Found in A Treatise on Political Economy
Say denounced slavery as “this vicious system of production” and argued that slaves were kept in poverty by their masters who pocketed most of the profits of their labor.
Indeed, this very exorbitance of profit shows, that the industry of the master is paid out of all proportion with that of the slave. To the consumer it makes no difference. One of the productive classes benefits by the depression of the rest; and that would be all, were it not that the vicious system of production, resulting from this derangement, opposes the introduction of a better plan of industry. The slave and the master are both degraded beings, incapable of approximating to the perfection of industry, and, by their contagion, degrading the industry of the free man, who has no slaves at his command.
Political economists in the late 18th and early 19th centuries were divided over whether or not the system of slave labor was “profitable”. The Smithian school argued that free labor was more productive than inefficient slave labor because of the “incentive problem.” Say, on the other hand, argued that slavery was immensely profitable to the slave owners who were able to benefit from protective tariffs and to transfer many of their costs to domestic consumers and taxpayers. The outcome of this academic debate would be very important to the problem of if and when slavery would end in the United States.