Slavery

[John Suburbs]

As the history shows, this is not strictly true. The use of slave labor tends to be very profitable in large-scale operations requiring significant number of unqualified workers. This was the case in Ancient Egypt, this was the case in Roman Empire, this was the case in some medieval societies, this was the case in 17th - 19th century USA, Russia and Latin America, this was the case in 20th century Nazi Germany and Soviet Union. It is still the case now. Slavery is still (illegally) practiced at present day for this very reason - it is very profitable in certain cases.

As far as medieval European feudal society is concerned, slavery was never actually abolished formally, as it happened in the 19th century Americas. The Roman institution of slavery gradually evolved into the institution of serfdoom (the very word "serf" derives from Latin *servus", i.e. "slave"). There is no clear boundary between slavery and serfdoom - legal status of a serf could be anywhere between that of a Roman slave and that of a free peasant depending on a specific historical period and geographic location.

I think you'll find that in Egypt, Rome, Greece and elsewhere slavery did not emerge to a great extent until their later periods, mostly as they gained power through conquest -- you must have some way to dismantle a rival culture, and just letting people go back to their business once you've conquered them is a non-starter. But it's almost universally accepted these days that slavery was, and is, more expensive than free labor.

The difference between a slave and serf is that the slave is bound to its owner while the serf is bound to the land. It's a distinction without a difference, of course, because they both had to work the fields for little more than the clothes on their backs and food in their bellies while the land-owners reaped all the profits. In general, serfs had more leeway to organize themselves into family units and they couldn't be bought or sold unless it was as part of the land they worked. In essence, the serf was like stone, timber, game or any other resource -- a thing to be exploited by its owner.

[Universal Sword Donor]

Hello buddies ! I want to ask why slavery and slave trade is so important for Essos and mostly for the free cities ?

In the words of Archer, "What's to prove? It's free labor."

[LiveFirstDieLater]

 But it's almost universally accepted these days that slavery was, and is, more expensive than free labor.

The difference between a slave and serf is that the slave is bound to its owner while the serf is bound to the land. It's a distinction without a difference, of course, because they both had to work the fields for little more than the clothes on their backs and food in their bellies while the land-owners reaped all the profits. In general, serfs had more leeway to organize themselves into family units and they couldn't be bought or sold unless it was as part of the land they worked. In essence, the serf was like stone, timber, game or any other resource -- a thing to be exploited by its owner.

This is nonsense.

slavery is free labor, labor that is not paid for... Literally the definition... And while morally reprehensible, is probably the only way the ancient world could have ever built wonders in the way they did. Pyramids, Great Wall, Collosium or colossus, all built by slaves. So to try and argue that they "cost more" is ridiculous. 

while there are many kinds of Slavery and Serfdom, a classic western major difference is that Slaves are almost never allowed their own property (because of course they were considered property themselves), unlike serfs. 

To say that serfdom and slavery amounted to the same thing is ignoring a major step up for the lower class.

[John Suburbs]

This is nonsense.

slavery is free labor, labor that is not paid for... Literally the definition... And while morally reprehensible, is probably the only way the ancient world could have ever built wonders in the way they did. Pyramids, Great Wall, Collosium or colossus, all built by slaves. So to try and argue that they "cost more" is ridiculous. 

while there are many kinds of Slavery and Serfdom, a classic western major difference is that Slaves are almost never allowed their own property (because of course they were considered property themselves), unlike serfs. 

To say that serfdom and slavery amounted to the same thing is ignoring a major step up for the lower class.

Sorry, but wrong. Slavery is not free. First of all, you have to buy your slaves, at least to start. And a young, strong male slave who's good for working in the fields cost about as much as a young strong horse. So right off the bat, your in the hole for today's equivalent of a Ford F-150. But even with slaves that are born to you, you still have to clothe them, feed them, provide medical care, keep them warm in the winter...and the costs go up the more slaves you own.

Compared to that, a working peasant is a bargain -- a few coppers a week, maybe,  and if they don't perform well, you fire them. You can't fire a slave, and if you just kill them, well there goes your investment.

The scholarly research is still evolving regarding the Pyramids, Coliseum, etc., but there are those who contest that they were built by slaves. And things like the Pyramids and the Great Wall were not built with regard to cost anyway: they were national initiatives, expenses be damned.

I never said serfdom and slavery were the same. Different in concept, but similar in the day-to-day life of the slave/serf. Serfs did not own property either. Only the land-owners did. Serfs were part of the land and could be utilized just like any other natural resource. Serfs could build their own hovels on that land and maintain a family unit that was unlikely (but not impossible) to be broken up by the master. They could be whipped, beaten and even killed by the land owner, and they were not allowed to travel freely without their lord's permission. So it was a minimal step up from slavery at best.

[Melisandre's White Pubes]

At least in the case of the USA, slavery became an inferior way to get cheap labor because of the increased mobility of poor people, largely because of technology, which made them easier to replace than maintain.  In the early 19th century, in some coastal cities there was a mix of free and slave labor working at the docks.  One of the most dangerous jobs for dockworkers was standing on the pier and catching heavy bags of goods that were thrown down from the deck of the ship…it was not uncommon for the worker to fall into the water, and since few people could swim and those who could just had a 75 pound bag thrown on top of them, drownings were very common.  There is a contemporary writing from a supervisor at a harbor I read back in college, where he explained that you never used slaves for that job, because a strong male slave would cost at least a $100 (which was equivalent to thousands today), while you could get an Irishman to do the job all day for the cost of one bottle of whiskey.  It didn't matter if the workers died frequently, or weren't paid enough to survive - there were always more coming off the ship.  In medieval times, we didn't have shiploads of poor people traveling the world looking for work - people were bound to the land, and essentially belonged to whoever owned the land (you could not sell serfs, but if you sold land with serfs on it, they were part of the deal).  Slaves were used for jobs that needed lots of man hours on a regular basis but were not particularly dangerous.

The increased supply of unskilled labor combined with the automation made slaves a poor choice to work in the dangerous industrial age factories.  Another factor was that basic literacy was required for a lot of factory jobs - especially with the high turnover, workers could not all be taught personally every aspect of operating the machinery, and had to refer to manuals to do their work.  Teaching slaves to read was a bad idea because writing allowed dangerous ideas to spread quickly, as well as making it easier to organize rebellions without having to gather in one place.  This increasing literacy in the underclass fueled the rise of popular fiction that was told in serial form in newspapers from authors such as Charles Dickens, which in turn raised social awareness and turned popular opinion against slavery, even among those who were not competing with slaves for work because their jobs were too dangerous to use expensive slaves.  As voting rights increased, this also increased the protections for workers and the invention of the weekend and the 40 hour work week.  This increased the labor cost of production, but the cat was already out of the bag and they couldn't go back to slavery even when Irishmen became as expensive per day as slaves.

Ironically, this increased social awareness and governmental protections for the working poor has allowed labor costs for businesses to go down again.  A company like Wal-Mart couldn't survive paying the majority of it's workers far less than is needed to survive in 1900 - the turnover would be onerous as employees starved or found better ways to make a living.  If you had to pay people enough to afford rent, food, and medical care, it would be cheaper to just buy slaves and pay for their housing, food, and care yourself and save money with the economy of scale.  But maintaining a healthy Wal-Mart employee today, even as a slave, would cost far more than the $9 an hour they pay their workers today.  The only reason they can maintain such a large workforce with such a small labor cost is that the rest of us are picking up the tab for the difference - people who live on those wages have their medical, housing, and food costs subsidized by taxpayers.  Slavery would have remained economical far longer if the slave owner could get their slaves food stamps, Medicaid, and subsidized housing.

[Moiraine Sedai]

Slavery is economically beneficial to one side, the owners.  It is exploitation of the weak.  Human beings treated like disposable resources.  George meant for the Masters of Slaver's Bay to be totally despicable people.  That's why he created the "Walk of Punishment" and the training protocol for The Unsullied.  The practice is inexcusable.

[LiveFirstDieLater]

Sorry, but wrong. Slavery is not free. First of all, you have to buy your slaves, at least to start. And a young, strong male slave who's good for working in the fields cost about as much as a young strong horse. So right off the bat, your in the hole for today's equivalent of a Ford F-150. But even with slaves that are born to you, you still have to clothe them, feed them, provide medical care, keep them warm in the winter...and the costs go up the more slaves you own.

Compared to that, a working peasant is a bargain -- a few coppers a week, maybe,  and if they don't perform well, you fire them. You can't fire a slave, and if you just kill them, well there goes your investment.

The scholarly research is still evolving regarding the Pyramids, Coliseum, etc., but there are those who contest that they were built by slaves. And things like the Pyramids and the Great Wall were not built with regard to cost anyway: they were national initiatives, expenses be damned.

I never said serfdom and slavery were the same. Different in concept, but similar in the day-to-day life of the slave/serf. Serfs did not own property either. Only the land-owners did. Serfs were part of the land and could be utilized just like any other natural resource. Serfs could build their own hovels on that land and maintain a family unit that was unlikely (but not impossible) to be broken up by the master. They could be whipped, beaten and even killed by the land owner, and they were not allowed to travel freely without their lord's permission. So it was a minimal step up from slavery at best.

haha I suppose how you define free, but in many cases (for instance the Greeks where the word slave comes from) slavers were not bought. Slave the word is derived from the same root as the Slavic people, because the Greeks would pillage and capture slaves from there... They didn't pay for the horses they took, or the people... Interestingly in this example the children of slaves were born free. Not terribly unlike the ironborn, paying the iron price and having the children of salt wives be free.

 

The arguement you should be making is not that slaves are more expensive but that they have no disposable income to drive an economy, so rather than poor consumers (serfs) you have slaves... They don't cost more they just only contribute through their labor and not via purchasing power. But this is a totally different argument.

 

also to say that wonders were built without regard to cost is silly, it's just that the cost was only possible because of slavery... And you can contest all you like but it's not terribly convincing, you need a huge amount of cheap labor to build huge projects like the wonders of he world, and no workforce is cheaper than slaves

[Jaak]

haha I suppose how you define free, but in many cases (for instance the Greeks where the word slave comes from)

No. Greek words are, e. g. "doulos".

slavers were not bought. Slave the word is derived from the same root as the Slavic people, because the Greeks would pillage and capture slaves from there...

Not at that period, much. And there were no Slavic people found at the time - not until 6th century.

They didn't pay for the horses they took, or the people...

The raiders didn´t. But the Greeks were no ironmen. THEY did not insist on iron price, or forbid sale of thralls - it was possible for soldiers to keep slaves they personally captured, but most of the slaves captured by Greek armies were sold by the captors for cash. And most Greek end employers of slaves had not personally captured their slaves - they had paid someone the market value of slave, whether that someone was their neighbour who went on the raid, or a professional slave merchant who visited another city.

Interestingly in this example the children of slaves were born free.

Not in Greece.

also to say that wonders were built without regard to cost is silly, it's just that the cost was only possible because of slavery... And you can contest all you like but it's not terribly convincing, you need a huge amount of cheap labor to build huge projects like the wonders of he world, and no workforce is cheaper than slaves

No. A large part of pyramid building was done by peasants mobilized for agricultural off season - who went back homes to farm during the rest of the year.

[John Suburbs]

haha I suppose how you define free, but in many cases (for instance the Greeks where the word slave comes from) slavers were not bought. Slave the word is derived from the same root as the Slavic people, because the Greeks would pillage and capture slaves from there... They didn't pay for the horses they took, or the people... Interestingly in this example the children of slaves were born free. Not terribly unlike the ironborn, paying the iron price and having the children of salt wives be free.

 

The arguement you should be making is not that slaves are more expensive but that they have no disposable income to drive an economy, so rather than poor consumers (serfs) you have slaves... They don't cost more they just only contribute through their labor and not via purchasing power. But this is a totally different argument.

 

also to say that wonders were built without regard to cost is silly, it's just that the cost was only possible because of slavery... And you can contest all you like but it's not terribly convincing, you need a huge amount of cheap labor to build huge projects like the wonders of he world, and no workforce is cheaper than slaves

When you account for the total cost of ownership, not just the absence of wages but all the costs required to support your labor, slavery is almost always the more expensive option. If free labor becomes organized to the point where it starts to cost more than slavery, that's when political pressure starts to mount to abolish slavery. Otherwise, peasants are paid a fraction of what it costs to keep a slave and then left to fend for themselves.

Most cultures, including the Greeks, acquired slaves through conquest, but the people doing the capturing were not the same ones putting the slaves to work. The newly conquered people, along with horses and anything else, were marched to the victorious cities and sold at auction to the landowners there. Very lucrative for the conquerors, and the top military brass, but more expensive for the eventual owners.

And you're right, without an income, a slave is a full cost center, while a paid laborer must acquire his own food, clothes, shelter, fuel, etc., which in many cases were bought from the employer who is paying the subsistence wages in the first place. So in both cases, the slave and the laborer often find themselves trapped in inhuman circumstances, it's just that the slave is trapped by law while the laborer is trapped by circumstance.

And I guess it wasn't accurate to say the Pyramids et al were built without regard to cost, but that since these were not commercial, money-making projects the need to keep costs to a bare minimum was not as strong as, say, a privately run aqueduct or a toll road. Again, the conquering empire must find something for all of these conquered people to do, so putting them to work on massive public projects was the easy answer, even though it would have been cheaper to pay for labor -- although perhaps a little more difficult to organize.

The only way slave labor even comes close in cost to free labor is in long, enduring projects like these in which the work is steady throughout the years. In most cases, though, particularly in agriculture, this is not the case. Planting and harvesting are peak work times, while summer and winter tends to drop off. So a farmer who uses 100 percent slave labor is not only paying more during peak times vs. free labor, but is responsible for these extra mouths to feed when the work slows down. With free labor, you can scale your workforce, and thus your costs, up and down to meet your workload.

[Jaak]

And you're right, without an income, a slave is a full cost center, while a paid laborer must acquire his own food, clothes, shelter, fuel, etc., which in many cases were bought from the employer who is paying the subsistence wages in the first place. So in both cases, the slave and the laborer often find themselves trapped in inhuman circumstances, it's just that the slave is trapped by law while the laborer is trapped by circumstance.

 The vital difference is that an employer who´s worse than most loses his employees - they are legally free to move to another employer, so the wages will level at the prevailing market rate. Whereas a slaveowner who´s worse than most still owns his slaves, and a master who employs his neighbour´s slave is a thief as much as a master who employs his neighbour´s horse.

And I guess it wasn't accurate to say the Pyramids et al were built without regard to cost, but that since these were not commercial, money-making projects the need to keep costs to a bare minimum was not as strong as, say, a privately run aqueduct or a toll road. Again, the conquering empire must find something for all of these conquered people to do, so putting them to work on massive public projects was the easy answer, even though it would have been cheaper to pay for labor -- although perhaps a little more difficult to organize.

A large part of pyramid workforce WAS "paid", and quite well, although not in cash, which Egypt did not have.

The professional building force was 4000 - the number known to Herodotus, but this one is confirmed by contemporary records. The graves of pyramid supervisors contain descriptions of the structure of that 4000 men workforce - 2 groups of 2000, each divided into 2 groups of 1000, each into 5 groups of 200, each into 10 groups of 20.

Herodotus´ 100 000 for seasonal workforce was overestimate - likely number is 40 000.

Now, it´s not something an ancient or Middle Age kingdom cannot do!

North mobilized 20 000 men under Robb and Eddard, who left their fields, sometimes to rot, and marched off to Riverlands, Duskendale and Storm´s End. Robb´s soldiers did not return (save those of Bolton), Eddard´s did - but they were away from their homes and jobs for 12 months.

If Eddard or Robb could call 20 000 men to leave their farms, and then feed them - how WAS the army kept fed?

Robb might have called 20 000 men to build a Pyramid for him. At least no one would be out to kill them...

[LiveFirstDieLater]

No. Greek words are, e. g. "doulos".

Not at that period, much. And there were no Slavic people found at the time - not until 6th century.

The raiders didn´t. But the Greeks were no ironmen. THEY did not insist on iron price, or forbid sale of thralls - it was possible for soldiers to keep slaves they personally captured, but most of the slaves captured by Greek armies were sold by the captors for cash. And most Greek end employers of slaves had not personally captured their slaves - they had paid someone the market value of slave, whether that someone was their neighbour who went on the raid, or a professional slave merchant who visited another city.

Not in Greece.

No. A large part of pyramid building was done by peasants mobilized for agricultural off season - who went back homes to farm during the rest of the year.

you are correct slave was from Latin not Greek. Based on old Otto the Great apparently.

however the point remains (and there were many Greek city states where one could not be born a slave, this doesn't make you a citizen but there is a difference) that the bit about the pyramids is more or less conjecture but slaves were almost defiantly used, as with the other wonders. 

It is patently ridiculous to claim that slaves are more expensive. Morally wrong, absolutely, but practical none the less

[Grazdan of Ghis]

you are correct slave was from Latin not Greek. Based on old Otto the Great apparently.

Medieval Latin / Byzantine Greek actually - https://en.wiktionary.org/wiki/slave#Etymology

The terms used during classical antiquity are "servus" (Latin) and "δουλος" /doulos/ (Greek). The new term was probably introduced because original terms came to mean "serf" rather then "slave" in medieval usage.  

[Jaak]

 the bit about the pyramids is more or less conjecture but slaves were almost defiantly used, as with the other wonders. 

It is patently ridiculous to claim that slaves are more expensive. Morally wrong, absolutely, but practical none the less

With pyramids, almost definitely not.

Repeat the argument from where I already mentioned. First group: seasonal workforce of about 40 000. Who went back to farms for the rest of the years.

Why would these have been slaves? Peasants mobilized to fight a war or build a pyramid for a few months? They would have had their fields, and probably families left behind in villages.

[The Marquis de Leech]

The thing about slaves... they aren't cheap to either buy or maintain.

If you buy a slave, you have to feed them and house them. You have to take precautions in case they run away (escaped slaves is a perennial problem in any slave-owning society). If you neglect them, they are unable to do work.

By contrast, low-wage free labour is much more lucrative - you don't need to feed them or house them, and in unskilled situations they're completely expendable. And they're never going to run away.

[OldGimletEye]

Hello buddies ! I want to ask why slavery and slave trade is so important for Essos and mostly for the free cities ?

Well, let me just give you the perspective of a rich Volantian noble. I own lots of stuff. And why shouldn't I? It was my Valyrian ancestors that conquered the place and why should we have to go with out? We're related to dragons after all. Nope, a hard scrabble existence is meant for "those people", if you know what I mean.

Anyways it turns out, I own lots and lots of land. I hire labors, you know "those people", to work on my land. They work on my land, I pay them as little as I can, and then sell the stuff on markets. I make a tidy little profit by doing this.

Now I am thinking about taking a hard earned (well my laborers hard work really) vacation to the Summer Isles and I might sell a little of my land off. But, you know, I am not even really sure what my land is even really worth. So, I write to this Maester in Oldtown about how to price land. And he writes back and says that to price an asset you are supposed to figure out its cash flows and then discount those flows over some suitable horizon. He says a real simple way to do it, making some assumptions and approximations, is just by:

value of land = profit/interest rate

Now obviously my profits are the quantity of stuff I sell, Q(L), times the price,p(L), of the stuff, minus the wages,w(L), I have to pay those people. Of course all these variables are functions of the amount of labor I higher in the Volantian labor market. If I hire more labor, more stuff gets made. But, if I make more stuff the price of the stuff drops. And if I hire more laborers their wages usually go higher. Of course, I want to just higher enough L* to make sure I'm maximizing my profits.

Anyway, assuming the interest rate is r

value of land = [p(L*)Q(L*) - w*(L*)]/r

No I would probably be richer if those lazy Lhazareen people would move here looking for work, as that would push wages down. But, they seem content to stay where they are, herding sheep or something.

Good help is so hard to find.

But, wait, there is some great news! Some guy named Khal Bozo has just announced he is going to enslave a whole bunch of Lhazareen people (after killing and raping a few of course), apparently to impress his high maintenance girlfriend, who claims to be the queen of something. Bozo has also said that he is going to partner up with people of SB to make these slaves.

This all sounds really great, but wait, what should I even be willing to pay for these Lhazareen slaves?

Well I know I am going to have to pay some amount, s, to provide for their sustenance. And of course I gotta pay the people in SB for the slaves. Well now, it seems like the present value of the cost of the sustenance I would have to provide would be something like:

PV= s/r

And it seems like the price of slaves could be written like:

PV(price of slaves) = v/r

So, it seems like the price of slaves could be written like:

PV(S) = v+s/r

Right now, it seems the the present value of the wages I'm expecting to pay is something like:

PV(L) = w/r

Now it seems that if

PV(S) < PV(L)

I should buy slaves. On the other hand,

PV(S)>PV(L)

I should hire labor. And if

PV(S) = PV(L)

I should be indifferent to buying either hiring slaves or labor.

Now the boys and gals down in SB are pretty greedy. It looks like the making the slaves is going to be highly profitable for them, giving them a lot better returns than just depositing their money in Braavosi bank accounts.

The point is that the SB will be making lots and lots of slaves. And as we all know, when lots of stuff gets made, the price of stuff tends to go down. Having all these Lhazareen slaves will be a lot like if the Lhazareen had just willing moved here to Volantis looking for work. Except, I won't even have to pretend that I even respect them. And I might be willing to pay a bit of a premium for them, cause you know everyone's gotta have someone they can look down upon and I might be willing to pay a little extra to watch someone doing something dirty, that decent folks, like myself, can frown upon.

Anyway, there is good chance that for quite awhile:

PV(S) < PV(L)

So I and my Volantian noble friends will buy slaves rather than Volantian labor. That should cause the the labor wage in Volantis to go down. That will teach those people not to get so uppity.

Now if I keep buying slaves, their price will generally go up. And if , I and my friends, stop hiring in the spot labor markets, wages should go down. Accordingly, things should tend toward the equilibrium condition:

PV(S) = PV(L)

But, you know, it may be a while before the equilibrium condition is even reached. So buying slave labor will increase my profits. And the value of my land is going to appreciate. This going to be awesome.

So I am buying slaves and getting richer. Everything is going great.

But, then suddenly the price of slaves is starting to sky rocket. What's up with that? It seems that Khal Bozo and his girlfriend got into a fight and she left him and now she is saying that she is against slavery, even though it seemed like she was kind of for it at one point. She has taken up residence in SB and now is calling herself a queen there (although I thought she was queen of somewhere else). And now she stopping the production of slaves there, making their purchase price to rise. And now, I have to hire laborers from Volantis, like everyone other rich noble Volantian, and these laborers are now demanding higher wages, cutting down on my profits, and causing the value of my land to depreciate. Can you believe this shit? I am really verklempt right about now.

 

[SuicideSheep]

Thank you guys , i've learned a lot of new things about slavery .

 

 

[John Suburbs]

 The vital difference is that an employer who´s worse than most loses his employees - they are legally free to move to another employer, so the wages will level at the prevailing market rate. Whereas a slaveowner who´s worse than most still owns his slaves, and a master who employs his neighbour´s slave is a thief as much as a master who employs his neighbour´s horse.

OK, but this is an issue of management and control, not cost. You have more control over your slave workforce than free labor, but you pay more for it, particularly in an agricultural setting.

A large part of pyramid workforce WAS "paid", and quite well, although not in cash, which Egypt did not have.

The professional building force was 4000 - the number known to Herodotus, but this one is confirmed by contemporary records. The graves of pyramid supervisors contain descriptions of the structure of that 4000 men workforce - 2 groups of 2000, each divided into 2 groups of 1000, each into 5 groups of 200, each into 10 groups of 20.

Herodotus´ 100 000 for seasonal workforce was overestimate - likely number is 40 000.

Now, it´s not something an ancient or Middle Age kingdom cannot do!

North mobilized 20 000 men under Robb and Eddard, who left their fields, sometimes to rot, and marched off to Riverlands, Duskendale and Storm´s End. Robb´s soldiers did not return (save those of Bolton), Eddard´s did - but they were away from their homes and jobs for 12 months.

If Eddard or Robb could call 20 000 men to leave their farms, and then feed them - how WAS the army kept fed?

Robb might have called 20 000 men to build a Pyramid for him. At least no one would be out to kill them...

I'm no expert in any of this. My understanding is that exactly how the pyramids were built and what kinds of labor they used is still being debated.

[John Suburbs]

Well, let me just give you the perspective of a rich Volantian noble. I own lots of stuff. And why shouldn't I? It was my Valyrian ancestors that conquered the place and why should we have to go with out? We're related to dragons after all. Nope, a hard scrabble existence is meant for "those people", if you know what I mean.

Anyways it turns out, I own lots and lots of land. I hire labors, you know "those people", to work on my land. They work on my land, I pay them as little as I can, and then sell the stuff on markets. I make a tidy little profit by doing this.

Now I am thinking about taking a hard earned (well my laborers hard work really) vacation to the Summer Isles and I might sell a little of my land off. But, you know, I am not even really sure what my land is even really worth. So, I write to this Maester in Oldtown about how to price land. And he writes back and says that to price an asset you are supposed to figure out its cash flows and then discount those flows over some suitable horizon. He says a real simple way to do it, making some assumptions and approximations, is just by:

value of land = profit/interest rate

Now obviously my profits are the quantity of stuff I sell, Q(L), times the price,p(L), of the stuff, minus the wages,w(L), I have to pay those people. Of course all these variables are functions of the amount of labor I higher in the Volantian labor market. If I hire more labor, more stuff gets made. But, if I make more stuff the price of the stuff drops. And if I hire more laborers their wages usually go higher. Of course, I want to just high enough L* to make sure I'm maximizing my profits.

Anyway, assuming the interest rate is r

value of land = [p(L*)Q(L*) - w*(L*)]/r

No I would probably be richer if those lazy Lhazareen people would move here looking for work, as that would push wages down. But, they seem content to stay where they are, herding sheep or something.

Good help is so hard to find.

But, wait, there is some great news! Some guy named Khal Bozo has just announced he is going to enslave a whole bunch of Lhazareen people (after killing and raping a few of course), apparently to impress his high maintenance girlfriend, who claims to be the queen of something. Bozo has also said that he is going to partner up with people of SB to make these slaves.

This all sounds really great, but wait, what should I even be willing to pay for these Lhazareen slaves?

Well I know I am going to have to pay some amount, s, to provide for their sustenance. And of course I gotta pay the people in SB for the slaves. Well now, it seems like the present value of the cost of the sustenance I would have to provide would be something like:

PV= s/r

And it seems like the price of slaves could be written like:

PV(price of slaves) = v/r

So, it seems like the price of slaves could be written like:

PV(S) = v+s/r

Right now, it seems the the present value of the wages I'm expecting to pay is something like:

PV(L) = w/r

Now it seems that if

PV(S) < PV(L)

I should buy slaves. On the other hand,

PV(S)>PV(L)

I should hire labor. And if

PV(S) = PV(L)

I should be indifferent to buying either hiring slaves or labor.

Now the boys and gals down in SB are pretty greedy. It looks like the making the slaves is going to be highly profitable for them, giving them a lot better returns than just depositing their money in Braavosi bank accounts.

The point is that the SB will be making lots and lots of slaves. And as we all know, when lots of stuff gets made, the price of stuff tends to go down. Having all these Lhazareen slaves will be a lot like if the Lhazareen had just willing moved here to Volantis looking for work. Except, I won't even have to pretend that I even respect them. And I might be willing to pay a bit of a premium for them, cause you know everyone's gotta have someone they can look down upon and I might be willing to pay a little extra to watch someone doing something dirty, that decent folks, like myself, can frown upon.

Anyway, there is good chance that for quite awhile:

PV(S) < PV(L)

So I and my Volantian noble friends will buy slaves rather than Volantian labor. That should cause the the labor wage in Volantis to go down. That will teach those people not to get so uppity.

Now if I keep buying slaves, their price will generally go up. And if , I and my friends, stop hiring in the spot labor markets, wages should go down. Accordingly, things should tend toward the equilibrium condition:

PV(S) = PV(L)

But, you know, it may be a while before the equilibrium condition is even reached. So buying slave labor will increase my profits. And the value of my land is going to appreciate. This going to be awesome.

So I am buying slaves and getting richer. Everything is going great.

But, then suddenly the price of slaves is starting to sky rocket. What's up with that? It seems that Khal Bozo and his girlfriend got into a fight and she left him and now she is saying that she is against slavery, even though it seemed like she was kind of for it at one point. She has taken up residence in SB and now is calling herself a queen there (although I thought she was queen of somewhere else). And now she stopping the production of slaves there, making their purchase price to rise. And now, I have to hire laborers from Volantis, like everyone other rich noble Volantian, and these laborers are now demanding higher wages, cutting down on my profits, and causing the value of my land to depreciate. Can you believe this shit? I am really verklempt right about now.

 

Nice analysis. Yes, the cost equation rises and falls based on a number of factors. So while slavery often looks like the better option at first, it's costs tend to go up the more prevalent it becomes while the cost of free labor drops. But by then, slavery has become an institution and you can't very well just free a bunch of people who are already pissed at you for destroying their civilization and enslaving you. That's why it tends to endure even though it invariably becomes the more expensive option. It's not about getting low-cost labor, it's about maintaining social order in a civilization based on conquest and subjugation.

[OldGimletEye]

Nice analysis. Yes, the cost equation rises and falls based on a number of factors. So while slavery often looks like the better option at first, it's costs tend to go up the more prevalent it becomes while the cost of free labor drops. But by then, slavery has become an institution and you can't very well just free a bunch of people who are already pissed at you for destroying their civilization and enslaving you. That's why it tends to endure even though it invariably becomes the more expensive option. It's not about getting low-cost labor, it's about maintaining social order in a civilization based on conquest and subjugation.

 

I am not so delusional as to believe that people are always super hyper rational economic maximizers.

It wouldn't surprise me if people were willing to pay a premium to feel superior to others. So instead of writing,

PV(S)< PV(L) as the condition of buying slaves over labor, you have

PV(S) <PV(L) + SP where SP is the "superiority premia"

How large would this superiority premia might have been? I have no idea. If data existed to estimate it, I wouldn't be surprised if it existed.

[Trigger Warning]

What's to prove? It's free labour.