On Tuesday, Andrew Sullivan posted a note about the South's economic lagging after the U.S. civil war. Yesterday, he posted a follow-up quoting one of his readers repeating the destruction-of-wealth canard, which posits that $4 bn of wealth (about $400 bn today) got wiped out with the 13th Amendment. The reader, an historian, said:
Perhaps the most important factor in the South’s economic underdevelopment was the fact that emancipation, while a milestone in human freedom, was an economic calamity. There were approximately 4 million slaves, with an average value of $1,000. Emancipation meant the destruction of $4 billion of Southern capital. Slavery as a symbol of status had encouraged successful professionals and entrepreneurs to invest in slaves rather than industry. With the end of the war, that “investment” was rendered valueless, and that put severe limits on the available local capital for investment.
Fortunately, this evening Sullivan posted a response from another reader (presumably an economist) who corrected the record:
If the economic value of a slave was the value of his future expected labor, less the cost of his subsistence, then to destroy his value as an asset would require that he be killed or disabled. In fact, Emancipation simply took that value from the slaveholder and returned it to the former slave, the rightful owner. For this transfer to be destructive of economic value workers would have to have been more productive enslaved than working freely for wages, which is unlikely.
The historian seems to suggest that possession of slaves had become a status symbol, causing overinvestment in this variety of asset. If this is true, then there was a "slave bubble", the popping of which would have erased value with or without Emancipation. In fact, if slavery had still existed when the bubble popped, the result would have been terrific brutality, as slave owners attempted to use starvation and the whip to salvage what profit they could. The rationalizing force of the market took the evil that was always present in slavery and made it an efficient evil.
I think the second reader has got it right. The whole thread is worth a read, though. I've always found the regional differences fascinating, even more after spending six months in North Carolina.