The first article on this subject discussed whether or not slavery constituted a theft of labor (of course it did) and if so, how much economic value that labor drove. Recall that in 1860, right before the Civil War, exports of cotton and other agricultural products farmed through slave labor represented $215 million of American exports. Capturing that number in today's dollars using an inflation rate of two percent results in a value of approximately $4.5 trillion dollars. Remember, that was the exports for one year. While that year represented a peak in exports, calculating and adding up the smaller numbers for previous years would easily result in a value today that is into the teens of trillions of dollars. Further, this number doesn't even capture the value created by slave labor for goods and services for domestic consumption. Suffice to say, the value created by that stolen slave labor is enormous, likely in the tens of trillions of dollars. Of course there is another way to approach this which might result in a smaller but still quite substantial number. That method involves the direct calculation of the actual wages taken away from the African through slavery.
Calculating the value of that lost compensation really isn't as hard as it might look. Much of the requisite information is knowable or at the very least reasonably estimated. We have federal census data that establishes the number of slaves from 1790 through 1860. The number of slaves at the end of the Civil War is known. As well, various states recorded slave populations prior to the first federal census. Finally, historians have documented the numbers of African slaves brought to the predecessor colonies. For instance, in 1620 there were 20 slaves and by the outbreak of war there were 4.0 million black people in bondage. We can assume that the number of slaves dropped dramatically - perhaps down to a million - with the signing of the Emancipation Proclamation. Population numbers in between the dates provided can be interpolated, with the result of a reasonably estimated slave population through the ratification of the 13th Amendment.
We also have documented evidence of compensation levels across the various states for various positions. Obviously, the vast majority of slave labor was agricultural so we can use those wages as market at the time. This should be considered relatively conservative as many slaves were used in skilled and other intensive labor efforts that generally paid higher wages. Thus, we can come up with a reasonable estimate of the amount of labor wages stolen through slavery each year. For instance, census data tells us that there were 3,950,000 slaves in America in 1860. Taking a simple average of monthly wage data for agricultural labor for that year we get to $13.43 per month (see www.nber.org/chapters/c2486.pdf).
Thus, the amount of wages lost to slavery in 1860 alone was:
($13.43 x 12 months) x 3,950,000 slaves in 1860 = $636,582,000
To the calculated numbers for stolen wages for each year, we would apply a financial cost of capital in the following formula:
FV = Ws(n) x (1+ r)^(2014-n)
FV = the future value (in 2014) of wages stolen in a given year
Ws(n) = the wages stolen in year n (e.g., 1860)
r= the rate of return on invested capital
^(2014-n) = the number of years between the year that the labor was stolen and the present, raised as an exponent.
Today's value of the $636.6 million of capital kept by slaveowners in 1860 comes to about $60.4 billion assuming an ability to invest that capital at 3.0%
$636.6 million x (1+.03)^(2014-1860) = $60.4 billion
The result is today's economic value of the labor that was stolen that year. In other words, slaveowners were able to use capital that they didn't have to use to pay wages for other productive purposes. The returns on that capital (r) represent a permanent economic opportunity that extends through to the present. After calculating the FV for each year from the year slaves were first brought to North American shores until ratification of the 13th Amendment, we simply add those results together to achieve the total current economic value of that slave labor:
What is that number you ask?
Well, when I do the calculation myself, it comes to about $20.5 trillion dollars, or about $500,000 for every African American man woman and child in the United States today. That said, it isn't far off from the results of others who have looked at this issue. In 2006, Mr. Warren H. Giles, Ph.D. wrote an essay regarding his efforts to calculate the value of slave labor, coming to a number of $20.3 trillion. University of Ottawa Professor Denis Rancourt calculated the much higher number of $59.7 trillion. On the other end, Forbes contributor Tim Worstall came up with the much smaller number of $1.75 trillion on his way to arguing that the value of slave labor is essentially nothing. The self-serving flaws in Worstall's analysis are obvious. First, he uses the years 1776 - 1860, thus ignoring both the slavery that occurred in the predecessor colonies and the fact that black people remained in bondage after the start of the war. Further, while Worstall uses a reinvestment of 4% for the slavery years he calculated, he uses a 1% reinvestment rate for every year from1860 to the present - a ridiculous assumption that serves the purpose of minimizing the future value of the capital kept from that slave labor. To be sure, however, the ultimate value is highly sensitive to that reinvestment rate. Dropping it down to 2.5%, for instance, results in a total current value of $5.1 trillion.
While we might fuss about specific assumptions, there is no escaping the reality that slavery represented a permanent theft of labor wages from the African and his descendants, the value of which is measured well into the trillions whether measured by the current value of goods and services produced or by the current value of those stolen wages. The taking of African slave labor created a permanent, unpaid debt, the proceeds of which was used to finance the early growth of the American economy and the fortunes of countless businesspeople.