Bluematter.

This is an edited version of a fascinating post from an economist in paradise:

The history of Mauritius is inextricably linked to the slave trade. In 1806, the slave population reached 78 000, an estimated 85% of the population, for an island no more than 720 square miles.

Slaves changed masters via openbid ascending (English) auctions; males were sold separately, women and their children were sold as a bundle. Armed with a uniquely detailed data set gathered from notarial acts on auction sales over the period 1825-1835, economists Chenny, Dionne, StAmour and Vencatachellum ask two questions in two separate papers. Firstly, was the market for slaves in Mauritius characterised by imperfect information, whereby sellers (masters) had more information about the productivity of the slaves than potential buyers? Secondly, how did the British take-over of 1810 and rumours of abolition affect the market for slaves?

Between 1825 and 1835, 2827 slaves were bought and sold at an average price of 326 piastre per slave, that is around 320 US dollars (roughly a quarter of per capita US income of that time). The average price for a male slave was $337 and a female slave $288. There are three broad categories of slave occupation: ’skilled’, ‘labourer’ and ‘household’. Relative to the average male price, ’skilled’ males were sold at 15% more, ‘household’ males at 4% less and ‘labourer’ males at 7% less. Slaves that grew up in the island, called ‘Creoles’, were sold at at premium of 13% over the average slave price, those recently imported from Mozambique were sold at a 10% discount, those from Madagascar at a 3% premium and ‘Indian’ slaves were sold at a whopping 54% discount.

The question asked by the authors is whether these prices reflected fundamentals. In some way, they do: ‘Indian’ slaves were ’smaller’ people and perceived to be less productive than their ‘African’ counterparts, while the ‘Creoles’ were perceived to be more adapted to local conditions. But the authors also find that asymmetric information was prevalent in the market for slaves: the circumstances under which a slave was sold dictate his/her price.

There are, in fact, three reasons for a slave to be sold: (1) death of the owner, which under Mauritian Law, required the assets of the deceased to be sold off and the proceeds distributed to the heirs, (2) bankruptcy of the owner and (3) voluntary sales. Two main findings emerge. Firstly, when male slaves are being sold involuntarily (death or bankruptcy of the owner), they were traded at a big premium (around 45% above the price of a slave sold voluntarily). Secondly, if, when a slave was being sold involuntarily, a relative of the owner participated and won the auction, the slave is generally traded at an even higher premium. This seems logical since relatives had insider information about the slave and would only bid aggressively when the slave is known to be productive.

Rumours about abolition

In their second study, the authors attempt to deduce whether slave owners believed in the persistent rumours that the British would abolish slavery. One way of finding this is to assess the market for children slave. Since children slave would only be productive in the future, rumours about abolition ought to depress their prices. In fact, they observe that the price for children slave rose between 1825 and 1827, from which they conclude that slave owners did not treat abolition as a serious possibility. Indeed, the threat only started to reveal itself in the data after 1833, two years before actual abolition.

Technological change

Improvements in technology took the form of the introduction of the horizontal roller mill in 1819, and steam-driven rollers in 1822. It seemed that technology ironed out differences in productivity as the price discount on handicapped, Indians and Mozambicans fell in the slave market.

The slavery period was undoubtedly the grimmest part of Mauritian history, the consequences of which are still being felt, more than five generations later. Descendants of slaves, who account for quarter of the population attain, on many counts, much less than the average Mauritian. Is there, after terrible uprooting, a degree of path dependency that we economists tend to seriously underestimate?

The papers are here and here. By the way, An Economist in Paradise provides an invaluable 'live-at-the-scene' perspective into Mauritius and the economics of developing countries in general, and is well worth a place in your bookmarks folder.