Would Buying All the Slaves Have Been Cheaper than the Civil War?

Abraham Lincoln in his Second Inaugural Address,

If we shall suppose that American slavery is one of those offenses which in the providence of God must needs come but which having continued through His appointed time He now wills to remove and that He gives to both North and South this terrible war as the woe due to those by whom the offense came shall we discern therein any departure from those divine attributes which the believers in a living God always ascribe to Him. Fondly do we hope ~ fervently do we pray ~ that this mighty scourge of war may speedily pass away. Yet, if God wills that it continue until all the wealth piled by the bondsman's two hundred and fifty years of unrequited toil shall be sunk and until every drop of blood drawn with the lash shall be paid by another drawn with the sword as was said three thousand years ago so still it must be said 'the judgments of the Lord are true and righteous altogether.'

Slavery was a great evil. The Civil War, too, was a great evil. It caused immense suffering, though, as Lincoln said, it was perhaps necessary in order to rid America of slavery. But in that case the War can be seen as one of the costs of slavery, the cost of the solution.

Was the Civil War necessary, though,to end slavery? Quite a number of states had ended slavery before 1860, though none with large slave populations (New York, with the most slaves, freed newly born children in 1799 and all slaves in 1827). The United Kingdom abolished slavery in 1834, allocating 40% of a year’s government budget to compensating the owners of slaves on sugar plantations in the British West Indies. Could the United States have bought out its slaveowners?

It would have been very expensive. The 1860 Census counted about 4 million slaves. The average price of slave has been estimated at $800 in 1860, which the website Measuring.worth says would convert to $370,000 in 2024 dollars measured using the growth in wages since then.¹ Let’s round the compensation up to $1,000 per slave for ease of computation. The cost would be $4 billion in1860 dollars.

U.S. GDP in 1860 was $4.4 billion, so compensated abolition would absorb almost an entire year’s national income. That was politically infeasible, even if we put aside the desire of Southerners to keep their peculiar institution for social reasons even if slaveowners were compensated. To be sure, it wouldn’t all have to be paid at once. The United Kingdom didn’t pay out 40% of its tax revenue to slaveholders in one year; it gave them government bonds which would pay interest every year.² That is how wars were financed too. The United States did not even have an income tax in 1860. It relied on tariffs and liquor taxes to finance the government.

On the other hand, the Civil War was very expensive too. The table at the start of this Substack, from a publication of Professor Richard Ransom of the University of California-Riverside, breaks down the costs in various ways. The two most relevant and accurate are government expenditures and total direct costs. The Confederate government spent $1.0 billion and the Union spent $2.3 billion, for a total of $3.3 billion. So if the government had bought out all the slaveowners for $4 billion, it wouldn’t be much more than the expenses of the war. Total direct costs include both government expenditure, physical destruction, and the monetary value of the lives lost (and, probably, the 4 years of lost private-sector output the soldiers would have produced). Total direct costs come to $3.3 billion for the South and $3.4 billion for the North, a total of $6.7 billion. That is much more than the $4 billion cost of buying the slaves and freeing them. And it doesn’t include the emotional value of the soldiers who died, just their monetary value as lost workers.

Going a step further, the cost of the war was so great that the slaves could not only have been freed but also returned to Africa. One source says Irish immigrants paid about 4 pounds each to immigrate to America, which at four dollars to the pound would be 16 dollars. Suppose $50 per slave was spent to take them to Africa. That would cost $200 million, bringing the total cost of emancipation to $4.2 billion. Repatriation was talked about before the Civil War, and the nation of Liberia was founded for freed slaves, but of course, very few slaves would have wanted to be taken to Africa. Recall that after 1809 slaves could not be imported to America, so few slaves had even been born in Africa. The average price per acre for West-South-Central farmland was $8.70 in 1860, says the 1930 Census Bureau. Rounding up to $10/acre, if they gave 2 million pairs of slaves 40 acres each, that would cost $800 million, so the total cost of this emancipation scheme would be $4.8 billion.

This has some connection to the reparations idea of how much the slaves lost by being enslaved and sent to America, but I won’t try to work it out here. That would involve damages to slaves in the 1700’s and those who died before they arrived as well as those living in 1860, and there are complications— e.g., interest since 1863, the benefit to descendants of slaves from being in America rather than Africa, whether the slaves would have been slaves in Africa even if there were no transatlantic slave trade, which non-blacks actually benefitted from slavery, etcetera.

What I have done in looking at the cost of buyout is also not quite what Abraham Lincoln was talking about. He wondered whether God might cause the war to

continue until all the wealth piled by the bondsman's two hundred and fifty years of unrequited toil shall be sunk and until every drop of blood drawn with the lash shall be paid by another drawn with the sword.

The wealth piled up by the bondsman is what we might try to calculate. That is harder than what I’ve tried to do here because it would require estimating how much of Southern wealth was due to slave labor.

The real problem in 1860, though, was what is common to many wars: nobody knew how bad it would be. When South Carolina and then the Deep South states seceded, it seemed unlikely there would be a war at all. Peaceful secession or a compromise constitutional arrangement seemed more likely. After Fort Sumter, it was clear there would be war, but the war started slowly. Little happened in 1861 except for mobilization and the First Battle of Bull Run. It was only in 1862’s Shiloh and the Peninsular Campaign that it became clear how bloody a war it would be.

But that lack of foresight may have been a good thing. To be sure, it meant no monetary settlement could have occurred; the cost had to be in war and destruction. But without that lack of foresight, the North, the South, or both might have backed off and retured to the status quo ante bellum. In that case slavery might be with us still. Nonetheless, what the numbers calculate here show is that compared to war, compensated emancipation could have made everybody better off— Northerners, Southerners, and slave.

Footnotes

1. If $370,000 seems like a high price for a slave, just think about the income the slave could generate. If a slave was worth $40,000/year in earnings, it would only take 10 years to pay back the purchase price. So it is the right order of magnitude.

2. The bonds the United Kingdom used were consols, perpetual bonds, which would pay interest forever, and did pay interest until they were finally redeemed by the government in 2015.