Walter Williams on Life, Liberty and Economics
Oct 16 2006

Professor, Radio Host, and Syndicated Columnist Walter Williams of George Mason University talks with EconTalk's Russ Roberts about his early days as an economist, his controversial view of the Civil War, the insights of Adam Smith and Friedrich Hayek, and some deep but simple economic principles.

Addendum: Check out the follow-up questions addressed in these Mailbags:
Michael Munger on Slavery and Racism
Michael Munger of Duke University talks with EconTalk host Russ Roberts about how attitudes in the American South toward slavery evolved over time and what we can learn from that evolution about the role culture plays in our lives.
Russ Roberts and Michael Munger on How Adam Smith Can Change Your Life
EconTalk host Russ Roberts is interviewed by long-time EconTalk guest Michael Munger about Russ's new book, How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness. Topics discussed include how economists view human motivation and...
Explore audio transcript, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Ken Willis
Oct 19 2006 at 12:50pm

I hold Walter Williams in the highest possible regard so that if I disagree with something he says I assume that I am wrong. However, his assertion that slavery had become unprofitable by the time the Civil War started, and especially the statement by Russ Roberts that Robert Fogel and Stanley Engerman agreed, in their book TIME ON THE CROSS (1974), needs to be corrected. It may be arguable whether slavery was profitable or whether it was economically moribund, but Fogel and Engerman wrote their book for the express intention of advancing the former proposition and debunking the latter. Their evidence is powerful, as well as their citation of other authorities.

Fogel and Engerman cite seven findings of econometric research for their thesis:

1. Cotton prices remained high during the antebellum period and during 1855-1860 demand exceed supply;
2. Between 1830 and 1850 the expected rate of return on an investment in slaves equaled or exceeded the average rate on alternative investments;
3. A large part of the price of 18-year old slaves was capitalized rent. The rental component in the price of slaves increased substantially between 1820 and 1860.
4. On the eve of the Civil War slaveholders were quite sanguine on their future economic prosperity.
5. If slavery had persisted until 1890 it is probable that the real price of slaves would have exceeded the 1860 price by more than 60 percent.
7. There is no evidence that slavery caused the ante-bellum South to stagnate. Between 1840 and 1860 Southern per capita income rose at least as rapidy as the national average.

It would seem to me that Fogel and Engerman’s conclusions are supported by common sense. If cotton prices remained high, and if cotton production was labor intensive, wouldn’t we expect that one who commands cheap labor, i.e., slave labor, would be pretty well situated? I know slaves weren’t free, they had to be bought. But if a large part of the price was capitalized rent and that component was increasing, then it really was cheap labor. Perhaps so cheap it was worth going to war to keep it.

So, was the Civil War fought over slavery? Maybe not for the North, but certainly it was the preservation of slavery that motivated Southern slaveholders.

Walter, you are still my hero. You’re just wrong on this one.

Ken Willis
Moose, Wyoming

Ken Willis
Oct 19 2006 at 1:04pm

Re-reading my above post it occurs to me that, given the current climate of political correctness, I should make something clear. If I had lived in 1860 I would probably have been an abolitionist. I believe, as did Lincoln, that every man has the right to eat the bread that his own labor produced, and that the man who wrests his bread from the sweat of another man’s brow is evil. In other words, slavery was immoral and the Civil War was a just war. OK?

Arnold Kriegbaum
Oct 21 2006 at 3:18pm

Did anyone else hearing this discussion feel like their life should have included several classes with both Russ and Walter? That was sure my response. Thank goodness for the extra effort of those that put this podcast together.

Russ, is the “Summer Econ. Institute for Podcast-Listening Economist Wanna-be’s” in the making? 🙂

(Note: I used first names above as a modern convention and not in any way to diminish the high regard with which I hold both people.)

Russ Roberts
Oct 25 2006 at 12:15pm


Going back and listening to the podcast, Walter cites Fogel and Engerman as saying that Texas was the natural boundary of slavery. He never says that they said that slavery was unprofitable at the time of the Civil War.

Walter makes the claim that slavery was becoming less profitable in the Old South.

But you’re certainly right that Fogel and Engerman found slavery to be highly profitable and that that was one of the points of the book.

Finally on the issue of the South’s motivation, preserving slavery may have motivated Southern slaveholders, but the proportion of Southern soldiers who owned slaves was very small. If anyone out there knows the number, please post it below.

I’m hoping we’ll look more into these issues in a future podcast.


Ken Willis
Oct 25 2006 at 2:35pm

Professor Roberts,

Thanks for responding to my comment. The relevant part of the discussion in the podcast which set off alarm bells was as follows:

Roberts: The question was how long it [slavery] would have endured in the absence of Lincoln’s decision [to go to war to prevent secession]

Williams: And I think something else that one has to recognize is that slavery was already dying a natural death, that is, in the Old South slavery was withering away because it was no longer profitable and…

* * *

some people who have studied it, I forget the two fellas who wrote TIME ON THE CROSS….

Roberts: Fogel and Engerman.

Williams: Yes, and they said that Texas was the natural boundary for slavery, that slavery would not have been profitable farther West than Texas.

You are correct that Professor Williams does not expressly say that Fogel and Engerman claim that slavery was unprofitable, but the above statements taken together do seem to convey that impression.

I don’t think it is correct to attribute to Fogel and Engerman the thesis that Texas formed a natural boundary for slavery. I can find no such statement in their book. In fact, that thesis is attributed to Charles W. Ramsdell, a professor of history at the University of Texas. Professor Ramsdell wrote an essay in 1929 titled “The Natural Limits of Slavery Expansion” in which he attempted to prove that Slavery had reached a natural frontier in Texas and Missouri beyond which it could not expand.

It’s not clear that Fogel and Engerman agree with Professor Ramsdell, certainly they do not agree with the conventional interpretation of Ramsdell’s position, that a shortage of land heralded the doom of slavery. In fact, they seem to go to great pains to demonstrate that the Westward expansion of slavery into Mississippi, Louisiana and Texas was making slavery more and more profitable.

For example, on page 44 of TIME ON THE CROSS they say:

“Planters eager to respond to the lure of profit rushed westward to lands in Georgia, Alabama, Mississippi, and Texas that were far better suited for cotton production than those of Maryland, Virginia, and the Carolinas.”

And on Pages 198-199:

“Cotton may be grown successfully in a long belt stretching mainly from South Carolina through Texas. The bounds of this belt were determined largely but not exclusively by climate conditions since the cotton culture requires a minimum of two hundred frostless days and ample rainfall. Temperature set the Northern boundary and rainfall the Western boundary. Not all land within this boundary is equally suitable. The black belt lands of Alabama and Texas were more congenial to cotton than the sandy loams of the Piedmont or the marshes of the coastal plains, except for long-staple cotton.

* * *

“But as demand for cotton grew, relative to other Southern commodities, efficiency dictated a reallocation of labor and other resources to the lands of Alabama, Mississippi, Louisiana, and later, Texas. In other words, the Westward movement of Southern farming was due, not to the depletion of soils, but to the increase in demand for products whose relative advantage was on Western rather than Eastern soils.”

On the question of slavery as the cause of the war, certainly there were slave owners under arms on the Confederate side, but I doubt that most of the Confederate soldiers were slave owners themselves. But I don’t think that matters, slavery was so imbedded into the soul of the South and its culture.

It will no doubt continue to be argued by many thoughtful people that the War Between the States was not about slavery. But given that slavery itself as well as its expansion into new territory was the driving force behind sectional conflict between North and South from the Revolution to the Civil War, it justs seem nuts to me to believe that those who fought one of the bloodiest wars in human history did so for reasons unrelated to the very thing that had divided them for eight decades. Without the slavery issue, it is hard to imagine that such a war could have occurred.

Russ Roberts
Oct 26 2006 at 3:21pm


You make some good points.

Don’t know enough about the Texas issue. I’ll see what I can find.

On your last point, I’m not saying that slavery had nothing to do with the war. I think it had a lot to do with the war. But one question is whether the economic differences between the North and South and their divergent economic interests were an important cause of their differences or was it merely an issue of morality.

I’m not an expert on the Civil War but my impression from casual reading is that Southern motivation was more complex than simply saying they were fighting to keep their slaves.

Ken Willis
Oct 27 2006 at 2:16pm

Professor Roberts,

I think you are right to question whether the differences between North and South were moral or economic. It was probably some of both. Lincoln began to talk about the immorality of slavery during the Lincoln/Douglas debates. He had been very hesitant to do that earlier. Douglas was aghast and Southerner’s were outraged that Lincoln would turn a debate on public policy into a forum on morality. See Allen Guelzo’s book on Lincoln for more on this.

It is understandable that Lincoln had been hesitant to stress the moral argument against slavery. The idea of Negro equality and Negro citizenship was no more popular in the North than it was in the South. Even some aboltionists drew the line on equality and citizenship.

The Kansas-Nebraska act of 1854 struck down the Missouri Compromise and sowed the seeds of the war that was to come six year later by declaring that the immigrants would enjoy “popular sovereignty” to “form and regulate their domestic institutions in the own way.” This meant that slavery would exist, or not exist, according to majority opinion in the Kansas/Nebraska territory. Edward Bates of Missouri accused Douglas of scrapping the Missouri Compromise as an “electioneering trick” to gain Southern support for his future presidential candidacy. New York Senator William Seward argued that slavery should not be made a subject of popular choice because it presented a moral problem which could not be reduced to a decision of a popular majority. This and more is recounted in Guelzo’s book.

On the other hand, the anti-slavery Democrats in the North who bolted to form the free-soil party were probably motivated by both economic and moral concerns because the thrust of their argument was that free men on free soil comprised a morally and economically superior system to slavery.

One aspect of the economic conflict might have been that Northern wage laborers saw Southern slavery as a force depressing wages in the North. There were many who spoke out against “wage labor” as nothing more than slavery in a different form, and saw the end of slavery as a necessary first step in gaining economic justice for workers. Guelzo reports that Lincoln regarded free markets as the poor man’s road to success and accomplishment. This is a view antagonistic to slavery on economic grounds not just for the slave but for all men who worked at the lowest wage jobs.

If all of this is true, then whether the Civil War was about slavery or economic conflicts is a false issue because slavery was seen both as a moral and an economic issue by most who opposed it. Those who made their living from it no doubt saw it as mostly an economic issue, but they infused questions of morality into their position also if only to counter the moral arguments of their opponents.

Ken Willis
Oct 27 2006 at 3:24pm

If Southern motivation were more complex than that they were fighting to keep slavery in existence, and to expand it into new territory, I’m having a hard time figuring out just what it was that motivated them to fight and die in such numbers. If it was more complex then shouldn’t we be able to take slavery out of the equation and see what is left? I can’t see that anything is left, at least nothing that isn’t still completely entangled with slavery. But maybe I just need to be shown.

Comments are closed.


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About the guest:



Podcast Episode Highlights
0:27Intro. How did your intellectual journey get started? Originally radical. Grad student at UCLA. Armen Alchian would not let him get away with nonsensical statements, like support of minimum wages without thinking about the effects as opposed to the intentions. Axel Leijonhufvud, Harold Demsetz. Essay contest. Jack Hirschleifer: "Walter, you should be apprehensious!" Flunked exam at first, subsequently passed. What was Alchian's class like? Very disorganized, used to pick on Williams. Question posed each week, which he'd then prove as wrong. "Why do current generations build things that will long outlast their lives" (e.g., Brooklyn Bridge)? Williams: In order to build a bridge like that you must need a lot of resources. Alchian: No--during WWII we built bridges with much less. Eventually Alchian pointed out that he had no satisfactory answers for these class questions. Good pedagogical technique.
9:00What did you think you'd become as an economist? How did you get into writing for the public? James Buchanan, Harold Hochman, Urban Institute, Washington, D.C. Became interested in writing for the intelligent layman. Temple U. Al Morris, Philadelphia Tribune, asked him if he'd write a weekly column on applied economics. Syndication. Alchian's continued influence: "You know, Walter, the true test of whether anyone understands his subject is when he can explain it to someone who doesn't know a damned thing about it." Williams now delights in doing this. Williams illustrating Type I, Type II errors, using himself and his wife as examples to Alchian. Wife maximizes number of friends but that maximizes chance of being hurt. Walter by contrast minimizes number of friends which also minimizes possibility of hurt. (Alchian's comeback: "Walter, have you considered a third alternative? Have you considered that people might not give a damn about you one way or the other?") Benefit to writing a syndicated column: get a lot of mail, which makes you more informed. Gas gouging example after Hurricane Katrina: Appalachian opportunity for oil production with higher price. Plenty of junk: people would never complain about the law of gravity, but they gripe all the time about the law of demand.
20:05What topics that you write on engender the most controversy? Agricultural subsidies, Social Security. Radical view of the Civil War and the right of secession: If States did not feel that they had the right to secede, then the Constitution would never have been ratified. Later, New England States, dissatisfied with the Louisiana Purchase, actually initiated secession discussions. U.S. War Between the States was about the right of principles to fire their agents, not over slavery or over two sides trying to take over the government. Deciding that States cannot secede means that the Federal Government can do whatever it wants to the States. Unintended benefit--freeing the slaves--came at most brutal cost. Slavery was already withering away. Frederick Douglass. Fogel and Engerman, Time on the Cross. Actual language of the Emancipation Proclamation: Lincoln freed the slaves only in those States that are in rebellion against the Union. Sec. of State or Treasury chastised Lincoln "We freed slaves where we cannot free them, and failed to free them where we can."
30:55Agricultural subsidies. American romance with back to nature, farming, but in reality farm subsidies go to the wealthy, and often farmers are paid to not do anything. Hayek's answer to "If you could pass one law, what would it be" was "I would enact a law that if Congress does anything for one American, it must do it for all Americans." So if Congress paid one American to not raise pigs, it should pay all Americans for not raising pigs. There would end up being no pig subsidy at all. Walter: "So, if you give one American the right to keep out foreign imports, you should give every American that right--even economists!" Hayek was gentle, kind, like Friedman--avuncular. Edward Teller, Stanford's linear accelerator, particle proliferation.
36:28What Russ has learned from Walter. Paraphrases:
  • "I don't tell my grocery when I'm coming. I don't tell the grocery what I want to buy. I don't tell 'em how much I'm going to buy. But if they don't have what I want to buy when I get there I fire 'em." If market-clearing were perfect, there would be nothing on the shelves when we got there. Simple explanation: We're happy to pay a small premium for buffer stocks at groceries. Conserves information and planning time.
  • Through most of human history you got rich by plunder. Only recently you get rich by serving your fellow man. Bill Gates, Windows. Those who criticize are really disagreeing with an outcome that was the result of voluntary decisions by millions of people. Those who become wealthy through the market make it possible for those who are not wealthy to have things that previously only the wealthy could afford. Vacuum cleaners, entertainment in one's home, microwaves, cell phones. 60% of those defined as poor by the Census Bureau own a car, 80% have air conditioners. Where do you really want to be born? Cuba, Korea: guards all face one direction.
46:52Morality of capitalism: Walter: "If you want to get potatoes from Idaho to NYC, would you want the farmer to be motivated by love for you or love for himself?" What human motivation gets the most wonderful things done? "If you ask me, I'd say greed." Not robbing, but trying to get more for themselves. Cattle farmers get up in the dead of winter, make great personal sacrifice, and result is New Yorkers have meat. If New Yorkers had to depend only on those who loved them, they might have nothing to eat! Adam Smith's Inquiry into the Nature and Causes of the Wealth of Nations, baker, candlestick maker example: self-interest. Public good is promoted best by private interest. "Greed" is catchier word than "enlightened self-interest."
51:43George Mason U. economics department emphasizes applying economics to real world. Williams's role while Chairman. Tom Sowell remarked that it was probably Williams's turn. Between Buchanan's winning of Nobel Prize and Williams's Chairmanship, GMU had drastically cut size of economics faculty by refusing to fill positions. Williams decided that the only way to improve the department was to privatize it. Nasty fight, standing up to the administration, raising money. Hired Vernon Smith who won the Nobel Prize the next year. Why aren't more economists interested in teaching economics to those outside the profession? We impress each other with mathematical models. Frank Knight: If the research is any good, get rid of the math and keep the English; if it's bad, keep the math and get rid of the English. Continued outcries about outsourcing, trade deficits suggest that economists are not doing their job to educate the public about bad public policies. Still, politicians have to be more clever today to act on their agendas because of the efforts of economists to educate the public. Big government wasn't always part of our history. William Jennings Bryan's "Cross of Gold speech", promoting government interference with private decisions, was not successful. Paul Samuelson even bought into central planning, but no one says that today.