Elasticity and Slave Redemption

Course Outline

Elasticity and Slave Redemption

Beginning in 1993, Sudan entered into a civil war, with one of the worst parts being that many people were kidnapped and sold into slavery. Humanitarian groups traveled to Sudan to redeem slaves by buying them out of slavery. Is this good policy? Did it work out, or make it worse? Let’s use elasticity to analyze the situation.

Teacher Resources


This is a pretty tragic topic, and in some ways, it's tough to talk about, but let's give it a try. Let's keep in mind that in the modern world, there still really is a lot of slavery and many people are rightfully outraged by this. But the question is what to do about it?


So in the 1990s, there were humanitarian reformers, and they went to Sudan, and their plan was to buy slaves and set them free. Now that sounds great. What could be better than setting free slaves? That sounds pretty noble, but did it actually help stamp out slavery, or did paying slaveholders to release these slaves lead to more people being captured? Let's use the economic concept of the elasticity of supply to help understand this better.


The problem is this, the people trying to free the slaves -- we'll call them the slave redeemers -- they're also creating additional demand for slaves. After all, they're buying slaves in the market. That additional demand shifts out the demand curve for slaves, and it leads to a new and higher market price. That higher price will bring forth additional supply. So what are the people who round up and kidnap the slaves -- what are they going to do? Well, they're going to increase their operations. They're going to have more raids, and they're going to take more people into slavery. We can already see there's at least a possibility that buying the slaves and setting them free will be counterproductive because we haven't managed to stamp out all of slavery. What we've done is set some people free but actually give those kidnappers, those people in the middle -- we've increased their incentives to bring more people into slavery. And therein lies the potential for an even greater tragedy.


The concept of elasticity in economic terms -- that refers to how responsive is quantity supplied when market price changes. It's going to help us understand how much a slave redemption program will increase the number of people who end up captured by slave raiders. Inelastic supply means that even a much higher price doesn't result in a much larger quantity supplied. In that case, even if the price of slaves went up by a lot, not that many additional people would be captured. That's the better case scenario. It also means the price of slaves will go up and stay high because the off-setting supply response is weak, and it's not pushing that market price back down again. Again, that's the better case scenario. It means that in the long run, the redeemers are doing more to limit slavery than to encourage it.


But, however, let's say the supply curve is more elastic -- that means a flatter curve, and it means the quantity supplied to the market will increase a lot with the higher price. In that case, it's easier to find more people to enslave. Then as a result of the boost in demand from the humanitarian redeemers, a lot more people will end up captured and enslaved. And then, the total number of people captured as slaves is going up quite a bit. And you have to wonder in that case are these slave redemption programs really a good idea?


So what's the answer? It's genuinely hard to say whether the supply of slaves is elastic or inelastic, but we can look at price as a possible indicator of which scenario is more likely to hold. We know that in the early years of slave redemption, there was a noticeable increase in the price of slaves, and that could be evidenced of a fairly inelastic supply curve. However, over time, the price of slaves has fallen, and that could indicate greater elasticity of supply in the longer run. That makes sense, but the suppliers are usually more responsive to an increase in price as they have more time to adjust. For instance, they can hire more people and expand their operations. So this evidence overall suggests that perhaps the program has become less effective over time, and perhaps today, it may actually be counterproductive and be increasing the burden of slavery.


In other words, good intentions aren't always enough. If someone comes along and puts an apparently good idea on the table, we still need to think through its unintended consequences.



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