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.

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- 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
1990's, 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 stamp out
slavery or did paying slaveholders to

release these slaves lead to more people
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 that 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 it's

unintended consequences.

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