Elasticity and Slave Redemption
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0:02 - 0:04♪ [music] ♪
-
0:14 - 0:16- [Tyler] This is a pretty
tragic topic, -
0:16 - 0:18and in some ways,
it's tough to talk about, -
0:18 - 0:20but let's give it a try.
-
0:20 - 0:21Let's keep in mind
that in the modern world, -
0:21 - 0:23there still really is
a lot of slavery -
0:24 - 0:26and many people are
rightfully outraged by this. -
0:27 - 0:29But the question is
what to do about it? -
0:29 - 0:33So in the 1990s, there were
humanitarian reformers, -
0:33 - 0:35and they went to Sudan,
and their plan was -
0:35 - 0:38to buy slaves and set them free.
-
0:38 - 0:39Now that sounds great.
-
0:39 - 0:42What could be better
than setting free slaves? -
0:42 - 0:43That sounds pretty noble,
-
0:43 - 0:46but did it actually help
stamp out slavery, -
0:46 - 0:49or did paying slaveholders
to release these slaves -
0:49 - 0:52lead to more people being captured?
-
0:52 - 0:54Let's use the economic concept
-
0:54 - 0:58of the elasticity of supply
to help understand this better. -
0:58 - 1:02The problem is this,
the people trying to free the slaves -- -
1:02 - 1:04we'll call them the slave redeemers --
-
1:04 - 1:07they're also creating
additional demand for slaves. -
1:07 - 1:10After all, they're buying slaves
in the market. -
1:10 - 1:14That additional demand shifts
out the demand curve for slaves, -
1:14 - 1:17and it leads to a new
and higher market price. -
1:17 - 1:21That higher price will bring
forth additional supply. -
1:21 - 1:24So what are the people who
round up and kidnap the slaves -- -
1:24 - 1:25what are they going to do?
-
1:25 - 1:27Well, they're going
to increase their operations. -
1:27 - 1:29They're going to have more raids,
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1:29 - 1:32and they're going to take
more people into slavery. -
1:33 - 1:36We can already see there's
at least a possibility that buying -
1:36 - 1:39the slaves and setting them free
will be counterproductive -
1:39 - 1:42because we haven't managed
to stamp out all of slavery. -
1:42 - 1:45What we've done is set
some people free -
1:45 - 1:48but actually give those kidnappers,
those people in the middle -- -
1:48 - 1:52we've increased their incentives
to bring more people into slavery. -
1:52 - 1:56And therein lies the potential
for an even greater tragedy. -
1:56 - 1:59The concept of elasticity
in economic terms -- that refers -
1:59 - 2:04to how responsive is quantity
supplied when market price changes. -
2:04 - 2:08It's going to help us understand
how much a slave redemption program -
2:08 - 2:10will increase the number of people
-
2:10 - 2:12who end up captured
by slave raiders. -
2:12 - 2:15Inelastic supply means that even
a much higher price -
2:15 - 2:19doesn't result in a much
larger quantity supplied. -
Not SyncedIn that case, even if the price
of slaves went up by a lot, -
Not Syncednot that many additional
people would be captured. -
Not SyncedThat's the better case scenario.
-
Not SyncedIt also means the price
of slaves will go up and stay high -
Not Syncedbecause the off setting
supply response is weak, -
Not Syncedand it's not pushing
that market price back down again. -
Not SyncedAgain that's
the better case scenario. -
Not SyncedIt means that in the long run,
the redeemers are doing more -
Not Syncedto limit slavery
than to encourage it. -
Not SyncedBut, however, let's say
the supply curve is more elastic, -
Not Syncedthat means a flatter curve
and it means the quantity supplied -
Not Syncedmarket will increase a lot
with the higher price. -
Not SyncedIn that case, it's easier to find
more people to enslave. -
Not SyncedThen as a result
of the boost in demand -
Not Syncedfrom the humanitarian redeemers,
a lot more people will -
Not Syncedend up captured
and enslaved and then, -
Not Syncedthe total number of people captured
as slaves is going up quite a bit. -
Not SyncedAnd you have to wonder
in that case are -
Not Syncedthese slave redemption programs
really a good idea? -
Not SyncedSo what's the answer?
-
Not SyncedIt's genuinely hard to say
whether the supply of slaves -
Not Syncedis elastic or inelastic,
but we can look at price -
Not Syncedas a possible indicator of which
scenario is more likely to hold. -
Not SyncedWe know that in the early years
of slave redemption, -
Not Syncedthere was a noticeable increase
in the price of slaves, -
Not Syncedand that could be evidenced
of a fairly inelastic supply curve. -
Not SyncedHowever, over time the price
of slaves has fallen, -
Not Syncedand that could indicate greater
elasticity of supply in the longer run. -
Not SyncedThat makes sense,
but the suppliers are usually -
Not Syncedmore responsive
to an increase in price -
Not Syncedas they have more time to adjust.
-
Not SyncedFor instance, they can
hire more people -
Not Syncedand expand their operations.
-
Not SyncedSo this evidence overall suggests
that perhaps the program has -
Not Syncedbecome less effective over time,
and perhaps today, it may actually -
Not Syncedbe counterproductive and be
increasing the burden of slavery. -
Not SyncedIn other words, good intentions
aren't always enough. -
Not SyncedIf someone comes along and puts
an apparently good idea on the table, -
Not Syncedwe still need to think through
its unintended consequences. -
Not Synced- [Narrator] If you want to test
yourself, click "Practice questions." -
Not SyncedOr, if you're ready to move on,
just click "Next Video." -
Not Synced♪ [music] ♪
- Title:
- Elasticity and Slave Redemption
- Description:
-
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.
Microeconomics Course: http://mruniversity.com/courses/principles-economics-microeconomics
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Next video: http://mruniversity.com/courses/principles-economics-microeconomics/elasticity-examples-applications
- Video Language:
- English
- Team:
- Marginal Revolution University
- Project:
- Micro
- Duration:
- 04:44
Kirstin Cosper edited English subtitles for Elasticity and Slave Redemption | ||
Kirstin Cosper edited English subtitles for Elasticity and Slave Redemption | ||
Kirstin Cosper edited English subtitles for Elasticity and Slave Redemption | ||
Kirstin Cosper edited English subtitles for Elasticity and Slave Redemption | ||
MRU2 edited English subtitles for Elasticity and Slave Redemption | ||
MRUniversity edited English subtitles for Elasticity and Slave Redemption |