The Causes of Serfdom: Domar's Puzzle Revisited

Abstract:     
Domar (1970) has singled out the land/labor ratio as the main cause of both slavery and serfdom. But he then recognizes that scarcity of labor is necessary but not sufficient for serfdom to exist, and that an exogenous political factor is required to determine the status of labor.

I show that in an agrarian subsistence economy the complementary conditions of serfdom are (a) oligopsony power in labor demand, sustained by (b) an oligopolistic supply of violence by large landowners.

These organizational conditions explain historical episodes that Domar accounted for, those he left unexplained, and imply that serfdom and slavery are mutually exclusive.

Number of Pages in PDF File: 39

Keywords: Oligopsony, rents, price elasticity, cartels, slavery, serfdom

JEL Classification: P26, P48, P23, J42

working papers series