Question

How would Slavery influence how we solve the Economic Problem? (what to produce, how to produce, and to whom to distribute the benefits of production)

Answer 1

An economy is imperfect in nature when it depends upon slavery as a source of labor skills. For example, the fall of the Roman empire was orchestrated by the abolishment of slavery over a period of time. Slavery is illegal, unfair and one sided, where both economic and humanitarian values are not followed. Slavers are profited immensely due to the ' free labor' that they forcefully derive from slaves, without exchanging any form of payment for their labor.

Slavery was commonly used to solve the issues of economic problem, that is ;

1) What to produce: Slaves were commonly used in the production activities of agriculture, mining, plantation, manual industrial labor, factory production , textile etc. It was evident that the industries or activities that involved slaves made enormous profits as the costs of production were very low and the market demand for the finished goods were high. Goods such as cotton, finished metal works, tobacco , agricultural  produce etc were produced.

2) How to produce: Slaves provided a cheap alternative of labor intensive techniques in the methods of production than the use of high cost capital intensive techniques in production. As a result, most production activities involved slaves to provide labor. This is why we see that low technological development in agriculture and other subsequent industries where slaves where heavily used as there was no intensive to research and develop a new method of production due to the high cost cutting benefits slavery provided.

3) For whom to produce : Goods were produced for the higher elites and other factor input owners of the economy. No welfare goods such as education, health facilities for the poor or for the slaves were produced at a large scale as the marketability for those goods is very low. In a slave driven economy, as the costs of production is low when slaves are used in the process of production, goods demanded by the people who have the purchasing power to buy the same goods, are produced by factor owners , thus contributing the never ending cycle of inequality in income and wealth distribution and the ever extending backwardness of the slaves and the poor. Human development and welfare goods and services were neglected due to the low profitability those sectors provided.