"But though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated. It is of difficult to ascertain the proportion between two different quantities of labour. The time spent in two different sorts of work will not always alone determine this proportion. The different degrees of hardship endured, and of ingenuity exercised, must likewise be taken into account."
--Adam Smith, The Wealth of Nations, Book 1, Chapter 5 (emphasis mine).
You may have seen T. Boone Pickens on television commercials touting his energy plan. In those ads, and on his website, this statement is made:
"Projected over the next 10 years the cost (of imported oil) will be $10 trillion — it will be the greatest transfer of wealth in the history of mankind."
This statement, alas is not followed by a citation. One of the things I try to do here on my blog, is whenever I make a declaration of fact of something that isn't readily apparent, I let you know where I got the information. (I say "something that isn't readily apparent" because I figure I can write "two plus two equals four" without being challenged.)
There are two reasons I cite sources. First, you might be interested in learning more, and by giving you a reference I've helped you start your own quest for knowledge. Second, and far more important, I would lose credibility if anybody thought the things I write as fact are simply matters that seem logical in my own head, where they aren't challenged as thoroughly as theories are in the marketplace of ideas.
So, I must say I'm disappointed that this assertion that the money we pay over the next decade for foreign oil will be the largest transfer of wealth in man's long history is not followed by some reference. I'd like to know how, when, and where this tidbit was determined so I can evaluate its authority. Personally, I'm suspicious. That's because I always assumed the greatest transfer of wealth in the history of mankind occurs whenever T. Boone Pickens withdraws cash at his local ATM.
Seriously though, in thinking about what Adam Smith wrote of labor being the "real" measure of the value of commodities, plus the old Scotsman's assertion that we must take the degree of hardship of that labor into account, I wonder if the greatest transfer of wealth in the history of mankind wasn't the taking of human beings from the African continent and forcing them to work for others in the New World.
Inhuman Bondage: The Rise and Fall of Slavery in the New World by David Brion Davis is one of those "bucket list" books everybody should read before checking out. On page 106 of his tome, Davis, summarizing the studies of others, presents a map showing where the slaves originated, where they wound up, and in what numbers. The figures are just rough estimates, of course, but they are quite staggering. There were around 224,000 slaves imported to Mexico and Central America, four million taken to the West Indies, and 4,675,000 carried to mainland South America. Oh, and another 480,000 were brought to the United States.
That makes a total of well over nine million people forcibly removed from Africa to work in the Western Hemisphere as uncompensated labor.
But remember: we're not talking here only about the actual slaves imported, but also their descendants. As I noted in a recent post, the 1860 U.S. census--the last one before the end of slavery--counted 3,950,511 slaves in the country. That's over an eightfold increase between the number of slaves ever imported into the United States and the number we eventually wound up having. No doubt there were millions of slaves in the US who were neither imported themselves nor counted in 1860 because they had died before that year. The point is, it's mind boggling to think just how many individuals there were in the New World between the sixteenth and nineteenth centuries who earned no money, but were responsible for vast creation of wealth that was transferred to their owners and others.
I'm no economist, but it seems to me that this might well have been the "greatest transfer of wealth in the history of mankind." I could be wrong, but I'd like to see some figures from the Pickens people showing me how sending Saudis ten trillion bucks for oil is a bigger transfer of wealth than two centuries of slavery.
At least sending money to the Arabs, bad as it is, isn't anywhere near as disgusting.