As the subtitle of this blog indicates, there is economics in everything. Even in activities that are illegal, immoral or banned. Slavery is one such activity, but at some time it was considered legal and moral in many parts of the world. The slavery market is in fact akin to a financial market, as a slave is an investment good that yields dividends in the form of labor, and depending on the country, also in the form of offspring. Now what is the first thing a financial economist would check when he encounters a new market? Verify whether this market is efficient.
This is what Elise Brezis and Heeho Kim do for the slave market in Korea in the 18th and 19th century, the period during which the existence of money and slavery overlapped. They compile data from several markets and deflate nominal prices using the price of rice, a proxy for the general level of prices. Given that slaves were typically farm workers, and thus their yield is probably correlated with the price of rice, this may not be the best choice for a deflator. But there may be no other price data to draw on consistently.
Brezis and Kim then use the arbitrage asset equation and find that the market is efficient most of the time, the exception being towards the end. The authors claim this is because monitoring costs became too high and hiring free workers became more economical. I wonder though whether the looming repeal of slavery may have something to do with this.