Elasticity and Slave Redemption

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.

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- [Tyler] This is a pretty
tragic topic,

and in some ways,
it's tough to talk about,

but let's give it a try.

Let's keep in mind
that in the modern world,

there still really is
a lot of slavery

and many people are
rightfully outraged by this.

But the question is
what to do about it?

So in the 1990s, there were
humanitarian reformers,

and they went to Sudan,
and their plan was

to buy slaves and set them free.

Now that sounds great.

What could be better
than setting free slaves?

That sounds pretty noble,

but did it actually help
stamp out slavery,

or did paying slaveholders
to release these slaves

lead to more people being captured?

Let's use the economic concept

of the elasticity of supply
to help understand this better.

The problem is this,
the people trying to free the slaves --

we'll call them the slave redeemers --

they're also creating
additional demand for slaves.

After all, they're buying slaves
in the market.

That additional demand shifts
out the demand curve for slaves,

and it leads to a new
and higher market price.

That higher price will bring
forth additional supply.

So what are the people who
round up and kidnap the slaves --

what are they going to do?

Well, they're going
to increase their operations.

They're going to have more raids,

and they're going to take
more people into slavery.

We can already see there's
at least a possibility that buying

the slaves and setting them free
will be counterproductive

because we haven't managed
to stamp out all of slavery.

What we've done is set
some people free

but actually give those kidnappers,
those people in the middle --

we've increased their incentives
to bring more people into slavery.

And therein lies the potential
for an even greater tragedy.

The concept of elasticity
in economic terms -- that refers

to how responsive is quantity
supplied when market price changes.

It's going to help us understand
how much a slave redemption program

will increase the number of people

who end up captured
by slave raiders.

Inelastic supply means that even
a much higher price

doesn't result in a much
larger quantity supplied.

In that case, even if the price
of slaves went up by a lot,

not that many additional
people would be captured.

That's the better case scenario.

It also means the price
of slaves will go up and stay high

because the off-setting
supply response is weak,

and it's not pushing
that market price back down again.

Again, that's
the better case scenario.

It means that in the long run,
the redeemers are doing more

to limit slavery
than to encourage it.

But, however, let's say
the supply curve is more elastic --

that means a flatter curve,
and it means the quantity supplied

to the market will increase a lot
with the higher price.

In that case, it's easier to find
more people to enslave.

Then as a result
of the boost in demand

from the humanitarian redeemers,
a lot more people will

end up captured and enslaved.

And then, the total number
of people captured as slaves

is going up quite a bit.

And you have to wonder
in that case are

these slave redemption programs
really a good idea?

So what's the answer?

It's genuinely hard to say
whether the supply of slaves

is elastic or inelastic,
but we can look at price

as a possible indicator of which
scenario is more likely to hold.

We know that in the early years
of slave redemption,

there was a noticeable increase
in the price of slaves,

and that could be evidenced
of a fairly inelastic supply curve.

However, over time,
the price of slaves has fallen,

and that could indicate greater
elasticity of supply in the longer run.

That makes sense,
but the suppliers are usually

more responsive
to an increase in price

as they have more time to adjust.

For instance, they can
hire more people

and expand their operations.

So this evidence overall suggests
that perhaps the program has

become less effective over time,
and perhaps today, it may actually

be counterproductive and be
increasing the burden of slavery.

In other words, good intentions
aren't always enough.

If someone comes along and puts
an apparently good idea on the table,

we still need to think through
its unintended consequences.

- [Narrator] If you want to test
yourself, click "Practice questions."

Or, if you're ready to move on,
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