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 1990's, 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
stamp out slavery,

or did paying slaveholders
to release these slaves

lead to more people 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.

Also they're buying slaves
in the market.

That additional demand shifts
out the demand curve for slaves,

and that 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 it's

unintended consequences.

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