The Profitability of Serfdom: A Comment

Abstract

e) Their empirical efforts to discern declining serf prices are not an appropriate test of the profitability or unprofitability of the institution of serfdom. The point of these criticisms is not to dispute Domar and Machina's contention that the Great Reform probably was not motivated by the unprofitability of serfdom, but to argue that their models and tests do not support their contention. If their derivation of the condition under which a lord will desire no more serfs is incorrect, and if they have interpreted that condition incorrectly to suggest that serf prices decline when grain prices rise, then their empirical work to test the profitability of serfdom is irrelevant. An examination of the trade-offs between serf and wage labor concludes that the most likely observable evidence of the unprofitability of serfdom would be the voluntary manumission of serfs. Domar and Machina model resource allocation on a single estate with fixed (in the short run) quantities of land and serfs. No market for serfs is recognized; the population can be increased only by natural increase. The land is divided between master and serf in a proportion determined by the master, as is the total amount of serf labor. The land and labor allotted to the serf sector is sufficient only to provide a subsistence living for the serfs. The lord is assumed to maximize his own income, measurable as output from the demesne. Domar and Machina also make the assumption that the same, unchanging production function applies to production on both the serfs' and the lord's land, and that constant returns to scale prevail. The model is used to examine the conditions under which the lord will desire to increase his serf population. The authors argue that more serfs will be desired as long as the marginal product of (an hour's worth of) serf labor exceeds the marginal product of the land which must be allotted to a serf, divided by the hours of labor provided by the serf in a week's time (RL) TSRI(H - L,)). They suggest