Games and Simulations

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Games and Simulations

Indentured Servitude: A Colonial Market for Labor
Content Standards addressed:

History Standards (from National Standards for History by the National Center for History in the Schools)
Era 2: Colonization and Settlement (1585 – 1763)

Standard 1: Why the Americas attracted Europeans, why they brought enslaved Africans to their

colonies, and how Europeans struggled for control of North America and the Caribbean.

1A: The student understands how diverse immigrants affected the formation of European colonies.

Therefore, the student is able to:

  • Explain why so many European indentured servants risked the hardships of bound labor overseas.

Standard 3: How the values and institutions of European economic life took root in the colonies, and

how slavery reshaped European and African life in the Americas.

3A: The student understands colonial economic life and labor systems in the Americas.

Therefore, the student is able to:

  • Identify the major economic regions in the Americas and explain how labor systems shaped them.

3B: The student understands economic life and the development of labor systems in the English colonies.

Therefore, the student is able to:

  • Compare the characteristics of free labor, indentured servitude, and chattel slavery.

Economics Standards (from Voluntary National Content Standards in Economics)
Economics Standard 7: Students will understand that: Markets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services.

  • Students will be able to use this knowledge to: Identify markets in which they have participated as a buyer and a seller and describe how the interaction of all buyers and sellers influences prices. Also, predict how prices change when there is either a shortage or surplus of the product available.

  • At the completion of grade 12, students will know . . . that:

  1. Shortages of a product usually result in price increases in a market economy; surpluses usually result in price decreases.

Economics Standard 8: Students will understand that: Prices send signals and provide incentives to buyers and sellers. When supply or demand changes, market prices adjust, affecting incentives.

  • Students will be able to use this knowledge to: Predict how prices change when the number of buyers or sellers in a market changes, and explain how the incentives facing individual buyers and sellers are affected.

  • At the completion of grade 12, students will know . . . that:

  1. Changes in supply or demand cause relative prices to change; in turn, buyers and sellers adjust their purchase and sales decisions.

Overview and Teacher Background:

The purpose of this activity is to demonstrate to students, using the context of colonial markets for indentured servants, that prices emerge from the choices made by individual people.

It would be hard to overstate the importance of indentured servitude in populating the American colonies and insuring that the successful nation that emerged from the colonial period looked to England, rather than to France or Spain, for its heritage. By 1775, more than 500,000 Europeans – mainly English, Scotch, Irish, and Germans – had crossed the Atlantic, and over 350,000 of them came as indentured servants. The indenture contract helped to populate the colonies by allowing the prospective emigrant to exchange his labor for Atlantic passage. The price of passage – from £9 -£11 in the early 17th century – was more than the average Englishman earned in a year. Thus, despite the fact that conditions in England made the colonies alluring, to say that the price of the transatlantic voyage was prohibitive for the laboring classes is the most extreme form of understatement. In very real terms, then, indenturing bridged the ocean for the labor necessary to begin the building the American economy.
Gary Walton and Hugh Rockoff describe the indenture system in the History of the American Economy:

The indenture contract was a device that enabled people to pay for their passage to America by selling their labor to someone in the New World for a specified period of time. These contracts were written in a variety of forms, but law and custom made them similar. Generally speaking, prospective immigrants would sign articles of indenture binding them to a period of service that varied from three to seven years, although four years was probably the most common term. Typically, an indenturer signed with a shipowner or a recruiting agent in England. As soon as the servant was delivered alive at an American port, the contract was sold to a planter or merchant. These contracts typically sold for £10 to £11 in the eighteenth century, nearly double the cost of passage. Indentured servants, thus bound, performed any work their “employers” demanded in exchange for room, board, and certain “freedom dues” of money or land that were received at the end of the period of indenture. . .

The first indentures were sent to Jamestown and sold by the Virginia Company: about 100 children in their early teens in 1618, a like number of young women in 1619 for marital purposes, and a young group of workers in 1620. Soon thereafter private agents scoured the ports, taverns, and countryside to sign on workers as indentures. The indentured servants were drawn from a wide spectrum of European society, from the ranks of farmers and unskilled workers, artisans, domestic servants, and others. Most came without specialized skills, but they came to America voluntarily because the likelihood of rising to the status of landowner was very low in Britain or on the Continent. They were also willing to sign indentures because their opportunity cost – the next best use of their time, was typically very low – room and board and low wages as a rural English farm worker, a “servant in husbandry.” Children born in English cottages usually went to work at the age of 10, moving among families and farms until good fortune (often inheritance or gifts) allowed them to marry. For many, a period of bondage for the trip to America seemed worth the risk. (28-30)
The process of negotiating for indentures was a form of labor market, but confusion arises if we forget that what is being sold in this market is the passage to America. Labor is the currency of exchange, or, in other words, the price that is being paid for the passage. Thus, the average length of the indenture – the 4 years mentioned in most textbooks – is best understood as a sort of “market clearing price,” paid in labor, for passage to America.
As in any market, indenture markets had both buyers and sellers. The buyers were the laborers, trying to use their labor to purchase passage. The sellers were the ship captains and their agents, accepting labor in the form of a signature on an indenture contract, in return for passage. Note, too, that the ship captains and agents were the real risk takers. In order to profit, they had to make sure that the indentured servant arrived in the colonies alive, with enough strength, training, and other desirable qualities to attract the interest of a land owner or merchant willing to purchase the indenture contract.
Like other markets for goods and services, the indenture market was affected by conditions of supply and demand. The promise of free land at the end of the indenture period (most colonies offered 50 acre headright land grants to free men) increased the willingness to emigrate, as agricultural workers saw little opportunity to ever own their own land in England. Because wages in the colonies were so much higher than in Europe, skilled workers, craftsmen, artisans, and scholars were also attracted to the cities and seaports of colonial America. Like other markets, the indenture market was dynamic, reacting to changes in society and/or changes in the willingness of individuals to participate. The characteristics of the laborers and/or of the society into which they were indentured affected the length of indenture – and some of those characteristics changed over time.

  • In the early 17th century, the severe shortage of women in the colonies meant that single females under the age of 18 served an average of 1.5 years less than men of similar age and qualifications. By the eve of the Revolution, the shortage of women had abated and the average indenture for a single girl under the age of 18 was only a few months less than that of a man.

  • The harsh conditions of the West Indies cane fields were well known to Europeans, and so it is not surprising that indentures there averaged 9 months less than on the continent of North America. (Eventually the high cost of indentures lead the planters to substitute slavery for indentured labor.)

  • Highly skilled and/or educated workers were able to secure shorter indentures (generally 20% shorter), although the rate varied with the occupation and situation.

  • Indenture was an alternative to the death penalty. Estimates suggest that as many as 30,000 prisoners agreed to indentures in order to avoid the death penalty or a lengthy imprisonment. Their indentures tended to be longer than those of free laborers. Records from 1718 indicate an average indenture of 7 years for minor crimes and 14 years for major crimes.

The success of indenture markets was also dependent on the rule of law. Both parties had to be confident that the terms of the contract would be carried out and that the courts would uphold their rights in the agreement. Without this security, the practice of indenturing based on voluntary participation, would not have persisted. Colonial courts routinely and reliably enforced indenture contracts, evidence of the importance of the practice to American colonists. Employers were fined and/or punished for abuse of indentures or failure to deliver on the promises of food, clothing, and “allowances.” Similarly, employers could depend on the courts to discipline rebellious servants and to punish servants who ran away – often by extending the indenture period.

Finally, it should be recognized that just as market forces were responsible for the genesis of the indenture system, so were they responsible for its demise. By the end of the 18th century, the indenture market had virtually disappeared. The reasons for its disappearance can be easily identified:

  • The rise of slavery provided a viable and cheaper alternative to indentures. While the initial price of a slave was greater than an indenture, the planter could anticipate a much longer work life of the slave. Planters quickly discovered that the terms of the indenture contract made maintaining an indenture more expensive than maintaining a slave. Also, the availability of free land and the high productivity of that land encouraged indentures to run away, especially in more rural or “frontier” areas.

  • The cost of passage from Europe to America fell to £6 and improved labor conditions in England and on the Continent resulted in higher wages and greater opportunities for laborers.

  • Over time, the availability of free land in the colonies declined.

  • Colonial population growth eliminated the gender imbalance that had created a market for women.

As students participate in the simulation, they will discover that the 4 year length of indenture mentioned in their textbooks was not the result of whim or decree, but an agreed upon “price” that emerged spontaneously from the voluntary interactions of people participating as buyers and sellers in a market.

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