Firm profitability and forced wage labour in Portuguese Africa: Evidence from the Sena Sugar Estates, 1920–74

Abstract

AbstractForced wage labour (FWL) in colonial‐era Portuguese Africa came to encompass a majority of working age men and persisted until the early 1960s. On the basis of reconstructed financial records from the Sena Sugar Estates in today's Mozambique, we estimate the long‐run profitability of the firm. With this we associate rates of extraction from native labour, defined as the difference between actual levels of remuneration and those under counterfactual freer market conditions. We estimate that coercion suppressed workers’ remuneration by about two‐fifths, representing a significant cost saving to the firm. However, a production function analysis indicates that coercion also negatively affected productivity. Using these results, we calculate that the firm's profitability might have remained broadly robust without FWL. This suggests other factors, including fiscal imperatives and technological factors, likely contributed to the persistence of labour coercion in Mozambique.