Introduction/background statement The elementary economic logic of slavery in a setting of land abundance has been outlined many times. If land is available to all comers, and if cultivation may be practiced at any scale without major loss of efficiency, then there will be no way for an entrepreneur to achieve a large absolute profit except with un-free labor. Most of the seventeenth-century development of tobacco culture in Virginia and Maryland was based on white indentured labor, in a system with many of the economic features of slavery men and women could be bought and sold at any time, families broken up, harsh punishments inflicted for running away or misbehavior, and some planters were able to expand their operations well beyond family scale. Indentured servitude was inherently transitional, however: as terms of service were completed, as free-labor wages rose and the cost of transport fell, only the full-fledged system of involuntary slavery-for-life survived. If the profitability of slavery is accepted, explanations based specifically on the notion that slave owners were losing money can be ruled out. But this agreement does not take us far, and the precise meaning of the statement “slavery was profitable” makes a great deal of difference. Land-labor conditions were initially similar in all of the colonies, as were attitudes toward profit-making and slavery. What is missing from this story is the fact that in the seventeenth and eighteenth centuries, North American colonies had to buy African slaves on a world market at prices which reflected the high profitability of slavery in the sugar colonies of the West Indies. For this reason, despite the underlying similarity in factor proportions, slavery expanded only in areas where profitable export staples were available. Though cotton was of no commercial importance before the 1780s, the growth of North American slavery revolved primarily around the fortunes of tobacco and rice, with indigo playing a briefer and lesser part in the mid-eighteenth century. In the North, according to a leading student of antislavery thought, the original and essential grievance of the colonists who cared about the matter was that they could not buy enough slaves at a reasonable price. Objective The objective of this paper is to analyze historical interpretations based on concept of profitability of slavery. To analyze some of the important assumptions of conventional economic analysis, basic to most of the existing research in econometric history. To analyze that the principle of opportunity costs implies that there is no essential difference between the production and consumption of nonmarket goods and services on the one hand, and the production, sale and purchase of commodities through the market, except for the costs of transportation and other costs directly associated with transactions. Survey of Literature A major flourishing of historical economic analysis of slavery dates from the 1958 Conrad and Meyer (1961) study on the profitability of slavery. The distinguishing feature of this work has been the application of basic economic principles of competitive market economies (principles commonly referred to as “price theory”) to the analysis of slavery. Generally, economists have found the slave economy readily amenable to their approach; its main features are well explained by price theory, and slavery seems to have functioned flexibly and efficiently in response to economic inc