Put in layman's terms it is the fairness of a transaction one feels, so it has been part of the human psychological makeup since the very beginning.
Is not a term used in economics generally, Econ 101 is usually called microeconomics: the study of the principles of how small systems work; and as one gets more advanced it becomes macroeconomics: the study of larger systems (national and global economics for example).
This is incorrect, both labor and machinery do work, but are not the same. Labor pertains to humans and has its associated costs, which go under labor costs; machinery is a fixed cost and goes under plant and equipment, you would not create a labor schedule for machinery, machinery replaces labor usually.
Is by far the smallest portion of labor in an advanced economy such as the Imperium or other starship building economies.
Slavery expands when entrepenuers become slavers and work to fill the demand with a supply of labor at costs the employer can accept, but are far lower than a worker can ask in a balanced labor market.
No, there are other costs associated with slavery beyond contracted (ie wage) labor, such as security, which also engenders higher total liability costs, for example: how do you offset the liability if your slaves escape and do damage beyond your organization? Not only would you be heavily sued, but you would incur a "societal cost" of having to maintain a security apparatus to enforce slavery while protecting society from your slaves, which represents a huge lost opportunity cost of spending that public revenue elsewhere. Societies are generally adverse to spending their money for the benefit of individual business, it does happen, but within reason and not when the more efficient option (free labor) is cheaper.
In a lower tech society (classical era)...
Primitive society economics are centered around subsistence farming, which is not the focus of modern or future economies; so the comparitive analysis does not match between the two.
The other end of interstellar slavery is high-tech worlds. There, slaves would either be ego-boosts ("yeah, I don't need a slave as a valet; my Naasirka robot does it better).
High tech worlds would not want or need savery for economic reasons, slaves are higher cost and less productive than contract labor.
The roomba doesn't require extra external/internal security costs as do slaves, nor engendering the same generally liability.
If the Zhodani invade your world, you would not be worried that your robot valet would become a fifth column and rise up against you, like you would with slaves. The robots could be hacked, but that is another thread for discussion elsewhere.
My players are trying to get into smuggling, but I haven't mentioned interstellar slaving to them yet. I'm thinking now about GenAssist TuberZombies with an implanted slave mentality, in addition to the Solomani military TuberZombie soldiers I was already thinking of introducing...
Creating an artificial condition is fine, my argument is only against using the principles of economics and business to support slavery; if you want to use TuberZombies in your traveller universe, I have no argument with that.