Slavery and the Industrial Revolution
I recently watched a good documentary called “The Better Hour,” which tells of the life and works of William Wilberforce. Wilberforce was among the leaders of the abolitionist movement in England that led to the end of slavery there in 1807.
In the film, Prof. James Walvin, a historian at the University of York, argued there was “a huge amount of money to be made in the slave trade…” which got me thinking about the old Eric Williams thesis and the rebuttal by Stanley Engerman (and, curious to see if there has been any more recent work on the topic since Williams’ published his book in 1944 and Engerman’s paper was published in 1972).
Williams’ major arguments have been summarized as: (1) racism was a consequence of slavery but not its cause; simply put, slavery was a way of exploiting labor, (2) profits earned in the slave trade were used to finance industrialization, and (3) abolition of the slave trade was driven by changing economic incentives, not by humanitarian interests.
The second argument has been of primary interest for economic historians since Williams’ original thesis appeared in Capitalism and Slavery. Was, as Williams claimed, the British Industrial revolution financed by the slave trade? To what extent does modern industrial capitalism depend on that supposedly highly profitable institution?
These are ultimately empirical questions and the Williams thesis simply does not hold up to empirical scrutiny, as Engerman showed back in 1972 (and whose critique has been pretty widely accepted).
The economic logic behind this is the simple story of competition eroding high profits: entry was, as David Richardson pointed out, easy since merchant ships could easily turn into slave transport ships. One would, under those circumstances, not expect exorbitant profits and Engerman’s work showed that prediction to be consistent with the evidence.
While some individuals certainly grew wealthy from the slave trade and invested those profits into British factories, they were of minor importance in the Industrial Revolution. The slave trade was not especially profitable relative to alternative investments and revenues from it were not big enough to have had much of an impact on British capital formation. The slave trade was actually quite a small part of British trade overall and, as McCloskey pointed out in Bourgeois Dignity, “to attribute great importance to a tiny trade would make every small trade important – we are back to the brass industry as a cause of the modern world.”
As for other recent scholarship on this topic, here is a short list for the interested reader:
Eltis, David and Stanley L. Engerman, “The Importance of Slavery and the Slave Trade to Industrializing Britain,” Journal of Economic History, Vol. 60, No. 1 (March 2000)
Darity, William A., “British Industry and the West Indies Plantations.” In The Atlantic Slave Trade, edited by Joseph. E. Inikor and Stanley L. Engerman, 1992.
Bailey, Ronald, “The Slave(ry) Trade and the Development of Capitalism in the United States: The Textile Industry in New England.” In The Atlantic Slave Trade, edited by Joseph. E. Inikor and Stanley L. Engerman, 1992.
Engerman, Stanley L. and Barbara Solow (eds.), British Capitalism and Caribbean Slavery: The Legacy of Eric Williams
McCloskey, Deirdre N. “Slavery and Imperialism Did Not Enrich Europe” in Bourgeois Dignity