paper source: http://www.nber.org/papers/w30451

Slavery and the British Industrial Revolution

The wealth generated from slavery significantly contributed to Britain’s economic development prior to the abolition of slavery in 1833.

📎 Executive Summary

This working paper explores the impact of wealth derived from slavery on Britain’s economic landscape before the abolition of the slave trade. It combines compensation records, mortality data from the middle passage, and a quantitative spatial model to show that slavery wealth lowered agricultural employment, increased manufacturing jobs, and substantially raised local incomes and property values.

❗Conclusion

The findings suggest that slavery wealth played a significant role in stimulating Britain’s Industrial Revolution by enhancing local economic activities and redistributing wealth favorably among capitalists, impacting the economic structure and geographic distribution of wealth in Britain during this period.

👁️ Key Findings

• Slavery wealth raised national income by approximately 3.5%, equivalent to a decade’s economic growth.
• Areas highly involved in slavery saw local incomes increase by over 40%.
• Exogenous increases in slavery wealth correlated with a shift from agricultural to manufacturing employment.

✅ Similarities

• Aligns with existing literature on the economic implications of slavery on capitalist development in the UK.
• Echoes the Williams hypothesis that posits slavery significantly aided industrial growth through capital accumulation.

⚔️ Differences

• Challenges the notion that profits from slavery were minimal compared to other sectors.
• Offers empirical evidence using a localized approach rather than aggregate data, distinguishing itself from previous studies.

📖 Content

1: Introduction

• The paper establishes the historical context of slavery, noting the extensive wealth generated from enslaved labor across British colonies.
• It asserts the necessity of examining how this wealth contributed to economic development in Britain, particularly when evaluating the impacts prior to the abolition in 1833.

2: Related Literature

• Reviews the extensive economic literature surrounding the relationship between slavery and British industrialization, highlighting the contested interpretations of slavery’s economic benefit.
• Discusses contrasting views, including Adam Smith’s skepticism about slavery’s efficiency and Eric Williams’ assertion of its critical role in capital generation for industrial investment.

3: Historical Background

• Outlines Britain’s deep engagement in the transatlantic slave trade beginning in the 1560s.
• Describes the economic structure before the abolition, including the dependency on slave-based agriculture and its implications for manufacturing growth.

4: Data

• Introduces the dataset created from compensation records and details about the geographical distribution of wealth linked to slavery.
• Data sources include slave voyages documentation, census records, and economic activity measures pre- and post-slavery involvement.

5: Motivating Evidence

• Provides evidence showing regional economic conditions correlating with slaveholding patterns and contrasting employment structures.
• Visual material, such as maps showing slaveholder wealth distribution correlated with manufacturing employment, strengthens the argument.

6: Theoretical Model

• Introduces a quantitative spatial model to analyze the relationship between slavery wealth, capital accumulation, and economic output.
• Discusses how exogenous variations in wealth affect economic structuring and employment patterns.

7: Main Empirical Results

• Reports findings from instrumental variable regressions correlating slaveholder compensation with key economic indicators.
• Discusses significant effects of slavery wealth on property values, employment shifts, and manufacturing scale via statistical evidence.

8: Quantitative Analysis of the Model

• Utilizes the theoretical model to predict counterfactual outcomes had Britain engaged differently with slavery.
• Suggests implications on the broader economic landscape, underscoring the critical role of slavery in shaping the industrial economy.

9: Conclusion

• Reinforces the middle ground reached by the findings, indicating that while slavery wasn’t the sole catalyst for industrialization, its wealth fundamentally contributed to structural economic changes within Britain.
• Highlights ongoing geographical disparities created by slavery wealth and its lasting impact on societal wealth distribution.

Overall, the paper compellingly argues for recognizing the interconnectedness of slavery and British economic progress, providing empirical and theoretical insights that reshape our understanding of historical economic development.