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Wednesday, October 21, 2020

The Economics of Trans-Atlantic Slave Trade

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Most slaves were shipped from West Africa and Central Africa and taken to the New World (primarily Brazil). Generally slaves were obtained through coastal trading with Africans, though some were captured by European slave traders through raids and kidnapping. Most contemporary historians estimate that between 9.4 and 12 million Africans arrived in the New World, although the number of people taken from their homestead is considerably higher.

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The slave-trade is sometimes called the Maafa by African and African-American scholars, meaning “holocaust” or “great disaster” in Swahili. The slaves were one element of a three-part economic cycle—the Triangular Trade and its Middle Passage—which ultimately involved four continents, four centuries and millions of people.

Slavery was practiced in Africa before the beginning of the Atlantic slave trade. The African slave trade provided a large number of slaves to Europeans and their African agents.

The Atlantic slave trade is customarily divided into two eras, known as the First and Second Atlantic Systems.

The First Atlantic system was the trade of African slaves to, primarily, South American colonies of the Portuguese and Spanish empires; it accounted for only slightly more than 3% of all Atlantic slave trade. It started (on a significant scale) in about 1502 and lasted until 1580, when Portugal was temporarily united with Spain. While the Portuguese traded slaves themselves, the Spanish empire relied on the asiento system, awarding merchants (mostly from other countries) the licence to trade slaves to their colonies. During the first Atlantic system most of these traders were Portuguese, giving them a near-monopoly during the era, although some Dutch, English, Spanish and French traders also participated in the slave trade. After the union, Portugal stayed formally autonomous, but was weakened, with its colonial empire being attacked by the Dutch and English.

The Second Atlantic system was the trade of African slaves by mostly English, Brazilian, French and Dutch traders. The main destinations of this phase were the Caribbean colonies, Brazil and North America, as a number of European countries built up economically slave-dependent colonial empires in the New World. Amongst the pioneers of this system were Francis Drake and John Hawkins.

Only slightly more than 3 percent of the slaves exported were traded between 1450 and 1600, 16% in the 17th century. More than half of them were exported in the 18th century, the remaining 28.5% in the 19th century.

 

Triangular trade

European colonists initially practised systems of both bonded labour and Indian slavery, enslaving many of the natives of the New World. For a variety of reasons, Africans replaced Indians as the main population of slaves in the Americas. In some cases, such as on some of the Caribbean Islands, warfare and diseases such as smallpox eliminated the natives completely. In other cases, such as in South Carolina, Virginia, and New England, the need for alliances with native tribes coupled with the availability of African slaves at affordable prices (beginning in the early 18th century for these colonies) resulted in a shift away from Indian slavery.

The first side of the triangle was the export of goods from Europe to Africa. A number of African kings and merchants took part in the trading of slaves from 1440 to about 1900. For each captive, the African rulers would receive a variety of goods from Europe. These included guns and ammunition and other factory made goods. The second leg of the triangle exported enslaved Africans across the Atlantic Ocean to South America, the Caribbean Islands, and North America. The third and final part of the triangle was the return of goods to Europe from the Americas. The goods were the products of slave-labour plantations and included cotton, sugar, tobacco, molasses and rum.

However, Brazil (the main importer of slaves) manufactured these goods in South America and directly traded with African ports, thus not taking part in a triangular trade.

 

Economics of slavery

The plantation economies of the New World were built on slave labour. Seventy percent of the slaves brought to the new world were used to produce sugar, the most labour-intensive crop. The rest were employed harvesting coffee, cotton, and tobacco, and in some cases in mining. The West Indian colonies of the European powers were some of their most important possessions, so they went to extremes to protect and retain them. For example, at the end of the Seven Years’ War in 1763, France agreed to cede the vast territory of New France to the victors in exchange for keeping the minute Antillean island of Guadeloupe.

Slave trade profits have been the object of many fantasies. Returns for the investors were not absurdly high (around 6% in France in the 18th century), but they were considerably higher than domestic alternatives (in the same century, around 5%). Risks — maritime and commercial — were important for individual voyages. Investors mitigated it by buying small shares of many ships at the same time. In that way, they were able to diversify a large part of the risk away. Between voyages, ship shares could be freely sold and bought. All these made the slave trade a very interesting investment.

By far the most successful West Indian colonies in 1800 belonged to the United Kingdom. After entering the sugar colony business late, British naval supremacy and control over key islands such as Jamaica, Trinidad, the Leeward Islands and Barbados and the territory of British Guiana gave it an important edge over all competitors; while many British did not make gains, a handful of individuals made small fortunes. This advantage was reinforced when France lost its most important colony, St. Dominigue (western Hispaniola, now Haiti), to a slave revolt in 1791 and supported revolts against its rival Britain, after the 1793 French revolution in the name of liberty (but in fact opportunistic selectivity). Before 1791, British sugar had to be protected to compete against cheaper French sugar.

After 1791, the British islands produced the most sugar, and the British people quickly became the largest consumers. West Indian sugar became ubiquitous as an additive to Indian tea. Nevertheless, the profits of the slave trade and of West Indian plantations amounted to less than 5% of the British economy at the time of the Industrial Revolution in the latter half of the 1700s.

Historian Walter Rodney has argued that at the start of the slave trade in the 16th century, even though there was a technological gap between Europe and Africa, it was not very substantial. Both continents were using Iron Age technology. The major advantage that Europe had was in ship building. During the period of slavery the populations of Europe and the Americas grew exponentially while the population of Africa remained stagnant. Rodney contended that the profits from slavery were used to fund economic growth and technological advancement in Europe and the Americas. Based on earlier theories by Eric Williams, he asserted that the Industrial Revolution was at least in part funded by agricultural profits from the Americas. He cited examples such as the invention of the steam engine by James Watt, which was funded by plantation owners from the Caribbean.

Other historians have attacked both Rodney’s methodology and factual accuracy. Joseph C. Miller has argued that the social change and demographic stagnation (which he researched on the example of West Central Africa) was caused primarily by domestic factors. Joseph Inikori provided a new line of argument, estimating counterfactual demographic developments in case the Atlantic slave trade had not existed. Patrick Manning has shown that the slave trade did indeed have profound impact on African demographics and social institutions, but nevertheless criticised Inikori’s approach for not taking other factors (such as famine and drought) into account and thus being highly speculative.

 

Effect on the economy of Africa

No scholars dispute the harm done to the slaves themselves, but the effect of the trade on African societies is much debated due to the apparent influx of capital to Africans. Proponents of the slave trade, such as Archibald Dalzel, argued that African societies were robust and not much affected by the ongoing trade. In the 19th century, European abolitionists, most prominently Dr. David Livingstone, took the opposite view arguing that the fragile local economy and societies were being severely harmed by the ongoing trade. This view continued with scholars until the 1960s and 70s such as Basil Davidson, who conceded it might have had some benefits while still acknowledging its largely negative impact on Africa. Historian Walter Rodney estimates that by c.1770, the King of Dahomey was earning an estimated £250,000 per year by selling captive African soldiers and even his own people to the European slave-traders.

 

Effects on Europe’s Economy

Eric Williams has attempted to show the contribution of Africans on the basis of profits from the slave trade and slavery, and the employment of those profits to finance England’s industrialization process. He argues that the enslavement of Africans was an essential element to the Industrial Revolution, and that European wealth is a result of slavery. However, he argued that by the time of its abolition it had lost its profitability and it was in Britain’s economic interest to ban it. Most modern scholars disagree with this view. Seymour Drescher and Robert Anstey have both presented evidence that the slave trade remained profitable until the end, and that reasons other than economics led to its cessation. Joseph Inikori has shown elsewhere that the British slave trade was more profitable than the critics of Williams would want us to believe. Nevertheless, the profits of the slave trade and of West Indian plantations amounted to less than 5% of the British economy at the time of the Industrial Revolution.

 

Demographics and Social impacts

The demographic effects of the slave trade are some of the most controversial and debated issues. More than 10 million people were removed from Africa via the slave trade, and what effect this had on Africa is an important question.

Walter Rodney argued that the export of so many people had been a demographic disaster and had left Africa permanently disadvantaged when compared to other parts of the world, and largely explains the continent’s continued poverty. He presented numbers showing that Africa’s population stagnated during this period, while that of Europe and Asia grew dramatically. According to Rodney, all other areas of the economy were disrupted by the slave trade as the top merchants abandoned traditional industries to pursue slaving, and the lower levels of the population were disrupted by the slaving itself.

Others have challenged this view. J. D. Fage compared the number effect on the continent as a whole. David Eltis has compared the numbers to the rate of emigration from Europe during this period. In the nineteenth century alone over 50 million people left Europe for the Americas, a far higher rate than were ever taken from Africa.

Other scholars accused Rodney of mischaracterizing the trade between Africans and Europeans. They argue that Africans, or more accurately African elites, deliberately let European traders join in an already large trade in slaves and were not patronized.

As Joseph E. Inikori argues, the history of the region shows that the effects were still quite deleterious. He argues that the African economic model of the period was very different from the European, and could not sustain such population losses. Population reductions in certain areas also led to widespread problems. Inikori also notes that after the suppression of the slave trade Africa’s population almost immediately began to rapidly increase, even prior to the introduction of modern medicines. Shahadah also states that the trade was not only of demographic significance, in aggregate population losses but also in the profound changes to settlement patterns, exposure to epidemics, and reproductive and social development potential.

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