Impact of the Slave Trade on the British Economy: Analytical Essay

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The importance of tropical crops

With rising population and urban movement, associated with factory production system, there was increased need in agricultural production. ‘Although British agricultural output was rising, still, there was need for imports. “While population more than tripled in the course of the Industrial Revolution, domestic agricultural output did not even double” (Clark, 2007, p. 247). These imports, however, needed to be paid by exporting manufactured goods. It turned Britain into “the workshop of the world”. Moreover, West Indies were well-suited for the production of expensive crops, like coffee, tobacco, cotton, and most importantly – sugar, which occupied 70% of slave labour. As a result of increased profits from sugar and tobacco trade in the 18th century, export patterns changed dramatically. The share of manufacturers in the exports to the Atlantic economy rose significantly in the 1700s. While in 1700, 80% of Britain’s trade relationships were with other parts of Europe, by 1800, America and Africa had captured 60% of its trade, in which three major ports of Glasgow, Liverpool and Bristol played a significant role.

Slave trade was one of the reasons for the growth of Atlantic ports, but the fact that they were involved with Atlantic economy played equally significant role. A question arises, what if there was no Atlantic slave trade? It would not stop the trade, because Britain was the source of colonial imports (because of regulations), however, without slaves, there would not have been a cheap workforce in the colonies for a very long time, and British exports to the America would have grown much more slowly.

The role of the trade in navigation

The Royal Navy and United kingdom’s merchant navy’s have benefited from slave trade, which supported their growth. The period of conflict for control of colonies was important for the Royal Navy’s growth. Despite the fact that Britain was dominating the Caribbean, the Navy still was not capable of protecting colonies and British sea transportation alone, it still needed help.

The Atlantic economy in 1700s

Trade in slaves and plantation crops and rising exports to American and Caribbean colonies contributed to the growth of sea transportation. According to Navigation Acts rules, which were used for overseas trade, only British ships, run by British seamen should have been used in commodity trade between British and European ports. With the newly introduced laws, British shipping companies took a lead over foreign ones: Import of sugar to North America was prohibited by the Molasses Act (1733) and British had the right to transport goods directly to Europe by the Direct Export Act (1739). This helped in building trading links between Europe, Africa and America. The triangular trade route was the most famous:

slaves were exchanged for the British goods (like guns or brandy)
slaves were then sold in the North America and West indies.
Sugar, tobacco and some other commodities were shipped to Britain for sale.

Slave trade supplied experienced crews to the British merchants and the Royal Navy. However, the diseases caused the high death rate, turning slave trade into a graveyard for seamen.

Manufacturing

Industrial revolution is described by many historians not as an event, but as a process. The role of exports can be shown in the following picture:

BBC. Slave Trade and the British Economy

Cotton

The year 1750 was important for British people, as new industry – the production of cotton cloth appeared. Before that, wool production held the major place in British industry, but compared to cotton fibres, it was more difficult to process wool using machinery. It was because of this that the industrial revolution started in cotton manufacturing – in Manchester and surrounding areas, to be more precise. Britain imported cotton from slave plantations, and slavery also played important role in industrial change and British growth by providing raw materials.

Atlantic economy grew with the growth of exports; an example one can consider is the export of manufactured cotton to Africa. In 1700’s, the Atlantic economy was founded on slave labor and is considered to have sparkled the biggest changes in modern economic history.

One of the most important feature of industrial revolution was that the production of different products moved from home to factories, machines which were driven by water or steam power replaced working by hand, all these resulted in increased productivity of workers. And as a result, cotton was the greatest British export industry. And slave labour was what cotton industry was built on.

Obtaining raw materials and trading patterns

Cheap and accessible labour, accompanied with the boom in productivity related to the invention of new technical devices, like spinning jenny, spinning mule, and power loom, the application of water, and steam power to operate power looms, carding machines, (National Geographic, n.d.) etc, led to the increased demand and supply for raw materials. The production of manufactures increased drastically. One crucial invention is said to have played significant role in slave trade – cotton gin, which increased cotton cultivation but also raised demand for slave labour.

The raw materials, provided by the slave labour were used in the production of manufactured goods, which were sold in Europe and in the colonies and generated a huge profit. The profits made by the slave trade were used to purchase goods such as rum, sugar, coffee, tobacco – which were plantation-grown. These goods were then sold in Britain and Europe at a profit.

Atlantic slave trade had a dramatic impact on the growth of Atlantic ports – Bristol, Liverpool and Glasgow. Liverpool and Bristol were very small back in 1700, while Glasgow had a population of only 12 000. The situation changed in 100 years. As a result of slave trade and trade in plantation-grown goods (mostly), these ports gained huge importance.

Shipping

With growing of shipping industry, it took as much effort to build, fit and repair ships as to sail them. Liverpool dominated other cities and became the main shipbuilder. About half of the Britain’s long distance ships were used for trading with the Caribbean. Ship owners who were involved in slave trade usually owned plantations too. Merchants usually spent the generated profits in the ports.

Impact of profits

Profits generated by plantation owners (especially by Scottish ones) increased dramatically, which resulted in them building large houses. Money was also donated to public buildings and schools. Edward Colston was one of the merchants, who donated £100,000, generated from Triangular Trade, to the city and founded a boys’ school, which was named after him.

Industrial economy

Slave traders generated good profits, which resulted in increased demand for goods like weapons, alcohol, textiles and pans. These products were exchanged for African slaves.

Profits generated by the slave trade were invested in British industries. These profits were also used to build canals and railways, which played significant role in connecting major production centers. (Cameron, R. 1989)

Profits made in the slave allowed for low domestic taxes. Investment was stimulated as a result. But unfortunately, slave trade lost its economic importance by the end of 18th century. It has been debated that an insignificant share of revenues from slave trade were directly invested in the industrial revolution.

Several factors played the role in the development of the British industry. First, technological changes created more efficient production methods, which were also cheaper and quicker. Secondly there were new machines, powered by water and steam. These new spinning and weaving machines minimized production costs, as a result, factories spread rapidly. Moreover, development of transportation infrastructure (canals and railways) made it easy to efficiently transport heavy goods. Furthermore, more and more factories were powered by coal, the supply of which was not seasonal. Therefore, it allowed for more manufacturing to take place.

Agricultural economy

Britain gradually transformed from agricultural economy to industrial economy with increased urbanization between 1700-1850. Agricultural changes included enclosure, mechanization, crop rotation and selective breeding, which created food surplus and was able to feed growing urban population (American imports, which used slave labour, however, were still very important). Therefore, it increased the labour force in cities, lowered wages and allowed companies to have a financial surplus for investment.

Wealth of ports and merchants

Bristol

Bristol was dominating the British part of slave trade in the 18th century. Bristol merchants were the ones who made trade connections with West Africa and developed the city by the revenues from the slave trade. The successful slave trade resulted in growth of other industries, like sugar-refining.

Liverpool

Slave trade made Liverpool a powerful city as well. Namely, this city managed more than 60% of British slave trade. Thousands of jobs were created in the industries that supplied slave traders (mainly cotton, linen, and some subsidiary industries – for example, rope) Moreover, Liverpool turned into the major slave shipbuilding place.

Glasgow

Another port that benefited from slave trade was Glasgow. The revenues from tobacco trade held a huge share in city profits. However, the merchants of Glasgow, known as “lords of tobacco”, made profits not by trading in slaves, but selling tobacco.

London

London got involved in slave trade back in the 1600s. This city was the major port for slave ships in Britain. However, it was not the only way the British merchants made money. The Atlantic trade, which included slave trade, created a momentum for the establishment of merchant banking

Growth of merchant banking

Merchants made profits by buying goods cheaply and then selling them at profit. However, gaining profits could take more than half a year as the merchants could not get the revenues until the goods had been transported and then sold. Merchants had to cover the costs of the voyage – including wages of sailors and the payment for the ship. This kind of voyages were risky as the ships could be lost or robbed. Moreover, merchants were responsible themselves to find selling places for their goods.

People involved in the Atlantic trade developed special skills. Moreover, different institutions were created to support the slave traders. For example, David and Alexander Barclay founded Barclays Bank, Sir Francis Baring founded Barings Bank. Besides, London gradually grew into the center of marine insurance and Lloyds of London, which is the world’s leading insurance marketplace to this day, was founded in 1688. Furthermore, profits made from Atlantic slave trade could be shared to thousands of stakeholders, with the invention of joint stock companies

The South Sea Trading Company, which was established in 1711, made its investments in slave trade and plantations. Their popularity caused them to rise quickly in value, which created the first bubble in the Britain, the South Sea Bubble of 1720. Upper classes enjoyed the profits made by the South Sea Trading company.

Wealth created by British slave traders

The contribution of the profits made in the slave trade to the British economy is debatable. The slave trade made it possible to become rich quickly, and many participants gained significant wealth. However, it was only the one side of the coin, because it involved significant risks and many participants suffered losses.

Merchants

Some of the merchants invested their money in British industries. Investments in banks and new businesses were also common. Others mainly spent their revenues on conspicuous consumption and acquisition of real estate.

Revenues from slavery and Atlantic trade were almost equal to the invested amount of money in new industries, therefore they were crucial for hastening industrial revolution.

Conclusion

To fully understand how the slave trade shaped Britain, one should take into consideration the scale and scope of the impact that slavery had on the British economy. Atlantic slave trade altered the economy of Britain. By 1800, America and Africa had captured 60% of British trade and British exports had increased fourfold compared to 1700. Slave trade was the reason of prosperity of ports, like London, Bristol and Liverpool, while other ports, like Glasgow benefited from trade in tobacco. The supply of goods to slave traders led to the creation of thousands of jobs. In the British industrialization period, traders made profits by exporting British manufactures to Africa. The import of products produced by slave labour, like sugar (which became increasingly popular with decreasing prices of tea), were sources of further profits. Just like the cotton industry was the reason for major developments in chemistry and manufacturing, slave trade played crucial role in the formation of financial, commercial, legal and insurance institutions, which specialized in supporting activities related to slave trade. Slave-trade led to the creation of many new businesses, which were financed by the profits made from this activity. On the other hand, trustworthy merchants started offering bank services. Even if we forget about these developments, it should be emphasized that slave labour was the source of raw materials for British manufacturing industry, which allowed manufacturing to grow. Cotton, industry, for example, which is said to be the working horse of the Industrial Revolution, depended on imports of raw cotton from American plantations, which employed African slaves. Therefore, one might argue, that Slave trade played crucial role in the British economy and the Industrial Revolution.

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