August 8, 2024
The following is another excerpt from my co-authored book (with Art Carden), Mere Economics: Lessons for and from the Ordinary Business of Life. This is a snippet from Chapter 13.
As before, we welcome your comments and feedback.
Pieces That Don’t Fit: Slavery, Imperialism, and Colonialism
Let’s start with pieces that don’t fit and aren’t part of the Progress Puzzle. Our ancestors thought any gain came at someone else’s expense: if some people got richer, they must have made someone else poorer. So do a lot of our contemporaries, and the effects are devastating.[1] Prometheus stole fire from the gods. The West stole prosperity from the Rest. There is no room for Essential 6 (trade is cooperation). Error 8 (businesses profit by exploiting people) is not an error. It’s the law of history.
But widely shared economic progress doesn’t fit the zero-sum worldview. “Exploitation” does not explain widespread economic progress. Rape, pillage, and plunder enriched the Vikings in northern Europe and Genghis Khan in Asia, briefly. Slavery enriched enslavers. Colonialism enriched Belgium’s King Leopold. Europe’s crowned heads crown their heads with stolen gold and jewels. As horrible as royals’ blood-soaked opulence was (and is), it doesn’t explain why the descendants of those they raped, pillaged, plundered, enslaved, and slaughtered can buy just about anything they want for mere minutes of effort at Walmart. Despite what some historians claim, exploitation contributed little or nothing to the wealth of nations.[2] Accounting profits from slavery, which do not even consider the foregone return on alternative investments, were a measly 0.005 percent of Dutch national income in the 1750s.[3] In sharp contrast to the 50 percent claimed by the Smithsonian, the enslaved produced about 12.6 percent of US output in 1860.[4] The way Southern agriculture recovered after the Civil War suggests that this output would not have disappeared had slavery been abolished peacefully.[5] Free labor would have done the job.
Clearly, conquest and enslavement aren’t growth catalysts. Furthermore, if there were any economic profits to be earned in the slave trade—profits in excess of what could have been earned by redeploying the necessary capital and labor elsewhere—they were earned by indigenous Africans who captured other Africans in the African interior who did not then finance an African Great Enrichment.[6] And finally, when the slaves were emancipated in the United States, the American economy did not collapse. Rather, the value of emancipation’s economic gains ranged from 7 percent to 35 percent of aggregate US productivity.[7] Thomas Sowell explains slavery’s economic straightjacket: “What this means is that, whether employed as domestic servants or producing crops or other goods, millions suffered exploitation and dehumanization for no higher purpose than the transient aggrandizement of slave owners.”[8] We should emphasize transient.
Pillage and plunder cannot explain why the average Briton, Belgian, or American is spectacularly wealthy by historical standards. The slave trade means lower incomes today in countries where it happened.[9] Despite claims that we prosper because of the legacies left by our ancestors’ sins, slavery, imperialism, and colonialism made us poorer. Of the ten to sixteen million slaves brought to the New World, between 60 and 70 percent were shipped to Brazil or the Caribbean. Only an astonishingly small group—6 percent—landed in what is now the United States.[10] If slavery could cause a Great Enrichment, it would have happened in Portugal and Brazil, not England and the United States. What’s more, until the nineteenth century, slavery existed virtually everywhere, and more Europeans were sold into slavery in North Africa than there were Africans transported to North America.[11] Slavery did not spark a Great Enrichment 5,000 years ago or any time.[12]
As for colonialism, landlocked Switzerland is one of the richest countries in the world, and it never had colonies. Portugal, one of Europe’s poorest countries, had an empire. And even colonialism’s track record in explaining why poor countries are still poor isn’t great. Hong Kong (rich) was a colony. Ethiopia (very poor) was not. The British never earned a profit on “investment” in the British Empire.[13] Colonization, or lack thereof, does not solve the Progress Puzzle.
Prometheus seized what wasn’t his, but the mere mortal Thomas Edison turned “fire” into cheap light for the masses by market-tested innovation (see chapter 6). Then competition transformed electric light from a luxury into something we take for granted. Before long, everyone could see further and longer because they stand on the shoulders of flashlight-carrying giants. The people who walked in darkness have seen a great light.[14]
References
[1] Sahil Chinoy et al., “Zero-Sum Thinking and the Roots of U.S. Political Divides” (Cambridge, MA: National Bureau of Economic Research, 2023), https://doi.org/10.3386/w31688.
[2] Works that put slavery at the center of American economic growth include Sven Beckert, Empire of Cotton: A Global History (London: Penguin, 2014); Edward E. Baptist, The Half Has Never Been Told: Slavery and the Making of American Capitalism (New York: Basic Books, 2016).
[3] David Eltis, Pieter C. Emmer, and Frank D. Lewis, “More than Profits? The Contribution of the Slave Trade to the Dutch Economy: Assessing Fatah-Black and Van Rossum,” Slavery & Abolition 37, no. 4 (October 2016): 724–35, https://doi.org/10.1080/0144039X.2016.1242905.
[4] Paul W. Rhode, “What Fraction of Antebellum US National Product Did the Enslaved Produce?,” Explorations in Economic History 91 (January 2024): 101552, https://doi.org/10.1016/j.eeh.2023.101552; Alan L. Olmstead and Paul W. Rhode, “Cotton, Slavery, and the New History of Capitalism,” Explorations in Economic History 67 (2018): 1–17.
[5] Olmstead and Rhode, “Cotton, Slavery,” 1–17.
[6] Robert Paul Thomas and Nelson Bean, “The Fishers of Men: The Profits of the Slave Trade,” Journal of Economic History 34, no. 4 (1974): 885–914.
[7] Richard Hornbeck and Trevon Logan, “One Giant Leap: Emancipation and Aggregate Economic Gains” (working paper, National Bureau of Economic Research, number 31758).
[8] Thomas Sowell, Black Rednecks and White Liberals (New York: Encounter Books, 2005), 159.
[9] The economist Nathan Nunn argues that this relationship is causal: Nunn, “The Long-Term Effects of Africa’s Slave Trades,” Quarterly Journal of Economics 123, no. 1 (2008): 139–76. But note that all of Africa remains (relatively) poor, even those regions which were fairly isolated from the slave trade.
[10] Steven Mintz, “Historical Context: American Slavery in Comparative Perspective,” Gilder Lehrman Institute of American History Resources, https://www.gilderlehrman.org/history-resources/teacher-resources/historical-context-american-slavery-comparative-perspective.
[11] Robert C. Davis, Christian Slaves, Muslim Masters: White Slavery in the Mediterranean, the Barbary Coast, and Italy, 1500–1800, Early Modern History: Society and Culture (Basingstoke: Palgrave Macmillan, 2007), 23; Thomas Sowell, Wealth, Poverty and Politics, rev. ed. (New York: Basic Books, 2016), 233–36.
[12] Deirdre N. McCloskey and Art Carden, Leave Me Alone and I’ll Make You Rich: How the Bourgeois Deal Enriched the World (Chicago: University of Chicago Press, 2020).
[13] Lance E. Davis and Robert A. Huttenback, “The Political Economy of British Imperialism: Measures of Benefits and Support,” Journal of Economic History 42, no. 1 (1970): 119–30.
[14] Isa 9:2; Matt 4:16.