Economic Theory

Book review: “Slavery, Capitalism and the Industrial Revolution” by Maxine Berg and Pat Hudson (Part 1)

I try to judge a book not primarily by whether or not I agree with the authors’ main conclusions, but by whether or not it has improved my understanding of the subject area. A good author should be able to teach you something about their subject – on which they will usually be far more knowledgeable than you are – that you’ll consider useful even if their main goal is to win you over to a particular viewpoint, and even if they ultimately fail in that endeavour. One can, for example, learn a great deal about the history of the Soviet Union from Eric Hobsbawn, even if one rejects his socialist interpretation of it.

I mention that in order to make clear that while this review will focus on why I don’t buy the central thesis of Slavery, Capitalism and the Industrial Revolution by Maxine Berg and Pat Hudson, I am by no means saying that it is a bad book, or that I would not recommend it. Quite the opposite. If you want to know more about the history of the transatlantic slave trade and its aftermath, about its role in Britain’s economic development, and about the debates surrounding it – get yourself a copy of Slavery, Capitalism and the Industrial Revolution. It is a thoroughly researched piece of scholarly work, which draws on mountains of academic literature, and condenses it all into a format that is both accessible, and relevant to present-days debates.

The book presents an updated and extended version of the so-called “Williams Thesis”, which is the idea that it was the gains from the slave trade which kick-started Britain’s industrial revolution, and that slavery can therefore be considered the midwife of modern capitalism. This idea was first formulated in the 1930s by Eric Williams, the future Prime Minister of Trinidad and Tobago. It can be read as an “original sin” story of capitalism (whether intended that way by Williams or not), which stands in stark contrast with the liberal perspective, in which capitalism is a benign system of voluntary and peaceful exchange between consenting adults. (And in which the slave trade, far from being in any way “foundational”, was an aberration and/or a hangover from a less enlightened period.)

A decade ago, this would have been considered an academic niche discussion. But in 2020, Black Lives Matter (BLM) and the wider movement that sprang up around them placed the issue centre stage. Most memorably, in the summer of June 2020, a group of BLM protestors in Bristol pulled down a statue of 17th century slave trader Edward Colston, and threw it into a river. Critics saw this as either mindless vandalism, or as the iconoclasm of a “woke Taliban”, but that is not at all how the protesters saw it. One of the organisers of that protest later wrote in the Guardian:

“We are trying to shine a light in places people don’t want lights shining. […] [S]o much of the prosperity enjoyed today in the UK […] comes off the back of historical atrocities.”

That, right there, is the Williams Thesis in undiluted form.

And its modern-day proponents quickly gained the upper hand. Soon, all over the country, monuments were being removed or altered, while streets, buildings and public squares with “problematic” names were being renamed. BLM had won.

The ground for this had been prepared before, though. A media analysis shows that at some point during the first half of the 2010s, the use of terms associated with a “woke” worldview (e.g. “unconscious bias”, “white privilege”, “cultural appropriation”, “hate speech”) started to grow rapidly in both the UK and the US mainstream media. The use of the terms “colonialism” and “slavery” has grown alongside.

So the subject of Slavery, Capitalism and the Industrial Revolution is not some arcane academic subject for a seminar at the Department of African and Caribbean Studies. It is, on the contrary, at the centre of today’s “Culture War”, even if the book is very un-Culture-War-like in tone. More precisely, it is at the point where the Culture War meets economics.

Berg and Hudson believe that the Williams Thesis is broadly correct. Indeed, the book title Slavery, Capitalism and the Industrial Revolution is clearly an allusion to Capitalism and Slavery, which was the title of Eric Williams’s book. They phrase their endorsement of the Williams Thesis cautiously:

“We do not argue that slavery caused the industrial revolution. Neither do we suggest that slavery was necessary for the development of industrial capitalism in Britain. Even less does our study attempt to estimate that the gains from slavery contributed a particular percentage to Britain’s economic growth, GDP or capital formation […] as earlier studies have attempted. That is not our purpose, partly because many aspects of the impact of slavery are not measurable in quantitative terms. What we do say is that the role of slavery in the process of industrialization and economic transformation […] has been generally underestimated by historians” (p. 7).

Yet the rest of the book very strongly implies that slavery did indeed make a huge contribution to the Industrial Revolution, even if they do not literally say it like that. They do not literally say that slavery contributed a particular percentage to Britain’s economic growth, GDP or capital formation, but they clearly do not believe that that contribution would be in the ballpark of 2% or 3%.

They acknowledge that theirs is not the mainstream view among Economic Historians who specialise in that period. They acknowledge that earlier empirical studies suggest that the profits earned from the slave trade were too small, relative to the size of the British economy or the total investment rate, to have made a material difference.

They also mention that their view is in conflict with (what we might now call) the proto-Public Choice perspective, first articulated by Adam Smith, that the slave trade only benefited a small elite, but not the British economy as a whole. In this perspective, the slave trade was only viable because it was indirectly subsidised by the state, at the expense of the general public, and the wider economy.

So what is Berg’s and Hudson’s problem with this?

We will address their objections in the second part.


Continue to Part 2

Head of Political Economy

Dr Kristian Niemietz is the IEA's Editorial Director, and Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

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