The rise of capitalism and the development of Europe

by Washington Alcott

Could Britain have grown from being a mainly agricultural society to a mainly industrial society without the transatlantic slave trade?

The forced flow of people and material from Africa resulted in great wealth in Europe. The profits gained from the transatlantic slave trade and then later from the exploitation of Africa by taking direct control over the land (colonialism) were used to develop the West.

'The colonial system was the spinal cord of the commercial capitalism of the mercantile epoch.' Eric Williams

Capitalist economies

So what is capitalism? A basic explanation would say that it is an economic system where those things that make money, like land, factories, communications, and transportation systems, are owned by private businesses and corporations which trade in a ‘free market’ of competition. This system uses the investment of money, or ‘capital’, to produce profits. It leads to a small upper class of people having the most wealth and the growth of large corporations. This leads to economic inequality between rich and poor, which governments try to reduce by various social schemes, regulations and activities. It is different to the system in the Middle Ages, usually called feudalism, where control of land and the workers who were bonded to that land was the key to making wealth.
In other words, capitalism is the system that allows rich people to invest their money in projects and make (or lose!) even more money. It allows anybody who is rich enough to do this. The historian Eric Williams argued that a huge amount of money was made by Europeans from their network of colonies, and their plantations of sugar, cotton and tobacco. This wealth – sometimes called ‘capital’ – had to be invested somewhere. It was used to pay for the industrialisation of Europe. So the transatlantic slave trade and plantation wealth were the major causes of the growth of capitalism in Europe.

Royal Africa Company monopoly

At the beginning of the transatlantic slave trade era, the British government did not allow rich individuals to try to make profits from the trade. The only company that transported enslaved people was the British government’s own, it was called The Royal Africa Company. Established in 1672, this Royal Company transported an average of 5,000 enslaved Africans a year between 1680 and 1686.
Then in 1698 the law changed. It became legal for other British merchants to trade enslaved Africans as a 'fundamental and natural right'. The number of enslaved Africans transported increased dramatically from 1698.
One port, Bristol, shipped 160,950 Africans from 1698 to 1707. In 1760, 146 slave ships with a capacity for 36,000 enslaved people sailed from British ports, while in 1771 that number had increased to 190 ships with a capacity for 47,000 enslaved Africans.

Exploitation for profit

The ‘upper’ or ‘capitalist’ class in Europe used their control of international trade to ensure that Africa specialised in exporting captives, and right through the 1600s and 1700s , and for most of the 1800s, Europeans continued to make super profits from the exploitation of African natural resources and African labour. These profits continued to be re-invested in Western Europe into areas such as shipping, insurance, the formation of companies, capitalist agriculture, technology and the manufacture of machinery, including James Watt’s invention and production of the steam engine.
Technological developments were funded with transatlantic slave trade money. James Watt expressed eternal gratitude to the West Indian slave owners who directly financed his famous steam engine. Their money allowed him to take his designs from the drawing-board to the factory.
The financial effects of the transatlantic slave trade were wide-ranging. For instance, the French St Malo fishing industry was revived by the opening up of markets in the French plantations flourishing using enslaved Africans; while the Portuguese in Europe depended heavily on dyes like indigo brought from Africa.
Trading in enslaved Africans also speeded up Europe’s technological development. For example, the evolution of European shipbuilding from the 1500s to the 1800s was a logical consequence of their monopoly of sea commerce in that period.

Port cities and industrial towns

The transatlantic slave trade directly led to the rise of many sea-port towns, notably Bristol and Liverpool in Britain, Nantes and Bordeaux in France, and Seville in Spain. Towns that were manufacturing centres often grew in places connected to these ports. And it was in these manufacturing centres that the ‘Industrial Revolution’ took place. In England, Manchester was the first centre of the Industrial Revolution. The growth of Manchester happened on the back of the growth of Liverpool. And why did Liverpool grow? It was where so many slave trading ships set off from, at one time the largest slaving ship port in the world.

Banking and insurance

Eric Williams cited several examples of great personal wealth, derived from trading and exploiting enslaved Africans. For instance, David and Alexander Barclay made vast amounts of money from the transatlantic slave trade in 1756. They later used this money to set up Barclays Bank. The famous Lloyds of London is another banking organisation with its roots in transatlantic slave trading. Slave trading profits allowed it to grow from being a small London coffee house to become one of the world’s largest banking and insurance houses.

European expansion

It was not just in Britain that such profits and connections existed. During the 1700s the West Indies accounted for 20% of France’s external trade – much more than that for the whole of Africa in the present century.
The Portuguese made enormous profits from the transatlantic slave trade. Perhaps unfortunately for Portugal, much of this money passed rapidly out of Portuguese hands into the hands of the more developed Western European nations. These more developed nations supplied Portugal with loans, ships and trade goods. Germany was one of these countries, along with Britain, Holland and France.
The transatlantic slave trade had a huge ‘ripple effect’ in terms of trade within Europe and beyond. Brazilian dyewoods, for example, were re-exported from Portugal into the Mediterranean, the North Sea and the Baltic, and passed into the continental cloth industry of the 1600s .
According to Eric Williams, by the middle of the 18th century there was hardly any British town of any size that was not in some way connected to the transatlantic slave trade or colonial rule. Thus, the accumulation of wealth (or ‘capital’) in Britain that helped to fuel the Industrial Revolution was made on the back of the transatlantic slave trade.