by Lipton Matthews
Slavery enriched slaveholders but not societies, which is why slave economies consistently lagged in growth, innovation, and industrial development across history.
Over the past two decades, the New History of Capitalism has transformed debates about Western development by restoring slavery to the center of the story of modern economic growth. A burgeoning literature
now contends that slavery was not simply a moral atrocity intertwined
with capitalism but the essential engine that powered the rise of the
Atlantic economy itself. According to this interpretation, slave labor
generated the capital accumulation, commodity production, and financial
sophistication that made the modern West rich. When British politician Kemi Badenoch publicly opposed this
argument, critics accused her of minimizing slavery’s economic
significance. Yet the central empirical difficulty with the enrichment
thesis remains unresolved: if slavery is such a powerful generator of
prosperity, why did societies organized around slavery remain poor for
most of human history, despite slavery existing across nearly every
major civilization?
At the heart of the argument lies a subtle but consequential
confusion between entanglement and causation. Western economies
undeniably became deeply entangled with slavery, but this does not
establish that slavery created Western prosperity. Long before the
Atlantic slave trade reached its height, countries such as England and
the Netherlands had
already developed sophisticated commercial institutions, secure
property rights, advanced legal systems, and increasingly complex
financial markets. These institutional advantages enabled slavery to
become integrated into Atlantic commerce on an unprecedented scale.
Slave traders could insure voyages, mortgage slaves, mobilize
international credit networks, and circulate slave-produced commodities
through organized exchanges not because slavery created these
institutions, but because those institutions already existed and were
sufficiently advanced to absorb slavery into their operations.
Comparison with other slave societies makes this point even clearer. Slavery existed throughout the Arabic world, sub-Saharan Africa, and numerous Asian empires,
often for longer periods than in the Atlantic world. Yet historians do
not argue that those regions generated modern capitalism through
slavery. Therefore, what distinguished the Atlantic economies was not
slavery but the institutional environment where slavery was embedded.
The Atlantic world possessed the accounting systems, insurance markets,
corporate forms, and financial instruments capable of incorporating
slavery into an expanding capitalist order. As one study notes,
management technologies such
as accounting books “were adopted by the largest slave plantations.”
The significance of this observation is frequently misunderstood. It
reveals the sophistication of Atlantic capitalism before slavery’s
expansion rather than demonstrating that slavery spawned capitalism.
Once the debate moves away from moral narrative and toward empirical
analysis, the evidence begins pointing consistently in the opposite
direction from the enrichment thesis. Research examining the
long-run economic consequences of slavery in the American South shows
that slavery generated institutional structures that suppressed
development rather than accelerated it. Counties with larger slave
populations before the Civil War developed post-Emancipation systems
that artificially depressed black wages, restricted labor mobility, and
weakened incentives for mechanization over generations. Through Black
Codes, vagrancy laws, anti-enticement provisions, and convict leasing
arrangements, Southern elites preserved a pool of cheap labor whose
bargaining power was systematically constrained by law and violence.
Instead of fostering dynamic economic transformation, slavery locked
large sections of the South into labor-intensive production patterns
that delayed industrialization.
The consequences of this institutional environment were visible
across agricultural development. Counties with higher historical slave
ratios shifted toward crops less exposed to labor-saving technological
change and away from crops where mechanization promised the greatest
productivity gains. These same counties lagged substantially in tractor
adoption during the mid-twentieth century, precisely when improvements
in tractor design made mechanization especially productive for Southern
farming. Cheap labor fundamentally altered the economic incentives
facing landowners. Where labor could be artificially suppressed,
investment in labor-saving machinery became less economically rational.
Slavery therefore weakened one of the central drivers of modern growth:
the pressure to innovate in response to labor scarcity.
Labor market evidence complements this conclusion with striking force. Counties with larger slave
populations continued paying significantly lower wages to black
agricultural workers well into the twentieth century, and those
depressed wages were closely associated with lower rates of tractor
adoption. Crucially, these disparities cannot simply be attributed to
differences in skill or education. Black workers with educational
backgrounds comparable to white workers still received lower wages and
lower returns to additional schooling in counties with higher slave
ratios. Mediation analysis further demonstrates that the effect of
slavery on delayed mechanization operated overwhelmingly through this
wage suppression channel. The deeper economic consequences extended far
beyond agriculture itself: counties that mechanized more slowly also
experienced weaker manufacturing growth and delayed structural
transformation into industrial economies. Rather than serving as a
foundation for development, slavery entrenched conditions that prolonged
stagnation.
Approaching slavery through
the lens of labor economics produces a remarkably similar conclusion.
Slavery created an unusually elastic labor supply because slaves lacked
the ability to leave employers, bargain over wages, or relocate in
search of better opportunities. Free labor markets are constrained by
labor scarcity, worker mobility, and bargaining frictions. Plantation
owners faced far fewer of these limitations, allowing large-scale
enterprises to expand more easily than farms dependent on free labor.
Yet the apparent efficiency of this system concealed deep
developmental distortions. Because plantation agriculture did not face
intense labor scarcity, entrepreneurial talent and capital flowed
disproportionately into plantation management rather than manufacturing
or industrial innovation. This shaped the direction of technological
change. In the North, labor scarcity encouraged labor-saving inventions
such as mechanical reapers and industrial machinery. In the South,
innovation largely focused on increasing the productivity of coerced
labor within the plantation system. As such, Southern innovations
included reinforced “planters hoes” and agricultural improvements
designed to maximize the output of slaves rather than reduce dependence
on labor altogether. Innovation existed within the slave economy, but it
evolved in ways that strengthened coercive labor systems instead of
transcending them.
Similarly, the example of Brazil presents a
cogent test of these claims, and one the New History of Capitalism has
conspicuously failed to engage. Brazil imported more African slaves than
any other country in the world, 4.9 million captives between the
sixteenth and nineteenth centuries, representing 46 percent of all
arrivals in the New World. Slavery in Brazil was not a peripheral or
sectoral phenomenon: it pervaded every region and almost every economic
activity. Slavery in nineteenth-century Brazil was so ubiquitous that
between 20 and 30 percent of all households owned at least one slave,
and slaves composed roughly one-third of the total population at
independence in 1822. If slavery were truly the engine of modern
economic growth, generating the capital, institutions, and industrial
momentum the New History of Capitalism claims, Brazil should have
industrialized faster and more thoroughly than almost anywhere on earth.
It did not. Between 1820 and 1900, the ratio of United States to
Brazilian per capita GDP widened from two to seven. Persistent economic
growth only commenced in the years following emancipation in 1888.
The quantitative evidence from within Brazil supports this finding
with precision. Examining the two neighboring southeastern states of Rio
de Janeiro and São Paulo, Brazil’s industrial heartland, across the
censuses of 1872 and 1920 reveals a consistent negative association
between the share of slaves in a municipality’s population and its level
of manufacturing employment. Before abolition, the slave share of the
population was statistically significantly and negatively correlated
with manufacturing employment, a relationship that became stronger once
other factors such as geography, agricultural orientation, and access to
ports were controlled for.
In 1872, Rio de Janeiro state held almost 300,000 slaves, over 37
percent of its population, while São Paulo, with half the slave
population and around 19 percent of its total population enslaved,
already had twice as many factory workers per capita. Following
emancipation, the picture changed rapidly: municipalities that had been
well-positioned for industrial development but suppressed by slavery
were able to leverage immigrant labor, higher literacy rates, and coffee
export revenues to industrialize quickly. The contribution of
immigration to manufacturing, known from other historiography to be
large, only became statistically visible after abolition, precisely
because slavery had been crowding out free labor and deterring European
workers who refused to compete with coerced labor.
The Brazilian cotton industry also directly undermines the claim,
advanced most forcefully by Edward Baptist, that coercive violence was
the primary driver of productivity gains on slave plantations. During
the American Civil War, global cotton prices spiked, and Brazilian
exports more than tripled almost overnight. This cotton boom took place
simultaneously across provinces with very different labor regimes: in
Maranhão, where slaves composed over 21 percent of the population, and
in Ceará, where the slave share was below 5 percent, and agriculture was
conducted “almost exclusively by free arms.” Crucially, the increase in
production across these provinces was statistically indistinguishable;
provinces relying on free labor performed no worse than those relying on
coerced labor.
Historical records show that productivity improvements during this
period were driven primarily by new seed varieties and improved ginning
machinery, not by any intensification of violence or supervision. Even
in the country with the world’s largest recorded slave trade, the
“pushing system” that Baptist identifies as the engine of American
cotton productivity has no explanatory power.
The institutional legacy in Brazil mirrors what the American South
experienced. As in the post-bellum United States, Brazilian landowners
deployed vagrancy laws, debt bondage arrangements, and racial prejudice
against manual labor to keep former slaves in conditions of constrained
employment after emancipation. The regions most dependent on slave
labor, such as the ParaÃba Valley in Rio de Janeiro state, where slaves
had represented nearly half of plantation owners’ capital, entered
prolonged stagnation after 1888, while São Paulo, which had anticipated
emancipation and replaced slaves with European migrants, became the
country’s industrial center and, by 1920, was responsible for over
one-third of all Brazilian industrial output. The Brazilian evidence
therefore does not merely corroborate the findings from the American
South; it extends and strengthens them. It demonstrates that slavery’s
retarding effects on industrialization were not an American peculiarity
but a systematic feature of slave-based economies wherever they existed
and were most severe precisely where slavery was most entrenched.
However, perhaps the clearest rebuttal against slavery as a source of
national prosperity comes from examples of contemporary slavery. If
slavery genuinely promoted economic development, countries with higher
levels of modern slavery should display stronger economic performance.
The evidence instead shows the reverse. Cross-national analysis covering
162 countries demonstrates that higher slavery prevalence is
consistently associated with lower Human Development Index scores, lower
GDP per capita, reduced access to financial services, and greater
economic inequality. The relationship remains statistically significant
even after controlling for geography, literacy, and political
institutions. The study estimates that a one percentage point increase
in slavery prevalence is associated with an average decline of roughly
$52.6 in GDP per capita; this translates into a $526 decrease in GDP per
capita, thereby indicating how even relatively small increases in
coercive labor correspond with measurable reductions in national
economic output. Rather than functioning as a motor of development,
slavery appears closely associated with economic stagnation and social
underdevelopment.
Part of the explanation lies in the fundamentally exclusionary
character of slavery itself. Slaves cannot freely accumulate assets,
invest in education, access financial institutions, or participate
meaningfully in labor markets. Coercion suppresses human capital
formation while concentrating economic gains within a narrow elite. The
study describes slave populations as “an untapped economic resource”
because slavery systematically denies individuals access to education,
political participation, and economic self-direction. Instead of
broadening economic participation, slavery narrows it, weakening the
foundations upon which long-run development depends.
Contemporary slavery also exposes a critical distinction between
private profitability and national prosperity. Slavery can certainly
generate large profits for slaveholders themselves. The International
Labour Organization estimates that slavery-derived profits amount to
roughly $44 billion annually worldwide. Yet these profits do not diffuse
throughout the wider economy in the way proponents of the enrichment
thesis often imply. In industries such as cocoa production, farmers
using slave labor receive the same global market price as farmers
employing free labor; the difference is simply that the slaveholder
retains a larger profit margin because labor costs are lower. The gains
remain concentrated within coercive networks rather than producing broad
social prosperity.
Examples from contemporary slavery describe how extreme these private
gains can become while simultaneously generating little wider economic
benefit. Forced prostitution enterprises in Thailand were found to
generate profit margins approaching 850 percent. Brick kilns in Pakistan
using slave labor earned substantially higher profits than kilns
employing paid workers. In northern India, hereditary debt bondage
persists because entire families can be trapped into labor over debts
amounting to only a few dollars. Yet despite these extraordinary profits
for individual exploiters, the broader economies in which slavery
flourishes remain characterized by inequality, underdevelopment, and
weak institutional capacity.
Another revealing feature of contemporary slavery is the dramatic
collapse in the cost of acquiring slaves. In the nineteenth-century
American South, slaves represented expensive capital assets worth the
equivalent of tens of thousands of modern dollars. Contemporary slavery
operates differently. Workers can
often be acquired for sums ranging from $10 to $100. Because
acquisition costs are so low, slaves are increasingly treated as
disposable inputs rather than valuable long-term investments. Hence,
modern slaves are often regarded as “disposable inputs into
criminal enterprises rather than capital investments.” This
transformation intensifies both the brutality and the economic
irrationality of slavery, since owners have little incentive to preserve
the welfare or long-term productivity of workers who can easily be
replaced.
Global supply chains provide further evidence that slavery enriches
narrow coercive elites without generating meaningful national
development. Slave labor has been documented in the production of
coffee, sugar, textiles, gemstones, agricultural goods, and minerals
essential for electronic devices. Armed groups in the Congo force slaves
to mine minerals used in mobile phones and computers. Slavery has even
entered financial markets indirectly through subcontracting arrangements
and investment portfolios linked to firms using forced labor. Yet none
of these activities has produced broad prosperity for the societies in
which they occur. Instead, coercion enriches small networks of
exploiters while surrounding populations remain economically
impoverished and politically unstable.
Taken together, the historical and contemporary evidence points in a
remarkably consistent direction. Slavery may enrich slaveholders, just
as organized crime may enrich criminals, but this is fundamentally
different from generating broad economic development. Across different
methodologies and historical contexts, slavery repeatedly appears as a
system that suppresses wages, delays technological adoption, weakens
human capital formation, discourages industrialization, and concentrates
wealth within coercive elites. Western Europe and North America became
wealthy because of institutional strengths such as secure property
rights, financial sophistication, technological innovation, and legal
stability. Those same institutions allowed slavery to become deeply
embedded within Atlantic commerce, but they were not created by slavery
itself. The West was undoubtedly entangled with slavery. What the
empirical evidence does not support is the claim that slavery was the
source of Western prosperity.
Photo: Title: Southern U.S. cotton picking Abstract/medium: 1 photographic print.
Source: Library of Congress (Wikipedia Commons)
Lipton Matthews
Source: https://amgreatness.com/2026/05/30/the-myth-of-slavery-as-an-engine-of-growth/
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