The Slave Trade And The Modern Caribbean

The Transatlantic Slave Trade which commenced in the early 1600s and lasted until the mid-to-late 1800s was one of the most transformative economic events in the history of the world. It is estimated that more than 12 million souls were captured and sold into Chattel Slavery in the Caribbean, the United States, and Central and South America. In 1672, King Charles II and London merchants founded the Royal Africa Company to finance the slave trade and provide enslaved Africans to work in the sugar and other mono-crop plantations being established throughout the West Indies. This financial syndication, blessed with a Royal Charter, allowed Great Britain to join and soon dominate other European nations including Spain, France, the Netherlands, and Portugal, that were all profiting handsomely from this lucrative trade. The result was that Europe’s sugar colonies in the West Indies, built on slave labor from Africa played a significant role in London becoming the financial center of the Trans-Atlantic Slave Trade.

A recent article in Reuters, reports that historians estimate that in the 18th century, between one and two-thirds of the British marine insurance market was based on the slave trade. The business of slavery would have an enduring impact on the making and profit-generating capacity of a new globalized financial market. To keep up with the demands for slaves and lucrative markets for the products being produced in the colonies, The financial markets innovated and developed what are today commonplace financial instruments and practices such as syndication and project financing, credit and bond structures, commodities trading with their forward purchase agreement, as well as specialized insurance on the life of the enslaved to be paid to their owners, and marine insurance to protect the transport of human cargo against “spoilage” - illness, death by suicide, mutiny and piracy.

The plantations also provided a ready-made laboratory for developing and enforcing modern labor management techniques such as time and motion practices to optimize operations which in turn spurred the development of new technology, such as the Cotton Gin and the Sugar Mill. These developments would accelerate a globalized industrial revolution, and lay the foundation for the modern world. In the end, it was the enslavement of Africans and their unpaid labor that fueled the accumulation of wealth of the European colonial powers that transformed these societies from largely feudal agrarian economies into social, cultural, and superpowers. Those advantages persist into the present time in the same way that the economic exploitation of those whose labor supplied the transformation remains unaddressed even as their descendants continue to be denied full economic and social integration in the world their ancestors built.

Although the African slave trade was abolished in the British Empire in 1807, it was not until 1833 that the Slavery Abolition Act banned the ownership of human beings. At the time of Emancipation, the enslaved population demanded Reparations and access to land as payment for their unpaid labor. However, it was the slave owners who were compensated for the loss of their property. The Slave Compensation Act provided £20m, (£17B today) in payments to 46,000 slave owners throughout the British colonies. The sum was so large, representing 40% of the national budget, that the government had to borrow that money from the markets and wealthy individuals. The formerly enslaved, now newly freed men and women revived nothing despite their repeated pleas and claims.