Slavery did not make Britain rich, finds report

slave ship

Slavery and colonialism did not make Britain rich, and may even have made the nation poorer, a new study has found.

The riches of the slave trade were concentrated in a few families while the nation footed the bill for extra military and administrative spending, according to a book by Kristian Niemietz at the Institute of Economic Affairs.

“Profits earned from overseas engagement were large enough to make some individuals very rich, but they were not large enough to seriously affect macroeconomic aggregates like Britain’s investment rate and capital formation,” he said.

Mr Niemietz argued that that the slave trade had little overall impact on the economy or the country’s ability to industrialise.

He said: “The transatlantic slave trade was no more important for the British economy than brewing or sheep farming, but we do not usually hear the claim that ‘brewing financed the Industrial Revolution’ or ‘sheep farming financed the Industrial Revolution’.”

It comes amid a heated debate over Britain’s imperial past. Caribbean states have demanded reparations from Britain, while more than 100 British families whose ancestors benefited from the slave trade, including former BBC broadcaster Laura Trevelyan, have pledged to seek ways to make financial amends.

Former BBC broadcaster Laura Trevelyan has pledged to make financial amends for her ancestors’ role in the slave trade – David Levenson/Getty Images

By contrast, leading figures including Kemi Badenoch, the Business and Trade Secretary, have hit back to argue that Britain’s wealth was not built on imperialism.

She hailed the report as “a welcome counterweight to simplistic narratives that exaggerate the significance of empire and slavery to Britain’s economic development”.

She added: “It was British ingenuity and industry, unleashed by free markets and liberal institutions, that powered the Industrial Revolution and our modern economy. It is these factors that we should focus on, rather than blaming the West and colonialism for economic difficulties and holding back growth with misguided policies.

“The paper argues persuasively that colonialism played a minor role in Britain’s economy, and may have actually been a net negative after accounting for military and administrative costs – a reminder that state overreach is always an expensive endeavour.”

Mr Niemietz found that while the empire “did deliver some modest gains for the British economy, it came with eye-watering military and administrative costs and so may have failed any cost-benefit test”.

He said that although Britain overall profited little from slavery, its effect on its victims was devastating.

The regions affected still struggle today with what the economist calls “long-term scarring from imperialism and slavery”, pointing to evidence “places that were once subject to short-termist colonialist extraction continue to have worse institutions today and are poorer as a result”.

“Colonialism and slavery were not zero-sum games that benefited the colonisers at the expense of the colonised,” he found. “It was more like a negative-sum game, which hurt the latter without really benefiting the former.”

He said the biggest example of a highly profitable colony was Belgium’s rule over the Congo, “often singled out as a particularly atrocious form of colonialism. It may have claimed up to 10 million lives”.

But most nations appear to have benefited little from colonialism or slavery, he said, with industrial development in particular instead powered by other factors.

Germany industrialised before it established a significant empire, for example, while Japan was relatively poor by Western standards in its imperial era, only becoming wealthy in the second half of the 20th century.

“The best predictors of how rich or poor a country is today are economic policy and governance indicators such as the Economic Freedom Index and the Ease of Doing Business Index,” Mr Niemietz said.

“This tells us a lot more than whether or not a country was involved in the slave trade, how many colonies it once possessed, or how long it held on to them.”

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