The Great Slavery Debate: Was Slavery Profitable?

Note: There are many who say that the economics of slavery were not very profitable, Thomas Sowell notably, and I would say they are wrong. However, it is important to distinguish (as I will attempt) between plantation slavery economics and the greater commerce value/impact of the triangular trade.

There are two high schools (Part 1 today), and one graduate school (Part 2 coming), of thought on the degree to which this country owes its fortunes to slavery, and by inference to Black ancestry. It is this notion of who benefited and who is owed, intertwined with current dysfunction, which sits as a big bugaboo to progress.

The Atlantic Slave Trade was a profitable component of triangular commerce of that day, but by itself not world changing. In fact, slavery has often been the spoil of a society that was good at something else, mainly war. Having other people to do your loathsome work has been a luxury for the already rich. The Atlantic Slave Trade was a final burst where pure labor was of pivotal importance to a more sophisticated system of commerce, mostly involving sugar and Europe’s sweet tooth for its by-products.

In the labor-starved Americas, slavery is what made the triangular system happen, on the front end. Thereby, it deserves a disproportion of the credit for the very profitable distilled-spirits and textiles on the back end. On the other hand, while plantation slavery made those owners rich, those same owners were not directly responsible for this country’s economic fortune. The overhead required to administer slaves within a system of zero incentive, was high. As a sidebar, had slaves been able to work in parallel to purchase their freedom, the US might have avoided a devastating war with itself.

The Wall Street banks and insurance companies in the north were a different story than the plantations. The slave trade business gave this country a critical foundation in establishing the commerce and banking infrastructure that world leadership would require. The names of those companies and their impact are undeniable – JP Morgan, Chase, Lehman Bros., Aetna, New York Life, to name a few.

So, in answer to whether slavery was profitable, the answer is both no and yes, but much more yes – as it was the lubricant for the most profitable European commerce transactions of the day. This is true even though American plantations were inefficient in their brutal waste and high overhead cost.

Up Next: Part 2 (Graduate School). Just because slavery was profitable does not mean that slaves, or their ancestors, have a rightful claim. The details and context of the day, both legal and ethical, must be applied.

James C. Collier

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