| Abstract: |
Did overseas slave-holding by Britons accelerate the Industrial Revolution? We
provide theory and evidence on the contribution of slave wealth to Britain's
growth prior to 1835. We compare areas of Britain with high and low exposure
to the colonial plantation economy, using granular data on wealth from
compensation records. Before the major expansion of slave holding from the
1640s onwards, both types of area exhibited similar levels of economic
activity. However, by the 1830s, slavery wealth is strongly correlated with
economic development - slave-holding areas are less agricultural, closer to
cotton mills, and have higher property wealth. We rationalize these findings
using a dynamic spatial model, where slavery investment raises the return to
capital accumulation, expanding production in capital-intensive sectors. To
establish causality, we use arguably exogenous variation in slave mortality on
the passage from Africa to the Indies, driven by weather shocks. We show that
weather shocks influenced the continued involvement of ancestors in the slave
trade; weather-induced slave mortality of slave-trading ancestors in each area
is strongly predictive of slaveholding in 1833. Quantifying our model using
the observed data, we find that Britain would have been substantially poorer
and more agricultural in the absence of overseas slave wealth. Overall, our
findings are consistent with the view that slavery wealth accelerated
Britain's industrial revolution. |