The peculiar combination of extensive land, capital and slave labour in the plantation entailed both a low organic composition of capital (countervailing tendency 4) and the means through which increases in absolute and relative surplus labour (countervailing tendency 1) were made possible. The very modal ‘hybridity’ of the slave plantations ‘made it a powerful engine of prim-itive accumulation … cheapening the supply of the means of production or
reproduction to the metropolitan regions’ (more on the latter below). Hence, the rate of surplus extraction and rate of profit on the plantation were exceptionally high.263
In the Jamaican sugar plantations, for example, the rate of return was 10 per cent or more higher than the prevailing rate of interest in England.264 On Barbara Solow’s estimates, the year 1770 saw slave profits forming 0.5 per cent of Britain’s national income, nearly 8 per cent of total investment and 39 per cent of commercial and industrial investments, constituting ‘enormous’
ratios.265 As Solow puts it, ‘[s]lavery made more profits for investment, a larger national income for the Empire, and a pattern of trade which strengthened the comparative advantage of the home country in industrial commodities’.266 In the late 18th century, income from colonial properties in the Americas was equal to approximately 50 per cent of British gross investment.267 Since much of this would have been reinvested in British industries, it provided a signifi-cant input into British industrialisation.268 An indication of the impact of such developments was the sharp decline in British interest rates. In the early 1690s, the rate of interest in Britain was 12 per cent, declining thereafter to 8 per cent after the establishment of the Bank of England in 1694, and then to 3 per cent in 1752. Rates on British public debt displayed a steady decline, falling from a high of 14 per cent in 1690 to 6 per cent and 7 per cent between 1707 and 1714.
Rates subsequently remained low, at around 5 per cent up to the 1730s, falling to 3 per cent by 1750.269
These rates indicate that the plantation economy was central to the expan-sion of foreign trade (countervailing tendency 5). The import of ‘luxury items’
from the New World (tobacco, sugar, coffee and so on) provided goods in global demand, enabling the colonial powers to engage in a lucrative re-export trade with the rest of Europe.270 Access to cheap sources of cotton lowered the cost of production in the all-important textile industry, raising the competitiveness of British exports. In particular, the transatlantic trades boosted the manufacture of cottons checks271 for export either in the form of Indian-piece imitations in West Africa or as ‘clothing material for the African slaves in the New World’.272 According to one estimate, British exports accounted for approximately 56 per cent of all industrial production between 1700 and 1760, and over 46 per cent between 1760 and 1800. North America, Latin America and the Caribbean were far and away the major markets for these overseas sales.273 Moreover, it is estimated that this Atlantic trade constituted as much as 55 per cent of Great Britain’s ‘gross fixed capital formation investment’.274 By 1772, the Americas consumed 37 per cent of English exports, making them a critical market for the imperial metropole while allowing the West Indies to concen-trate exclusively on sugar.275 If we include all the colonies, the proportion of British manufacturing exports rose from 14 per cent in 1700 to 55 per cent in 1773 to 71 per cent in 1855.276 For the 1750–1800 period alone, British trade
with the colonies accounted for approximately 15 per cent of national income – a ‘colossal figure’.277 Hence, it seems clear that during the critical early stages of Britain’s industrialisation, the colonial export markets played a particularly crucial role making up for the demand often lacking in the highly protected home market – Smith’s ‘vent for surplus’.
Certainly in the 17th century, cotton textiles were central to the widening of Britain’s export markets, saving British industry as a whole from a crisis of stagnation. Initial domestic demand was stimulated by the East India Company trade in Indian textiles. In 1613, the Company’s first sales amounted to 5,000 pieces. By 1625 this had increased to 221,500 pieces. In 1681 sales peaked at 3,445,000 pieces.278 The negative effects Indian imports had on domestic woollen manufacturing in turn led to ‘noisy agitation’ among English producers, who petitioned for protective legislation. Such constraints subsequently stimulated the production of home-made calicoes – using Indian methods – which were then sold as East Indian products in the domestic market.279 Again woollen and silk producers moved against this market by pressuring Parliament to pass legis-lation banning the domestic consumption of calicoes. The unintended effect was to provide a boost to cotton manufacturing.280 ‘As the expansion reached the limits of the protected pre-existing domestic market’, Joseph Inikori writes,
‘stagnation set in’. Not surprisingly, the means to resolve this crisis of stagnation was ‘through the exploitation of export opportunities in the transatlantic slave trade from Africa and in the slave-based economy of the Atlantic system’.281 Indeed, the larger market offered by the Atlantic increased the number of firms engaged in textile production. Consequently, Solow and Engerman argue that these foreign outlets ‘provided Britain with new markets as old ones were drying up’ and that ‘increased demand for British manufacturing exports played an important role in the expansion of the British industrial sector’.282 Hence, the 20 years from 1782 to 1802 have a marked originality, owing to their very high growth rate in exports, in which transatlantic commodities and markets played a leading role.283 The role of the Atlantic colonies for the British economy was particularly important during periods of intense international economic compe-tition. In the period after 1650, for example, the North American colonies had a positive net impact on English demand, ‘thereby opening up an exclusive market for English industrial output precisely when intra-European trade was depressed and competition intensifying’.284
In sum, the American colonies and slave plantations generated both the markets and needed surpluses that assisted, through reinvestment, in jump-starting the engine of industrial accumulation. In Britain, the growth of an array of sectors – sugar refining, rum production, metallurgical products such as guns, chains and iron bars, wool and cotton textiles – benefited from capital investments derived from the transatlantic trade. Moreover, the profits from such sectors were often realised in this same trade, as all of these goods were
transported to Africa, the Americas or both. The development of port cities such as Bristol and Liverpool, and centres of manufacture such as Manchester, was a direct product of slavery.
To take an anecdotal but revealing example, the business activities of the Hibbert family embodied the transatlantic sociological combination of planta-tion slavery and capitalism. The Hibberts owned ‘a 3,000-acre sugar plantaplanta-tion in Jamaica and sugar commission enterprise in London as well as a cotton cloth manufactory in Manchester’.285 The investments derived from dealings such as these were, moreover, constitutive of British finance. The bulk of exchange bills and company bonds circulating in England ‘originated directly and indirectly from the trans-Atlantic slave trade and the trade centred on slave produced American products’.286 Many banks and insurance firms grew and reproduced themselves on the basis of ownership and/or investment in plantations, and their related trades. Most notably, Barclays and Lloyds developed from slave trade profits, and subsequently became sources of credit for British industry.287