Slavery and the Periphery

The Industrial Revolution saw a previously unspectacular part of the world become the centre of a new worldwide economy.

To put how inconsequential Europe was in perspective we can look at agricultural productivity throughout Europe and compare this with Asia. Agriculture made up the overwhelming majority of a pre-industrial economy so the harvest to seed yield ratio [1] tells us a lot about how wealthy a pre-industrial society is.

In the 1500s the harvest to seed yield in England and the Netherlands was 7.4 to 1. This would decline as we travel out from north western Europe so that as we reach Poland this yield falls to something around 4 to 1. In contrast by the 1100s the Chinese state had induced a yield of 10 to 1.

The introduction of water power [2] and the spread of mechanical innovations in England and then northwest Europe raised manufacturing production to previously unknown levels.

In 1750 Britain had 1% of the world’s population and already produced an impressive 2% of manufactured output, but by 1860 Britain had 2% of a greatly swelled world population and produced 20% of a more than equally swollen manufactured output.

Accompanying this growth in industrial productivity was a massive increase in the demand for food and non food agricultural goods such as wood, tallow and leather tallow for building machines, oiling machines and connecting the rotating parts of these machines.

The other thing which accompanied the growth of Industrial Capitalism was the creation of slave societies on an unprecedented scale. Slavery was not something new, it had existed in western Africa for centuries and in the eastern Mediterranean Slavs had been enslaved by Venetian merchants for sugar cultivation since the time of the crusade.

In premodern economies most commerce and nearly all of day to day economic life took place within microeconomies with a radius of  around 20 mile. This was the longest distance that grain could be profitably transported and where water transport was unavailable it was nearly impossible before the railway to link these micro economies.

These microeconomies were formed of rough concentric rings with each further out ring less profitable than the last. The simpler production systems used on the edges of this economy imply a lower level of Smithian specialisation and lower productivity per worker.

With the advent of industrial production and cheapening of mass transport the limits of profitable agricultural production was pushed out and out until it reached North American, the Caribbean and even Australia.

I “clashed” with Thomas Byrne on the benefits or drawbacks of Fairtrade and I found these von Thunenian zoning useful to explain how trade with an industrial centre will cause inequality as described above, rather than inequality merely being a residual of a premodern world.

This spatial inequality in the uneven world of the 19th century may have helped feed England’s Satanic Mills but it also induced the far greater evil of slavery in Europe’s colonies.

To see why we have to look at the failure of these colonial economies to attract labour from across the outermost ring of our agricultural zones. Beyond the very least profitable zone, where transport costs make even wheat produced on almost free land too expensive to ship, is the subsistence zone.

In this zone labour is free to migrate and produce enough to live even with only minimal contact with the “civilised” world and there is little incentive to cross the subsistence barrier to take up wage labour at a lower rate than that available through subsistence agriculture.

We can see why slave labour becomes “better” than wage labour in this situation by looking at the difference in luring labour across the subsistence barrier in low land-to-labour and high land-to-labour situations.

In a high land-to-labour situation a worker can migrate across our subsistence barrier and establish a self sufficient lifestyle outside our production rings. With the existence of this option, to lure workers to our agricultural zone the needed wages exist

Whereas in north-western Europe, our low land-to-labour situation, productivity in the subsistence zone is so low that any subtraction of workers from this zone to work in our agricultural zones does not diminish total production in the subsistence zone. The wage needed to attract workers is therefore very much lower than in our above example.

In the newly emptied New World there were relatively few people occupying a huge amount of land. For a long time it was impossible to enforce European style property rights over this land; it was impossible to use force to disposes those present as the peasants had been expelled from their homes in Europe.

This meant that the cost of voluntarily attracting labour to these zones was very high – and once there is was prone to set up farm on its own. Consequently this made slaves and indentured servants by far the cheapest option to encourage production in the New World.

The vast slave movements across the Atlantic, the convict shipments to Australia and the indentured servants from Asia all helped feed the industrial revolution the raw goods which it demanded.

Slavery was very much central to the creation of a modern world economy and there is no way Europe and later North America could have satisfied their thirst for raw materials without it.

Slavery only stopped being necessary for production in this outer zone once the state had been successful in creating a land market past the frontier of our subsistence zone. A market in labour presumes a market in land to prevent exit. By parcelling out land labourers were forced to find work on the market.

In the New World the violence of the state and its ability to commodify land enabled the creation of a low land-to-labour world which would otherwise not have existed. This transformation was more successful in the north eastern part of the North American continent than it was in most of Latin America with massive and unequal consequences for the development of each.

[1] This figure is the number of grains harvested to one planted. For example a harvest to seed yield of 4.5 on a field scatered with 1,000 seeds would yield 4,500 seeds as harvest.

[2] Steam power would later be introduced too of course. However, the importance of steam is usually overstated and that of the humble water mill too often overlooked.

With much gratitude to Hermann Schwartz and his excellent States Versus Markets.

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2 thoughts on “Slavery and the Periphery

  1. Ooh, interesting.

    As far as the relevance of this to poverty today goes, it’s my understanding that the worst absolute poverty today exists in regions most detached from the world economy. Parts of sub-Saharan Africa have such poor infrastructure that economic exchange becomes unfeasible even between metropolitan and rural areas within a country, let alone to potentially more profitable export markets. This is where certain anti-trade anti-globalization types become unstuck. It can’t be as simple as just blaming western trade practices for all poverty and underdevelopment. Reality is more complicated than that, and I can’t possibly claim to understand it.

    1. Although I’m all for deeper integration its a little more complicated than just building infrastucture to connect outlying parts to commercial centres. But I will never say no to a bit more infrastructure.

      Integration in to the world economy can also cause regression, for example being sucked into the outer ring of our production zones your production will have to be in low value added, low specialisation work, and in areas with large population, like much of the developing world this will also tend to produce low wages. These low wages preclude a strong domestic market and hence make industrialisation more difficult.

      So rather than just integrate as the market demands states need to try to integrate on their own terms. Doing this is no guarantee of success but I think the idea that simply integrating an relying on comparative advantage to do the rest is naive.

      Deeper integration of the micro economies you still find dotted around the world is almost certainly a good thing in it self, but as we scale up I think the story becomes more complicated.

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