How the Slave Trade Built the Modern Economy

Original article: Michela Fantozzi, Come la tratta degli schiavi ha costruito l’economia moderna (2023)

“Without slavery there would be no cotton,
without cotton there would be no modern industry.”
Karl Marx, The Poverty of Philosophy, 1846

The Ndongo Kingdom stretched along the western shores of the African continent. The people who lived there, the Mbundu, typically conferred upon their kings the title of Ngola. It is from this ancient honorific that the present-day state of Angola takes its name, on which shores the slave trade to the American continent began.

March 25th is the date chosen by the UN to commemorate the victims of slavery and the transatlantic trade to the Americas. Between 1525 and 1866, the beginning and end dates of the trade, it is estimated that 12 and a half million people were deported to the New World.

Many might wonder why a phenomenon that ended a century and a half ago should concern us.

Yet, that precise historical fact, now recognized as a crime against humanity, still tells much about us and who we are.

Portugal inaugurated the slave trade, initially through commercial agreements with the realm of Ndongo at the beginning of the 16th century.

The slavery trade in North American regions occurred later and is traced back to a specific historical event. In 1619, the Portuguese slave ship São João Bautista was seized by two English pirate ships. The vessel was then taken to Point Comfort, a port near Jamestown, the capital of the English colony of Virginia. Here, for the first time, a cargo of African slaves made its appearance in territories that would later become the United States of America.

Slavery existed in Africa and Europe before the trade in America. But, to say it in the words of Karl Marx, what became the slave trade to America has no equal in history.

Before the expansion to the New World, reducing a person to slavery did not follow rules connected to the concept of race. In particular, in Europe was typical to enslave people who were not Christians.

At the beginning of the 1500s, the slave trade was not as large as during the Roman Empire, but southern Europeans from the Mediterranean coast used to buy slaves from various parts of Eastern Europe, Asia, the Middle East, and Africa. Religion was the discriminating element between who could be enslaved and who could not.

When the Portuguese began trading humans from Africa to America, they used religious excuses to justify their actions. But when slaves began converting to Christianity, Portuguese landowners faced a dilemma. What could allow a Portuguese conqueror to always abuse African slaves without ever risking slavery themselves? The answer was the color of the skin.

“European concepts of conquest combined religious prejudices and stereotypes of physical and mental inferiority to justify subjugation as a civilizing force. […] Notably, as the economic incentives for subjugation increased, European racial stereotypes about Africans became more derogatory. As historian Ira Berlin notes, during New World expansion, Europeans initially characterized West and Central Africans as ‘sly, cunning, deceptive. . . perhaps too clever.’ These stereotypes were not unlike the stereotypes Europeans made about one another, and they reveal a begrudging sense of equal competition rather than white superiority. With the rise of African slavery in the New World, Europeans shifted these stereotypes to support a racial hierarchy where Africans and African Americans were depicted as animalistic, servile, unintelligent, and sexually promiscuous. […] New World racism developed to justify New World slavery.[1]

If we understand racism as the fear of the unknown, then it is a sentiment that has always existed in humanity. The hate toward certain cultures, such as the Jewish one, is age-old.

But if we seek the origin of the mere term, we find its roots in the slave trade in America. It is from here that the idea of race is taken and firmly inserted within a social hierarchy to justify the exploitation of some for the economic benefit of others.

The concept of race heavily influenced Western European culture. The slave trade in America was the first crime committed in its name, but not the last, as we all know.

Even today, the color line draws boundaries between producers and consumers e and between those exploited and those who exploit.

Indeed, another reason why it is worth dedicating a day to the memory of the victims of the slavery trade is the creation, thanks to the labor of slaves, of the modern market economy. The fortune of this economic system is owed primarily to the large-scale plantation agriculture of the vast territories of the Americas.

“The labor of enslaved Africans was critical for two basic reasons. First, the available markets for bulky export commodities from the Americas were in Europe, initially. Given the high cost of trans-Atlantic transportation in the sixteenth to early nineteenth centuries, production costs […] had to be very low for them to have sufficiently large markets overseas. […] Second, with unlimited supplies of agricultural land in the Americas, large-scale production that required legally free wage laborers was virtually impossible. […] In the end, the long-term solution to the difficult problem was found in the importation of captives from Africa for enslavement in Spanish America, Brazil, the Caribbean, and the United States. This experiment was so successful that production costs for sugar, tobacco, cotton, coffee, and several other commodities were drastically reduced, bringing their prices in Europe within the reach of even the common people.[2]

The most relevant product of American commercial agriculture, particularly in North America, was cotton. From the slavery and cotton trade, it is possible to trace three fundamental elements of the history of the current economic system: the American mortgage market invention, the emergence of Wall Street, and the beginning of the English (and then European) Industrial Revolution.

Referring to a detailed article from The New York Times, human property in the United States contributed significantly to the creation of the mortgage market, as slaves were used as collateral by white owners. In the words of American historian Joshua Rothman: “The extension of mortgages to slave property helped fuel the development of American (and global) capitalism.[3]

The mortgage market on slaves also attracted financial speculation. Speculations led to the exchange of bonds that allowed European financiers to enrich themselves without being directly involved in the human trade of slavery. The creation of Wall Street wealth is a direct consequence of these exchanges, which owe everything to slave labor.

“New York factories produced the agricultural tools forced into Southern slaves’ hands and the rough fabric called Negro Cloth worn on their backs. Ships originating in New York docked in the port of New Orleans to service the trade in domestic and (by then, illegal) international slaves. As the historian David Quigley has demonstrated, New York City’s phenomenal economic consolidation came as a result of its dominance in the Southern cotton trade, facilitated by the construction of the Erie Canal. It was in this moment — the early decades of the 1800s — that New York City gained its status as a financial behemoth through shipping raw cotton to Europe and bankrolling the boom industry that slavery made.[4]

But cotton also played a fundamental role in the primary driving force of European technological progress: the industrial revolution.

European ports trading goods from America had become places of wealth, and this is particularly true for England. The counties of Lancashire and West Riding of Yorkshire were among the poorest, but when neighboring ports became hubs of Atlantic exchange, the two counties became so rich that the cotton trade made them makers of the Industrial Revolution. A revolution that unsurprisingly first affected the textile sector.

To sum up, slavery is at the foundation of American capitalism and the ruthless culture on which it rests. The Atlantic trade forms the basis upon which liberals like Adam Smith argued that “progress” could be pursued through a market economy expansion to other subsistence economies, an idea that England sought in the conquest of India. The race concept justified the colonization of the African continent, its plundering, and the destruction of its peoples, kingdoms, and histories. A continent that still today is trapped in debt that prevents its growth and loans that only further indebts it, plundered of its mineral resources to support Western (and now Chinese and Russian) technological industry and prosperity. Let’s add that the distortions of this market lead global wealth to a greater concentration, all in the hands of a few masters who are no longer satisfied only with the lives of the exploited in the so-called “third world” but also seek to satisfy their greed with the rights of their fellow country workers.

Do we need any more reasons to commemorate the Atlantic trade?

[1] African Passages, Lowcountry Adaptations, New World Racism (

[2] Joseph E. Inikori, Atlantic Slavery and the Rise of the Capitalist Global Economy (

[3] Matthew Desmond, In order to understand the brutality of merican capitalism, you have to start on the plantation (

[4] Ibidem.

Translated by Michela Fantozzi.

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