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Slavery
and the American Economy
By Waldron H. Giles, Ph.D.
Slavery raises a host of negative images for
Black people; so much so, they fail to realize the tremendous
economic contributions they made, albeit forced, to the
development of the United States into a world power.
This lack of realization stems from the national shame of
slavery and the concomitant national denial, which in reality
has become a weak defense mechanism. To a large degree Blacks
and whites have bought into this denial, albeit for different
reasons. In spite
of this contribution Blacks continue to vie for respect and
acceptance by the very country that they practically own via a
down payment with their own blood, sweat, and tears.
Through the shame of slavery African Americans continue
to increase the “Debt” they are owed instead of steadfastly
demanding payment.
The resulting hypothesis of this economic
analysis of slavery is that the current “Debt” is too large
to foster healthy discussions with whites and continued
avoidance of such discussions has been and will continue to be
disguised under a variety of racist manipulations.
The purpose of this economic analysis is to enlighten
African Americans and end the impotence produced by this shame
and to undo those stereotypical images of laziness, ignorance,
criminal behavior, and incompetence.
The form of superiority imposed by self-pity
continues to defeat the positive self-images and hinders the
increased racial creativity and accomplishments that African
Americans need in today’s jingoistic climate.
Whether African descendants will be justly compensated
for their sacrifices is not the principle issue, here. The
paramount issue is that African Americans appreciate their
contributions and constantly remind their heirs of the trillions
of unpaid dollars earned by their ancestors. They and they alone
made the largest national loan in history and financed the
world’s greatest power. Most
of that “loaned” money is still in circulation today and the
“Debt” is still alive and real!
The first African slaves hit the shores of
the United States in 1619 and were constantly imported into the
US until 1860 even though importation had been outlawed in 1808.
Over those intervening 246 years they contributed more
than 605 billion hours of free labor, which funded the Industrial
Revolution, financed most of the fortune 500 companies, helped
finance two World Wars, and left a negative sociological impact
on an entire race of people.
Slaves born in the US since slave importation
started decreasing in 1810 supplied most of the labor.
Importation as a source of free labor was replaced by
forced breeding because it was a lot more profitable.
However, the profits obtained from slave importation were
phenomenal since slaves could be purchased in Africa for less
than $40 and sold in the US for between $500 and $1,000.
Profits obtained from a single ship traversing the golden
triangle passage averaged greater than $175,000 even though as
many as one in three of the slaves died during the middle
passage. Commodities
(cotton, tobacco, Bibles, and guns) were the cargoes on the
other two legs of the triangle.
To determine the economic value of slavery,
the population of slaves in the US was obtained from the US
Census Bureau. It
was assumed that, on average, slaves worked some 60 hours per
week for 51 weeks during the years with the average pay rate
over the 164 years at $.10 per hour.
All of these assumptions are conservative since
underreporting was a common practice since state and local taxes
had to be paid on the number of slaves.
This practice was offset since congressional
representation counted slaves as 3/5 of a person.
The results of the economic value of this
free labor are, when inflated conservatively at 3% to 2006
dollars, a staggering value of 20.3
trillion dollars or to put this number in a more visual
perspective; it amounts to $563,450 per African American
currently living in the US.
This amount is low since slave labor was counted from the
year 1700 instead of 1619 and, as mentioned previously, the
census data, in all likelihood, is low for various taxing
demands and for those members of the Black race that were able
to pass for white or elude the census.
The undercounting of Blacks still is a major problem for
adequate representation, particularly in the South.
The 19.7 trillion dollar slave contribution
is still within the US economy since the dollar has constantly
inflated in value, and money like matter in never destroyed; it
can be wasted but not destroyed, in an inflationary economy.
This slave-induced contribution is still working and funding new
ventures, within the US economy as we speak.
Those who made this contribution, albeit forced, have
been largely denied access to the very capital and business
accouterments they developed.
Following the thread of these dollars would
be another interesting aspect of black economic research since
even without detailed research it is known that Aetna Insurance
Co., E.I. Dupont, and J.P. Morgan, Brown University, to name a
very, very few, reaped substantial benefits from the grim
business of slavery. For
example, Pierre Bauduy purchased 4 out of the original 16 shares
issued for the E.I. DuPont Company for $8,000.
Pierre Bauduy obtained his money from the profits of a
Haitian plantation which he was forced to vacate during the
Haitian revolution.
The manufacturers of slave ships and cotton
merchants heavily financed Brown University in its early
beginnings. Aetna
Insurance Co. sold insurance policies on slaves to protect slave
owners from the losses of run away slaves.
The original capital for J.P. Morgan was derived from its
cotton trading company in the South.
So much fortune was amassed off the backs of the cotton,
tobacco, and rice-picking slaves that J.P. Morgan loaned money
to the US government during the Civil War.
Another way to view the economic contribution
of slavery to the US economy would be to assume that only 5% of
the value of the slave labor was invested in the stock market in
the year the labor was accrued.
Five percent was chosen since this is the most common
bottom line that is found in Fortune 500 income statements.
Using market growth data provided by the Rittenhouse
Trust data and the moneys are accumulated from 1700 through 1830
(the beginning of the Rittenhouse data), yields a value of $6.42
trillion current dollars. The subsequent moneys are invested at the time they accrued yields
an additional $1.44 trillion.
Combining these values leads to a staggering
$7.86 quadrillion in 2006 dollars!
With these staggering capital gains, we begin to gain
insight into the US national avoidance on the subject of slave
labor, reparations, and why African Americans are constantly
being placed on the defensive around their monumental economic
contribution. When
one reflects on the magnitude of this capital, denial becomes a
pitiful and yet effective excuse for continued domination of the
people and nations that have been exploited.
Whereas, only four major institutions and
corporations have been mentioned here, considering the vast sums
of money most, if not all, major corporations have benefited in
varying degrees from the $7,860 trillion of profits accrued from
slavery. Major
endowments to universities that have reluctantly, at best,
supported Affirmative Action are another major financial thread
yet to be unwound. Education
and the business of education are another twist of irony for
those who have struggled long and hard to escape the yoke and
stigma of slavery.
The economic yields from slavery presented
herein are for the United States only and covers only the period
from 1700 through 1865. One
must keep in mind that the first slaves came to North America
almost 100 years prior to the time period of this economic
evaluation. The
majority of the slaves were imported to the Caribbean, Brazil,
Columbia, the Guyanas, and other parts of South America, which
more than doubles the economic figures, presented here when
viewed on a global scale. Brazil
alone has close to 100 million descendants of African
slaves!
The capital gained from slavery in the
Americas was invested in colonialism, which further compounded
the current economic enslavement of the African descendants on
both sides of the Atlantic.
The problem was further compounded considering some 20 to
25 million young souls (mostly male) were taken from the
continent of Africa, leaving that continent devoid of military
protection and agricultural productivity.
This human capital deficit from slavery and its evil
offspring, colonialism, is still being felt in all African
countries and the Diaspora.
On a global scale the magnitude of the
total “Debt” is so huge as to possibly destabilize
capitalism as opposed to the continued economic exploitation of
Africa. Under the
enormity of this “Debt,” reparations, which in the future
may be the cheapest way out, will be vigorously resisted by the
former colonial powers. Continuing
demands for a return on investment of $7.86 quadrillion will
force African nations (ironically, the original unwilling
investors) further into debt leading to deeper poverty,
depravation, political instability and exploitation of their
natural resources.
The tragic irony of African national debts
is that they were the original investors who should be seeking
compensation for the egregious crimes of slavery instead of
merely seeking debt relief.
The sheer increasing weight of this global “Debt” is
the force that must be reckoned with and surely will change
world history in this the 21st century.
The repayment will be extracted in one way or the other.
As the saying goes, “What goes around, comes around!”
References
U.S. Department of Commerce, Bureau of Census, Negro
Population, 1790-1915 (Washington, D.C., 1918), 29, 53.
U.S. Department of Commerce, Bureau of Census, (1975), Historical
Statistics of the United States, (Washington, D.C.. 1975)
2:1168.
Carr, William H. A. (1964),
The Duponts of Delaware,
(Mead Co. 1964).
Hedges, J.B. (1999),
Browns of Providence Plantation,
(Harvard University Press,1952).
Strouse, Jean
(1999),
Morgan, American Financier, (Random House NY,
April 1999).
The Rittenhouse Trust Co., The Market Keeps Going, (Ibottson
Associates, 2001).
Robinson, Randall (2000),
The Debt, (Penguin Putnam,
Inc., NY, Jan 2000). posted 17 February 2006
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updated 6 October 2007 |
