Slavery and the British Industrial Revolution*

* Stephan Heblich, Stephen J. Redding, Hans-Joachim Voth

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 econ-
omy, using granular data on wealth from compensation records. Before the major expan-
sion 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 ndings 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 inuenced 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 nd that Britain would have been substantially poorer and more agricultural in
the absence of overseas slave wealth. Overall, our ndings are consistent with the view
that slavery wealth accelerated Britain’s industrial revolution.

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