Donald J. Boudreaux, chairman of the Department of Economics at George Mason University, opens Capitalism & slavery with a few economic fallacies:
Wrongheaded notions about the economy are always in high supply. Most calamitous was the idea that central planning outperforms the market. The pulverizing poverty and tyranny of the former Soviet Union, North Korea, and similar Workers’ Paradises have ended that particular illusion.
Other less disastrous but equally mistaken notions about the economy remain on the loose — for example, that tariffs promote prosperity.
But the most far-fetched myth that I’ve encountered recently is that the wealth of the modern Western world, especially that of the United States, is the product of slavery.
His story:
I first encountered this notion during a talk I gave in Toronto. I explained to the college-age audience how extraordinarily wealthy all of us are today compared to our preindustrial ancestors. I wanted them to understand the great benefits of capitalism. During the Q-&-A session, a young woman informed me that the wealth we enjoy today is the product of slavery.
At first I thought she was speaking figuratively, as in “workers under capitalism really are slaves.” Having heard such an argument before, I was half-expecting it. But no. What she meant is that the modern world’s prosperity is the product of the pre-20th-century enslavement of Africans in the Americas.
“But slavery ended in the United States in 1863!” I responded. “Look at all the wealth produced since then — telephones, automobiles, antibiotics, computers. None was built with slave labor.”
She anticipated my response. “Not directly. But the capital that made these innovations possible was extracted from slave labor. The wealth accumulated by slaveholders is what financed the industrialization that makes today’s wealth possible.”
I looked at her in raw disbelief. (Not a good strategy, by the way, for a public speaker.)
Collecting my thoughts, I pointed out that slavery had been an ever-present institution throughout human history until just about 200 years ago. Why didn’t slaveholders of 2,000 years ago in Europe or 500 years ago in Asia accumulate wealth that triggered economic growth comparable to ours? Why is Latin America so much poorer today than the United States, given that the Spaniards and Portuguese who settled that part of the world were enthusiastic slavers? Indeed, the last country in the Americas to abolish slavery was Brazil — in 1888, a quarter-century after U.S. abolition. By American and western European standards, Brazil remains impoverished.