Good and evil in economic history (4-5-2020)

Written by: Jan Luiten van Zanden

The 4^th of May is a good day to think about moral issues, about wrong and right. In the Dutch collective memory they were usually linked to collaboration and resistance during the German occupation, but in more recent years the debate about slavery has become increasingly important. But apart from trying to find out how big it was – which share slave-related economic activities contributed to GDP – economic historians have not contributed a lot to this debate. More can be said about the role of slavery and what it tells us about institutions and social norms in the past, and in the book with Maarten we try to further develop the discussion. Because, once you start thinking about it, it is a crucial issue.

Firstly, slavery is a ‘bad institution’. By taking away the agency, the freedom of the enslaved, it is the ultimate negation of Sen-style development. Moreover, as humans have per definition agency, it must ultimately be based on violence, as it forces both the slave owner and the enslaved to use violence; the slave owner for keeping the enslaved enslaved, the enslaved for trying to exert their agency. Even the supposedly more ‘mild’ Asian slavery, as encountered by the VOC, is ultimately based on violence, as the growing literature about is shows. It is an institution that in a negative way illustrates the importance of a power balances between humans, as the slave owner had all the power, and the slave was powerless, and this fundamental inequality lead to cruelty, to excessive violence, to dramatic suffering. So this dark institution in its blackness tells us something about institutional design, about how a bad institution can lead to bad behaviour. A final point to make here that there is overwhelming evidence that the long-term consequences of slavery for development were also extremely negative. The development potential of former slave based societies is generally extremely low – they are among the poorest countries in the world economy. So for New Institutional Economics slavery is an interesting institution. If there are so obviously bad institutions, does that mean there are equally good institutions? And if such bad institutions do exist, why did societies adopt them, why did they make this wrong choice?

The second important issue is that the Netherlands in 1500 was one of the very rare example of a highly complex, relatively advanced pre-modern society without slavery. Almost all advanced civilizations in 1500, and before 1500, made use of various forms of slavery, mostly in the form of debt slavery, where the person who could not repay his debts anymore, became a slave, or ‘sold’ his wife and/or children as a form of repayment. The other main source of slaves was warfare, where one state raided the population of another to force them into slavery, or, after a full-scale war, where entire cities – including the courts of defeated kings – were subjugated into slavery. These forms of slavery were normal in almost all parts of the world in 1500, with the single exception of North-west Europe, where it had disappeared gradually (it is a long and complex story why this happened, and we try to tell this in the book; there is also a fine paper by Jeff Fynn-Paul about this in P&P). In the Mediterranean region slavery still existed, for example, because it was not forbidden to enslave non-Christians, so Muslims were bought and captured, who were often kept as domestic slaves. In Portugal and Spain this domestic slavery smoothened the transition towards the large-scale trade of slaves and the use of their manpower in the colonies.

Thirdly, people at the time knew. There was jurisprudence (again the details will be told elsewhere) and it was obvious that slavery was not a Dutch institution. Some understood the importance of this. Adriaen Heindricxsen ten Haeff, mayor of Middelburg, was one of them. When in 1596 a ship with more than 100 African slaves who had been seized from a hostile Portuguese vessel, docked in Middelburg, and the captain Melchior van den Kerckhoven wanted to start selling these slaves in Middelburg, Adriaen protested and requested the Estates of Zeeland to release them. The Estates of Zeeland agreed, and the slaves were set free. But Melchior and shipowner Pieter van der Haegen appealed to the Estates-General, which, after further deliberations (they initially agreed with the decision, then changed their mind), decided that the captain could do whatever he liked with the slaves, but they could not be sold in the Dutch Republic. Most of the slaves were caught again, brought back to the ship that departed with unknown destination. A few remained in Middelburg. The decision by the Estates-General was a compromise maintaining the integrity of the Republic as a slave-free nation, and at the same time respecting the property rights of the slave owners, who were allowed to do  “soe hy ’t verstaet” (whatever he liked) with their property.

And this is basically how the moral and institutional problem of slavery was ‘solved’. The Netherlands had the ‘best’ of two worlds: no slavery with its nasty consequences at home, and overseas Dutchmen could do whatever was convenient. This double standard – of norms and values, and of institutions – remained basically unchanged for the next 200 years; one can argue, even until 1949 and thereafter. And only in a few exceptional cases, did people really have an issue with this.

More about this tomorrow – it is too big a subject to deal with in one blog.

Continue reading: East of Suez (5-5-2020)