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Profitability of slave and long distance trading in context: the case of eighteenth century France

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  • Guillaume Daudin

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

Abstract

This paper studies the characteristics of investment in the slave trade and other long distance trades in France during the eighteenth century. After justifying why the slave trade should be aggregated with other long distance trades for this study, the paper introduces French data. Information is available on a total of 238 ventures from seven French harbours from the 1710s to the 1780s. The paper then focuses on computing the internal rate of return of the portfolio of investment in 65 voyages owned by an investor from Nantes. Using the undiscounted benefit-cost ratio as a proxy, the paper shows that this was typical of French long distance trade investments. These investments compared favourably with domestic alternatives. They were more liquid, shorter and more profitable than private notarized credit without being more risky. They were less risky and had a shorter duration than government bonds, without being less liquid or less profitable. The paper conclude that investment in the slave trade and other long distance trade was preferable to domestic alternatives in France during the eighteenth century. This might be explained by the existence of barriers to entry.
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(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Guillaume Daudin, 2006. "Profitability of slave and long distance trading in context: the case of eighteenth century France," SciencePo Working papers Main hal-03587861, HAL.
    • Handle: RePEc:hal:spmain:hal-03587861
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    References listed on IDEAS

    as
    1. R. B. Sheridan, 1958. "The Commercial And Financial Organization Of The British Slave Trade, 1750–1807," Economic History Review, Economic History Society, vol. 11(2), pages 249-263, December.
    2. Darity, William, 1985. "The Numbers Game and the Profitability of the British Trade in Slaves," The Journal of Economic History, Cambridge University Press, vol. 45(3), pages 693-703, September.
    3. Potter, Mark, 2000. "Good Offices: Intermediation by Corporate Bodies in Early Modern French Public Finance," The Journal of Economic History, Cambridge University Press, vol. 60(3), pages 599-626, September.
    4. Rosenthal Jean-Laurent, 1993. "Credit Markets and Economic Change in Southeastern France 1630-1788," Explorations in Economic History, Elsevier, vol. 30(2), pages 129-157, April.
    5. Velde, François R. & Weir, David R., 1992. "The Financial Market and Government Debt Policy in France, 1746–1793," The Journal of Economic History, Cambridge University Press, vol. 52(1), pages 1-39, March.
    6. repec:hal:wpspec:info:hdl:2441/691 is not listed on IDEAS
    7. repec:hal:spmain:info:hdl:2441/691 is not listed on IDEAS
    8. Postma,Johannes, 1990. "The Dutch in the Atlantic Slave Trade, 1600–1815," Cambridge Books, Cambridge University Press, number 9780521365857, September.
    9. Inikori, J. E., 1981. "Market Structure and the Profits of the British African Trade in the Late Eighteenth Century," The Journal of Economic History, Cambridge University Press, vol. 41(4), pages 745-776, December.
    10. Eltis, David & Engerman, Stanley L., 2000. "The Importance of Slavery and the Slave Trade to Industrializing Britain," The Journal of Economic History, Cambridge University Press, vol. 60(1), pages 123-144, March.
    11. Guillaume Daudin, 2002. "Comment calculer les profits de la traite ?," Post-Print hal-03587770, HAL.
    12. Thomas, Robert Paul & Bean, Richard Nelson, 1974. "The Fishers of Men: The Profits of the Slave Trade," The Journal of Economic History, Cambridge University Press, vol. 34(4), pages 885-914, December.
    13. Clark, Gregory, 2001. "Debt, deficits, and crowding out: England, 1727–1840," European Review of Economic History, Cambridge University Press, vol. 5(3), pages 403-436, December.
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    Cited by:

    1. Kevin H. O'Rourke, Leandro Prados de la Escosura and Guilllaume Daudin, 2008. "Trade and Empire, 1700-1870," The Institute for International Integration Studies Discussion Paper Series iiisdp249, IIIS.
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    3. repec:hal:wpspec:info:hdl:2441/684 is not listed on IDEAS
    4. Guillaume Daudin, 2003. "Do Frontiers give of do frontiers take ? The case of intercontinental trade in France at the end of the Ancien Régime," Documents de Travail de l'OFCE 2003-03, Observatoire Francais des Conjonctures Economiques (OFCE).
    5. Albin Skog & Örjan Sölvell, 2020. "The dark side of agglomeration, sustained wealth and transposition of trading institutions—the case of Bordeaux in the 18th and 19th centuries," Journal of Economic Geography, Oxford University Press, vol. 20(1), pages 67-91.
    6. Gregory Price & Warren Whatley, 2021. "Did profitable slave trading enable the expansion of empire?: The Asiento de Negros, the South Sea Company and the financial revolution in Great Britain," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 15(3), pages 675-718, September.
    7. Sarah Guilland Carmichael & Alexandra de Pleijt & Jan Luiten van Zanden & Tine De Moor, 2015. "Reply to Tracy Dennison and Sheilagh Ogilvie: The European Marriage pattern and the Little Divergence," Working Papers 0070, Utrecht University, Centre for Global Economic History.
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    11. Guillaume Daudin, 2006. "Profits du commerce intercontinental et croissance dans la France du xviiie siècle," Revue économique, Presses de Sciences-Po, vol. 57(3), pages 605-613.
    12. repec:spo:wpmain:info:hdl:2441/6149 is not listed on IDEAS
    13. repec:spo:wpecon:info:hdl:2441/6149 is not listed on IDEAS
    14. Baafi Antwi, Joseph, 2011. "Western Guilt and Third World Development: Part 1," MPRA Paper 28422, University Library of Munich, Germany, revised 26 Jan 2011.
    15. Gregg, Amanda & Ruderman, Anne, 2021. "Cross-cultural trade and the slave ship the Bonne Société: baskets of goods, diverse sellers, and time pressure on the African coast," Economic History Working Papers 112507, London School of Economics and Political Science, Department of Economic History.
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