Free Trade, Corporatism, and the State in The English/ African Slave Trade

18th century public and political debates between British merchants over the “state of the African trade” not only contributed to modern economic theory, but also helped set the standard for the roles, expectations, and relations between private merchants, corporations, and the state in Britain’s expanding Empire. 

Historian William Pettigrew recently argued that the modern liberal notion of free trade, often associated laissez faire capitalism, emerged in the late 17th century as a rallying cry for private English merchants to trade with Africa for slaves. Prior to debates over free trade, the Royal African Company held a monopoly on the African trade through the royal patronage of King Charles II. But after the Glorious Revolution in 1688, parliament overthrew the previous Stuart lineage and invited William and Mary to rule England. Britons argued that because King Charles II granted the monopoly without consulting, the monopoly was not only illegal, but an infringement on the natural liberties of free Englishmen to trade with Africa for slaves. The Royal African Company tried to compete with private traders, but according Davis (the prominent RAC historian), the RAC was unable to compete because the company had to provide governance and maintenance for a series of company trading post along the African coast. Parliament, however, recognized the importance of the trading establishments during the initial debates between private merchants and the RAC, deciding that the establishments were important signs of possession on the coast (the signs of possession were most likely for Britain’s European rivalries; Britain did not own the establishments, instead the company rented the land from the local community). Because of this importance, Parliament awarded the RAC a yearly stipend for the maintenance of the forts, parliament acquired this stipend through a ten percent tax levied on individual traders. But the RAC still complained that the stipend was not enough and that they could not compete with individual traders. In 1750, the RAC fell into bankruptcy, closed its doors and the establishments became the subject of heated debates in the halls of Westminster and even in the public press as merchants, rhetoricians, officials, etc. weighed in on the debate. 

Up until the middle of the 18th century (a even beyond), England expanded through the use of corporations. According to recent revisions on the early modern English state, historians such as Michael Braddick argued that the English state was relatively weak well into the 18th century and that the state consolidated control of the outer English provinces, generally, through compromises and cooperation with provincial leaders. Another historian, Philip Stern, who focuses on the British East India Company argued that the EIC operated like a company state, meaning that it was well organized, efficient, provided its own military support, incurred its own costs, etc. Early companies, especially monopolies, expanded the frontiers of the Empire and served as a model for proper and efficient governing (not all the time). But after the Glorious Revolution, the state became more efficient at collecting taxes and began to expand, most likely in part because parliament controlled the purse-strings and held sway in decisions concerning trade. 

At first, private trade (or free trade) seemed like a horrible idea to the old mercantilist vanguard. Author Aphra Behn captured aristocratic fears of opening trade to any free Englishmen. Not all Englishmen, Behn argued in Oroonoko, were honorable. In fact, she considered many Englishmen as scoundrels. In her book Oroonoko, a Coromantyn Prince (Oroonoko) and his wife (Imoinda) were kidnapped from the African coast and sold into slavery. They were sold into slavery by an honor less Englishmen. For Behn, the honor less Englishmen were commoners, nor aristocrats, etc. Although mercantilist and “company men” feared that Englishmen would ruin the trade by kidnapping royalty in Africa (which they did), these men were concerned not only with the conduct of Englishmen, but also the protection of the African trade from rival Europeans — the French. Companies, too, were hierarchical meaning that the commands of the Crown could be communicated through the ranks of a company and the company would be more likely to carry out directives from Westminster. As mentioned above, companies such as the RAC and EIC provided military support and protection for English interest (loosely defined). Individual private traders could not offer the same support and protection for the nation. Critics of free trade even went so far as to suggest that free traders would probably aid England’s enemies. 

Critics of free trade also accused individual merchants of putting their own interest before the interest of the nation, thereby accusing individual merchants of a serious moral violation that could inevitably affect the whole country. But towards the middle of the 18th century, support for ideas such as natural order and self-interest gained popularity. These ideas, of course, are often associated with the philosopher Adam Smith, who argued that principles of self-interest in a larger economic sphere were directed by natural forces thereby creating a greater sense of order out of what seemed like selfish motives and happenstance. Self-interest will emerge again in the writings of Hippisley. 

Britons, however, quickly recognized the benefits of free trade. Free trade provided the Caribbean sugar plantations with far more slaves than the RAC could have delivered. The extensive number of slaves transferred to the Americas and the sheer wealth generated by free trade made it a staple of modern economic thought. 

Parliament, however, was in a bind. English merchants had successfully made their case that it was their natural born liberty to purchase and sell slaves; free trade had proved highly successful; but after the RAC closed, who would govern and maintain the forts? The Board of Trade and Plantations did not want to take on the responsibility of the forts, though their reasons were not clear, some contemporary commentators believed that the state had no business being involved in commerce. 

Several groups of merchants from London, Bristol, and Liverpool (the leading slave ports) argued that a joint-stock company should take control of the forts. Though these men did not argue in favor of monopolies nor should they be considered mercantilist because they did not all agree in the core beliefs of mercantilism, such as finite wealth, bullionism, and especially the notion of a strong state that dictated trade common to mercantilist thought. These were “company men.” They believed that companies were more efficient than individual traders for the reasons given above. Because a joint stock company sold shares to the public, the company (employees included) had a responsibility to generate profit fro share holders, thereby providing employees with the incentive to do a thorough job at whatever it was they were supposed to do — like guard the forts. Adam Smith, of course, disagreed, but we will get to that later. 

Because joint-stock companies operate off of a profit motive for the entire company, parliament worried that a joint-stock company would needlessly compete with individual slave traders on the coast, thereby undermining the benefits of free trade. Competition with France and even the influx of British slave traders in Africa were already driving slave prices up. Parliament did not want to harm the nation’s most lucrative trade. But France was encroaching on the English slave trade. The RAC had defeated a French garrison that was intent on destroying Cape Coast Castle (the headquarters for English African Companies in present day Ghana), but without the RAC who would protect the slave trade? 

British officials decided to create an experimental company to govern and maintain the trade establishments, while the British navy patrolled the African coast. They created a regulated company called the Company of Merchants Trading to Africa. A regulated company differed from a joint-stock company, primarily, because members of a regulated company did not work for the general good of the company. For instance, a Briton would pay a fee to become a member of a regulated company — not a stock. This fee allowed the Briton to use the facilities of the company, if the company had facilities, but the Briton was also obliged to following the general rules of the company, this assured an overall sense of good conduct among members to help facilitate trust, which was essential for trade. But each member traded for their own profit, not the profit of the company. According to the charter of the Company of Merchants Trading to Africa, the sole purpose of the company was to govern and maintain the forts. A committee of nine men, three from each of England’s primary trading ports, controlled the company from England. According to historian Eveline Martin, the main duty of the committee centered on acquiring a yearly stipend from parliament for the establishments in Africa. The CMTA, obviously, was publicly funded both through taxes and a “membership fee” that individual merchants had to pay the company to use the establishments — totaling 40 shillings. 

In Africa, each of the establishments was governed by a “chief” or simply “governor.” The Governor of Cape Coast Castle lead the council of governors on the African coast. Wary of competition that might arise on the African coast between English merchants, parliament included a clause in the company’s charter forbidding company employees from trading in a corporate capacity for profit. In other words, employees were only supposed to govern and maintain the establishments for individual English merchants. 

Part of the company’s job in aiding the English slave trade was to keep the forts well equipped with goods that were in high demand with the local Fanti merchants. Company employees were to purchase slaves at favorable prices using said goods and then resell the slaves to the slave traders. The committee was tasked with supplying the forts wit tradeable merchandize. This became a problem as the committee was not always aware of what was in demand in Africa. 

Paying company employees on the coast, however, ended up worse than supplying the forts. The committee paid its employees with tradeable goods that employees were supposed to exchange on the coast for their pay. Just like the fort’s supplies, the committee often failed to know what was in high demand on the coast. In many cases, employee pay was worthless. As Martin suggested, the problem with the CMTA from start to finish was the deplorable state of management. Though Adam Smith would disagree, but we will get to that later. 

Many employees, especially the chiefs of the establishments, sold slaves from coast. Richard Brew, for instance, became a prominent slave trader on the Gold Coast and he finally assimilated into the Fanti community. Brew, however, started out as a chief and when he got caught trading slaves in 1753, Brew quite the company and went into business for himself. According to Margaret Priestley, Brew’s influence on the coast grew and when the Seven Years War began, the CMTA hired him back, knowing quite well that Brew was using the company’s facilities for his own personal gain. 

Both individual merchants and “company men” complained that employee trade on the coast was causing slave prices to rise. In 1753, a series of affidavits accused various employees of monopolizing trade on the coast, thereby causing prices to rise. Brew, as mentioned above, was one of the major culprits, but so was John Hippisley. In an affidavit, a merchant accused Hippisley of threatening to beat a private English trader who landed at Winebah where Hippisley served as chief. 

After the Seven Years War, England acquired a French trading post in Senegambia.  The CMTA  petitioned the government to  acquire the trading post, but the companies reputation preceded it and the government turned down the company’s request.  In fact, the state sent the English military to occupy the trading post, marking the first  time the English military got involved in the African trade before the end of the 19thcentury.  The larger pictures shows that when free trade emerged, the state needed to become more involved in trade to protect merchants, which is the opposite impression we get from free trade proponents today.

Africa was not the only place where the English had a trade deficit, but it differed from China and India.  For instance, money flowed to China and India, but the state and the East India Company actively sought to undermine local manufacturing practices.  The African trade was carried out by more than one company, it would have been difficult to carry out a single policy to undermine local slave traders because of the competition between the Royal African Company and the private merchants—not to mention other European traders.  Africans, also, did not allow Europeans to go inward, nor were they able to because of disease.  The African trade spurred industry in England.  Gunpowder and Brass, specifically, became major trade items to Africa and these were produced in Bristol and other places.  

Although some contemporaries knew about African dominance on the coast, information about trade in the public sphere was political and in many cases the strength of the Fante over the company was either misrepresented all together or portrayed as weakness of the company.  Private merchants complained that the company dominated trade, thereby causing slave prices to rise, while joint-stock advocates argued that the company was too weak to force the Fante to open roads leading inland, where they thought Africans were more abundant and therefore cheaper.  Extra pressure was laid on the company because Gold Coast Africans were often preferred over slaves from other regions.

Prices had been increasing since the trade was open to the English public and as demand grew in the Americas, so did the price of slaves.  Although this is widely recognized by historians, African agency is lost to notion of natural market forces of supply and demand.  The price of slaves at company outposts costs more because it cost the company supplies to house and feed the slaves, though contemporaries thought that the supplies provided through parliament should have made up for this difference. [quote from Hippisley] In the mid eighteenth century, the African Gold Coast was facing a dearth of slaves imported from the hinterland because of internal political conflicts between the Fante and the rising power of the inland Ashante power.  Slaves, further south, were more abundant and cheaper and the general trade started moving in that direction, but according to company adversaries, this southern trend was the fault of the company. It was complained that the company lacked the means of forcing the inroads open and that the RAC could have done it, but this accusation simply ignores the power structure on the coast.  Any force exerted on the Fante by Europeans was met with resounding counterforce. Simply put, the company was not in a position to force the Fante to do anything.  What’s more is Britain supported the Fante in their strife with the Ashanti, though the company did trade with the Ashanti when they could, they were not likely to undermine Fante coastal institutions and norms in case they offended the Fante and were kicked off the coast.   

After the Seven Years War, England acquired a French trading post in Senegambia.  The CMTA  petitioned the government to  acquire the trading post, but the company’s reputation preceded it and the government turned down the company’s request.  In fact, the state sent the English military to occupy the trading post, marking the first  time the English military got involved in the African trade before the end of the 19thcentury.  The larger pictures shows that when free trade emerged, the state needed to become more involved in trade to protect merchants, which is the opposite impression we get from free trade proponents today.

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