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Profitability of Slave and Long-Distance Trading in Context: The Case of Eighteenth-Century France

  • DAUDIN, GUILLAUME

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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Article provided by Cambridge University Press in its journal The Journal of Economic History.

Volume (Year): 64 (2004)
Issue (Month): 01 (March)
Pages: 144-171

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Handle: RePEc:cup:jechis:v:64:y:2004:i:01:p:144-171_00
Contact details of provider: Postal: Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK
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  1. 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(03), pages 599-626, September.
  2. 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(01), pages 1-39, March.
  3. repec:cup:jechis:v:60:y:2000:i:01:p:123-144_00 is not listed on IDEAS
  4. 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(01), pages 123-144, March.
  5. 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(03), pages 693-703, September.
  6. 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(04), pages 745-776, December.
  7. Hoffman, Philip T. & Postel-Vinay, Gilles & Rosenthal, Jean-Laurent, 2001. "Priceless Markets," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226348018, October.
  8. repec:cup:jechis:v:60:y:2000:i:03:p:599-626_00 is not listed on IDEAS
  9. 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.
  10. 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(04), pages 885-914, December.
  11. Clark, Gregory, 2001. "Debt, deficits, and crowding out: England, 1727 1840," European Review of Economic History, Cambridge University Press, vol. 5(03), pages 403-436, December.
  12. repec:cup:cbooks:9780521365857 is not listed on IDEAS
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