The Shadow of Slavery still exists over Global financial Opportunities?


When the infamous Zong trial started in 1783, the poisonous relationship between finance and slavery was barely known. This was an extraordinary and distressing argument for compensation – regarding a massacre of 133 prisoners, thrown overboard on the Zong slave ship. The slave trade was pioneering a new kind of money, held on the bodies of the impotent. Today, the mysterious high finance goods that target the vulnerable and distressed as income opportunities for the already wealthy still carry that profound injustice.

The Gregsons, plaintiffs in the Zong court, were 18th century Liverpool merchant princes, a town that had rapidly developed into one of the world’s leading commercial capitals. The prosperity of Liverpool always originated from their finance inventions. The great slave traders were also banks and insurers, leaders of what we call financialization today-they converted human lives into opportunities for profit. Slaves would be bought in the African colonies of Britain, and shipped to the Americas where they were sold at the sale. The merchant’s agent will take the obtained money and send a bill of exchange – credit notes for the amount plus interest – across the Atlantic, rather than investing it in goods such as sugar or cotton to be sent back to Liverpool.

The exchange bill may be cashed at a discount at one of the city’s many banking houses, or replaced by another, again at a discount, to be sent to Africa for payment for more human chattels. Credit flowed easily, cleanly, and cost-effectively.

The insane innovation of the banking system for slavers was that it imposed this financial interest on human bodies. The same activities persisted on the plantations, where the slave bodies were used as collateral on loans for the expansion of the estates and the creation of even more profitable entities. The slaves were abused twice: they were deprived of their freedom and labor, their stolen “economic interest” leveraged by cutting-edge financial instruments.

Since then, financialization has taken many forms but essential principles remain the same. It is based on unequal relationships of power that capture future individual obligations and make them saleable. For example, the contracts underlying the 2008 credit crisis converted future mortgage payments into commercially tradable financial securities with real present value.

The income for those who sold the bonds was risk-free. The burden was borne by disproportionately poor Americans whose adverse credit scores and lack of financial expertise made them easy targets for mortgage issuers so built that they would be trapped into economic slavery.

Bailout for the financial crisis is eerily reminiscent of another. At the time slave slavery was abolished, it was so entrenched in British culture that the government was forced to reimburse individual owners for the loss of their property – a large debt needed that taxpayers only finished paying off in 2015.


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