Discussion Paper 0924, "The South Sea Company’s Slaving Activities", by Helen Paul
The South Sea Bubble of 1720 is often cited as an example of a fraud. It is often stated that the South Sea Company had not interest in, or aptitude for, the slave trade. It had been granted the monopoly right to ship slaves to the Spanish-held Americas. This paper uses shipping data to show that the company did approach the trade in earnest and also that it managed to continue with some degree of success. Therefore, investors in the company were not complete fools. The traditional explanations for the Bubble rest on the assumption that there was a mysterious gambling mania. However, this idea has been challenged by recent scholarship especially from the cliometrics literature. The South Sea Company was able to show that it did engage in trading activities and this is one rational reason why investors might have been attracted to the company.
Keynames: South Sea Bubble, slave trade, financial crash, cliometrics.
JEL Classification: N23, N97, N96