Prime Minister Cameron has rightfully faced questions about reparations for slavery during his recent trip to Jamaica.
How much is owed? Well, that gets controversial, but let’s take a stab at it. Slavery seized the wages otherwise due the slaves, minus the cost of keeping the slaves alive. Since slaves were considered an investment, the price of slaves reflected the value of that stolen income.
One rough estimate of the value of Jamaica’s slaves in the late 1820s, before Parliament started seriously debating abolition, comes to £14.0 million.
There is a problem with this method, which is that slaves were tortured into working far more hours at far higher effort than any free worker would have agreed to. (The best work on this comes from Roger Ransom and Richard Sutch on the American South.) This measure only captures the damage inflicted by that torture inasmuch as it created higher value for the torturers. It does not capture the damage the torture inflicted on the tortured.
It also captures only the value of the wages to be stolen from enslaved Jamaicans who were alive in the 1820s. It does not take into account the value of the wages stolen from enslaved people who had the bad luck to die before abolition. In fact, it does not account for wages already stolen from the people alive at abolition.
But let us start with the number we have. How do we convert that into a 2015 value? One possibility is to simply adjust for inflation. That would give us £1.3 billion.
Wow! That is not a lot of money. Add in the rest of the West Indies and you get only £4.3 billion. In 2013, the U.K. spent £11.5 billion on overseas aid. Come on, Cameron! Cut a check and go home.
Or at least that is what a reasonable government would do if it believed that the above was the correct and unassailable calculation. Of course, it is not. The value extracted from the slaves was invested in other things. One quick-and-dirty assumption is that the value of those investments increased with the value of the United Kingdom’s GDP. Use that assumption, and you get a current value of £53.3 billion, which is a substantial amount of money ... and still does not account for all the costs of slavery.
If you think that £53.3 billion is the correct amount (or possibly something even higher) then I can see why you might be reluctant to admit to even £4.3 billion in damages. At current long-term rates, it would cost the U.K. about £1.5 billion per year to compensate Jamaica for that.
Maybe the Jamaicans should demand to become part of the United Kingdom. Why not? Let Scotland go and replace it with Jamaica! Consider that in 2014 the United Kingdom subsidized the Scottish budget to the tune of £10.9 billion. (That figure allocates North Sea oil and gas revenues to Scotland.) Jamaica would be much cheaper! Public spending per person in England is about £8500. The price level in the U.K. is 2.2 times higher than in Jamaica, so equalized real spending would cost the exchequer only £3900 per person; roughly £10.6 billion per year.
But Jamaica already generates tax revenues around £2.3 billion. And helpful people at the IMF (see pages 16 and 26 here and page 44 here) have calculated how much could be collected with better enforcement brought to you courtesy of the good people of Her Majesty’s Revenue and Customs, which would up the amount to £3.1 billion. Add in the £300 million collected by brining Jamaican VAT rates up to U.K. levels, and you have £3.4 billion, for a net cost to the Exchequer of only £7.0 billion! (Rounding explains the discrepancy.)
Take off the part of that due as reparations for slavery, and Jamaica requires only £5.5 billion to join the U.K! Moreover, considering that Jamaica has a GDP of only £8.6 billion, you would need to phase that subsidy in over at least two decades. Include the phase-in, and you get a net present cost of bringing Jamaica into the U.K. of only £66.7 billion over 20 years, scarcely more than the £53.3 billion reparations bill!
Plus savings if Scotland walks out in the meantime.
And then there are the growth effects on Jamaica. If Jamaica became as rich as French Guiana (the poorest overseas department of France), its nominal GDP would increase to £36 billion.
What is not to like about that? Sure, it would still be a net drain on U.K. coffers, generating taxes of £14 billion against expenditures of £23 billion, but now you are quibbling. It is still cheaper than Scotland!
So the solution is obvious. Cameron should offer membership in the United Kingdom to Jamaica.