Appearing in 1944, Capitalism and Slavery was a comprehensive attempt to explain the rise and fall of British colonial slavery in relation to the evolution of European world-capitalism. For the final stages of British slavery, Eric Williams developed a two-pronged argument linking its demise to changes in the British imperial economy. The first prong emphasized changes in the economic balance between the metropolis and the colonies. Down to the American Revolutionary War, concluded Williams, British slavery and the British Atlantic slave trade were growing and complementary elements of the imperial economy. The slave system provided an ever-increasing amount of tropical staples, a protected market for British manufacturers, and a main source of British metropolitan capital. In a number of ways the slave economy helped to fuel the Industrial Revolution. Williams's second prong related the political economy of Caribbean slavery to an economic ideology designated as mercantilism. Mercantilism theoretically rationalized the multiple linkages of the system by assuming the need for a protected imperial zone in which British manufacturers, trade, and maritime skills could develop.

For Williams, the American Revolutionary War dramatically changed the economic and ideological relationship that had hitherto sustained and nurtured the slave system. British colonial production, under increasing competition from its French counterpart, ceased to provide what was needed by the Empire amply or cheaply enough. According to Capitalism and Slavery, 1776 began the “uninterrupted decline” of the British West Indies as a producer of British staples, as a consumer of British industrial output, and as a contributor to British capital.