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The Economy of the Southern States

Economy plays a large role not only in the future, but in a society’s past. Here is an example of how economy shaped history for an entire country. In this article, we will cover the American Civil War as whether or not the civil war was inevitable.

When the Industrial Revolution crossed the Atlantic into the United States, it settled mostly in the North. Part of this reason is that water was the main power source of the industrial mills, and it was easier to build by the great waterways of the North.

The other part of the reason is that the South was doing just fine without any industrial mills. The cotton industry was thriving, due to great plantations and the slaves who did the labor. There was no reason for the South to choose diversification over the profitable cotton industry.

The Cotton Industry

In 1793, Eli Whitney invented the cotton gin. It separated the flax from the seeds through a mechanical combing system. Since workers had had to do the separation by hand, the cotton gin increased the amount of cotton that could be produced with every crop, and greatly reduced the amount of time and money farmers had to spend on the cotton.

As a result, around two-thirds of the total global demand for cotton was satisfied by Southern plantations. For Great Britain alone, 77% of that nation’s cotton needs were met by the American South. Such was their economic relationship with Great Britain, that the South even attempted to create a cotton shortage to coerce that nation into recognizing the Confederacy.

The Backs of Slaves

The source of the wealth of the South, the cotton plantations, demanded a great amount of labor. The South was not the target of the immigrants, unlike the North. There was no influx of low-wage workers to the South. Instead, there were slaves. At first look, it seems like it would have been cheaper to attract immigrants rather than house and feed slaves.

However, slaves were not “labor” but a commodity. They had value, as assets, to their owners. Their owners could sell them, rent them, or keep them. Either way, as assets, they would have inherent value that no hired worker ever could have. Simply put, the slaves themselves were a large part of Southern wealth.

The Threat of the North

It is rare for any one country to be completely specialized in its source of wealth. The United States of America could simply have settled for having an industrialized North and an agricultural South, and that would have been the end of it.

However, the Federal Government was accused by the South of preference for the North, by protecting Northern goods from European competition. However, the South did not produce its own food (unlike the North), and therefore depended on the cheap European imports. The tariffs were one point of contention.

However, the crux of the matter was the demand for the abolition of slavery. From an economic perspective, the Southern economy was built on the backs of slaves–slavery could not be given up. From a cultural perspective, the Southern way of life was dependent on the social classes, and social class was partly determined by the number of slaves one had.

The Economy of the Southern States

From a Southern perspective, all the arguments of the North against slavery in the South were detrimental to them. They would lose so much, which is one of the reasons slavery, although today known as morally wrong, was easier to rationalize then.


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