Slavery and the Economy: An Overview

Forced labor was an essential component of the Southern economy from the time Europeans first settled the American South in significant numbers. Seventeenth-century planters required field hands to cultivate and harvest cash crops, but had a tiny wage labor force from which to draw. Enslaving Indians to meet their labor needs proved to be an unsuccessful experiment. Indentured servants provided a temporary solution and comprised the majority of forced laborers until the 1680s, but a combination of factors led to a sea change in the labor market after that point. On both the supply side and the demand side, the market for indentured servants began to dry up. Economic conditions in England improved, and as a result fewer English laborers were willing to indenture themselves to get to America. In 1676 Bacon's Rebellion, an uprising in Virginia involving mostly indentured servants, instilled a fear of class revolt in the colonial landed gentry. Planters started looking elsewhere to meet their labor needs.

At the same time, African slaves in the American colonies experienced a dramatic rise in their fertility rate and a simultaneous drop in their mortality rate. Slave traders had brought the first African slaves to Jamestown in 1619, but for the better part of the century most planters considered slaves a risky investment. By 1700, however, African slaves were living long enough and reproducing sufficiently to attract the interest of planters, especially those wealthy enough to afford the initial cost of purchase. With indentured servants in short supply and falling out of favor, racial slavery inexorably became the dominant form of labor in the South and the defining feature of Southern economic development.

Slavery in the eighteenth century existed throughout the British colonies, but the systems of commercial agriculture that took hold in the South utilized and exploited slave labor more effectively than did the North. Three economies developed in the South, each revolving around different commodities, but sharing the plantation form as the ideal method of production. Planters in the upper South in the Chesapeake Bay area used slave labor to produce tobacco. In coastal South Carolina and Georgia, slaves worked rice plantations. By the late eighteenth century, Louisiana planters used slaves on sugar plantations. In the North, where colonial economies did not rely on the production of cash crops, slaves served most often as domestic servants. After the American Revolution, Northern states began to abolish slavery, a strong indication that slaves were superfluous to the functioning of the Northern economies.

Even in the South, the slave economy began to lose its luster after the Revolution as the price of tobacco fell and agricultural profits in the upper South declined. At the same time, some members of the founding generation, including slaveholders like Thomas Jefferson, expressed their doubts about the viability and wisdom of slavery. But in 1794 Eli Whitney reinvigorated the slave labor economy with his patented cotton gin, an invention that would make cotton the most important and lucrative agricultural commodity in America for the next sixty years.

Cotton cultivation before the cotton gin existed only in the low country of coastal South Carolina, where a handful of planters produced long-staple cotton. Outside that region, long-staple cotton would not grow. Its close relative, short-staple cotton, flourished outside the low country, but removing its many seeds from the cotton fiber by hand was simply too difficult and time-intensive to be profitable. The cotton gin, however, could do this job mechanically and produce as much as fifty pounds of cotton per day. All that was required were slaves to work the plantation.

A short-staple cotton crop could only reach maturity after 200 days without frost. Consequently, cotton was bound by climate to the Deep South. There, cotton grew exceptionally well, especially in the Black Belt, a region of dark, fertile soil stretching from central Alabama into northeast Mississippi. In 1790 about 3,000 bales of cotton were produced annually in America. By 1810, planters were producing more than 175,000 bales. The meteoric rise in cotton production fueled the nascent industrialization taking place in Britain and the Northern American states. Textile mills multiplied. Even as these regions gravitated toward abolishing slavery—Britain would emancipate its slaves in 1833—the development of their market economies relied on a product harvested by slave labor.

Within the South, the impact of slavery and "King Cotton" was profound and indelible. Cotton production continued to soar; by 1860, the South exported more than 4 million bales of cotton. Such growth depended on securing more acreage for cotton crops and a constant supply of slaves to harvest them. The imperative to find more land was compounded by the very nature of cotton, because the cotton plant quickly denudes the soil of its nutrients. Taking their slaves with them if they could, planters seeking new land migrated westward, where the climate remained conducive to cotton cultivation. Planters who remained in the upper South still grew tobacco, but their revenues were marginal compared with those of cotton planters.

The great demand for slaves in the Deep South, coupled with the decline of the plantation economy in the Upper South, gave rise to a new, rapidly expanding economy of internal slave trading. Professional slave traders purchased slaves and marched them west where, as historian Michael Tadman showed in his book Speculators and Slaves (1996), they earned massive profits reselling them to cotton planters. According to Tadman's estimates, the number of slaves forced to migrate from the Upper South to the Lower South grew over the course of the antebellum period in tandem with cotton production. In the 1790s, between 40,000 and 50,000 slaves were "sold South;" in the 1820s, the number rose to 150,000 slaves; and in the 1830s and 1850s, the decades with the highest slave migrations, the number reached 250,000 slaves. The internal slave trade tore husbands and wives and slave families apart. Nearly 60 percent of slaves took part in the process of cotton production (Fogel and Engerman 1995, p. 95).

The tremendous emphasis on cotton within the antebellum South, though it reaped great profits, tended to retard development in other areas. Cities in the South, for example, could not match the rapid urbanization of the North in the antebellum period. With the exception of New Orleans, the Deep South remained almost entirely rural. Conventional wisdom in the South held that slaves did not do well in urban settings, where less contact with masters allowed slaves greater personal freedom and eroded their obedience. (The latitude afforded abolitionist Frederick Douglass when he was a slave in Baltimore contributed significantly to his escape.)

Historian Peter Kolchin noted that lagging urbanization was a symptom of a larger problem: a lack of modernization caused by the slave labor economy. In American Slavery (1993), Kolchin wrote, "the South badly trailed the North in railroad construction, literacy (even excluding blacks), and education" (p. 176). As the South grew to rely more and more on the architecture of capitalism in the North, the failure to modernize its own region took an economic toll. In spite of high cotton profits, per capita income in the South was $103 in 1860, far behind the North's per capita income at $141. This disparity becomes more pronounced when the South's smaller population is taken into account.

Whereas the market revolution ushered in the trappings of capitalism and an ethos of free labor in the North, Southerners remained defiantly faithful to the agrarian lifestyle and the political economy of slavery. By the 1830s they no longer considered slavery a necessary evil, but a responsible and benevolent economic system in which paternal masters cared for their childlike slaves. The owner of a plantation stood at the pinnacle of the South's hierarchical society. Slave ownership signaled more than a financial investment; it represented prestige and power. Most whites in the South did not own slaves, but local and state legislative bodies were overwhelmingly peopled with slaveholders, a reflection of their influence within Southern communities. By the 1840s the primary agenda for Southern politicians was to defend the slave economy by protecting the right to own slaves and ensuring slavery's expansion westward.

For a long time, a school of historians argued that economic indicators in the 1850s pointed to the natural demise of slavery. Noting a large increase in cotton production between 1858 and 1860, they postulated that the temptation for planters to overproduce would cause a steady decline in cotton prices, ultimately making slavery unprofitable. Economic historians Robert Fogel and Stanley Engerman comprehensively refuted this argument in their book Time on the Cross (1995). Setting the economic data of the 1850s in the context of the global cotton market, Fogel and Engerman found that cotton production in the South still could not meet worldwide demand, and so prices would have remained high. In 1861 slavery was as profitable as ever. As the next four years would show, Southerners were prepared to spend their blood and treasure protecting the slave economy and the culture that had evolved around it.