Katerina Swanson
The role of slavery in fuelling economic growth is a highly debated topic, with some arguing that it was a critical driver of the American economy, particularly in the South, while others claim it was inefficient and acted as a brake on growth. Slavery, specifically cotton slavery, was a modern business that continuously evolved to maximise profits. It was deeply intertwined with capitalism and played a significant role in transforming the US from a colonial, agricultural economy to the second-largest industrial power globally. The labour of enslaved people was central to this transformation, with some arguing that it was an efficient and profitable system that created immense wealth for slaveholders and contributed to the country's economic expansion before the Civil War. However, others emphasise the human cost of slavery, arguing that the gains from emancipation far outweighed the economic benefits of slavery, making it one of the most significant economic events in US history.
| Characteristics | Values |
|---|---|
| Was slavery profitable? | Yes, it was profitable for individual slaveholders and the economy. |
| Was slavery efficient? | Yes, slave plantations were 40% more efficient than northern free farms. |
| Were there economic gains from emancipation? | Yes, emancipation generated aggregate economic gains for the US economy worth between 4% and 35% of US GDP. |
| Were enslaved people considered property? | Yes, enslaved people became a legal form of property that could be used as collateral in business transactions or to pay off debt. |
| Were there alternative narratives about slavery? | Yes, there were myths that slavery was not fuel for economic growth and that it was less efficient than wage labor. |
| What were the cash crops that fueled the economy? | Tobacco, cotton, and sugarcane. |
| What was the role of the cotton industry? | Cotton became the backbone of the Southern economy, with the South producing 75% of the world's cotton by the Civil War. |
| How did slavery shape the economy pre-Civil War? | Enslaved workers' per capita commodity output increased dramatically, contributing to regional and national economic growth. |
| How did slavery impact the economic trajectory of the US? | Slavery helped transform the US from a colonial, agricultural economy to the second biggest industrial power in the world. |
| What were the human costs of slavery? | Enslaved people endured violence, coercion, and beatings to maximize their labor output. |
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What You'll Learn
Cotton slavery fuelled global industrialisation
Cotton slavery, which existed from the end of the 18th century until the beginning of the Civil War, was a key factor in fuelling global industrialisation. During this period, the labour of thousands of enslaved men and women was used to grow cotton, which was then used to clothe the world. This system of forced labour was aimed at maximising efficiency and profits, with overseers and plantation owners managing the system and interacting with a network of bankers and accountants to maintain America's empire of cotton.
The cotton economy was deeply tied to the global economy, with Britain taking control of the global cotton market between 1780 and 1815. Raw cotton constituted a significant portion of American exports, and slaves picked a large percentage of the cotton spun in British mills, powering the economic engine of the American South. This supply chain, rooted in human exploitation, led to substantial economic growth and improvements in living standards in Britain, even as the country began to abolish the slave trade and slavery itself in its colonies.
The impact of cotton slavery on global industrialisation can also be seen in Manchester, which transformed into the world's first industrial city due to its reliance on the transatlantic slave trade and cotton grown by enslaved people. The labour and exploitation of African men, women, and children fuelled Manchester's industrial expansion, with the city having a complex relationship with campaigns for the abolition of slavery.
While there are differing views on the profitability and efficiency of slavery, it is clear that the use of enslaved labour in the cotton industry played a significant role in global industrialisation, particularly in the transformation of the US into the second biggest industrial power in the world.
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Slave labour was efficient and profitable
The institution of slavery in the United States was a significant driver of economic growth and development. The use of slave labour was deeply entrenched in the Southern economy, with cash crops like tobacco, cotton, and sugarcane forming the backbone of the region's economic engine. By the start of the Civil War, the South was producing 75% of the world's cotton, and the slave economy had made the Mississippi River valley the nation's wealthiest region per capita.
Secondly, slave labour was a source of cheap labour, with the ultimate beneficiaries being those who could purchase goods at lower prices due to the increased output generated by slave labour. The use of slave labour also allowed plantation owners to invest in other areas, such as taking out loans and purchasing more land and slaves, further entrenching the system of slavery in the economy.
Additionally, slave labour was profitable for individual slaveholders, as enslaved workers represented their most significant investment and the bulk of their wealth. Enslaved people also became a legal form of property, which could be used as collateral in business transactions or to pay off debts. This further incentivised the continued use of slave labour and its integration into the economy.
The efficiency and profitability of slave labour are evident in the economic growth of the Southern states and the nation as a whole. The output of enslaved workers increased dramatically in the two decades before the Civil War, contributing to regional and national economic growth. This efficiency and profitability, however, came at a tremendous human cost, with the total losses borne by enslaved people far exceeding the market value of the increased output.
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$8.2 $10.3
Slaveholders' wealth was tied to human capital
The economic trajectory and development of capitalism in the United States were closely tied to the institution of slavery. Slaveholders had a significant amount of wealth tied up in human capital, and this was particularly evident in the cotton industry, which existed from the end of the 18th century until the Civil War. Cotton was the backbone of the Southern economy, and enslaved workers represented Southern planters' most significant investment and the bulk of their wealth.
The labour of enslaved people was central to the economic growth of the Southern states and the nation as a whole in the years leading up to the Civil War. Enslaved Americans were a source of profit and wealth for slaveholders, and their labour contributed to the growth in per capita output. This is supported by the findings of economist Mark Stelzner and historian Sven Beckert, who state that "slavery remained a source of profits, wealth, political power and opportunities for growth, including productivity enhancements, all the way until the 1860s."
The wealth generated by slaveholders through the exploitation of enslaved people was so significant that they were willing to invest considerable resources and fight to preserve a system that provided them with market returns. This resulted in a near-feudal society in the South, with an aristocratic landowning elite wielding economic and political power. The benefits of cotton produced by enslaved workers extended beyond the South, impacting industries in the North and Great Britain, as well as the financial and shipping sectors.
While some argue that slavery was inefficient and unprofitable, others, like Fogel and Engerman, claim that slave plantations were economically efficient and that the material well-being of American slaves was comparable to that of free labourers in the North and Europe. The debate around the efficiency and profitability of slavery is complex, and it is important to consider the human costs endured by enslaved people, which may have been underestimated in previous analyses.
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Slave labour was integral to the Southern economy
Slave labour was a significant driver of economic growth in the South. Enslaved workers represented Southern planters' most significant investment and the bulk of their wealth. The Southern economy was fuelled by human slavery, with the region producing 75% of the world's cotton by the start of the Civil War. The cotton economy was built on the continuous threat of violence and meticulous record-keeping, with the labour of each person tracked daily. The ultimate beneficiaries of slavery were those who could buy cheaper goods, the output of which was increased by slave labour.
Slave labour was also a source of tax revenue for state and local governments in the South. Enslaved people became a legal form of property, used as collateral in business transactions or to pay off debts. The Southern economy was so dependent on slavery that the end of slavery represented an existential threat to the region. The expansion of slavery into new states was seen as necessary to maintain the economic status quo.
While some argue that slavery was inefficient and unprofitable, others contend that it was a model of economic rationality, with slave plantations outperforming free farms in the North. The debate around the efficiency and profitability of slavery centres on the output produced and its allocation, as well as the costs borne by enslaved people. The ultimate impact of slavery on the Southern economy is a subject of ongoing discussion and research.
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Abolition threatened the economic status quo
The institution of slavery was deeply entrenched in the American economy, particularly in the southern states. By the outbreak of the Civil War in 1861, slaves constituted one-third of the total slave-state population of 12.3 million. The southern economy was largely driven by agricultural cash crops like tobacco, cotton, and sugarcane. Slavery was so profitable that the southern states had more millionaires per capita than anywhere else in the nation.
Slavery was a thoroughly modern business, continuously changing to maximize profits. The labor of enslaved people was tracked daily, and those who did not meet their assigned picking goals were beaten. The best workers were also beaten to coerce them into doing more work in less time. As overseers and plantation owners managed a forced-labor system, they interacted with a network of bankers and accountants, took out lines of credit and mortgages, and managed America's empire of cotton.
The economic and political power of the southern states was heavily dependent on slavery. Enslaved workers represented Southern planters' most significant investment and the bulk of their wealth. The end of slavery represented an existential threat to the economic status quo of the South. Slaveholding elites worried that the increasing inequality between free southerners and slaveholders would become politically untenable, and nonslaveholding white people would begin to oppose the practice of slavery.
While some have argued that slavery was inefficient and unprofitable, others contend that it was both profitable and efficient. Economists and historians have reached different conclusions, with some arguing that slavery was a model of economic rationality, and others arguing that it was highly inefficient. However, it is important to consider the human cost of slavery and the implications for aggregate economic performance when analyzing its economic impact.
The emancipation of enslaved people may have generated some of the largest economic gains in US history. Researchers estimate that the gains produced by emancipation were substantially greater than the costs of the Civil War and were a more substantial driver of US economic growth than railroads. These gains came from reducing the substantial costs imposed by slavery, even though the former slave states experienced significantly lower output.
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Frequently asked questions
Yes, slavery was profitable and fueled the economy. Chattel slavery, which involves the ownership of a person, emerged in the US after the importation of Africans to the Virginia colony in 1619. By the outbreak of the Civil War in 1861, slaves constituted one-third of the total slave-state population of 12.3 million. Slave labor drove impressive profits, especially in the Southern states, and was an important driver of growth in the national economy as a whole.
Slavery fueled the economy through the production of cash crops such as tobacco, cotton, and sugarcane. Cotton, in particular, became the backbone of the Southern economy. The benefits of cotton produced by enslaved workers extended beyond the South to the North and Great Britain. Slave labor was also increasingly important to the economic and political status quo in the South.
Slavery was the fuel that transformed the US from a colonial economy to the second biggest industrial power in the world. It was also the catalyst for the emergence of a near-feudal society in the South, with an aristocratic landowning elite at the top, wielding much of the economic and political power.
Yes, the economy was dependent on slavery. Slave labor had become so entrenched in the Southern economy that even the belief that "all men were created equal" was not enough to dislodge it. The economic gains produced by emancipation were substantially greater than the costs of the Civil War, demonstrating the economic dependence on slavery.
