Antebellum White South:  Economy














Henry Roque

For our purposes, the South was a region characterized by production of the market of a number of agricultural staples in which slave labor was both the major capital investment and an important intermediate product. The uniqueness of the antebellum South continues to challenge the imagination of Americans, who, despite persistent attempts, cannot divert their attention from slavery. Slavery provided the foundation on which the South rose and grew. Two interpretations leading to the cause of the war had to do with the economy. The first of these interpretations considers the antebellum South an agrarian society fighting against the encroachments of industrial capitalism. The second considers the slave plantation merely a from of capitalistic enterprise and suggests that the material differences between Northern and Southern capitalism were more apparent
than real.

The first view cannot explain why some rural societies give rise to industrialization and some do not. A prosperous agricultural hinterland has generally served as a basis for industrial development by providing a home market for manufactures and a source of capital accumulation, and the prosperity of farmers has largely depended on the growth of industrial centers as markets for foodstuffs. In a capitalistic society agriculture is one industry, or one set of industries, among many, and its conflict with manufacturing is one of many competitive rivalries. There must have been something unusual about an agriculture that generated violent opposition to the agrarian West as well as the industrial Northeast.

The second view, which is more widely held, emphasizes that the plantation system produced for a distant market, responded to supply and demand, invested capital in land and slaves, and operated with funds borrowed from banks and factors.

The proponents of the idea of planter capitalism draw heavily, wittingly or not, on Lewis C. Gray’s theory of the genesis of the plantation system. "Gray defines the plantation as a ‘capitalistic type of agricultural organization in which a considerable number of unfree laborers were employed under a unified direction and control in the production of a staple crop’." Gray considers the plantation system inseparably linked with the international development of capitalism. He notes the plantation’s need for large
outlays of capital, and its strong tendency toward specialization in a single crop, and its commercialism and argues that these appeared with the industrial revolution (Genovese 15).

In modern times, the plantation often rose under bourgeois means to provide industry with cheap raw materials, but the
consequences were not always harmonious with bourgeois society. Colonial expansion produced three sometimes overlapping patterns: (1) the capitalists of the advanced country simply invested in colonial land-as illustrated even today by the practice of the United Fruit Company in the Caribbean; (2) the colonial planters were largely subservient to the advanced countries-as illustrated by the British West Indies before the abolition of slavery; and (3) the planters were able to win independence and build a society under their own direction-as illustrated by the Southern United States. The essential element in this distinct civilization was the slaveholder’s domination, made possible by their command of labor. Slavery provided the basis for a
special Southern economic and social life (Genovese 15).

The slave economy developed within, and was in a sense exploited by, the capitalist world market; consequently, slavery developed many seemingly capitalistic features, such as banking, commerce and credit. These played a fundamentally different role in the South than in the North. Capitalism has absorbed and even encouraged many kinds of "precapitalist" social systems:  serfdom, slavery, Oriental state enterprises, and others. It has introduced credit, finance, banking and similar institutions where
they did not previously exist (Genovese 19).

The defenders of the "planter-capitalism" thesis have noted the extensive commercial links between the plantation and the world market and the modest commercial bourgeoisie in the South and have concluded that there is no reason to predicate an antagonism between cotton producers and cotton merchants. However valid as a reply to the na´ve arguments of the proponents of the agrarianism-versus-industrialism thesis, this criticism has unjustifiably been twisted to suggest that the presence of commercial activity proves the predominance of capitalism in the South. Many "precapitalist" economic systems have well-developed commercial relations, but if every commercial society is to be considered capitalist, the word loses all meaning. In general, commercial classes have supported the existing system of production (Genovese 19).

In the South extensive and complicated commercial relations with the world market permitted the growth of a small commercial bourgeoisie. The resultant fortunes flowed into slaveholding, which offered prestige and economic and social security planter-dominated society. Independent merchants found their businesses dependent on the patronage of slaveholders. The merchants either became planters themselves or assumed a servile attitude toward the planters. The commercial bourgeoisie remained tied to the slaveholding interest, had little desire or opportunity to invest capital in industrial expansion, and adopted the prevailing aristocratic attitudes (Genovese 20).

The Southern industrialists were in a similar position, although one that was potentially subversive of the political power and ideological unity of the planters. The majority of planters and slaves on the countryside retarded the home market. The Southern landless white labor lacked the purchasing power to sustain rapid industrial development. The planters spent much of their money abroad for luxuries. The plantation market consisted primarily of the demand for cheap slave clothing and cheap agricultural implements for use or misuse by the slaves. Southern industrialism needed a sweeping agrarian revolution to provide it with cheap labor and a substantial rural market, but the Southern industrialists depended on the existing, limited, plantation market (Genovese 20).

The slave states paid considerable attention to the development of a conservative, stable banking system, which could guarantee the movement of staple crops and the extension of credit to the planters. Southern banks were primarily designed to lend the planters money for outlays that were economically feasible and socially acceptable in a slave society: the movement of crops, the purchase of land and slaves, and little else (Genovese 21).

Whenever Southerners pursued easy-credit policies, the damage done outweighed the advantages of increased production. This imbalance probably did not occur in the West, for easy credit made possible agricultural and industrial expansion of a diverse nature and, despite acute crisis, established a firm basis for long-range prosperity. Easy credit in the South let to the expansion of cotton production and low prices; simultaneously, it increased the price of slaves.

If the planters were losing their economic and political cold war with the Northern capitalism, the failure of the South to develop sufficient industry provided the most striking immediate cause. Its instability to develop adequate manufactures is usually attributed to the inefficiency of its labor force. No doubt slaves did not easily adjust to industrial employment of whites. Slaves did work effectively in hemp, tobacco, iron and cotton factories but only under socially dangerous conditions. They received a wide variety of privileges and approached an elite status. Planters generally appreciated the potentially subversive quality of
these arrangements and looked askance at their extension (Genovese 23).

Slavery led to the rapid concentration of land and wealth and prevented the expansion of a Southern home market. Instead of providing a basis for industrial growth, the Southern countryside, economically dominated by a few large estates, provided only a limited market for industry. Data on the cotton textile factories almost always reveal that Southern producers aimed at supplying slaves with the cheapest and coarsest kind of cotton goods. Even so, local industry has to compete with Northern firms, which sometimes shipped direct and sometimes established Southern Branches (Genovese 23-24).

The South’s greatest economic weakness was the low productivity of its labor force. The slaves worked indifferently. They could be made to work reasonably well under close supervision in the cotton fields, but the cost of supervising them in more than one or two operations at a time was prohibitive. Slavery prevented the significant technological progress damaged Southern agriculture, for improved implements and machines largely accounted for the big increases in crop yields per acre in the Northern states during the nineteenth century.

The planters were not mere capitalists; they were precapitalist landowners who had to adjust their economy and ways of thinking to a capitalist world market. Their society, in its spirit and fundamental direction, represented the antithesis of capitalism, however many compromises it had to make. The fact of slave ownership is central to our problem. This seemingly formal question of whether the owners of the means of production command labor or purchase the labor of free workers contain in itself the content of Southern life.


Genovese, Eugene. The Political Economy of Slavery. Rev. Ed. Hanover; Wesleyan University Press, 1989.