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What was the basic difference between the economy of the North and the economy of the South?

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I am going to assume that this question is asking about the differences in the economies of the northern and southern United States during the Civil War. Prior to the Civil War, the South was the big money maker for the United States in terms of exports. That main export was cotton, and by 1840 it was worth more than all of our other exports combined. Unfortunately, the South lacked in other areas. The South had minimal manufacturing capability, about 29 percent of the railroad tracks, and only 13 percent of the nation's banks. Additionally, most of the South's economy was tightly tied to...

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the-excellentclare | Student

In addition to the engrained ideological and societal differences that plagued the North and the South, the two regions also shared major economic differences. The key difference was the South’s dependence on an agricultural based economy driven by slave labor and the North’s dependence on a commercial and manufacturing economy driven by free labor.

As the northern states began to shun slavery from the late 1700s and the early 1800s, the economy also started shifting from agriculture to manufacturing buoyed by European immigration into America, and more specifically into the northern states. European immigrants were more attracted to the free northern states rather than the slavery-dependent southern states, with only one in eight immigrants moving to the South. Most of these immigrants moved into urban areas, providing labor and instigating the growth and success of machine-tool, food-processing, railroad equipment and farm-machinery factories among others. Contrary, the southern states continued to rely on a slavery-driven, agricultural economy which was buoyed by the profitability of cotton. The South did not need to embrace industrial development, the slave economy was extremely profitable and cotton prices were historically high in the early 1800s leaving the South tremendously wealthy.

In essence, the basic economic difference between the South and the North was built on each region’s reliance on the “slave labor” and “free market” economic structures respectively.

scotty3097 | Student

Essentially, the most basic difference between the Northern and Southern economy was in labor and production.

The North had a more diversified economy based on manufacturing a variety of products. In the years leading to the Civil War, the North had begun to feel the effects of the Industrial Revolution. Although much of the region had been industrialized, agriculture remained important. In comparison, the South's economy was largely based in agriculture, specifically cotton. Cotton was an vital cash crop that was produced, for the most part, in the South. However, it was rarely, if ever, manufactured there.

In terms of labor, there was a clear distinction between the North and South: slavery. The North allowed slaves in the early history of the United States, however it was abolished completely by 1804. The North then worked with free labor, meaning that employees had the freedom in choosing positions and reaching success. Conversely, the South worked off slave labor. Slave masters did have to buy their slaves (they were expensive) but they did not have to pay slaves.

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