Slavery was a crucial determinant of the economy and society of the South during the colonial period. It was the economic enabler of the plantation system, large-scale farms owned by wealthy slave-owning aristocrats raising cotton and tobacco primarily for export. Because the plantations were mass producers and could afford to buy up large amounts of arable land, yeoman, or small farmers, could not compete, giving rise to a highly stratified society consisting of aristocratic extremely wealthy planters on the one hand and slaves, indentured workers, and other less fortunate people, on the other side.
The plantations, although initially allowing the South to be wealthier than the North, were, in the long term, a drag on the economy, grounding it in low-value agricultural production and export of raw materials, while the North, less blessed in natural resources, developed a strong manufacturing industry.
The long term social legacy of the plantation system was extreme social stratification by wealth and color and an economy which, until the 1950s, tended to look backwards towards raw material production rather than forward to the Industrial Revolution and subsequent growth in industries higher on the value chain.