What was the impact of slavery on the southern economy?
Slavery was very important to the southern economy. The majority of slaves worked in plantation agriculture but many had other occupations such as butlers, maids, seamstresses, carriage drivers and stable hands. These are jobs that white people would not do-slaves kept the economy going. They made little or no money while the plantation owners became wealthy.
The cotton gin was also significant to slavery and the economy:
The invention of the cotton gin in 1793 gave slavery a new life in the United States. Between 1800 and 1860, slave-produced cotton expanded from South Carolina and Georgia to newly colonized lands west of the Mississippi. This shift of the slave economy from the upper South (Virginia and Maryland) to the lower South was accompanied by a comparable shift of the enslaved African population to the lower South and West.
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It also depends on what time frame you are referring to, as colonial slavery prior to 1750 was much different than than the King Cotton slave economy of 1800 - 1865. In both cases though, reliance on slave labor for agriculture prevented the South from diversifying economically and put them at a growing disadvantage with the North.
We also have to admit that slavery created a small but very wealthy and powerful class of landowners in southern states that were to have a huge effect on the formation of the country in the early years (many of the Founding Fathers were Virginia slaveholders) and the direction of expansion and sectional tension in the 1800s.
With cotton becoming the dominant crop in the South by 1820, the US became the leading exporter of the crop to England's textile mills, giving the South a steady supply of income, and a potential ally when the Civil War came.
Slavery had a stranglehold on the Southern economy. The agrarian culture of the South made it a necessity to have manpower to work and harvest the crops of the fields. When Whitney's invention of the cotton gin was introduced to the South, more cotton could be picked and produced. This increased production, but also increased the need for more slaves to work the fields. As more slaves were present, more cotton was produced, leading to more more money being generated, increasing the ability to purchase more slaves. The cycle continued for decades in the South, leading to a greater dependency on slaves and slave labor. This might be one of the reasons why the support of slavery was more economic than anything else.
The obvious answer is that slavery was the basis of the southern economy. Most of the wealth of the South came from the crops that the slaves grew.
Beyond that, there is a great deal of controversy. Historians disagree as to whether slavery was good or bad, economically speaking. Some historians argue that slavery actually retarded the growth of the South's economy. They say that it encouraged farming over industry and that it discouraged the invention of labor saving devices that would have made the plantations more productive and the South richer.
The economy of the South was dependent upon slave labor. There were not enough whites willing to do the grueling work required to grow the cash crops (tobacco, cotton, rice, indigo) that enabled the Southern economy to grow. It was the dependency of the South upon slavery that in part led to the Civil War; they were incapable of giving up their labor while maintaining a profit.