an agrarian economy and a diversified economy. The South’s economy was based mainly on the production of cotton for export.  There was very little manufacturing.  By contrast, the North’s economy had a great deal of manufacturing and relatively less farming.  The farming that did go on in the North (and there was a great deal of it) was generally concerned with producing food for domestic markets. 

In these ways, there were two very important differences between the economies of the North and South before the Civil War.

The Civil War tore apart the United States during the period from 1861 to 1865 with a death toll of over six hundred thousand people. The legacy of this war shaped the future of the United States, including motivating amendments to the Constitution and solidifying regional identity. The Confederate States of America included South Carolina, Mississippi, Florida, Alabama, Georgia, Louisiana, and Texas. Remaining within the Union were the northern and Midwestern, and western states of Maine, New York, New Hampshire, Vermont, Massachusetts, Connecticut, Rhode Island, Pennsylvania, New Jersey, Ohio, Indiana, Illinois, Kansas, Michigan, Wisconsin, Minnesota, Iowa, California, Nevada, and Oregon.

The central difference between North and South was slavery, which was illegal in the North and legal in the South. Many Northerners were part of an abolitionist movement, often grounded in evangelical Christianity, that believed slavery to be morally wrong.

Another difference between North and South was that the South remained far more closely connected with the aristocratic traditions of England. Southern aristocrats owned vast plantations. The plantation economy depended on massive armies of cheap slave labor to produce crops such as rice, cotton, and tobacco. The economy of the South was fundamentally agricultural, which led to dramatic economic inequality, with vast wealth held by a small number of plantation owners and little opportunity for social mobility or middle class innovation and entrepreneurship.

The North was far more urbanized than the South. Although the North actually had higher total agricultural production than the South, much of it was based in small farms. The major wealth and economic development of the North was industry, especially manufacturing. The new Midwestern and Western states included substantial grain farms, livestock operations, and mining in their economies, but these were organized as individual or family operations that as they expanded, hired rather than bought laborers.

Finally, the South tended to advocate states' rights, to a large degree as part of their desire to maintain their historic traditions of slavery, while the North tended to favor a stronger federal government, a difference that persisted in politics through the twentieth century.