Several people [NG, David Hawthorne] have posted lengthy, thoughtful comments on this tutorial, which at some point I should like to address. This interim digression is meant to speak to an interesting question that was not raised, but that may well have occurred to readers of the tutorial. To put it simply: Inasmuch as the wages paid to free laborers in the North were, for the most part, no more than subsistence wages, and since the slave owners had to protect their very large investments in slaves by feeding, clothing, and housing them at least well enough to keep them working, what economic difference did slavery make? It was, after all, common for radical critics of capitalism to refer to "wage slavery," and there was a great deal of truth in that epithet.
A number of economic historians have addressed this question, none more suggestively, in my limited experience, than Yale Professor of Economics Gerald David Jaynes in his 1986 book Branches Without Roots. Let me summarize briefly two of the important points that Jaynes makes. First of all, agriculture is a seasonal enterprise. One plants in the early Spring and, if all goes well, reaps a harvest come Fall. Thus agricultural capital is invested -- tied up -- for six months or more. This is in striking contrast with manufacturing, in which the turnover of capital is typically quite short. The Southern plantation owners, although they might live large and feature themselves great men, were in fact from an economic point of view small business owners with very little spare capital. It was the rare plantation that had as many as a hundred slaves. The owners lived [albeit well] from harvest to harvest. While the crop was in the ground, the plantation owner had to lay out money for seed and equipment, as well as for the food, clothing, and shelter required by his slaves.
What the plantation owners did, typically, was to take out a loan [or, in the lovely phrase used by Jaynes, "to hypothecate a loan"], payable at harvest time. To secure the loan, they pledged their slaves. [Not their land, for to do so was to risk, in a bad harvest year, losing the land itself on which their wealth and social position rested.] Once the Slave Trade came to an end in 1808, as required by the US Constitution, the only source of slaves, save for some illegal importation, was the internal slave market and the procreation of the slaves themselves [or the rape of slave women by their masters, which was a common and lucrative practice.] The market price for slaves rose steadily, and by the middle of the nineteenth century, it is estimated that fully one-half of the entire wealth of the Southern states consisted of slaves!
Thus the economic structure of the Southern economy was quite different from that of the Northern states. There were many, many slaves in the North, of course. Indeed, at one point New York City had more slaves among its residents than any other city in America. But the Northern economy, although it included slaves, was not a slave economy. The Southern economy was a slave economy.
Before the Civil War, the South was far and away the wealthiest region in the United States. When four million enslaved men, women, and children walked into freedom, they carried with them in their own persons half of the wealth of the South. The South plunged into economic depression, and it was almost a century before it recovered its economic strength, but even then, it never regained its preeminence as the wealthiest region in the country.
A second difference slavery made was in the organization of agricultural production. The owners of the larger plantations developed a gang system of field work that was, in a way, quasi-industrial in its organization. Slaves would be lined up at one end of a field and driven down the rows of cotton by slavedrivers wielding whips [and not, Henry Steele Commager and Allan Nevins to the contrary notwithstanding, "letting the lash fall lightly on their shoulders."] This was brutally hard work, but efficient and productive, and inasmuch as the slaves were the legal property of the plantation owners, they had no recourse against the practice in law or public opinion.
When the slaves were freed, the plantation owners faced the problem of securing a work force to plant, tend, and bring in the crops. The plantation owners very quickly discovering that their former slaves had less love for their ole massas than they had fancied, they tried offering them wages. But it there simply were no wages they could imagine themselves offering that could persuade the freedmen and freedwomen to return to the old gang method of field work. Some sort of solution was worked out, of course. After a brief, heady period of Reconstruction, lasting little more than a decade, the Southern Whites enacted a system of oppressive Black Codes that effectively reduced the newly free workers to a form of quasi-slavery that lasted almost a hundred years. Sharecropping, debt peonage, and chain gang labor kept Southern agriculture going, but not at the ante bellum levels of profitability.