The economics behind the Civil War

[Southern Senator North Carolina Yankee]

You are correct and I made similar posts a few months back on the history board, though I didn't emphasize regulatory capture, the simple fact of the matter is that slavery restrained economic development and diversification. The context of my previous posts was that of a victorious Confederacy and refuting the notion that it was would be anything other than an economic backwater and an increasingly repressive regime at that. There is no way the South's plantation based resource (Cotton) dependent economy would not have been left in the dust by the major industrial powers of the era, including especially the Northern United States. As steel, urban expansion and railroad building became the dominant economic activities, leaving textiles a matured and largely First Industrial Revolution industry in a Second Wave Industrial Revolution World, the resource production to supply it would of course yield less and less a share of the economic pie over time. The South would struggle to produce large quantities of coal with its economic system and the dominance of the plantations, which would remain dominant and yes the owners would remain rich, which would dissuade them from changing. But it is likely controlling a small sandbox and dominating it while everyone else's sandbox gets bigger.

The point you make about repression of opposition to slavery is important. A slave society is by nature a totalitarian state because it rests on holding a large percentage of the population against their will. This means you cannot speak, write, preach or assemble for a position that might risk a slave revolt. It also means you can be compelled to join posses to round up escaped slaves. It rests heavily on government support to be maintained and it crowds out competing economic sectors for investment and deprives them of workers since they cannot compete with slaves.

This would get worse and the number of whites in the middle and lower classes would decline over time as they moved to the United States to take factory jobs or to the West to build farms. Eventually, you would reach a point of no return where the proportion of slaves to owners would be so much that you would see frantic attempts to either attack the Western US or Mexico to try and spread out the slaves and avert becoming a redux of Haiti in the 1790's.