The economics behind the Civil War

[136or142]

Although I don't know if the Northern States would have ever let the Southern States simply secede, the problem was this was tied up with 'Manifest Destiny': The view that the United States should occupy the entire North American continent above Mexico and below Canada (sometimes Manifest Destiny included Canada.)  When Lincoln mentioned 'The Great Experiment' he was referring to a democratic republic, but I think he was also referring to Manifest Destiny.  So, leaving aside the issue of whether Lincoln and the Union would not accept the South seceding, there was the issue of the North American territory that was still unincorporated that both the North and the South would have laid claim to.  Given 'Bleeding Kansas' it's impossible to think that wouldn't have led to war anyway.  Likely the Civil War would have broken out before Lincoln was elected had James Buchanan not been elected President in 1856.
 
For anti slavery Northerners and for many Southerners there seemed to be for a long time a belief that the 'Peculiar Institution' would eventually wither away, especially after the abolition of the slave trade.In fact, this likely would have happened had it not been for the invention of the cotton gin that greatly lowered the cost of cotton milling and the price of the finished cotton and thereby greatly increased demand for cotton, especially in the U.K. Ultimately, the repeal of the Missouri Compromise and 'Bleeding Kansas' convinced many former moderate anti slavery types such as Lincoln that the South would never give up on slavery.  The battle over the unincorporated territories was very important because it played into North/South Congressional Balance of Power politics: under the Missouri Compromise, for every free state admitted, there would be one slave state.  This especially ensured that South would have the votes in the U.S Senate to prevent any Anti Slavery laws from passing.
 
The Southern States seceded immediately after the election of Lincoln before he even took office, but he attempted to compromise with them by supporting a Constitutional Amendment that would guarantee the continuation of slavery in the states where it already existed as long as slavery was not exported to any of the territories that had not yet been admitted into the Union.  The South turned it down.
 
Part of the reason for this seems to be that the South believed it could win the war as a result of bumper cotton crops for the preceding years while I believe India had poor cotton crops at the same time.  This meant both a great deal of southern cotton exports at the same time as these crops received high prices.  So, the Confederate States were confident in their chances based on their economic fortunes.
 

[136or142]

My views as to the ideological beliefs and the economics in the U.S South that led up to the Civil War.
 
As I've written previously, history is largely a clash of competing ideas.  Many Northerners regarded slavery as abhorrent, but the South had an answer to that:  "While we don't pay our slaves, we provide them full security with room and board.  We care for our slaves.  What do you do?  You pay a worker a wage for hours worked, and then you say 'you're on your own.' Your 'wage slavery' is much more abhorrent than our 'negro slavery."
 
From essays, novels, poems... published at the time, this seems to have been an extremely common view at the time in the U.S South.  I don't think people today fully appreciate how widely and deeply held this view was in the U.S South, and, for them, how much it justified slavery, even aside from various Biblical passages and Social Darwinian views that came from Calvinist or Southern Baptist religions.
 
The economics in the U.S South is very interesting because I think what was going on was a clear attempt by the wealthy plantation owners to cement their status permanently as the dominant interests in the South.  This involved both keeping the U.S South as a single industry economy (of course, cotton with some tobacco) and engaging in what is now called 'regulatory capture.'  Regulatory capture occurs when existing players in an industry are able to push for regulations or rules that keep new competitors out.
 
The data is fairly clear behind this, though my conclusions can be separately challenged.  Because immigrants to the United States did not want to compete against slave labor in the South, a full 7/8 of immigrants (mainly from Europe at that time) immigrated to the U.S North, so the South was falling significantly behind the North in population growth.  Although there are arguments that the U.S South was geographically especially well suited to agriculture, that didn't mean that other industries couldn't have thrived.  There are presently large forestry concerns in the U.S Southern states, I don't see any reason why they could not have existed prior to the Civil War.  In fact, there were some attempts, but I gather the Southern slave owners were reluctant to use their slaves to cut timber.  Also, paying 'free whites' to cut timber would have been out of the question due to the ideology of 'wage slavery.'
 
Similarly, AFTER the Civil War a large number of cotton mills were opened up in the U.S South.  The same wet conditions that made the U.S South great for agriculture also made it great for cotton milling, and, very likely, other manufacturing.  I know there were some slaves who worked in cotton mills in the U.S South, but contrary to the view that free slave labor would make these Southern Mills dominant, in fact, the greater technology in the Northern mills made them dominant and far more economical.
 

[136or142]

However, I don't think the wealthy plantation owners cared about forestry or manufacturing because they dominated cotton (and tobacco) production.  Why risk allowing 'wage slaves' into the South to develop forestry and manufacturing?
 
So, what this did is it guaranteed that, as long as slavery existed in the U.S South, the wealthy plantation owners would remain dominant.  As we've seen at various times, for instance at present with mining in Australia and, here in Canada, with Alberta with oil, when there is a dominant single industry, people come to, not only feel dependent on it, but feel that their lives are directly connected to the industry and the industry's corporations.  So, even the many non slave owning white voters in the South became convinced that the interests of the Wealthy Plantation owners and their interests were one and the same.  Of course, this also explains why so many non slave owning white Southerners wanted to secede and why they were also willing to fight the Civil War.
 
In regards to regulatory capture, the maintaining of slavery itself was the main one.  As long as so few European whites were willing to emigrate to the U.S South, it was impossible to expect investors either in the North or, possibly overseas, to invest in, for instance, forestry or manufacturing businesses in the U.S South. So, this barrier to entry for new investment into the South guaranteed the continued dominance of these existing wealthy plantation owners in the Southern States.
 
In regards to specific examples of wealthy Southern plantation owners engaging in regulatory capture, I think by far the best example was that when Southern religious revivals turned some white Southerners against slavery, laws were passed to outlaw anybody in the South, Southern or Northern from speaking or writing pamphlets against slavery.  Interestingly, the Southerners also tried to get these laws passed in the Northern States, which kind of shows how false the idea of 'states' rights' being the 'real' reason for secession is.
 
The net effect of this was that White Southerners who opposed slavery either chose to or, sometimes, were compelled to leave the South.  So, this ensured that pretty much only White Southerners who supported slavery (or at most remained silent) remained.
 
The data is also quite clear that, although the wealth of the U.S South tended to fluctuate greatly as happens with a 'boom/bust' dominant single industry, the U.S South share of GDP per person (GDP per capita) had been declining as a total share of U.S GDP per capita, meaning that white U.S Southerners were getting poorer and poorer relative to Northerners.  
 
I think this clearly shows the power that ideology ('wage slavery' is evil) and dependence often have on people, even when it means identifying with and supporting the people that were keeping them in increasing relative poverty (the wealthy plantation owners.)
 
Of course, I don't know if these wealthy plantation owners would have recognized that they were engaging in regulatory capture, but I think there is no question they realized that slavery created a barrier to entry for potential competitors to their power positions and they didn't care that it made their fellow white Southerners increasingly relatively poor and dependent on them.

[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.