Economics of SlaveryThe profitability of the slave trade to Europeans has been debated by historians, yet even if this aspect is contentious, the productivity of slave labor is undeniable. Further, the controlled labor of millions of people has been linked, directly or indirectly, to the rise of European industrialization, capitalism, the scientific revolution, rapid population growth, huge migrations, and changing social roles for men, women, and children, to name just a few. For example, one historian has suggested that the increase in British textile exports to West Africa during the eighteenth century, in order to pay for increasingly expensive slaves, was a factor which lead to British industrialization. The benefit to European nations from new crops, especially sugar, owed its development and expansion to the labor of African slaves, at the expense of Africa and the slaves themselves. It is difficult, therefore, to underestimate the benefits gained from the use of slaves in the New World.
From the middle of the seventeenth century to the start of the Civil War, slavery and commercial agriculture were intimately associated. During the colonial period, slaves grew much of the tobacco in Virginia and the Carolinas, rice in the low country of South Carolina and Georgia, and sugar on the Caribbean islands—all crops that found their way into world markets. Neither southerners, who used slaves as field laborers and servants, nor northerners, who supplied slaves and food to the southern and Caribbean plantations and consumed the products of slave labor, questioned the economic value of slavery. By the late eighteenth century, however, some southern slaveholders began to have doubts. Deteriorating tobacco lands and declining prices for southern crops seemed to be transforming valuable slaves into what George Washington in 1794 called "a very troublesome species of property."
Ironically, Washington wrote just as Eli Whitney began production of his cotton gin, an innovation that would begin the expansion of cotton production and end any slaveholders' doubts about the economic value of slavery. The growing demand for cotton from European and northern mills drove prices up and drew settlers west seeking new lands on which to grow the staple. Cotton rapidly became far and away the nation's most valuable commercial crop during the antebellum years. Although cotton was grown on family farms, the amount was small, limited by the labor force of family members and their need to produce food also. Those using slaves could increase output and their income, which allowed them to buy more and better land and more slaves to increase production even further. As a result, slaves grew most of the cotton (as well as the other southern staple crops—tobacco, rice, and sugar), the largest proportion on plantations with a slave labor force that numbered in the tens or hundreds.
Slavery seemed enormously profitable. Cotton exports alone constituted 50-60 percent of the value of the nation's total exports, helping pay for imports from abroad. And slave labor provided the raw material for New England's textile mills, helping stimulate the nation's early industrialization. Slave-produced commercial crops required a host of middlemen to sell and transport them to markets and to finance and supply the slave-owning planters. Southern cities such as New Orleans, Mobile, Savannah, Charleston, and Memphis and northern ports such as New York, Boston, and Philadelphia depended heavily on the southern trade. Northern farmers and manufacturers found ready markets for their products in southern towns and cities, but especially on the southern plantations.
If the products of slave labor stimulated the nation's economic development, the slave South itself remained primarily agricultural and did not experience the urban and industrial growth that took place in the North.
A major text on the economics of slavery is: Robert William Fogel and Stanley L. Engerman, Time on the Cross: The Economics of American Negro Slavery. Boston: Little, Brown and Company, 1974. These scholars argued that: