Econ 1740
Kevin Smith

Economics of the Civil War
By Bailey Smith
April, 2016

As one of the foremost studied historical topics of the United States of America, The Civil
War has been looked at many different angles. Much of the interest of that time period has been
the war itself. How the battles were waged? What would have been the outcome of the battle/war
if this or that happened? The topics of slavery, the industrial situations of both the north and the
south and the political tension has also had their time in the spot light. There is one side that I
have not heard much about when regarding that time in the country’s history. The economy of
the south; which consists more than just cotton and slaves even though those are the biggest
contributors. On learning more about the economic situation of the South, it is easier to
understand why the southern states seceded and eventually fought against the ideas that forced
upon them.

During that time period the northern states economy ran on industry such as; textile mills,
foundries, factories and the railroad. Not much was put into the agriculture section. This allowed
them to start making an easier way of living that allowed them to focus on bettering others.
When we look back that is one of the main reasons the north ultimately won the war. Since they
had the resources to have better equipment and supplies and the ability to get them to the troops

While in the southern states, the cornerstone of their economy was. Mainly the growth and
production of cotton, sugar cane, and tobacco. Without the technological advancements that we
have today; the only effective way to tend to the crops was that of manual labor. Due to the rural
nature of the southern states there was simply not enough people and not enough economic

wealth to pay for the number of workers required to produce the final crop in a reason able and
profitable sense. The simplest way to resolve the problem is use the concept of slavery.

There was still a cost for the implementation of slavery. In order to have an efficient large
acre plantation, it would need 50 or more. With the average cost of a prime unskilled male being
priced around $1,800 back in the 1860’s. In today’s monetary worth that is around $37,000.
When you multiply that by the amount needed (37,000 X 50) it totals at $1.850,000 per man in
today’s money. As you would imagine after making that kind of investment, security and living
quarters would be needed. For the southerners that were not employed in their own fields, or in
the transportation of goods. Slavery provided some employment opportunities such as Guards
and traders. Even though these jobs are looked down upon now they were a necessary part.

Another little known fact about the civil war, that I feel should be included in this discussion,
is that most of the men that fought did not even own slaves. They knew that if slavery was made
illegal the it would nearly kill their economy. If it wasn’t for the use of slavery, the southern
economy would struggle to stay afloat. After learning about the value of the slaves and the
important role that slavery had for the southern way of life; I began to see why the southern
states were feeling man handled by the north. In order to keep the best way of producing their
cash crop along with, not being bullied the south sought upon themselves to become their own
country. In conclusion, slavery did play a role in the civil war but it wasn’t for the better
treatment of the slaves.


Works cited

Numbers of slave’s worth provided from Walton, G. M., & Rockoff, H. (2005). History
of the American economy. (10 edition) Mason, OH: South-Western Cengage Learning.