In the decades prior to the War between the States, the North and the South took very different paths. The North, with a long tradition of merchants and manufacturing, industrialized. The South, long the storehouse and producer of the nation's food supply, did not. Also by this time, most of the North had abolished slavery and involuntary servitude outright and emancipated the former slaves. The South had not. Are these two events related? Is there any connection between industrialization and slavery? Between slavery and stagnation? Yes! The North industrialized precisely because it regarded the institution of slavery as immoral. If it had retained the right of one person to hold another in bondage, it would not have industrialized as successfully as it did. Similarly, the South never achieved prosperity because of its promotion of slavery. The institution of slavery presupposes assent to three premises: that men can be a means to an end, that the government grants you individual rights and can take them away at will, and that man's mind is irrelevant. The first two premises follow from the last one, but they are all too significant to be left untouched. The South qua slaveholding region accepted these three premises and never was able to industrialize to the extent the North did.
It is important to understand the nature of production before we can examine the economic systems of the two regions of the United States generally and the slave system of the South, in particular. What is production? It is the application of man's mind to man's need to survive. Man's survival is not guaranteed; one must eke out one's existence against the elements. Animals do not have this problem since they operate on instinct. When their stomachs growl, their instincts tell them what is and is not food. When man is hungry, there is no similar instinctual mechanism. He must first discern what the sensation means. Then he must understand what would satisfy that sensation. Finally, he must devise a plan to acquire food (or, in modern society, make it) to satisfy it. On the simple level of survival, the importance of thought is readily self-evident. As societies evolve into more complex interrelationships, the role of thought—and the mind—becomes more and more important, but less and less obvious. Typically, first, you have an inventor who creates something where a void had existed previously. For example, in 1814, a Englishman named George Stephenson invented the modern railroad locomotive. At this point, the role of the mind is unmistakable. This product would never have existed without the ingenuity of Stephenson's mind. Later, entrepreneurs saw the promise of the locomotive. They established companies to utilize Stephenson's invention to solve the problem of transportation. They exchanged a passenger's or shipper's fare for conveyance. Thus, the entrepreneurs were able to survive and flourish through the use of their mind. The passengers were able to survive and flourish through the use of their's, since they had used their minds to earn the wages to pay for their fare. In short, at every stage of the economy, production depends on mental effort. But, since survival is not automatic, production is not either. It depends on the ability of the mind to gather observations, develop hypotheses, and act on its thoughts. Thus, there are requirements for the successful use of reason, namely that the mind must be free. Any element of force negates the mind. For example, when a mugger points a gun at you and insists that you give him your money, the mind must evade the knowledge that it is your money and that he has no right to it. Similarly, on a much grander scale, if the government tells you that you must pay them income taxes, your mind has to ignore the facts of reality; viz., the government has not earned the right to your money and that to say otherwise is to support robbery.
The political implication of this important principle is individual rights. If man survives and flourishes through the use of his mind, then the proper function of government is to insure that conditions are such that the mind remains uninhibited. The government must protect the rights of life, liberty, and property because they represent the metaphysical requirements of man's mind. Man's mind requires that man be able to pursue survival, that is, life. Man's mind requires that he be able to be free to act on whatever his reason dictates so long as it does not involve the coercion of others, that is, he must be at liberty. Finally, man's mind dictates that man be able to keep the fruits of his mind's labors, since property enables man to survive. Thus, the system of government which protects individual rights is the system which protects man's mind and furthers man's capacity for survival. And that system which protects man's mind is the system of government which fosters production. Conversely, any system which does not recognize individual rights inhibits production.
This is exactly what happened in the South. The governments and people of the Southern states did not recognize the inviolability of man's mind. They believed that labor and industry required nothing but muscle. The aristocratic, landed gentry lived lives of opulence and idleness while their black slaves tilled the fields and picked the cotton. The yeoman farmers, those entrepreneurial farmers who relied on their minds to increase production, that had always been a part of Southern society had moved on to the West. These same governments were also among the most proactive ones around in that they were based on the political philosophy of Thomas Hobbes. Hobbes believed that people, if left to their own devices, would soon become mired in conflict. Therefore, they enter into a social contract—giving their rights up to the government—in order that their society may be ordered and orderly. The government then grants them rights as citizens of that government and these rights may be taken away should the government so desire. In short, Hobbes believed in the absolute State. Slavery, Law, and Politics mentions the instance of a law regarding free blacks in South Carolina. After an insurrection was discovered and quashed, the liberties of any free black were similarly crushed. When a vessel came to port, all the black crew members were summarily arrested and held in jail until their ships left port. Examples abound of the abrogated rights of both free blacks and enslaved blacks. Blacks did not have freedom of movement or freedom of association. They had but limited property rights and could be executed for trying to secure their liberties. The Southern government not only did not recognize individual rights, but they did not recognize blacks as individuals. They saw blacks as means to their ends. They were literally regarded as chattel. In reality, blacks had (and still do, of course) the same minds and rationality that the whites did (and still do, of course).
This philosophic evasion was the direct cause of the South's relative poverty. Because they did not recognize the import of the mind, they could not understand the method of production. Because they did not recognize that men are ends in themselves, they could not discover the trader principle—that two people exchange goods for mutual benefit. Because the Southern governments did not recognize the metaphysical nature of individual rights, their political systems could not promote industrialization. The South became stagnant, just as an individual does if he does not use his mind.
This stagnation was confined to the South because the North was much more aware of the political responsibilities that come with industrialization—freedom is to be protected at all costs. To be sure, the North was not fully consistent and would have prospered even more if it had been. The times being what they were, we could not have expected more from the Northern states. The economic system of the North rewarded productivity by the profit motive; the Southern economic system punished unproductiveness by the whip.
The preceding paragraphs explicated the philosophical reason why the black slavery system of labor was established, why it expanded, and why it was confined to the South. But there were many other factors. The climate and soil of the North was ill-suited to extremely large and profitable crops, which necessitated large numbers of field workers. The North had a large enough labor pool already. The South developed the plantation system, which required large amounts of land and labor. Also, racism was much more prevalent in the South. Finally, in the colonial period, the King and Parliament deemed that slavery should exist primarily in the South. These factors are all well and good, but they do not really answer the 'why' of the aforementioned questions—they do not examine the philosophic underpinnings of the institution of slavery.
But why did such a horrible institution last for so long? Slavery was not abolished until the Fourteenth Amendment in 1868. The Northern states had long recognized the immoral nature of servitude, most of them having abolished the institution by 1800. The reason: slavery was such a hot issue at the Constitutional Convention in 1787 and the philosophic argument against it was not entirely formulated, that the Founding Fathers neglected to categorically reject the institution in the new Constitution. As such, the Southern delegates got language inserted that was, in fact, rather agreeable to the institution of slavery. For example, the Southern states argued that the Constitution's enumerated rights applied only to citizens of the United States. They further contended that the blacks were not really citizens and could not, therefore, enjoy the liberties that full citizens enjoyed. They also got the odious institution officially recognized in the apportionment clauses of the Constitution. Finally, they were able to appeal to the Constitution when a slave escaped: there was a clause in Article IV that was essentially an ambiguously-worded fugitive-slave law. But all these Constitutional provisions simply allowed the institution of slavery to exist and flourish. Many slave owners, particularly in the years prior to the Civil War, believed that the federal government actually had a responsibility to protect slavery. They believed that the Constitutional duty to "insure domestic Tranquility" meant that any internal turmoil that slavery produced was inimical to the Constitution. Therefore, the government must quell abolitionist propaganda. In fact, the Congress did just that. For many years, the "gag rule" was law—abolitionists could not seek a vote on the elimination or limitation of slavery. To an extent, suppressing abolitionism did insure domestic tranquility. When the "gag rule" was lifted, the Civil War soon followed. Surely, the abolitionist movement did not cease to exist, but it did not have a voice. And without a voice, the abolitionists were powerless.
The North and the South's economic systems were consequences of the philosophies that dominated their cultures. There were many factors that influenced the form of those consequences, but the prime factor was the role of man's mind in the two disparate economies. The South, being agricultural and stagnant, did not recognize the crucial part the mind played in production. The North, realizing the mind's importance, industrialized and became the industrial heart of the United States for most of its history.