Did Slavery Benefit the US Economy?

Did the Southern states trail the North because slavery is bad for the economy?

WHEN writing about why Nordic countries still trail the US in GDP per capita I pointed to slavery as one of the factors. If you are curious about that claim, read my article discussing that subject more in detail: If Social Democracy Is So Great, Why Is the US Richer Than Nordics?

What I want to discuss in this story are some of the interesting counterpoints I got to that claim in the comment section. Historian David Wilson makes a good point:

Try visiting Charleston, South Carolina today. It is the city that most resembles what cities looked like in the 18th and 19th centuries. No skyscrapers… hardly any tall buildings at all. The principal city of the Deep South slave trade and the birth place of the Confederacy is an economic backwater even today.

What should we conclude from that? Rather than giving the US an edge over Nordic countries was slavery actually something that held back the development of the United States? I think the answer to that question is quite complex. I do believe slavery contributed to structural problems that the American South still struggles with. Problems that even America itself struggle with such as racism and the conflict between African-Americans and the white majority population.

However, I am less willing to concede that slavery did not benefit the American economy as a whole. To explain why I will call upon some of the observations economist Adam Smith made on slavery in his works the Wealth of Nations published in 1776 as well as explain why hot regions have generally had problems industrializing. If you look at world history the American South is hardly unique is an area that industrialized late. In fact it is a very common pattern.

Did Slavery Hinder the Establishment of Business in the South

Historian David Wilson argues that slavery made it hard to establish business in the South compared to the North:

It made no sense for free whites to start any business in the South that might have slave labor as competition as the slave economy would drive down the cost of goods compared…