were interpreted by Fogel and Engerman as involving not low income for the South, but abnormally high income for the northeastern section of the United States. That the South was far behind the North in industrialization and manufacturing was consistent with the South having a comparative advantage in agriculture in that period.
A major finding from the continuing research on the period after slavery in the southern United States is that the economic well-being of the former slaves actually decreased. Research by Atack and Passell suggests that the decline in economic performance in the South after the Civil War was due to a lack of flexibility in making the economic transformation out of agriculture.
The South's unimpressive economic performance in the first postwar decade was almost inevitable. Free African-Americans could not be expected to work like slaves. Nor could the South control the declining fortunes of cotton in the world economy. In part the continuing misery of African Americans after emancipation is attributable to economic exploitation and to racial discrimination in everyday life. But the great portion of blame must go to the failure to provide ex-slaves with property comparable to that of landed whites or to provide access to the education and jobs vital to social mobility ( Atack and Passell 1994:400).
We have presented the views of the Classical economic school on the question of profitability in a slave-using economy, along with recent empirical research on the topic of slavery in the antebellum South. The Classical economists were aware that slavery could prove profitable in the short run. The limitations that Cairnes theorized for the system of slavery are still valid; however, the correctness of his assumptions as they relate to the southern experience are in question. Given the constraints on the system identified by Cairnes, slavery should theoretically become unprofitable and deteriorate in the long run.
Recent studies by Conrad and Meyer ( 1964), and Fogel and Engerman ( 1974) conclude that slavery in the southern United States was profitable. Slavery returned a normal profit to entrepreneurs. The indictment that slavery retarded southern economic development, therefore, would tend to be illogical. The question becomes whether slavery was the appropriate system to adopt in order to develop the South's economy. This is the question that Classical economists were concerned with in their analyses.
The Classical economists differed to some degree on the minor details as to when and under what conditions slavery would prove profitable to the entrepreneur; however, they all saw slavery as a barrier to long-term economic advancement and believed it would create major problems for society once it became unprofitable to the firm. Thus, the Classical economists condemned slavery as a major step backward for economic and social development. Society would experience tremendous social costs associated with improving social and economic conditions and opportunities for ex-slaves in a society still wrought with racial prejudice and discrimination.