South of the Potomac an aristocratic system of land ownership emerged early on in America.

Old South Culture

South of the Potomac an aristocratic system of land ownership emerged early on in America.

Seventeenth-century immigrants included many indentured servants who were awarded 50 acres after working seven years.

They were replaced by slaves in the 18th century who were likewise awarded 50 acres, which were taken by captains of the ships bringing them from West Africa.

Land speculators then consolidated these parcels into large plantations, which were more efficient-sized productive units.

Cotton and tobacco agriculture were labor-intensive, could be performed by unskilled labor, required year-round, grueling labor in sub-tropical, malarial conditions. In short, no free person would do it.

Eli Whitney’s cotton gin (1793), increased productivity ten fold, which enabled the South to supply the booming British textile industry.

Cotton soon became “King,” displacing tobacco and thereby shifting slaves to cotton production.

By 1850, there were 3,204,000 slaves in the South, 1,815,000 engaged in cotton production.

Socially, the plantation economy discounted the commercial values thrift, prudence, enterprise, and progress; it exalted qualities of magnanimity, command, manly prowess, and physical courage; and it adopted a cult of chivalry and a code of dueling to enshrine these values. (Think of all those dandies ((grandees)) at the pre-war ball in “Gone With the Wind.”)

Southern social philosophy included holding country-gentry ideals, conservative values of status in a fixed social order, stability rather than progress, and more interest in maintaining a way of life than accumulating wealth.

This emphasis was almost inevitable in a region where one-third of the population was in a position of fixed legal subordination.


The war shattered an entire generation of young men in the South with one-fourth to one-third of their young males being killed or wounded.

In 1866, Mississippi spent one-fourth of its revenues for artificial arms and legs.

It also destroyed their economy. Slaves were no longer available free, the land was overgrown with weeds, and factories and railroads were destroyed.

Owners had lost $2 billion in slave property — their principle form of wealth.

Owners emerged from war without money to pay wages, and former slaves were free but poor.

Consequently, they adopted share cropping, a legal form of slavery. (Postcards shown here were given propaganda captions in an attempt to create the myth of sharecropping being an idyllic lifestyle for African Americans.)

With new constitutions, southern states passed “Jim Crow” laws to keep African Americans politically, economically and socially subordinated.

The North prospered from war with their per capita wealth doubling 1860 to 1870, while the south’s was halved in that interval.

The institution of slavery was replaced by three institutions: the economic system of sharecropping, the political system of one-party politics, and the social system of segregation, supported both by law and by custom.

Until 1932, the south remained an impoverished and undiversified region.

War’s Costs

The Union engaged 2,772,448 troops in the war, of which 385, 245 were killed or wounded.

The CSA engaged 1,234,000 troops, of whom 94,000 were killed.

It was estimated that the Civil War cost the North $2 million a day for a total of $6.1 billion by war’s end, of which $2.18 billion was borrowed.

Lincoln’s Role

Lincoln led one of the most remarkable periods of legislation in Congressional history.

It led directly to the sound financing of the war and the 35-year period of prosperity in the nation that followed.

The Homestead Act (1862) opened the West to small farmers and 1862-64 Congress promised as much as 100,000,000 acres to subsidize land-grant railroads connecting the Mississippi and Gulf with the Pacific Coast.

The Morrill Act (1862) established land-grant colleges.

Southern agriculture languished after the war. Cotton was hit hard by the boll worm and lack of capital to invest in the latest farm machinery.

Northern agriculture prospered aided by the USDA (1862).

The North financed the war primarily by passing the nation’s first progressive income tax with the Revenue Act of 1862.

As Adam Smith, intellectual father of free market capitalism, wrote in “The Wealth of Nations,” “The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities.”

Tax revenues combined with bank loans from state banks laid the foundation of the National Bank Acts of 1863-64 which provided a basis for economic growth following the war.

Lincoln’s Memorial

The best memorial to Lincoln is not the edifice of that name in Washington but the era of national growth and prosperity that occurred as a result of his policies and programs called the “Gilded Age” (1865-1900).

The reasons for that are to be found in recent research on the Wealth of Nations flowing from comparisons of modern nations.

Wealthy countries are so because of inclusive political systems supporting inclusive economic systems.

Countries that don’t grow and gain wealth have extractive political and economic systems for the benefit of the few.

The old south’s political culture was “traditional” e.g., paternalistic, reflecting an older, pre-commercial, pre-industrial attitude that accepts a hierarchical society as part of the ordered nature of things.

It was similar to developing countries today having exclusive political and extractive economic systems in which political power is confined to a small and self-perpetuating group drawn from an established elite who often inherit the right to govern through families ties or social position.

Consequently, there is high income and wealth inequality.

He began and ended a man of the people — all of them.


Acemoglu, Daron, and James A. Robinson, “Why Nations Fail: The Origins of Power, Prosperity, and Poverty,” NY: Crown Business Books, 2012, 428-31.

Eleazar, Daniel J., ‘American Federalism,’ NY: Harper & Row, 1972, pp.99-104.

Encycopaedia Britannica, University of Chicago, 1966. Vol.1, 376-81; Vol.21, 39-42.

Gillon, Steven M., “10 Days That Unexpectedly Changed America,”NY: Three

Rivers Press, 2006, pp.94-6.

Lepore, Jill, “Tax Time,” The New Yorker, November 2012, 24-30.