The Misconception That Slavery Built the South's Economy

In his Selma anniversary speech,  President Obama got the loudest applause when he said:

"We’re the slaves who built the White House and the economy of the South."

While it is true that some slaves were used to build the White House, it is also true that many black free men, black non-slaves, and freed slaves also worked on that noted symbol; especially true after the Civil War.  However, when it comes to the building of the southern economy, slavery actually caused the economy to regress.

Increasingly, slavery made the South dependent on a "plantation" economy that drew it away from the type of industrialization and economic diversification that was happening in the North.  As such, the South was relatively poor when compared to the North. The overuse of the land resulted in soil erosion and soils that were being exhausted of their nutrients. A fact that ruined the South's future agricultural success.

Also, slaves had no incomes.  They were totally dependent on slave owners for their food, shelter, and clothing. By 1750, half of the Southern population were slaves.  Therefore they had no money to buy the kinds of things that could have grown an economy.  So, simply, as the number of slaves grew, so did the South's overall poverty.  Additionally, because so many slaves tended the plantations and served as housekeepers, handymen, construction workers, and cooks, the whites, too, got poorer for the lack of any of those jobs due to something that economists call the "crowding-out effect."

As a result of this, there are many economists who think slavery would have died out on its own. Not just for moral reasons but, because of economic self-preservation.  Today, some of the poorest states in the union are still in the South as a hangover from those days of slavery and the failure to industrialize their economies.

References:

Transcript: Read Full Text of President Barack Obama's Speech in Selma: http://time.com/3736357/barack-obama-selma-speech-transcript/

White House History: http://www.whitehousehistory.org/history/white-house-timelines/african-americans-1790s-1840s.html

 The South's Economy: http://www.digitalhistory.uh.edu/disp_textbook.cfm?smtID=2&psid=3558

Plantation economy: http://en.wikipedia.org/wiki/Plantation_economy

Did slavery make economic sense?: http://www.economist.com/blogs/freeexchange/2013/09/economic-history-2

List of U.S. states by income: http://en.wikipedia.org/wiki/List_of_U.S._states_by_income

The South Is Essentially A Solid, Grim Block Of Poverty: http://www.huffingtonpost.com/2014/07/02/poverty-increase-map_n_5548577.html

Poor [Southern] Whites: http://en.wikipedia.org/wiki/Poor_White

Crowding-out Effect: http://en.wikipedia.org/wiki/Crowding_out_%28economics%29