Why are the North and South so different in their economic practices?

1. Why are the North and South so different in their economic practices?

2. When did the divergence begin? • mid 17th century- Southern economic development • Establishment of racial slavery • GREAT STAPLE CROPin tobacco and other crops that were important to England and Europe. • Rise of a growing plantation sector

3. Why are the North and South so different? • Differences: • Climate • Profit possibilities • Land/ Natural Resources • PATH DEPENDENCE: The North and South remained distinctly different because once the first decision was made, all future decisions are limited by those previously made.

4. How did this influence the colonists? • Behavior changed due to the way the colony or region responded to the economic market. • Example: South • Climate: Warm- Natural Resources: good for agriculture. • The South had little experimentation to do before they realized that the land was an agricultural gold mine. • South became organized economically, socially, politically and culturally around the plantation.

5. Southern Colonies

6. Economic Path of the South • Tobacco and Rice • quickly found to be staple, money making crops • Led to the dependency on slavery • Replaced free and indentured labor because they were seen as being too expensive • Plantations went up around the South beginning in the 1620s and dominated the South by the 1770s

7. Who owned the plantations? • A small group of white planters and merchants • Shaped the region’s economic development • Wealthy, slave-based economy • Dependent on agricultural staples for export to northern Europe • 40% of the Southern population were slaves

8. Distribution of Wealth and Southern “strategy” • Southern colonies had extreme inequalities in wealth • Strategy: Benefit a few by exporting staple crops produced by slaves. • Owners become wealthy because they export (sell) MUCH more than their labor expenses.

9. Outcomes • Weak institutional development and slow growth of: • Transportation Networks • Urban systems • Educational organization • Religious organization

10. The Northern Economic Path • “Lacked economic definition” • Did not have exports of high importance for England • NO GREAT STAPLE MARKET few agricultural slaves ECONOMIC IMPROVISATION

11. Northern Strategy • Economic Improvisation • A strategy based on flexibility and creativity • Flexible business organization • Quick decision making and constant change • Commercial and shipping services • Local AND regional trade

12. Outcome • Slow growth as compared to the South • Eventually became very wealthy • Made way for future industrialization • BUT: • Some northerners were also trying to make money quickly by developing land, stealing, or trading slaves.

13. New England

14. New England • Overcame limitations in natural resources • Combined subsistence activities with local, regional, and international trade • Led to strong export earnings and good flow of imports • Steady economic growth • Higher living standards for a large portion of the population

15. Middle Colonies

16. Middle Colonies • Most ethnically diverse region • NO GREAT STAPLE MARKET • Agriculture, manufacturing, and trade all worked and played off of each other • Fertile valleys and great harbors • Thousands of agricultural, manufacturing and commercial activities were pursued

17. Outcome • Family, wage, and indentured labor were used • Slave labor was used as well, but not to the extent of the South • High domestic demand for wheat • Good opportunities for all economic activities, including craft and artisanal jobs. • Wealth was distributed more evenly than in the other 2 regions

18. Philadelphia and New York • Excellent harbors • Great trading posts • Generated more jobs for the Middle Colonies • Trading of goods AND ideas/information • Increased productivity • Increased wealth

19. North South • Couldn’t produce valuable plantation staples • Limited value/use of slave labor • Economic balance and diversity • Constant innovation/change • Creative business practices • Early organization around plantation staples • High use of slave labor • No need for creativity due to the large profits that came from plantation agriculture

20. Led to…North South • Local and regional trade • Relatively equal distribution of wealth • More established social, educational, political and cultural institutions • These were made available to a wide variety of people • Focused on exports • Very unequal distribution of wealth • Economic and social inequalities • Inflexible strategies • Unskilled slave labor • Low-tech • Unable to develop with the North