Economic Growth During the Postbellum Economy

 

There are multiple examples of how economic growth occurred during the postbellum economy. In 1865 the Civil War had just ended. This allows one to look at two regions of the postbellum economy and understand the differences. For Southern states this period reflected the lowest income due to the abolishment of slavery and the negative effects of the Civil War. In contrast, one can look at the North as a high-income region. Comparing these two regions allows one to further understand most of the initial income inequality that occurred in the United States during the postbellum period. There are multiple contributing factors that led to the disparity between the two regions. There was low productivity in the South during the postbellum period. This can be attributed to a generally low level of education and a lack of sufficiently skilled labor force. This significantly impacted the process of industrialization in the South. One can look at human capital levels to further understand the low productivity that existed in the postbellum south. The plantation legacy left the South with barely any human capital compared to the rest of the nation following the Civil War. This occurred due to the laws against formal education of slaves prior to and during the war. Subsequently, 95% of African American Southerners were completely illiterate by the start of the war. Additionally, the older generations tended to slow educational improvements for the younger generation. Children of illiterate parents were unable to turn to them for advice when learning to read and write. Furthermore, these home dynamics caused many children to be drawn away from school to assist their families in the market or on the farm. To add an additional complication, state funds were allocated independently of race on a per pupil basis. However, states diverted funds at the local district level from African American to white schools. Due to this redistribution of funds at the school district or county level, the severity of redistribution depended on the population of African Americans in that county. Ergo, in counties with a lower population of African American students there were less resources for diversion to white pupils. In contrast, in a predominantly African American county there were significant funds redirected towards the relatively few white students.[1]

An additional mean in the South that impacted the postbellum economy was the concept of sharecropping. Sharecropping allows a landowner to have someone utilize a portion of their land in exchange for a portion of crops produced. Sharecropping stemmed from a unique situation. Neither prior master nor former slave would have selected sharecropping as the best economic arrangement. Many freed people had desires to acquire land and become independent proprietors. In contrast, many plantation owners wished to return to the ideology of slavery. Sharecropping emerged as a compromise that neither party was fully satisfied with. Nevertheless, sharecropping occurred after the Civil War and much throughout the Reconstruction and well beyond. It became one of the top forms of organizing labor throughout the cotton belt from the Carolinas to Texas.[2]

In contrast to the economy of the South the North did not have the same economic struggle in the postbellum period. The Civil War increased the level of production throughout multiple industries in the North. This in turn accelerated economic production. In the postbellum period the North had plenty of industries to stimulate the economy. This allowed Northern states to recover their economy much faster than those in the South. Another contributing factor to Northern states was the U.S. army. Soldiers were sent into former Confederate states after the Civil War. U.S. factories were suppling the soldiers in the Southern states. The North had a consistent need to increase production during and after the Civil War. One can also argue that the railroad impacted the Northern economy and its quicker recovery in the postbellum period. There were large cities in the North connected by railroads. This allowed goods to be transported quickly between the cities. The factories and industrialization of the North allowed the economy to recover exponentially faster than the states in the South. Additionally, due to the Union blockade of Southern states during the Civil War cotton was not the same cash crop that it was before the war. Southern farmers lacked the crops and labor force that they had previously. Farm owners had to figure out a new way to build income.[3]

In the postbellum period the economy was different in the North and South. The South had to relearn a new way of life following the Civil War. The plantation legacy left the South with barely any human capital compared to the rest of the nation following the Civil War. In contrast, the North had the infrastructure and factories that thrived during the war. The North had a consistent need to increase production during and after the Civil War. This allowed them to continue to be successful and quickly recover their economy after the war.

 

 

Bibliography

Brown, Thomas J. Reconstructions: New Perspectives on Postbellum America. New York: Oxford University Press, Incorporated, 2006.

Connolly, Michelle. “Human Capital and Growth in the Postbellum South: A Separate but Unequal Story.” The Journal of Economic History 64, no. 2 (2004): 363–99. http://www.jstor.org/stable/3874778.

Mizruchi, Susan L. The Rise of Multicultural America: Economy and Print Culture, 1865-1915. Chapel Hill: University of North Carolina Press, 2009. 

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[1] Michelle Connolly. “Human Capital and Growth in the Postbellum South: A Separate but Unequal Story.” The Journal of Economic History 64, no. 2 (2004): 363–99.

[2] Thomas J. Brown. Reconstructions: New Perspectives on Postbellum America. (New York: Oxford University Press, Incorporated, 2006). 10-25

[3] Susan L. Mizruchi. The Rise of Multicultural America: Economy and Print Culture, 1865-1915. (Chapel Hill: University of North Carolina Press, 2009). 53-122