The plantation era was a period in the history of the Southern United States, from the early 18th century until the start of the American Civil War in 1860 (which ended slavery and destroyed much of the economic landscape of the South), marked by the economic growth of the South, based on slave-driven plantation farming of tobacco, and the later cash crop, cotton.
The leading historian of the era was Ulrich Bonnell Phillips who studied slavery not so much as a political issue between North and South, but as a social and economic system. He focused on the large plantations that dominated the South.
Phillips addressed the unprofitability of slave labor and slavery's ill effects on the southern economy. Phillips systematically hunted down and opened plantation and other southern manuscript sources. An example of pioneering comparative work was "A Jamaica Slave Plantation" (1914). His methods inspired the "Phillips school" of slavery studies between 1900 and 1950.
Phillips argued that large-scale plantation slavery was inefficient and not progressive. It had reached its geographical limits by 1860 or so, and therefore eventually had to fade away (as happened in Brazil). In 1910, he argued in "The Decadence of the Plantation System" that slavery was an unprofitable relic that persisted because it produced social status, honor, and political power.
Phillips contended that masters treated slaves relatively well; his views on that issue were later sharply rejected by Kenneth M. Stampp. His conclusions about the economic decline of slavery were challenged in the 1960s by Robert Fogel and Stanley L. Engerman, who argued in their book, Time on the Cross: The Economics of American Negro Slavery, that slavery was both efficient and profitable, as long as the price of cotton was high enough. In turn, Fogel and Engerman came under attack from other historians of slavery.
British mercantilist ideology largely explains the rise of the plantation system in the United States. In the sixteenth and seventeenth centuries under mercantilism, rulers of nations believed that the accumulation of wealth through a favorable balance of trade was the best way to ensure power. As a result, Britain began to colonize territories across the Atlantic to take advantage of their rich natural resources and encourage exports.
Perhaps the best example of Britain utilizing the colonies for economic gain was tobacco. When tobacco was first discovered as a recreational substance, there was a widespread social backlash in mainland England, spearheaded by King James himself. By the middle of the 17th century, however, the British government had realized the revenue potential of tobacco and quickly changed its official moral stance towards its use. As a result, tobacco plantations sprung up across the American South in large numbers to support European demand. Britain benefitted from the immense volume of tobacco that Colonial plantations could produce. By 1670, more than half of all tobacco shipped to England was being re-exported to other countries throughout Europe at a premium. In similar ways Britain was able to profit from other American staple crops, such as cotton, rice, and indigo. As Russell Menard puts it, Britain’s capitalizing on increased European demand for these crops “fueled the expansion of the American plantation colonies, transformed the Atlantic into an English inland sea, and led to the creation of the first British Empire.”
This mercantilist approach to colonization was not as exploitative as it may seem at first glance. Many claim that being a part of the British mercantilist system was in the best economic interest of the colonies as well, as they would not have been able to survive as independent economic entities. Robert Haywood, in his article “Mercantilism and South Carolina Agriculture, 1700-1763,” argues that “it was unthinkable that any trade could prosper in the straight-jacket of regimented and restricted international trade, without the guiding hand of a powerful protecting government.”
The Plantation Era, while it was in large part the source of the South’s initial economic prosperity, was also the reason why the South lagged in productivity starting in the early to mid 19th century. Because the plantation system mainly required a large volume of unskilled labor, the South did not have the human capital to succeed when the Plantation Era was over. Ulrich Bonnell Phillips contends that the plantation “sadly restricted the opportunity of such men as were of better industrial quality than was required for the field gangs.” Essentially, men who would have been otherwise capable of performing other skilled jobs were nonetheless relegated to field work because of the nature of the system.
According to the Goldin-Sokoloff hypothesis, in the South, the relative productivity of women and children were higher than in the North, since the relative abilities of a man, woman, or child to pick cotton or harvest tobacco are nearly the same. In the North, however, since the relative productivity of women and children was much lower, factory jobs became attractive, and there arose an abundant supply of labor to fuel the industrial boom. As a result of the misallocation of labor in the South, the system “hindered all diversification in southern industry, and kept the whole community in a state of commercial dependence upon the North.”