Economic Reaction of the South to the Emancipation Proclamation

 Economic Reaction of the South to the Emancipation Proclamation
Initially, the emancipation did little to hamper the economic activity of the southern states since it had yet to be fully enforced during the Civil War. It was only after the war was over and the edict was in full effect that the adverse effects were felt in their entirety. One of the first negative economic impacts of the emancipation proclamation on the southern states was the subsequent increase in the cost of labor associated with growing essential agricultural products and exported goods. What must be understood is that slavery, in essence, acted as a form of subsidy for southern plantation owners due to the lower cost of labor (Letzer & Lewis 16).

Since slaves were not paid for their services, they were able to sell products at a lower cost. The lack of slave labor when the emancipation proclamation was put into effect translated into rising costs for agricultural products. While the increase in labor cost was understandable given the change in production methods (i.e. no slaves), what must be understood is that the South did not account for the entirety of the nation’s production of agricultural products and, as such, could not unilaterally raise the price of the products to such an extent that it would make up for the increased cost of production.

As stated earlier, due to the focus on more efficient mechanized methods of agricultural production, the North was able to keep pace with the South in terms of the amount of essential agricultural products that it could produce (Letzer & Lewis 16). As such, since the North was not overly dependent on the South for agricultural goods, this meant that demand for products was in effect based on their inherent price. This presented itself as a considerable problem for local plantation owners since they lacked the industrial methods of production found in the North that enabled efficient methods of production despite having fewer laborers. The end result was that several plantations went out of business since they could not sustain their business models in the new economy.