The Civil War impacted the Northern and Southern economies differently. While the North witnessed significant post-war economic growth, the Confederacy was left in shambles. Factors such as the location of the battlegrounds and the Union’s triumph over the South can explain this disparity. According to Dupont and Rosenbloom, the war led to the loss of free slave labor, affecting the agriculture-driven Southern economy. The South was an agricultural and less industrial region. Thus, free labor was needed to increase output for export. Moreover, the confederate states lacked infrastructural resources and a skilled workforce (uneducated slaves) to industrialize like the North. Therefore, the loss of free labor through the war had impacted the Southern economy negatively. In contrast, the North remained largely unaffected by the abolition of slavery because it was an industrial region with an adequate supply of manufacturing jobs.
Most of the battlegrounds during the Civil War were located in the South. The marches by Union forces such as the one by Sherman led to the destruction of Southern railroads, cities such as Atlanta, and crops, affecting livelihoods and causing economic deprivation in the Confederacy. The destruction reduced investment in agriculture and led to the closure of financial institutions. Blockades laid by the Union army affected cotton exports, leading to inflation in confederate states. In contrast, fewer battles were fought in the Union territory, and thus, during and after the war, its industries were running. Additionally, the South’s currency lost value in the post-war era, resulting in billions in losses to the economy. In contrast, the North’s currency became stronger after it triumphed over the Confederacy. After the war, the Northern states experienced an industrial boom driven by the reconstruction of railroads and cities.