Why did slavery make the Southern States poorer than the Northern States?

A human beings economic value is a combination of his potential labor output and his potential ability to leverage that with tools including personal capital.  Obviously a slave is reduced to his baseline value as labor output.

This means that an economy using slaves forgoes use of that and is naturally impoverished to the extent of its slave population,  this is also obviously why communism failed so badly in russia.

.Recall also that banking as we know it based on fiat money access evolved at the same time as formal chattel slavery and if anything made it all worse.

Understand that every last one of you can pick raspberries for me.  Except that the most you can make is around ten dollars per hour for maybe a max of five productive hours. obviously, almost no one will show up.  Now i can buy your labor as a slave.  At most you will make me about one hundred productive hours over a fo ur weeka season and then i need to have another value task for you to do.  there are many days in agricuture in which you must be a non earner.  Yet i own you.

So even at its height in them cotton fields, slavery was a bad bet but sustained because otherwise no one would show up.  the actual loss of personal capital made it expensive labor.

Why did slavery make the Southern States poorer than the Northern States? It was a free labour after all.

It was “free labour” where you paid the equivalent of about $20,000 in today’s money to get one.

Up in the north, people were taking money from banks to borrow to buy industrial machinery (which often had to be imported). That provided “free labor” too, either from direct water power or by steam power obtained by burning coal.

In the south, people were taking money from banks to buy people. Usually, when you bought a slave, you signed a promissory note to repay the purchase price which was essentially secured against the value of the slave.

As such, while the north was building mills, steel plants and railroads with borrowed money, the south was buying people who had to do everything by hand.

Here’s how labor was done in the north - farmers would borrow money to buy these huge combine harvesters that mowed down grain, plus separated the wheat from the shaft. Down in the south, all this harvesting was done by hand. As such, with a team of horses and a few paid laborers, you could outperform the entire output of a large holding of slaves on a plantation.

You can really see the difference in the development of railways between the north and the south

From 1850 - the north is covered in an interconnected system of railways that pretty much allow anything to be sent by rail from anywhere to anywhere. The south is covered by disconnected railroads that mostly lead to port towns where things were re-loaded onto barges or ships.

These developments in the north depended on a skilled workforce, and slaves rarely had the same sets of skills as developing them took time and effort and the slave wouldn’t be compensated for that. In “Twelve Years a Slave”, our protagonist is finally freed when his master has to hire a carpenter from Canada because he doesn’t have any skilled workers in his area. The Canadian agrees to contact the slave’s friends in New York State and he is freed.