*should read, cotton comprised 50% of American exports, and was the industry most tied to the slave trade in the USA.

"If you want examples of slavery persisting in areas where it was not profitable look at the upper south."

Ok, let's look at it. The slave-owning farmers in Kentucky, although a small minority of the population, produced virtually all the hemp in the state and 2/3 of the wheat. If slave-owning was unprofitable it's curious as to why this happened.

http://books.google.com/books?id=e0YuhW73gDMC&pg=PA106&lpg=PA106&dq=slavery+kentucky+tobacco+profit&source=bl&ots=yBPgDj6hKs&sig=aNC7EYPOzx9hwQCOgTcY6ujEBgA&hl=en&sa=X&ei=wVn1UsTjCIGwyQHfiIH4Cw&ved=0CEcQ6AEwBQ#v=onepage&q=slavery%20kentucky%20tobacco%20profit&f=false

My point about Spain's imperial conquests being, long run, harmful is that they papered over those Spanish problems, and contributed to them with (as goldfinger notes) inflation. As Putin correctly points out, Castille was the main source of Hapsburg wealth, but it was not governed very well. The monarchy had to resort to things like seizing American silver or going into gigantic debt (often backed up by the promise of that American silver). Rather than fixing the economic problems hidden by the elite Spanish military, the Hapsburgs increasingly relied on debt and colonial income to fund their constant wars. And when I say England is the most ineffective colonizer, I'm talking about England getting its start (late) and where it mostly started (the middle of North America, which was only open because nobody else wanted it).

"Considering the slave system resulted in the US South producing 70% of the world's cotton and 50% of American exports, it's hard to imagine any kind of alterations leading to even greater levels. It seems like wishful thinking to me."

It's not wishful thinking, because we know that American cotton production didn't need slavery. Americans kept making lots of cotton -- too much, as you note, to keep the price up. And other American crops managed to do just fine without slavery ever being an important part of their cultivation.

"If slave-owning was unprofitable it's curious as to why this happened."

Is it really curious why white southerners might continue defending and engaging in slavery, even if it was not profitable? I don't have any trouble believing it. People do lots of unprofitable things because of social norms. Slavery was, as Santa accurately describes above, not just an economic system. It was the defining social institution of the American South.

"The monarchy had to resort to things like seizing American silver or going into gigantic debt (often backed up by the promise of that American silver). Rather than fixing the economic problems hidden by the elite Spanish military, the Hapsburgs increasingly relied on debt and colonial income to fund their constant wars."

What on earth does this have to do with slavery? You claimed the slave colonies made Spain poorer. In fact the slave colonies were the richest parts of the empire.

"And when I say England is the most ineffective colonizer, I'm talking about England getting its start (late)"

The English start wasn't that late. Later than Spain and Portugal, yes, but earlier than most everybody else.

"and where it mostly started (the middle of North America, which was only open because nobody else wanted it"

British North America started in Newfoundland, and that area was heavily frequented by French and other nations' mariners at the time. It was quite perplexing to the French that the British would claim the area as their exclusive territory (the French state was unconcerned with establishing colonies, being preoccupied with European affairs). They followed that up with the conquest of Acadia, also heavily French. The Dutch and Swedes both had colonies in the mid-atlantic, while Spain had settlements in the Carolinas & Georgia.

"It's not wishful thinking, because we know that American cotton production didn't need slavery. "

You say that, but yet the industry went from being the most profitable in America to collapsing in the span of a couple of decades. It's about on par with the oil industry collapsing overnight today.

"Is it really curious why white southerners might continue defending and engaging in slavery, even if it was not profitable?"

No you took what I said out of context. It is curious why the handful of slave-owners produced most of the ag production in an upper southern state like Kentucky if it supposedly was not profitable.

Spain and the colonies are not the same. As the Spanish colonies (relatively) prospered, the Spanish monarchy used that not to strengthen the Spanish economy but to fund a series of destructive wars. Colonial wealth did not make Spain a stronger country in the long run, like lotto winners who end up in bankruptcy. The habits and institutions of a healthy modern economy did not necessarily do better because of slave-based colonial wealth. And England did start late -- the Spanish had what was considered the best part of the New World for a hundred years, and the French the most valuable part of continental North America, when the English got started as a serious New World colonial power (and I believe the first permanent English settlement in the New World was at Jamestown, although you might be referring to something else). That the English seized colonial possessions from rivals doesn't really change that.

"You say that, but yet the industry went from being the most profitable in America to collapsing in the span of a couple of decades. It's about on par with the oil industry collapsing overnight today. "

Can you explain what you mean? All Americans farmers faced agricultural problems as over-productivity drove prices down. That's part of what caused the Populist revolt, which wasn't just a southern thing. Cotton had particular problems -- growing competition internationally, etc etc -- but it wasn't uniquely bad except to the extent that the South, with its tenancy and lack of capital and race tension and so on, was uniquely bad. The first AAA contracts in the New Deal (admittedly a bit after what we are talking about) included cotton but also wheat and hogs, with corn and tobacco and maybe something else added later. If anything, slavery hid cotton's lack of profitability pre-Civil War by limiting those who participated in them.

"No you took what I said out of context. It is curious why the handful of slave-owners produced most of the ag production in an upper southern state like Kentucky if it supposedly was not profitable. "

I don't quite understand, But maybe to clarify, the key distinction is not simply profitability, but relative profitability. Free laborers are (usually) more profitable than slave ones, but southerners continued to use slaves for a variety of non-economic, as well as economic, reasons.

You're looking at it perhaps the wrong way, ck. For the farmers, maybe slavery wasn't profitable. But the production drove down prices to the extent that it made industrialization profitable.

But production rose even more after slavery ended (correlation and causation and all that, but it does indicate slavery was not a necessary component of high agricultural output). And anyway, industrialization in England started before cotton production in the USA became so important.