The plantation system developed for several reasons. The Southern colonies had been founded by companies or proprietors who wished to make a profit, and they accordingly encouraged cash crops like tobacco (in the Chesapeake) and rice (in the Low Country). These crops were labor intensive, which meant that growers turned first to indentured servants and then to African slaves as a labor supply (so, too, did sugar planters in the Caribbean.) They also required a great deal of land and capital, which meant that due to an economic principle called "economies of scale," cash crops, especially rice, favored very wealthy people with large landholdings and access to large labor forces. So in the Southern colonies/United States, the economic realities of staple crop production favored the formation of large farms, or plantations. Cotton, which emerged as the biggest cash crop in the nineteenth-century South, was less shaped by economies of scale--many small planters and farmers could profitably raise the crop. But even still, the largest cotton planters in places like Alabama and Mississippi dominated the Southern economy and increasingly its politics. Large capital investments in land and enslaved people made the production of large amounts of cotton profitable, so the region's dependence on cash crops continued to foster the plantation system.
