> Admittedly without support, I'd assume that slavery held back southern productivity. If you are making profit to support a lavish lifestyle relative to your local peers and (crucially) there is no free market value of your laborers' labor, then what incentive do you have to apply innovation?

I agree. It is my understanding that the Romans were in a good position to develop a usable steam engine, but never had enough motivation to do so, because slave labor was cheaper.