Slavery was the Southern economy in terms of investment in internal improvements. The plantation system was anti-capitalist and in a way it was also quasi-socialist. There was little upward mobility for most white Southerners. Obviously the cotton trade was highly profitable for some merchants and for the planters who dominated Southern society.

In the North, investment in things such as canals, railroads, factories, etc. was occurring, along with the rise of the free labor ideology that many people associate with as the "American Dream." Lincoln was one of the proponents of this ideology. The Northern economy was experiencing the Industrial Revolution but the Southern economy was not.

US economic history is not my speciality, but I wanted to give another perspective on this.

The South developed a plantation economy based around large landholdings and a population of exploited agricultural labourers. The economy was primarily based around agricultural production and export. The most important commodity was, of course, cotton, demanding a large, low-skilled labour force. The largest part of these exports went to Britain.

It's common to view the South as heading towards a semi-colonial relationship with Britain. It was in the interests of both Britain and Southern elites to keep those commodities flowing. For Southern elites, as long as commodity prices remained relatively stable, there was limited incentive to diversify or industrialise. This situation can be seen in other countries with economies based around exporting commodities to industrial powers, who develop an elite class with interests aligned to the industrial country.

The North, had a much more dynamic economy, boosted by inflows of capital and migrants. It's easy to characterise the Northern economy as a typical early-industrial economy. An expanding population urbanising and moving from agriculture to industry. The rise of capitalists, in the classic 19th century sense, maybe even proto-robber barons. Increasing exploitation of natural resources. I think this picture is valid for the Northern US in this period, even if it has some distinctive features, such as unusually weak government and very high rates of migration. While the American Dream encompassed settling down with a homestead, this was not the experience of most people.

It's also worth noting that the railroad system in the US ended up primarily being built East-West, rather than North-South (or NW-SE), or linking up firmly with the Mississipi. So transport was conducted laterally, concentrating in the Northern states, rather than incorporating the South.

To what extent slavery made the difference between the two regions is a more difficult question. Slavery undoubtedly affected attitudes, and probably deterred immigration. However I'd argue the lack of development came from more than just the form of the labour market. There are countries which have maintained economies similar to that of the South without slavery. There are other ways to tie people down and exploit them, whether it's some form of indenture or simple poverty. Perhaps the strongest argument against the importance of slavery is that there was no radical change in the southern economy after abolition. (While the economic strength of slavery can be seen in how it re-emerged in things like the coolie system.)