The reference occurs in the context of using the destruction of a free peasantry in ancient Rome to illustrate the idea that whether or not this is "progressive" in the sense of creating conditions more conducive ultimately to the "integral development of every individual producer," i.e. to the development of individual "minds," depends on the conditions created.
In the Roman case, in contrast to the destruction of a free peasantry in England by means of "primitive accumulation," it wasn't; it substituted a system of slavery for a system of free peasants and created conditions for those displaced that transformed free peasants into "a mob of do-nothings more abject than the former 'poor whites' in the southern country of the United States."
"In several parts of Capital I allude to the fate which overtook the plebeians of ancient Rome. They were originally free peasants, each cultivating his own piece of land on his own account. In the course of Roman history they were expropriated. The same movement which divorced them from their means of production and subsistence involved the formation not only of big landed property but also of big money capital. And so one fine morning there were to be found on the one hand free men, stripped of everything except their labour power, and on the other, in order to exploit this labour, those who held all the acquired wealth in possession. What happened? The Roman proletarians became, not wage labourers but a mob of do-nothings more abject than the former “poor whites” in the southern country of the United States, and alongside of them there developed a mode of production which was not capitalist but dependent upon slavery. Thus events strikingly analogous but taking place in different historic surroundings led to totally different results. By studying each of these forms of evolution separately and then comparing them one can easily find the clue to this phenomenon, but one will never arrive there by the universal passport of a general historico-philosophical theory, the supreme virtue of which consists in being super-historical." http://www.marxists.org/archive/marx/works/1877/11/russia.htm
In the case of the American Civil War, Marx claimed the result (even if it only halted the expansion of the system of slavery) would be ultimately to substitute a system of free labour for this system and that this, because of the much greater consistency of the latter with giving "the greatest impulse to the development of the productive forces of social labour and the integral development of every individual producer," would be "progressive" in the sense of creating conditions much more conducive to "the development of the human mind."
Apart from the conditions of slavery itself, Marx points to the conditions the system created for "poor whites."
"the number of actual slaveholders in the South of the Union does not amount to more than three hundred thousand, a narrow oligarchy that is confronted with many millions of so-called poor whites, whose numbers have been constantly growing through concentration of landed property and whose condition is only to be compared with that of the Roman plebeians in the period of Rome's extreme decline. Only by acquisition and the prospect of acquisition of new Territories, as well as by filibustering expeditions, is it possible to square the interests of these poor whites with those of the slaveholders, to give their restless thirst for action a harmless direction and to tame them with the prospect of one day becoming slaveholders themselves." http://www.marxists.org/archive/marx/works/1861/10/25.htm
This this is the reasoning is confirmed by the following passage from Theories of Surplus Value which specifies ways in which, according to Marx, the system of free labour is more conducive to "integral development" than the system of slavery, e.g the wage labourer "learns to master himself, in contrast to the slave, who needs a master.
It explicitly points to the differential outcomes of the two systems in the US to demonstrate this.
It also claims, consistent with what is claimed in Capital about the consistency of "petty industry" with the development of "free individuality," that, while the system of free labour (particularly, he also claims here as in Capital, in the form this takes in the US) is a "step up the social scale" in comparison to the system of slave labour, " "It is the opposite when an independent peasant or craftsman is transformed into a wage labourer."
"The slave belongs to a particular master; it is true that the worker must sell himself to capital, but not to a particular capitalist, and thus he has a choice, within a particular sphere, as to who he sells himself to, and can change masters. All these differences in the relation make the activity of the free worker more intensive, more continuous, more agile, and more dexterous than that of the slave, quite apart from the fact that they fit the worker himself to undertake historical actions of an entirely different nature. The slave receives the means of subsistence necessary for his maintenance in a natural form, which is as fixed in kind as in extent — in use values. The free worker receives them in the form of money, of exchange value, of the abstract social form of wealth. However much the wage is now in fact nothing but the silver or gold or copper or paper form of the necessary means of subsistence, into which it must constantly be resolved — money functioning here as the merely transitory form of exchange value, as mere means of circulation — abstract wealth, exchange value, and not a specific traditionally and locally limited use value, still remains for the worker the purpose and result of his labour. It is the worker himself who turns the money into whatever use values he wants, buys the commodities he wants with it, and as an owner of money, as a buyer of commodities, he stands in exactly the same relation to the sellers of commodities as any other buyer. The conditions of his existence — and also the limited extent of the value of the money he has acquired — naturally compel him to spend it on a rather restricted range of means of subsistence. Nevertheless, some degree of variation is possible here, such as e.g. newspapers, which form part of the necessary means of subsistence of the English urban worker. He can save something, form a hoard. He can also waste his wages on spirits, etc. But in acting this way he acts as a free agent, he must pay his own way; he is himself responsible for the way in which he spends his wages. He learns to master himself, in contrast to the slave, who needs a master. To be sure, this only applies when one considers the transformation of a serf or slave into a free wage labourer. The capitalist relation appears here as a step up the social scale. It is the opposite when an independent peasant or craftsman is transformed into a wage labourer. What a difference there is between the proud yeomanry of England, of whom Shakespeare speaks,[73] and the English agricultural day labourers! Since the purpose of labour is for the wage labourer wages alone, money, a definite quantity of exchange value, in which any specific characteristics of use value have been extinguished, he is completely indifferent to the content of his labour, and therefore to the specific character of his activity. In the guild or caste system, on the other hand, this activity was regarded as the exercise of a vocation, whereas with the slave, as with the beast of burden, it is only a particular kind of activity, of exertion of his labour capacity, imposed on him and handed down from the past. Hence in so far as the division of labour has not made his labour capacity entirely one-sided, the free worker is in principle receptive to, and ready for, any variation in his labour capacity and his working activity which promises better wages (as is indeed demonstrated in the case of the surplus population of the countryside, which constantly transfers to the towns). If the developed worker is more or less incapable of this variation, he still regards it as always open to the next generation, and the emerging generation of workers can always be distributed among, and is constantly at the disposal of, new branches of labour or particularly prosperous branches of labour. In North America, where the development of wage labour has least of all been affected by reminiscences of the old guild system, etc., this variability, this complete indifference to the specific content of labour, this ability to transfer from one branch to another, is shown particularly strongly. Hence the contrast between this variability and the uniform, traditional character of slave labour, which does not vary according to the requirements of production, but rather the reverse, requiring that production should itself be adapted to the mode of labour introduced originally and handed down by tradition, is emphasised by all United States writers as the grand characteristic of the free wage labour of the North as against the slave labour of the South. (See Cairnes.) The constant creation of new kinds of labour, this continuous variation — which results in a multiplicity of use values and therefore is also a real development of exchange value — this continuing division of labour in the whole of the society — first becomes possible with the capitalist mode of production. It begins with the free handicraft guild system, where it does not meet with a barrier in the ossification of each particular branch of the craft itself." http://www.marxists.org/archive/marx/works/1864/economic/ch02a.htm
Ted