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Modernizing a Slave Economy: The Economic Vision of the Confederate Nation (Civil War America)

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Given slavery's worldwide extinction, the topic of modernizing a slave economy seems irrelevant. Nevertheless, in his new book MODERNIZING A SLAVE ECONOMY, John Majewski answers some important questions, such as: Why did the Southern states secede, and why did the Confederacy fail? He presents a picture of some antebellum Southerners that many readers will find surprising. Although I have done a great deal of research on antebellum slavery and the Civil War, Majewski's book illuminates some key questions for me.

The key to the book's value is its portrayal of secessionists not as a group of free-trade, states' rights libertarians, but rather as leaders who often had conditional views about free trade and states' rights. Many, for example, did not want free trade; they wanted lower tariff rates in order to build Southern industry. To make matters even worse, some even wanted the tariff revenues to pay for publicworks projects, such as railroads. They did support states' rights, but they also wanted a fugitive slave law in order to have the federal government capture runaway slaves.

The South's ideology was therefore much more Hamiltonian, as opposed to Jeffersonian, than I had previously thought. Thomas Jefferson himself promoted building a state university, made the Louisiana Purchase, and imposed a comprehensive embargo on the economy. The secessionists that Majewski focuses on would have cheered all of these nonlibertarian actions. He examines select secessionist leaders from South Carolina and Virginia. This sample may be biased because these two states supposedly had much to gain in an independent Confederacy. Virginia was poised to become the Confederacy's industrial base, and Charleston, South Carolina, aspired to become the leading port for European trade....

Majewski explains that many states' rights extremists were actually for big government within their own states. This situation is illustrated by the railroad construction boom in the 1850s. State and local subsidies provided half the capital for Southern railroads, or about 200 percent more per capita than in the North. This "build it and they will come" strategy generally failed. During the 1850s, state governments provided backing for railroad bonds and created a railroad boom. Mark Yanochik, Mark Thornton, and Bradley Ewing have found that this boom helped to keep slavery profitable and slave prices high when the price of cotton was relatively flat ("Railroad Construction and Antebellum Slave Prices," Social Science Quarterly 84, no. 3 [September 2003]: 723-37).

The free-trade tradition in the South rested on the ideas that tariffs reduced Southern exports of cotton and increased the prices of the goods Southerners imported and that the bulk of tariff revenues was spent in the North. However, many Southern extremists were not true free traders in the same sense as Bastiat and Cobden. They had a King Cotton strategy of coercing Europe to aid the Confederacy by starving Europe of cotton. They also adopted a variety of protectionist measures during the war. In my own research on trade policy in the Confederacy, I originally attributed these counterproductive measures to hard-pressed decisions under emergency wartime conditions (see Robert B. Ekelund Jr., John D. Jackson, and Mark Thornton, "Desperation Votes and Private Interests: An Analysis of Confederate Trade Legislation," Public Choice [forthcoming]). However, Majewski shows that the extremists were never true free traders and that they planned to use protectionism to foster economic development, first by protecting local industry and second by using tariff revenues to pay for public-works projects, such as railroads.

I have long been curious about the growth of government in the Confederacy, and I have even argued that the big-government approach was the central cause of the Confederacy's defeat. After reading Majewski's book, I now see how easy it was for slave plantation owners to develop an outlook of the "man of system" central planner who believes he can produce results by moving people around as if they were pawns on a chessboard. On a slave plantation, the owner makes decisions and issues orders, and definite things happen as a result. This outlook is yet another fatal flaw of slavery. Majewski has convinced me that there were enough of these central-planning extremists to advocate and implement state-level fascist policies prior to the war and Confederate-level fascist policies during the Civil War.

From a review by Mark Thornton (The Independent Review, Summer 2010)

John Majewski believes almost all historians have gotten a major piece of Southern economic history wrong.

Historians have long noted that Southern agriculture resulted in worn-out soil, and frequent moves to new land. This has been attributed to slavery, directly and indirectly. Majewski argues that this idea is false. He gives a lot of evidence that the problem was geographic: the South was cursed with nutrient poor, acidic soil, a climate that caused legumes then known to grow poorly, livestock diseases, and rain patterns that led to erosion. These things combined to make slash-and-burn agriculture the only real economic option for most of the South (the practice continued well into the 20th Century).

The fact that there was little good soil, and that badly located, led in turn to low populations densities. As a result, roads and railroads were more expensive (fewer customers per mile), and manufacturers had fewer local customers. These factors in turn influenced the whole of Southern economic development. Majewski sees slavery as having harmful economic effects, but principally from the fact that slaves, with little or no cash, couldn't buy much of anything. Lack of demand further depressed the Southern economy, he thinks.

There's also interesting material on various attempts to invigorate the pre-war economy, why they failed, and the part played by those failures in making secession seem more attractive.

Altogether, a very thought-provoking little book. Recommended for all Civil War buffs.