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Gavin Wright

Old South, New South: Revolutions in the Southern Economy since the Civil War Paperback – January 1, 1997

by Gavin Wright (Author)

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In this provocative and intricate analysis of the postbellum southern economy, Gavin Wright finds in the South’s peculiar labor market the answer to the perennial question of why the region remained backward for so long. After the Civil War, Wright explains, the South continued to be a low-wage regional market embedded in a high-wage national economy. He vividly details the origins, workings, and ultimate demise of that distinct system. The post-World War II southern economy, which created today’s Sunbelt, Wright shows, is not the result of the evolution of the old system, but the product of a revolution brought on by the New Deal and World War II that shattered the South’s stagnant structure and created a genuinely new, thriving order.

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Editorial Reviews

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Mr. Wright . . . has given us economic history at its best―comprehensive, stimulating, readable. ― New York Times Book Review

If you can read only one book about how history happened to the post-Civil War economy, read this one. ― New York Review of Books

Gavin Wright's book emancipates southern history from many traditional bonds and outworn concepts. I enjoyed reading it and take pleasure in recommending it. -- C. Vann Woodward

About the Author

Gavin Wright is William Robertson Coe Professor in American Economic History at Stanford University and the author of The Political Economy of the Cotton South and Old South, New South: Revolutions in the Southern Economy Since the Civil War, winner of the Frank L. and Harriet C. Owsley Award of the Southern Historical Association. He is a past president of the Economic History Association and the Agricultural History Society.

Product details

Publisher ‏ : ‎ LSU Press (January 1, 1997)
Language ‏ : ‎ English
Paperback ‏ : ‎ 336 pages
ISBN-10 ‏ : ‎ 0807120987
ISBN-13 ‏ : ‎ 978-0807120989
Item Weight ‏ : ‎ 14.1 ounces
Dimensions ‏ : ‎ 5.5 x 0.69 x 8.5 inches

Best Sellers Rank: #406,068 in Books (See Top 100 in Books)
- #739 in Economic Conditions (Books)
- #921 in Economic History (Books)
- #6,401 in U.S. State & Local History

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Flying Scot

Land of Exploitation

Reviewed in the United States 🇺🇸 on November 13, 2018

The author says that in the New South wages are equivalent to the rest of the nation. Not true. As someone who lived in Mobile, Alabama for 29 years, in New Orleans for 5, and in Georgia for 6 years, I can promise you that wages in the South still significantly trail those of the rest of the nation. As a teacher in the Deep South, after 36 years of teaching I retired at $67,000, top of the scale in my county. This is far behind teachers in most states to the north, often 15 to $20,000 behind teachers in the Midwest and Northeast, and in some cases even $25,000 behind. And it's not just in teaching. Name any occupation and you find a similar lag. Why? Because even though we may call it the "New" South, it's still the same old south with that same old legacy of exploitation, that legacy that is traced back to slavery, then sharecropping, segregation, and virulent anti-unionism throughout its history. If teachers in the South tried to walkout, they'd be fired because every Deep South state has made walkouts illegal. There are no teacher's unions down here, only "associations," which have no real bargaining power, no binding arbitration, no legal redress of grievances. Further, the South fights Federal minimum wage laws tooth and nail, fang and claw. People down here trying to start a union on their worksite often simply lose their jobs. We are not that far removed from the days of beating up of union "agitators." The author needs to try working a real job down here. For employees, the "New" South is the same old exploitative South it has been going back to the 18th century. Nothing new about that.

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James Hoogerwerf

An economic history of the South

Reviewed in the United States 🇺🇸 on March 15, 2007

Gavin Wright in Old South, New South, applies an economic interpretation to the southern condition. Wright's analysis is an economic history of the American South since the Civil War. The South, he argues, was an economy within a larger economy. The basic theme of his study is how the South related to national and international economies in different times. Wright argues that the South was a "colonial economy"(vii) whose most important feature was a "separate regional labor market, outside the scope of national and international labor markets that were active and effective during the same era."(7) The agricultural low-wage basis of the labor market Wright hypothesizes, is the key to understanding the Old South. But in the New South, wages are on a par with the rest of the nation. Old South, New South is an economist's explanation of this transition. Because he relies strictly on economic theory, much of Gavin Wright's interpretation contradicts traditional historiography.

Slavery was the root cause of how the north and south developed economically different. "The incentives of slave property tended to disperse population across the land, reduce investments in transportation and in cities, and limit exploration of southern natural resources."(11) Because slave labor was so mobile, Wright argues that before the Civil War, there was little incentive for local investment. Two other economists support this contention. Bateman and Weiss (1981) argue that an unrealized potential for industrialization existed in the south, but that the attitude and behavior of the planter class inhibited its development. (20) This "deplorable scarcity" of manufacturing capacity contributed to a common theme of industrial backwardness among writers of southern history. Northerners who came south saw the region as "backward and stagnant" because they did not see signs of progress apparent in the north (31) but Wright states "by no conventional measures of performance was the south stagnant or declining, nor was slavery unviable economically."(33) The northern visitors were simply not seeing what they expected from their northern perspective.

After the war, when the investment value of slaves was lost, entrepreneurial incentives were redirected toward investment in land. The potential return from the productivity and value of land was the new method of creating wealth. (19) In Wright's words southern "laborlords" became "landlords." Whereas historians argue about the "continuities" or "discontinuities," of the South before and after the Civil War, economists see a striking change in the South following the war. After the war the output per acre of land was paramount. Labor was now a variable cost which had to be covered by the value of the crops grown. Cotton became the most valuable crop and more cotton was grown following the Civil War than before. (34) As a consequence of the value of land, towns, railroads, and manufacturing developed. Wright revalidates Broadus Mitchell's (1921) boosterism interpretation for the spread of cotton mills after 1880 from C. Vann Woodward's critique. Woodward claimed the reasons were rather from economic motives. Wright argues "that the early mill-building movement was an outgrowth of town building."(44) From Wright's point of view, "virtually every industrial beginning may be traced to someone's attempt to make capital gain on property in land."(47) With the abolition of slavery, towns were formed which brought entrepreneurs together to process local raw materials. What evolved was a continuing separateness of the South " as a low-wage region in a high-wage country, a consideration that shaped its economic future for another century."(50) Not that there was no labor market after the Civil War. It was simply that the labor market was isolated from the rest of the nation or the world for that matter. (64) As a result the unskilled labor market in the south affected all Southerners up to WW II . (70) Because entrepreneurs risked losing their cheap labor, they restricted themselves from the capital markets and discouraged educating workers. The separateness of the South was a self perpetuating cycle. In separate chapters Wright discusses three specific areas of labor in the South covering agriculture, textiles, and industry. From his perspective as an economist, it is low-wage labor that they share in common.

Southern people were united economically first by slavery and then by a regional low-wage labor market. In agriculture there were the plantations and small farms. After the Civil War a new relationship was fostered between landowners and freedmen. Wright concludes that market forces determined the resulting sharecropper system. "Sharecropping was a balance between the freedmen's desire for autonomy and the employer's interest in extracting work effort and having labor when it was needed."(86) Historians interpret this system as denying black labor its freedom of mobility and as being exploitive in nature, but Wright disagrees. In economic terms, the sharecropper agreement was a credit transaction and a cropper had to be known in the community to participate. His reputation was important in accumulating such wealth as was possible short of land ownership. Small white farmers were caught in a similar credit trap. It was not possible for a farmer to maintain self-sufficiency once he fell into debt.

Southern labor costs attracted textile mills, but it took some time for them to proliferate. Part of the problem was from the learning curve necessary for labor and management to operate the mills. In this regard the isolation of southern labor retarded the process. The lack of investment capital was another problem. It would not be until the 1920s that the South finally came to dominate the textile industry. The family labor system was used to attract workers to mill villages, especially those with large numbers of girls. (138) This system continued until the 1920s when the southern wage advantage eroded.

In Old South, New South, low-wage labor is highlighted as the South's most distinctive characteristic. Wright alsonotes "the southern industrial workplace was highly segregated, and its lines of segregation were remarkably persistent through good times and bad."(158) Industrialists came to see these patterns as "natural" and acquiesced in them. But southern industries were plagued by problems. In lumbering and timber the workforce was temporary and predominantly black. However furniture manufacturing was able to continue beyond the decline of the timber industry. But Wright notes southern industries shared a common trait: "they paid low wages and they added relatively little value to the raw materials with which they worked."(163) More directly, in the case of iron and steel, development was "actively suppressed by northern capital."(165) U.S. Steel purposely bought up its southern competitor, TCI, to limit its competition. In southern labor practices, blacks were restricted in how far they could advance in industry until such time as there were no longer enough white workers available to fill positions, Only then did black work experience became relevant. "By 1910 three-fourths of the iron and steel laborers were black, and many semiskilled and skilled jobs came to have heavy black representation."(194)

Low wages in the south came under increasing pressure by the federal government in response to national political and economic prerogatives in the 1930s. "It was not primarily market forces that forced convergence [of wages] through migration of labor and capital, but political pressures on the labor market that imposed wage convergence well in advance of the market out of fear of southern competition."(208) Under the New Deal wages were raised nationwide, but the effect was more in the South than in north. "In every case...the NRA significantly reduced the North-South differential, and the important point is that these reductions were never rally reversed."(217) In agriculture the AAA encouraged planters to reduce acreage, and the planters complied by cutting that assigned to croppers and tenants. To replace cheap labor, mechanization, long delayed in southern agriculture, permitted planters to compete without low-wage labor. Southern entrepreneurs were now no longer afraid of a national wage market. "With the decline of the tenant plantation and the effective abolition of the low-wage industrial labor market, southern political and economic leadership no longer had strong interests in regional isolation from outside labor and capital markets."(238

According to Wright the economy of the Old South no longer exists. It was displaced by a new economy merged inextricably into the national and global economies of the twentieth century.

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