By Hunter Wallace
Here are some more thoughts on the ‘Golden Circle’ which I wanted to address separately from the book review:
1.) First, while the book is an introduction to the ‘Golden Circle’ concept of a slave-based, classical-oriented plantation civilization, there are some very significant differences within the zone. The most important difference is that all the other plantation societies were located in the tropics whereas the American South has a sub-tropical climate. We’re in the temperate zone and have four seasons.
This is very important because European settlement failed in the Caribbean – except in Cuba and Puerto Rico, which developed plantation economies very late in the game – because of diseases like malaria and yellow fever. The South was also affected by these diseases, but unlike in the Caribbean, both blacks and Whites demographically thrived here. Thus, the slave trade wasn’t necessary to sustain our economy.
2.) Second, the crops grown here were different: outside of south Louisiana, the major Southern plantation crops were cotton, tobacco, and rice. The intensity of work and the number of laborers required on your typical Caribbean sugar plantation was much greater than on Southern cotton or tobacco plantations.
Compared to the Caribbean sugar planters, the Southern cotton planter was really little more than a jumped up farmer and the tobacco farmer was just a farmer with a few laborers. Fortunately, the Southern cotton planters and tobacco farmers didn’t have the wealth to reside in Britain like the absentee Caribbean sugar barons.
3.) Third, American slavery because of the climate and the crops grown here was much more bourgeois than in the Caribbean. In the United States, a planter owned 20 slaves. The majority of slaves were owned by the planter class, but the vast majority of slaveholders were not planters. Instead, slavery was much more of a middle class institution with some families owning maybe 1 or 2 slaves as an investment.
4.) Fourth, the Old South was a slave society and a settler society. The Confederacy was majority White. Aside from Cuba, this generally wasn’t true of the Caribbean plantation societies.
So anyway, the point I am driving at here is that because of the sub-tropical climate, the crops grown, the size of plantations, relative lack of disease, the distribution of slaves and the demographics that the ‘the South’ is best understood as a hybrid which had one foot in the Caribbean and the other in North America. This is not what made ‘the South’ distinct relative to ‘the North’, which is why we are addressing this separately, but ‘the South’ as a transition zone is closer to the truth.
Now, a few observations:
1.) First, as everyone including mainstream historians now acknowledge, the division of the Caribbean between rival European metropoles – starting with France, Britain, Spain, Denmark and the Netherlands, but later including the US and USSR – has been one of the leading causes of its regional underdevelopment.
2.) Second, as Cushman points out, this was also true of the American South and Brazil. The destruction of one plantation society by radical republican revolution – at different times, Haiti, ‘the South’, Cuba and Brazil – had a ripple effect across all the others.
3.) The ‘Golden Circle’ had one major inherent flaw: all of these countries had a colonial economy, which made them rich but weak. The slave-based, plantation agriculture model was export-oriented and totally dependent on European trade and security.
That’s why Cuba and Puerto Rico, unlike Mexico, remained loyal to Spain until it was too late. It is why Saint-Domingue fell during the Haitian Revolution. It is why the British Caribbean, which was cut off from North America by the Royal Navy, remained loyal and doomed itself to abolition and social revolution. The Empire of Brazil held out the longest because it was independent, but like the Confederacy, it too was still too dependent on international trade and eventually succumbed to its isolation and international pressure.
4.) As we saw in all cases, but most famously in Haiti, the racial demographics of the ‘Golden Circle’ proved to be a major liability and long term security threat.
5.) The ‘Golden Circle’ slave-based, plantation model with its overwhelmingly black workforce and monoculture in one or two agricultural commodities was doomed in the long run. It generated enormous wealth in the 17th and 18th centuries, but in the 19th century it was eclipsed by industrization. As long as the colonies were tied to their metropole, they were doomed to a long term slide in power and influence due to new wealth generating industries.
6.) In most cases, these extractive economies had a single play – sugar or coffee or cotton – and that was pretty much it.
Let’s take a closer look at the South:
1.) As I have pointed out in recent weeks, the unbalanced economy of the South was the major factor that doomed the Confederacy. Southerners followed the ‘law of comparative advantage’ to the point where they spent most of their time starving and burning their cotton in the war.
2.) Lincoln played the Negro Revolt card. See all the radical republican revolutions for parallels.
3.) The plantation economy discouraged industrialization and urbanization. The lack of internal markets and dependence on international trade made the South rich but weak. Again, it was a play that couldn’t last in the long term.
4.) The infrastructure that was built was oriented around the plantation: factories which processed cotton, railroads which carried the cotton to the largest cities, which naturally were ports where the cotton and tobacco was exported abroad. The colonial nature of the economy was reminiscent of sub-Saharan Africa in a later era.
5.) The plantation complex only dominated South Carolina. In every other Southern state, there were sectional rifts due to areas which were not fully integrated into the slave-based, plantation economy. In time, this would have changed, but 1860 was too early.
6.) Among other things, the planter class didn’t need public schools or universities to serve an overwhelmingly rural society. In the long run, this made ‘the South’ into a cultural satellite of ‘the North’.
7.) Unlike in the Caribbean, ‘the South’ had the resources, demographics, and potential to launch a slave-based or free labor-based industrialization program. Slaves were used to build railroads in Cuba and ‘the South’. In Cuba, slaves worked in sugar mills which were essentially factories, and in Appalachia they worked in salt mines. There is no reason why slaves or free laborers or both couldn’t have been used in textile and steel mills. Blacks later worked in both industries after the war.
All of this is very interesting. We can only speculate about alternate history. Neither the South or the Caribbean has an economy that is based any longer on slave-based plantation agriculture. Both sugar and cotton are now fully mechanized and the production of these commodities has largely migrated to other regions.
A final thought: the thrust of Cushman’s book is that the classical values of the ‘Golden Circle’ still have applications today, but he is not proposing to bring back slavery. Indeed, slavery and plantations aren’t really necessary to have a seigneurial society. How does that apply in a world where almost no one works in agriculture?
So, here is a clear direction for the next book: coming to grips with the modern South and Caribbean, or the “Southern Future,” and articulating a path forward based on classical values which are now untethered to a world of slavery and plantations.
Thank you for the recommendation to make further inquiry regarding the Belgian presence in the Congo. As you suggested, it appears to be a bit more complicated than I had been led to believe, with many original accounts coming from tawdry yellow-journalism. That does not mean the Belgian presence may not have been a giant scar through that unfortunate land, but it is (again, as you suggested) a subject where a bit of independent research should accompany any of the conventional wisdom.
I’m still doing some reading on it.
As you learn more about the country, it will gradually occur to you that blacks are the only reason why the Democratic Republic of Congo is one of the poorest countries in the world.
Read about what Stanley and Livingstone found there as the first Europeans to explore the region and fast forward to the Belgian accomplishment by 1960. The Belgians easily created a modern country there with cities, industries, roads, airports, schools, hospitals, sewer systems, electricity, etc. Congo was poised to become a peaceful, prosperous nation. The future was so bright that independence was expedited. It was world news when it all fell apart.
Of all the countries in the world, the Democratic Republic of Congo has more going for it than maybe a half a dozen other countries. The Congo River alone has the hydroelectric potential to generate electricity to power most of the continent. All of sub-Saharan Africa could be fed with Congo’s arable land and it has mineral deposits which dwarf any European country except for Russia. The only thing it lacks is a population capable of self government.
What comparative disadvantages existed that prevented industrialization of the South?
I can’t help wondering, Mr. W., whether you and others are overlooking the role of race in the doom of the South. Maybe the black workforce simply made the place unattractive to enterprising men other than those who had, so to speak, inherited the plantation economy from the Caribbean. Without realizing it, the men who thrived in that life were cutting themselves off from the mainstream of European culture. When, at last, war came, what card did they have to play other than money–supposed-king cotton–which was hardly enough? How much sympathy for them and their cause was there among Europeans, to whom their entire way of life was not only alien but racially alien?
A few years ago, I read an opening chapter or two of a pre-Civil-War tour of the South by a Northerner–Olmsted, maybe? Wasn’t he the Central Park fellow? One of his stops was Richmond, which he described as a black city–filled with free blacks, I think–rather the way, say, Atlanta was touted in the 1970s or ’80s, after the Civil Rights movement. (I’m going from my memory of those years.) It all seemed very strange to me–and probably pretty strange to him, too, though I don’t recall that he emphasized the strangeness. The state capitol had armed men at its front door, because there’d been a slave rebellion–something like that. Apparently, none of this bothered the planters, who, ultimately, went to war to preserve a South that featured such things, but maybe it put off industrialists, journalists, and, as I say, other enterprising men, who were keeping the North connected to developments in the racial hearth, i.e., Europe.
Can’t say I have any evidence for this. It’s just something I wonder.
It was cheaper for Southerners to buy manufactured goods from the North or imports from Britain than to support local industry in the antebellum era.
It was more profitable, familiar and socially acceptable to specialize in slave-based plantations and cotton monoculture – to reinvest profits in ever more land and slaves rather than in manufacturing – and import food crops and animals from the Midwest. This led to an export-based economy that was overwhelmingly built around a single commodity.
The “Invisible Hand” of the free-market made the South dependent on the Midwest for food and animals, dependent on the Northeast for manufactured goods, and dependent on anti-slavery Britain for any chance of winning its independence. When the war came, it exposed all the fallacies of entrusting our fate to blind market forces.
As we have seen with the East Asian countries, it was due more to a failure of vision on the part of the South’s leadership. There were plenty of men like De Bow who were associated with the antebellum Southern commercial convention movement who had the right vision, but their voices were marginalized until after the war when abolition forced the issue.
The alleged diplomatic power of King Cotton best symbolizes this failure of vision. It was a world that was tragically seen from the narrow perspective of the lawyer and the cotton planter.
The relative price of manufactured goods matters only to consumers. If goods manufactured in the North and British Empire were cheaper, why was it more expensive to produce manufactured goods in the South? Why were capitalist discouraged from investing in manufacturing in the South.
According to laissez-faire, free-market economics, the ‘consumer’ and the ‘individual’ has the only perspective that matters. It doesn’t matter where the ‘consumer’ acquires these goods from and it makes sense to purchase imports with a cheaper price.
The world is just a mere collection of individuals engaging in trade … UNTIL, a big war comes and reality comes crashing down on this theory, and we are reminded that the world consists of rival nations engaged in a geopolitical struggle for wealth and power.
THEN it matters a great deal that your entire economy is based around the export of cotton, which you spend the war torching because the people who used to carry your cotton to Europe on their ships have now blockaded your coast with their navy to strangle your economy.
It suddenly matters a great deal that things like salt used to be imported, or there are no factories capable of making locomotives and spare railroad parts, or all these animals and crops you relied on before the war had to be imported from your current enemy. BTW, the vast majority of war related industry is located behind enemy lines as well.
This is less of a problem of the “Invisible Hand” than it is of the character of the people. The reason why Africa is poor is not due to a fatal flaw with the Invisible Hand. It’s poverty is due to the character of its people. That the North was willing to invest in industrialization and the South wasn’t demonstrates that there is a stark difference in the character of Northerners and Southerners. Northerners most likely had a far lower time preference that Southerners (hence, the lack of long term vision). There is nothing that the Invisible Hand could do to fix the relative poorer character/decision making of the Southern elites. Better people will have better results nearly 100% of the time. Look at the post War South. As you correctly noted, textile manufacturing that originated in the Nortg eventually moved South. This was a case of Northern owned capital that’s transported to the South. Nearly all major manufacturing in the South comes from capital investments from the North and from foreign countries (primarily from Asia). If left alone, the South would be largely not industrialized today. Why aren’t Southerners capable of organizing capital for industrialization?
This doesn’t answer the question as to what factors caused manufacturing in the South to be uneconomical (if that is indeed the case – I’m not convinced that it was). If the South expended all of its resources to cotton and agriculture, this may have been a valid point. But there was vast amounts of available, natural resources, and raw materials to support manufacturing in the South. And due to most plantation labor being sourced from black slaves, there should have been an availability of labor to work at a Southern plant.
Sure it is.
It wasn’t the “Invisible Hand” that led to the Industrial Revolution in Britain. It was the “Visible Hand” of the state. The same is true of the Northern states after the War of 1812 and particularly Japan which is a country that would have never industrialized due its to lack of natural resources had the decision to do so been left up to the free-market and private actors.
The Embargo of 1807 and the War of 1812 briefly crippled New England’s shipping industry, but stimulated domestic manufacturing in the region. After the war, Yankees came to appreciate the value of protective tariffs and pushed for them in Congress out of self interest.
OTOH, Southerners continued to follow the logic of laissez-faire, the profit motive, and comparative advantage to its logical conclusion, which was a land completely given over to and dominated by cotton monoculture. Abolition wiped out virtually all the capital in the South and led directly to the colonial economy of the ‘New South’ era. The spirit of the ‘New South’ lives on today in our approach to economics.
This had nothing to do with racial or ethnic differences. Ethnically speaking, the English, Yankees and Southerners were all derived from a similar British racial stock. Instead, it is due the influence of certain economic doctrines and the way those doctrines have narrowed the economic vision of Southerners.
That was dealt with at length in the previous thread.
1.) In Britain, industrialization was due to centuries of government intervention in the economy going back to Henry VII, which was only loosened AFTER becoming the world’s leading industrial, colonial, and military power.
2.) In the North, it was due to both conscious imitation of Britain in government policy, but more specifically the impact of the War of 1812 on the region. There were also a number geological and environmental advantages that led to Northern industrialization – swift streams whose water power could be used in textile mills, as well as easily accessible coal and iron deposits in Pennsylvania.
3.) The South was ideologically dominated by Jeffersonianism and its hostility to commerce, industry, and urbanization. As De Bow pointed out for twenty years, there were all sorts of industrial and commercial opportunities in the South, but the simple formula of investing in ever more land and slaves and the congenial lifestyle that accompanied it won the day.
These are assertions that you have failed to provide evidence to support. More accurately, this is a narrative you’ve pushing to support your position that the government created everything, which is patently false. Want a little proof? From 1789-1861 the North and South existed under the same state, the US. Why was the North more industrialized than the South? And from 1865 until today we all are exist under the same state. Why the North is still more industrialized than the South? And why is it that the South would be largely non-industrialized today if it were not for non Southern investment? And why was it that it was two bicycle makers from Ohio privately funded their invention of the airplane but no one from the South had the initiative to create one? And why were there hundreds of automobile manufacturers that were founded in the upper Midwest (mainly from Michigan( but virtually zero were founded in the South while living under the same state? And of the visible hand of the state makes industrialization possible, why did the Soviet Union, which did everything that you advocate, fail? If the state makes industrialization possible, the private sector is not needed. And if the state drives technology, why is the Tech sector centerd in Silicon Valley and not the South? Both exist under the same state. Therefore, the results should be the same. Shouldn’t they?
1.) Let’s start with the Industrial Revolution in Britain. Did that occur BEFORE or AFTER the triumph of the laissez-faire, free-market, free-trade doctrine popularized by Adam Smith and David Ricardo? When exactly did Britain move away from centuries of mercantilism and adopt the free-market, free-trade model?
2.) As I said above, Jefferson’s Embargo of 1807 and the War of 1812 crippled New England’s shipping industry, and spurred nascent industrialization in the region. After the War of 1812, the US embraced the protectionist trade policy which nurtured industrialization and maintained it until WW2. Thus, the government had quite a lot to do with fostering Northern industrialization, while Southerners preferred to invest in land and slaves.
3.) In the North, slave-based plantation agriculture of the ‘Golden Circle’ variety was never on the menu as a development model. It was always a Southern problem. The Northeast never had a similar elite or economy or settlement pattern and was able to abolish slavery and industrialize much more easily. It was also never as enraptured with Jeffersonianism as the South.
4.) The North that emerged from the WBTS in 1865 never had its entire capital base wiped out by the war. The economy of every Northern state grew during the war while the agricultural economy of the South collapsed under pressure. After the war, the South became a Northern colony. It had a timber, textile, and steel industry, but those industries produced raw materials – again, like a European colony -and the profits flowed out of the South.
5.) Just listen to how Southerners talk about economics (this thread is a great example) and contrast what they say with almost any other advanced industrialized nation which doesn’t debate any of this libertarian nonsense. As I said in the other thread, Alabama is a superpower in poultry processing while South Korea builds automobile plants here for a reason.
6.) If you at the vast majority of American patents, you will similarly find they were located in the North after the WBTS. Perhaps that has something to do with the spillover effects of a manufacturing ecosystem? Only a free-trader believes all industries are equal.
7.) We’ve already discussed at length the differences between state socialism and private sector-government cooperation.
8.) I’ve already explained how Silicon Valley has always worked closely with the federal government.
9.) Southerners and other Americans have different ideas about economics. Just turn on your television, open a newspaper, or log on to the internet and you will rarely hear any concept of economics from Southerners that does not conform to the dominant laissez-faire, free-market, free-trade doctrine that goes back to Jefferson.
How could the South be hostile to commerce when it relied on it for their well being?
By commerce, I am referring to middle class professionals typically found in large cities and towns, businessmen who are not engaged in plantation agriculture. The Old South had very few of those.
How did Jeffersonian economic doctrines prevent the South from industrializing? How many Southerners chose not to invest in industrialization because it would upset St Thomas?
As an ideology, Jeffersonianism lionized agriculture and created a suspicion of urbanization and industrialization. Jefferson’s followers were suspicious of ‘elites’, internal improvements, and were stridently protective of states’ rights. It was the dominant ideology in the South through the antebellum era and the Confederacy and shaped the South’s economy.
How did those doctrines narrow the South’s economic vision? Well, for starters, in the last thread you advocated an Amish-style economy In the 21st century, so I would cite that as one example.
“What comparative disadvantages existed that prevented industrialization of the South?” – slavery. slaves themselves were worth more as an asset at the time of the civil war than all of the factories, roads, and so on throughout the entire country. So why invest in a factory when a slave will yield a better return on investment? Likewise there were also some environmental concerns that made factories less viable then as well.
“Just turn on your television, open a newspaper, or log on to the internet and you will rarely hear any concept of economics from Southerners that does not conform to the dominant laissez-faire, free-market, free-trade doctrine that goes back to Jefferson.”
Yes–that’s one of the things I like about Southerners.
Very, very VERY broadly speaking – the Antebellum South was based on traditional European social systems. The South was sort of an American Feudal system. Aristocracy was based on land ownership, with peasants/vassals/slaves working the land. Industrialization is a relatively new development, in Human social orders. Most Human societies have been based on turf ownership, and the populations sustain themselves by fishing/farming/herding. Manufacturing was generally small scale, and local. Oh – there’s always been trading between towns/regions/countries – bur most communities met their own basic needs.
Large scale industrial global trade, with dis-associated, unaccountable ownership, is a very new thing. The international Elite does not care for distinct Nations, as these Divine Masters stride the globe. The Peons are merely workers/consumers of the things they choose to create. Humans, including Whites, are simply the Prole Masses, and Human relationships, communities, and social structures don’t matter at all.
Globalism is a beautiful thing to the tiny, tiny Elite that profits – but it’s inhuman, deranged, and utterly bizarre to every-one else.
Back to the AB South – how could the Southerners have known what would happen aka Reality smacking them hard, until it happened?
When I speak of bringing back manufacturing, I don’t mean the boom times of post WWII. I mean local organic manufacturing. Let’s make the things we need, and trade with those we choose to trade with.
What does the industrial revolution have to do with an 18th century Scottish philosopher? The industrial revolution was a transition from hand made goods to mass produced machine made goods. And these machines were not made possible by trade policy. They were made possible by innovation. Are you insisting that Adam Smith’s policies held up the invention of the power loom and the steam engine? These inventions served a major role in the Industrial Revolution.
You insist that Adam Smith’s “libertarianism” held back the British Empire and protectionism created the Industrial Revolution. Adam Smith lived from lived from 1723-1790. In 1685, GB imposed a 10% import tariff on Indian goods. In 1690 the tariff doubled to 20%. In 1701, First Calico Act, legislation banning imports of dyed, painted or printed fabric was enacted. In 1707 British textiles manufacturers obtained further tariffs on Indian textiles. In 1721 Second Calico Act further banned imports of Indian textiles. All of this happened before Adam Smith was born. Your timeline doesn’t add up. With the tariffs in place, British textiles were not competitive with Indian textiles until 1815 to 1830 until the spinning jenny (invented in 1764), the spinning frame(patented in 1790), the spinning mule (invented in 1779), the power loom (invented in 1784) and most importantly, the Boulton and Watt steam engine were factored into production of textiles. Therefore, for roughly 130 years the people of GB were forced to buy higher priced and lower quality textiles to support a domestic textile industry that wasn’t competitive until technological innovation (which has nothing to do with tariffs) made British made textiles competitive. For 130 years, poor, lower, and middle class British citizens were forced to subsidize wealthy British textile manufacturers inefficiency.
Adam Smith published ‘The Wealth of Nations’ in 1776. David Ricardo articulated the ‘law of comparative advantage’ in 1817. Yet it wasn’t until the repeal of the Corn Laws and the Sugar Duties Act in 1846 that Great Britain embraced the laissez-faire, free-trade, free-market model of classical liberal economics.
From Henry VII in the late 15th century until the triumph of classical liberal economics under Queen Victoria in 1846, Great Britain was the leading practitioner of mercantilism and protectionism in Europe.
You’re right. The English and British government (after the union with Scotland) practiced extreme protectionism against the Indian textile industry. This continued for decades after Adam Smith published ‘The Wealth of Nations’ until British manufactures finally became competitive with Indian textiles.
And how did that happen? Well, for starters, there were the high tariffs behind which the British textile industry was fostered for over a century – the century during which the Industrial Revolution took shape in Britain. There was also the cotton grown by American slaves in the ‘Golden Circle’ in the American South which gradually dropped the price of British textiles. Finally, India itself fell under the colonial control of the East India Company before the Raj was taken over directly by Britain.
None of it had anything to do with the laissez-faire, free-market, free-trade model. The notion that classical liberal economics sparked the Industrial Revolution in Britain is nothing more than a legend. Had the British textile industry competed with India on true laissez-faire, free-market, free-trade grounds, it would have been put out of business and the Industrial Revolution never would have happened.
This post explains in great detail how the British destroyed the Indian textile industry:
Just how far do we want to go down the rabbit hole? A few points are in order that may broaden and enlighten this discussion:
1. Albion’s Seed by David H. Fischer whereby he identifies 4 unique bio-cultural strains that populated America and we can still see them play out in America today. For instance most of the witch craze in England took place in East Anglia and guess what region of the United States that group populated? The witch craze was rare in Southern England who populated the American Southland.It was unknown in the American South.
2. Slave labor undercut free white labor and that may have been a major factor why industrialization never developed. See Hinton Rowan Helper and The Impending Crisis of the South
( Even today in literate we can see the witch craze with Northern authors like Stephen King who writes of malevolent supernatural beings whereas Poe-The best writer in the English language second only to Shakespeare- writes horror stories centered around psychological insanity- horror is more internal. The North always needs an external enemy)
On an unrelated note November 11,2015 was the 50th anniversary of Rhodesia’s Unilateral Declaration of Independence. One can only wonder how Africa would be today is the South had won its independence. I suspect Rhodesia and South Africa would be going strong with the Confederacy as one of their allies. Can OD do a special on Rhodesia?
Read my original post. The Industrial Revolution was made possible by the innovation of private inventors. Those inventions are independent of the tariffs.For example, there is no connection between James Watt’s steam engine and British tariffs. Without that steam engine there would be no Industrial Revolution. If you insist that tariffs brought about the Watt steam engine, explain how.
These innovations in 18th century Britain came about under a mercantalist trade policy, NOT the laissez-faire, free-trade, free-market model advocated by Smith and Ricardo. Had Britain followed the laissez-faire model, it would have followed the ‘law of comparative advantage’ and imported cheaper textiles from India with cotton grown by Indian free labor, not by slaves on Southern plantations. The British textile industry would have gone out of business long before the invention of the steam engine.
The same trend can be seen in late 19th century and early 20th century America. It was a golden age of innovation in industrial patents in the Northern States … precisely because the high tariffs had nurtured a manufacturing industry there, and the creation of an industrial ecosystem led to a feedback loop of innovation. It is the same story with Japan and South Korea neither of which were known for high tech innovation before the late 20th century.
The textile industry came to Britain from the Low Countries … again, because of a century of government intervention that transferred the technology and ultimately the industry.
You still didn’t demonstrate/explain how the mercantilist trade policy is tied to technological innovation. Just because Great Britain happened to have a mercantilist trade policy while the inventions were made doesn’t mean that they are connected. If anything, they are completely unrelated for no other reason than restricting competition staggers innovation. It took one hundred and thirty freaking years for British made textiles to become competitive with Indian textiles. That’s a sad legacy. Why innovate when there isn’t any competition? What’s even worse is that poor, lower, and middle class people had to pay more for garments than they otherwise would have had to. Tariffs are highly regressive taxes that hurt the poor and help the rich.
That’s just a narrative that you are pushing. But if tariffs drive innovation, what tariffs were in place that led to the creation of the smartphone, or the personal computer, or the laptop, etc? How did tariffs help Apple Computer get started out of Steve Job’s garage?
According to free-market theorists, it doesn’t matter that Britain’s textile industry was 1.) created in the first place by industrial espionage, monopolies, government subsidies, export bans, and tariffs that put its Flemish competitor out of business, 2.) that for over 130 years it was protected by high tariffs which prevented the industry from being destroyed by superior Indian competition, or that 3.) it finally “caught up” with Indian competition by virtue of using cotton grown by slave laborers on American plantations and then finally by direct colonization and control of India’s trade policies by the East India Company.
In this way of seeing things, “technological innovation” is something that just happens out of the blue like random lightning strikes and has no connection at all to the economic context – the nature of industries in the economy, the foreign competition those industries are facing, the policies of the national government – in which these inventors find themselves. The history of Japan, South Korea, the US, Britain and Germany all show otherwise.
I cited above the torrent of industrial patents in late 19th century America. I’ve also explained how once established manufacturing industries, unlike agriculture, have spillover effects as tinkering around leads to new innovations and industries and a positive feedback loop that results in economic growth.
Again, this is precisely what happened again in Japan and South Korea after WW2, neither of which were high tech innovators until the government fostered industrialization there. Now Japan has a cutting edge robotics industry and countries like Taiwan and South Korea produce semicondutors and advanced consumer electronics.
So now the Industrial Revolution in Britain is a sad legacy? How could the Industrial Revolution have taken off in 18th century Britain in a mercantilist, protectionist world that violated the free-market, free-trade doctrine in every conceivable way?
That’s a good question: why was there so much innovation in 18th century Britain and 19th century America? If protectionism crushes innovation, as you say, how did the US become the world’s leading industrial power by 1900?
Government sponsored R&D also leads to innovation. We’ve already discussed how it lead to the semiconductor, the computer, the internet, nuclear power, and space travel. Oh, and the Soviet Union put the first satellite and man in space, which should be a been impossible under the free-market doctrine. A private company should have put a man on the moon, not NASA.
Following the ‘law of comparative advantage’, the British free-traders and classical liberal economists thought that the Germans should grow wheat and agricultural products and trade those for manufactured goods. As we have seen, Adam Smith also believed the United States should specialize in agriculture.
The best example of free-trade vs. protectionism would be the US and Britain from 1860 to 1932. During this period, the US has the highest tariffs in the world while Britain practiced unilateral free trade. Britain sunk in relative power and influence to the US and Germany during this period and embroiled itself in WW1 and WW2 to retain its position against a rising Germany.
I really think John B. suggested some provocative points about the relationship of the North (which actually also included out to the West coast) to British/European culture. Did the large German population of St. Louis arguably give it a more authentic and vibrant connection to Europe than anywhere in the South, save, I suppose, New Orleans? Esp. when you consider how much of the growth in “German” (a rather broad term that seemed to even cover Magyars) population came from those fleeing after 1848/49.
Think of the ideas flowing into the North versus the relative stagnancy of the South. Outside of New Orleans there was no city of any size or note. Education was poor enough to convince some folk to start the university at Sewanee with the vision of an Oxford/Cambridge in the South. I know from my Ky background that U of Transylvania was one of the leading schools in the South! Face it, wealthy Southerners sent their kids up North (or to UK) for college. The opportunities for industry, engineering & finance were almost always in the North.
I think any intelligent Southerner who studies the 1860-1861 period is struck by the blinders on too many Southerners when it came to “Cotton”. I do not want to underplay the incredible importance of Southern cotton to the world’s textile industry, but there was an incredible level of arrogance and pride among too many pre-Civil War leaders in the South. Esp the “Fire Eaters”.
Of course, hindsight is always 20/20! It’s likely most men in office other than Lincoln would have sought a negotiated end to the War in 1862. Or in 1863, after Chancellorsville when Lee was marching North & Lincoln relieved Hooker. Most of Lincoln’s predecessors would have.
Hunter. Do you think the early loss of New Orleans is overlooked as a factor leading to Southern defeat. I recall in Grad School I had a few Civil War era colleagues who suggested the loss of New Orleans was an immense blow to the Confederacy. I believe arguments included that besides the obvious (only significant sized city, only significant port), I was told it was the only City in the South most Europeans even knew of!
Probably a good 90% of Country and Bluegrass music is of Southern origin, along with the infamous Southern Rock. Not only do we have a lot of representation in these genres, you might say they are our very own. Country especially is exported worldwide and the megastars make a lot of money doing concerts in Europe and Japan.
Jeff, I’m from Kentucky, lived most of my life in Georgia. I saw Bill Monroe in Centennial Park when I was at Vanderbilt. So the “we” and “them” type of thing doesn’t really fit. LOL! I never saw Lynyrd Skynyrd. Almost, but the plane crash happened before I could take in a concert. Their former drummer’s band did a show at my college, which was as close as I got.
The above is not really my type of music, but as a white Southern kid its some of what was around. One couldn’t very well miss it. Plus, spending a few years in Nashville… Can’t say I much cared for country beyond the usual people folks not into country like. Johnny Cash, Merle Haggard, Jerry Jeff Walker, Emmylou Harris. Gram Parsons was my favorite. Such a loss. You always hear talk about they’re going to make a movie about Gram.
Both free trade and gov planned economies have their attributes and their own downfalls.
-greater national security due to autonomy (if planned well)which is part of a holistic defense strategy.
-greater general prosperity and efficiency during peacetime
-no need for gov planners who may or may not become corrupt
-Economic autonomy is highly desirable, for security reasons.
-Mutually beneficial Intl. trade is highly desirable for more immediate prosperity.
-going full bore Soviet style is a nonstarter, even if it were superior.
-government planning is very failure prone.
-any government planning (except maybe tariffs) will be more efficient at the state level than the federal level, as smaller is generally more nimble and people have more control over their own state than federal level.
-allowing the states to plan autonomously or in interstate agreements if so desired creates a superior natural experiment for economy planning than one big federal level.
-Western men of British descent, as a race appreciate individual freedoms and autonomy more than others.
-Southerners, as a race, are a more agrarian people than most other races outside of the US. Midwesterners and Westerners are probably in the same boat.
When I put these premises together, they don’t necessarily spell “No government planning whatsoever” but at the same time it’s not exactly a recipe for gov planning, especially federal.
I also think tariffs are especially advantageous since:
-they don’t outright ban anything. If people still want their Cuban cigars or Russian Vodka bad enough, they can still have them.
-they encourage domestic production of the goods being produced, giving us greater economic autonomy.
-I think they are less risky than subsidized projects, since you are not create a bureaucracy or any other entity that may need bailout later on. Tariffs can also easily be adjusted up or down overnight by decree rather than having to build a giant gov venture that may take a decade, only to watch it fail.
As you can see, I lean towards letting tariffs be the #1 planning done at the federal level, perhaps giving a little more free rein to the states. I also think this will be a pretty easy package to market to the general public since most have a resentment to the federal gov trying to do too much.