Extractive Industries, Poverty, and Underdevelopment in Central Appalachia

Miners from the Battle of Blair Mountain at the foot of Blair Mountain giving up their guns

By Hunter Wallace

The following excerpts come from Richard B. Drake’s A History of Appalachia:

“First came the explorers and “scholars” like Broanz, Anstead, and Hotchkiss, who discovered and precisely located the coalfields. Then came the buyers who secured title to the minerals when they were not able to deal directly with the absentee owners of vast tracts of mountain land. When small owners were involved, buyers gained control of mineral rights by outright purchase of the mountain lands or by purchase of the mineral rights only, leaving the surface to the original owners. After a careful search for title in the state capital or county seat, and into the legal chaos that has troubled Appalachia’s lands since the American Revolution, the mineral buyers came to the Appalachian farmer with gold, charm, legal maneuver, and sometimes fraud. They came into western Maryland, western Pennsylvania , northern West Virginia, and northern Alabama during the 1860s. During the 1870s, the buyers into central Tennessee, then into southern West Virginia in the 1880s, and finally into eastern Kentucky in the 1890s. …

Mayo went among his people on horseback and by buckboard wagon with his pockets full of gold dollars, buying thousands of acres of mineral rights. He had his farmer-customers sign a “Broadform Deed,” which gave the owner of the mineral the privilege of using the service, which the mountaineer retained, in any way necessary to get at the minerals beneath the surface. Of course, with his yeoman values, the mountaineer could see value only in the surface. Obviously the mountaineer had in mind only the deep mining methods used at that time, the kind of mining he had seen at Millers Fork on the Big Sandy or the few holes that were hacked into the coal seams then operative in the Kentucky River or the Big Sandy Valleys.

Mayo brought thousands of parcels of mineral rights, and then consolidated these titles into blocks of mineral rights, which he sold or leased to companies that might actually do the mining. These dealings made him a rich man and a respected “benefactor to his region.” His mansion in Paintsville, Kentucky, a huge Victorian structure, is still a showplace in the region. His funeral in 1914 was the largest ever held in eastern Kentucky.”

So, this is how it all gets started by buying up the mineral rights to vast coal deposits in Appalachia, consolidating them into huge blocks, and then selling the rights to Northern corporations:

“Historian Ronald Lewis has noted that the late-developing Central Coalfield of northeastern Tennessee, eastern Kentucky, southwestern Virginia and southern West Virginia, transformed a vast farming and virgin forest area in 1880 into an area covered with coal towns and small cities dedicated to coal. Population boomed as coal production “tripled by 1900 and multiplied fivefold by 1920.”

During the early 20th century, Central Appalachia – roughly the area corresponding to the Central Coalfield – developed the most intensely colonial, extractive economy in the United States:

“In almost every case of industrial paternalism – some called it “corporate feudalism” – it worked badly. In the Appalachian coalfields, the company towns – necessarily built by a company needing the workers in areas remote from regular urban services – often became centers of oppression. Appalachia, in fact, had a much higher concentration of company towns than any other area of the nation. Some towns quickly became fiefdoms run by the resident manager or mine manager, using the leverage of the company store, the company-financed church, and the school, or control of company housing, to strengthen the company’s control.”

Just so you know, the antebellum cotton plantation never penetrated this area. Instead, the free-market system led to this type of Northern corporate feudalism in Central Appalachia after 1900:

“These and scores of other coal towns, many constructed as shacks row on row, spread across the Cumberland-Allegheny portion of Appalachia. They became at best small cities of romance for those wishing to escape the confinement of the mountains and the poverty of mountain farming. For others they were a grim lure into a neo-feudal vassalage to some mining corporation.


In many of these towns, one company literally owned the whole. The coal company paid the preacher, owned the company store, the houses, the hotels, and the school. A wage check-off paid for the doctor, the teacher and other services. The very smallest towns – jerry built villages erected by get-rich-quick developers – provided only the barest housing and no services. In the large company-built towns, important amenities were provided, and a sense of permanence and community existed. Usually only company men could bring their families to live in the company houses. The company often paid its wages in scrip covertible only at the company store, where prices were often higher than in competing stores in the county. Miners frequently came to think of themselves as virtual vassals, working for the company in unsafe mines for low-wages, renting a company-owned house, and paid in scrip. In some communities, a reputation for being a “model town” was widely recognized by elite and worker alike, although in times of industrial trouble such “model” towns often suffered from particularly bitter divisions.”

By the 1920s, the ruthless exploitation of Central Appalachia was so bad that the region descended into warfare between striking miners and the puppet governments of West Virginia:

“West Virginia’s governor, Epharaim F. Morgan, called out the state police and the state militia and appealed to President Harding for help. On the last day of August 1921, the two armies met at Blair Mountain at the crest of the watershed between the Central Mine Fields and the fields of Mingo and Logan. Twelve hundred state police, militia, and sheriff’s deputies and mine guards met the three thousand UMW marchers in a pitched battle that probably had more sophisticated logistics across a twenty-five-mile front than was involved in the Battle of New Orleans in 1815. Both sides were supported by scouts, physicians, nurses, and even chaplains.


On the side of the State of West Virginia and the operators, airplanes dropped bombs on the miners’ army during the battle. The operators defending their domain suffered three deaths and about forty wounded. The “invading” miners’ casualties were not known. Neither side gained any particular advantage until a detachment from the U.S. Army arrived on September 4 to support the operators’ army. With the appearance of the U.S. Army contingent, the miners withdrew and the battle ceased.”

The extractive industries in Central Appalachia – coal and railroads – created a plutocracy which captured control of the state governments of West Virginia and Kentucky:

“The 1920s, though hard years for the coal industry generally, were also years in which control of the region seemed wholly within the hands of the region’s coal operators. Not only had the union been beaten back and the rising consciousness of labor frustrated, but the handles of power seemed to rest totally in the hands of the region’s coal and railroad barons. Perhaps the major manifestation of this kind of plutocratic power concentration was in the rise of the so-called “Fairmont Ring” during the early decades of the twentieth century. This was a small group of West Virginia politicians and coal-owners, including Peter H. Watson, Johnson N. Camden, Clarence Wayland Watson, and Aretas B. Fleming. These gentlemen sat atop a network that included such great corporations as the Standard Oil Company of Ohio, the Baltimore and Ohio Railway, the Fairmont Coal Company , Consolidation Coal Company, and the Monongah Coal and Coke Company. This combine openly bought U.S. senatorships for Johnson Camden in Kentucky and for Clarence Watson in West Virginia.”

Even U.S. senatorships were bought and sold on the free-market. As the profits from coal mining flowed out of Kentucky and West Virginia to Northern owners and investors in Ohio, Pennsylvania and New York, the Northern-owned timber companies invaded the area too and stripped the entire region of its virgin forest:

“Such companies as the Kentucky Coal and Timber Company of New York; the Chicago Lumber Company; the American Associates Ltd of London, England; Burt and Babb Lumber Company of Michigan; the Yellow Popular Lumber Company of Ohio; and W.M. Ritter of Pennsylvania”

Northern corporations made large fortunes by denuding huge swathes of the Appalachian Forest at firesale prices, one of the most biologically diverse regions in the world, between 1880 and 1920.

Ellis G. Arnall, a progressive governor of Georgia 1940s, later led the fight against the discriminatory railroad rates that kept the South in colonial subjection:

“The belief that the South was an oppressed colony of the North was widespread for many decades after the War Between the States. Georgia’s governor in the mid-1940s, Ellis G. Arnall, for example, said that while growing up in Newnan, Georgia in the early 20th century, he “realized that the South was merely a colonial appendage of the imperial domain called the North; that the South was the economic doormat of the United States as Ireland was of the United Kingdom. Eastern and Northern writers,” he observed, “had field days in steady criticism of the South, its poverty and problems.” …

Arnall attributed the South’s relative poverty in part to discriminatory (railroad) freight rates. (Up until after World War II, railroads were the nation’s dominant carrier of freight; not only heavy, low-value freight, but of all freight than moved a substantial distance. Therefore, the level of their rates was very important.) Railroad freight rates were, he said, discriminatory to both the South and the nation’s other “colonial” economy, the Mountain States.

The fact that it was cheaper for northerners to ship manufactured goods South than it was for southerners to ship manufactured goods North, while it was cheaper for Southerners to ship raw materials North than for northerners to ship raw materials South, almost irremediably handicapped the South by limiting its industrial production to unfinished, heavy goods. Low rates for shipping raw materials to northern manufacturers and for shipping northern finished goods South , of course, profited northern manufacturers, and southern manufacturers of finished goods were harmed. (Both northerners and southerners wanted to produce finished goods because profit margins are higher on finished goods. Arnall claimed that the higher freight rates southern manufacturers had to pay precluded even the manufacture of fine cotton textiles in the South. Georgia, for example, despite its man cotton mills, had not a single fine-goods bleachery.

Rates on raw materials moving from the South were set so low that they amounted to a subsidy to manufacturers in the North, especially in parts of New England where obsolete plants might have to be refitted or junked if they did not enjoy an effective subsidy on their raw materials and a domestic tariff (the higher freight rates southern manufacturers paid to ship their goods to the North) that protected their goods from the competition from newer and more efficient …”

The libertarian dream of a privately-owned transportation network was also achieved in Central Appalachia. After around 1900, the railroads that crisscrossed the region – this was before the creation of the federal interstate network and long distance trucking put an end to this – were also owned by private Northern corporations.

The railroads hired armies of lobbyists, bribed newspaper editors and politicians, and had so much power that they designed West Virginia’s constitution. Monopoly control of the American transportation system (railroads) allowed them to price gouge Appalachian consumers and cripple domestic industries with an effective domestic tariff that plundered the South in that way as well.

About Hunter Wallace 12387 Articles
Founder and Editor-in-Chief of Occidental Dissent

82 Comments

  1. Well said Brad,

    All the railroads that crisscrossed the region were also owned by private Northern corporations. The railroads hired armies of lobbyists, bribed newspaper editors and politicians, and had so much power they designed West Virginia’s constitution.

  2. O/T – I’m watching, in grim fascination an interview with Ta Negro Coates, on “Book Discussion” on C=Span2. I can’t think of a more disgraceful whining, retarded GRIFTER, besides Al Charlatan. EVERYTHIBG is “waycism” EVERYTHING. Reparashuns reparahuns reparashuns. Meanwhile – no-one’s done a bloody thing for the genuinely mis-treated, abused, spat upon White Appalachians.

  3. The coal industry really didn’t go to hell until after WWI. Up until then growing demand for coal, and the inability to bully the White natives in the region kept the Northern coal barons in check.

    After WWI the demand for coal and consequently the price of coal started to go down. That combined with unlimited foreign immigrant labor, and the importation of Blacks by the coal companies ruined wages and conditions in the mines.

    Right up through World War one, coal mining was the highest paid wage labor in the US. Everyone talks about Henry Ford’s 5 dollars a day. Coal miners could and did make between $8 and $18 dollars a day depending on the deal and the mine they worked in. Granted coal mining was dangerous work, but, it paid well up until the end of WWI. After that things went to hell.

  4. Blair Mountain was a real mess. Phil Murray the vp of the UMW tried to talk sense to the leadership of District 17 in Southern WV—they wanted to march over the mountain from Charleston and carry the UMWA into the Logan area by force. I don’t know what transpired between Murray and the District 17 leaders in private, but, Murray decided to leave Charleston for Washington to confer with John Lewis the President of the UMWA. No sooner that Murray left the scene, the armed march started.

    Once the Blair Mountain fiasco was over, much to his credit Murray did everything to save the District 17 leadership who were put on trial for treason. To make a long story short Murray fixed the “treason trial” in a most unique manner, and the District 17 leadership were acquitted.

  5. Earl,

    Was that the case in all the coal fields? From what I have read, there was a big difference between coal mining in Pennsylvania, Illinois and Indiana and most of Southern Appalachia. In eastern Kentucky and southern West Virginia, there were these company towns, but not so much in southern Illinois.

  6. A coal company would have had a standard form of operation, there might have been small differences, but, not much. If you worked in a US Steel mine it would have been, similar in Pennsylvania, West Virginia or Alabama i.e. “Union Supply Company” the US Steel company Store.

    The company town was called the “patch”, and Italians were called “hunkies” in coal country.

  7. If you have time, you should consider taking a look at issues related to Louisiana oil and gas extraction around Huey Long’s time. Long correctly perceived that Standard Oil and other northern interests were enriching themselves off of Louisiana’s energy resources while returning very little value to the people of the state, and indeed foisting as much of the externality costs from the energy production onto them as possible.

  8. Not sure what the complaint is against the coal companies in this article.
    –Did they imprison or enslave people that had not been duly convicted?
    –Did they forcibly take anybody’s property? Or buy it at a freely negotiated price?

    Regarding the railroads, that pricing scheme was peculiar, and of course was designed to be unfair, but I wonder how much difference it really made. I guess they wanted to protect their main industry just like the antebellum South wanted to protect its main industry.

    –Why didn’t the Southerners use boats to ship goods North or anywhere else in the world? Boats are generally cheaper than rail, but not as fast. Of course that’s today’s rates. Perhaps rail was cheaper than boat back then???

    –Why didn’t the South have a competing railroad built, even if owned by other Northerners?

    What gov alternative would have been better? A gov administered railroad might have been more equal, but does that really make it cheaper overall? I don’t take it as a guarantee that equal would have been necessarily better if it cost both parties more.

    If it had been up to the government alone, would the railroad have gotten built cost effectively? Or would it have been a fiasco like the TVA?

    Is it possible that there were simply more smart businessmen living in the North than the South at that time?

    Of course the civil war was destructive to the South, so there could have simply been less Southern capital available to do the job. After all, so much of the South’s wealth was in slaves and they had that taken away, along with their main industry altogether.

    • “Not sure what the complaint is against the coal companies in this article.
      –Did they imprison or enslave people that had not been duly convicted?
      –Did they forcibly take anybody’s property? Or buy it at a freely negotiated price?”

      LMAO.

      They only sucked the region dry and left its people worse off than the rest of Appalachia that didn’t have coal mining. Aside from that, what is so objectionable about the economy of one area – in this case, Central Appalachia – being plundered to develop the economy of another area?

      “Regarding the railroads, that pricing scheme was peculiar, and of course was designed to be unfair, but I wonder how much difference it really made. I guess they wanted to protect their main industry just like the antebellum South wanted to protect its main industry.”

      The private Northern-owned railroad network effectively acted like a toll road that subsidized commerce going in one direction while taxing it coming from the other direction. What, pray tell, could be wrong with that? The railroads were owned by entrepreneurs, not the state!

      –Why didn’t the Southerners use boats to ship goods North or anywhere else in the world? Boats are generally cheaper than rail, but not as fast. Of course that’s today’s rates. Perhaps rail was cheaper than boat back then???”

      You answered your own question.

      –Why didn’t the South have a competing railroad built, even if owned by other Northerners?

      Indeed. According to free-market theorists, the entrepreneur was supposed to respond … and beat Carnegie, Rockefeller, JP Morgan, etc.

      “If it had been up to the government alone, would the railroad have gotten built cost effectively? Or would it have been a fiasco like the TVA?”

      Who are the historians who say TVA was a fiasco?

      “Is it possible that there were simply more smart businessmen living in the North than the South at that time?”

      Were the Japanese and South Koreans of 1900 inferior to those of 2000?

      “What gov alternative would have been better? A gov administered railroad might have been more equal, but does that really make it cheaper overall? I don’t take it as a guarantee that equal would have been necessarily better if it cost both parties more.”

      How about federal highways? Look those that exist in every state in the country now?

      “Of course the civil war was destructive to the South, so there could have simply been less Southern capital available to do the job. After all, so much of the South’s wealth was in slaves and they had that taken away, along with their main industry altogether”

      According to free-market theorists, the free-labor system was supposed to be vastly superior to slave-labor.

      • Hunter,

        “They only sucked the region dry and left its people worse off than the rest of Appalachia that didn’t have coal mining. Aside from that, what is so objectionable about the economy of one area – in this case, Central Appalachia – being plundered to develop the economy of another area?”

        How do you suck people dry by giving them the option of a job? They weren’t forced to work for the company. They did it because the company paid them.

        Why are you stuck on this “sucking them dry” talk? I feel like I’m arguing against somebody from MSNBC or SPLC.

        “Indeed. According to free-market theorists, the entrepreneur was supposed to respond … and beat Carnegie, Rockefeller, JP Morgan, etc.”

        I’d say that in time they would have if it were cost effective. Despite the peculiar pricing strategy, trade by rail must have remained profitable or both parties wouldn’t have been willing to use it.

        “How about federal highways? Look those that exist in every state in the country now?”

        No, rail is way cheaper than highway for transporting freight. Not even close. And barge is cheaper than rail.

        “According to free-market theorists, the free-labor system was supposed to be vastly superior to slave-labor.”

        Really? Who said that? It might have been better for the slave (depending on his intelligence and the benevolence of the master) but I’ve never heard anybody claim that slavery of negroes was bad for the white man. Of course slavery and free market aren’t exactly competing theories. The South was both free market (or so you say) at the same time it had slavery.

        • “How do you suck people dry by giving them the option of a job? They weren’t forced to work for the company. They did it because the company paid them.

          Why are you stuck on this “sucking them dry” talk? I feel like I’m arguing against somebody from MSNBC or SPLC.”

          Face it.

          They milked the area of its raw materials, coal and timber, which were used to power the North’s great industrial expansion, and the scraps left behind were so meager that Central Appalachia was left poorer and worse off than the rest of the region. As I have said all along, the profits flowed out of the region to the Northeast.

          The part of Appalachia that had the most natural resources is worse off than the areas which never had coal mining. This is no coincidence. Everyone from the mine manager to the preacher to the landlord to the sheriff to judges and state legislators was in the pocket of the coal companies that plundered the region.

          US Senate seats were bought and sold like commodities.

          • Really? Who said that? It might have been better for the slave (depending on his intelligence and the benevolence of the master) but I’ve never heard anybody claim that slavery of negroes was bad for the white man. Of course slavery and free market aren’t exactly competing theories. The South was both free market (or so you say) at the same time it had slavery.”

            Ever hear of Adam Smith?

          • Hunter,

            “Ever hear of Adam Smith?”

            Yes, but I don’t remember him claiming that slaves were not a form of wealth for whites or that whites owning negro slaves made whites poorer.

            Would a farmer of the day owning a lot of horses be poorer than one with no horses?

            Was it cheaper to pay a man to pull a plow than to own a horse to do it for the price of the purchase and feed?

            I guess it depends on how far you want to pull the plow. If you only want to pull it a foot or two, then hiring somebody might be cheaper than buying a horse.

          • Hunter,

            “Face it.

            They milked the area of its raw materials, coal and timber, which were used to power the North’s great industrial expansion, and the scraps left behind were so meager that Central Appalachia was left poorer and worse off than the rest of the region.”

            Translation: They bought them on the open market at the agreed upon price. Both parties benefitted, as well as the loggers and miners.

            “As I have said all along, the profits flowed out of the region to the Northeast.”

            Translation: They bought them on the open market at the agreed upon price. Both parties benefitted, as well as the loggers and miners.

          • Jeff,

            “Translation: They bought them on the open market at the agreed upon price. Both parties benefitted, as well as the loggers and miners.”

            According to free-market theorists, both parties benefited from the exchange, but in reality – as mainstream historians acknowledge – Central Appalachia was left worse off than the rest of Appalachia because the coal mining companies didn’t create a plutocracy that dominated their social structure.

            The free-market looted the region of its natural resources, made a handful of Northern investors extremely rich, and retarded investment in technology, infrastructure and education, thereby stifling diversification and underdeveloping the region’s economy in the long run. In spite of all that wealth, Central Appalachia was left worse off than other areas which didn’t have large coal deposits.

            The free-market failed the region.

        • “Why are you stuck on this “sucking them dry” talk? I feel like I’m arguing against somebody from MSNBC or SPLC.”

          See all the above excerpts from mainstream historians. I could cite a half dozen other sources from memory. I transcribed the excerpts above for the benefit of everyone.

          I’d say that in time they would have if it were cost effective. Despite the peculiar pricing strategy, trade by rail must have remained profitable or both parties wouldn’t have been willing to use it.

          “In time they would have” … electricity, broadband, nuclear power, the internet, etc.

          No, rail is way cheaper than highway for transporting freight. Not even close. And barge is cheaper than rail.

          The vast majority of commerce that goes on in the South on a daily basis takes place on all-weather roads. It is a good thing those roads aren’t burdened with tolls and discriminatory rates that choke away our wealth. The Southern economy began to recover once the stranglehold of the private railroads was broken after WW2.

          • Hunter,

            You quoted me:

            “Why are you stuck on this “sucking them dry” talk? I feel like I’m arguing against somebody from MSNBC or SPLC.”

            You said:
            “See all the above excerpts from mainstream historians. I could cite a half dozen other sources from memory. I transcribed the excerpts above for the benefit of everyone.”

            So basically you are ignoring 90% of economists and getting your Economics from historians. So do you trust economists to teach you History? It only makes sense.

            “The vast majority of commerce that goes on in the South on a daily basis takes place on all-weather roads. It is a good thing those roads aren’t burdened with tolls and discriminatory rates that choke away our wealth.”

            You understand that the roads aren’t free don’t you? They are paid for by tolls and gas/diesel taxes. Some states use only gas tax and have no toll roads (I think NC still doesn’t have toll roads) and some states use a hybrid model.

            The trucks delivering goods are paying for the state to maintain the roads. It’s pretty unlikely that the state is paving roads as efficiently as the private sector could. They sure can’t generate electricity as cheap as the private sector.

  9. Jeff, I hate to tell you, but, the South lost the Civil War, and that left the railroads in Northern hands.

    The Baltimore & Ohio Railroad & their lawyers played a key role in splitting Virginia and creating West Virginia.

    I’m trying to remember which Confederate General, that Tom Watson, found out was working for Northern railroad interests?

  10. “Ever hear of Adam Smith?”

    Are you saying the South now, without slavery, has less wealth than the antebellum South?

  11. Hunter,

    “Who are the historians who say TVA was a fiasco?”

    TA to this day:
    –has never paid back its principal loan from the Treasury.
    –does not pay the interest on the principle, which is essentially the same as running on a yearly subsidy.
    –sells some of the highest priced electricity in the region.

    How can you not call it a government fiasco?

    The private sector in the area:
    –took no taxpayer money to fund
    –sells electricity cheaper than TVA

    There are claims that TVA was also about flood control and maintaining navigable waterways, but nobody really seemed to care about those things. Here’s a snippet from https://en.wikipedia.org/wiki/Tennessee_Valley_Authority

    —-During his presidential campaign, Roosevelt claimed that private utilities had “selfish purposes” and said, “Never shall the federal government part with its sovereignty or with its control of its power resources while I’m president of the United States.”—-

    So I think that explains a lot of the motive.

  12. If the intent here is so we of Dixie got used? Raped financially? Why, yes, this is correct.

    Ask around here in South Carolina: Why did our Steppen Fetchit state gov create a Right-To-Work state? Easy, kids, most easy.

    Mostly, to attract what industry that could be attracted, and that was the union-busting/escaping textile firms from New England states. “Wowee Zowee, Batman! Loads of cheap labor out the wazoo!”

    Yeppers, and back to that sumbitch Roger Milliken one more time, whose legacy includes a mention in the law books, for getting scolded by SCOTUS. No, closing down the Darlington plant had zip to do with “we’re losing money”, all to do with Milliken’s anti-union stance, yes.

    Well, son, the joke backfired with NAFTA. And Raygun. And Slick Willie, yes. Drive from Greenville to Florence to Marion to Myrtle Beach and count all the closed-down mills. And where did they go? China, Sri Lanka, Mexico, Jamaica, shit, pick one already.

    Even farming ‘baccer is gone. I know, I’ve relative who once made pretty good on that, now, that’s long over with. So, what we got left? Ah, yes, milking Yankees and Canuckistani’s as they hit the beaches. Which, in a Douglas Adams way, does not explain why Horry county is a hotbed of poverty. And it is! Out past Conway and Socastee? Third World, yeppers. Grinding poverty enough to make old Karl get livid.

    I point all this out to the kids. See, slavery was not but one issue, that the South got used and raped by the North? Look around our state and tell me otherwise. Dare ya.

  13. “The free-market failed the region.”

    What’s that supposed to mean? The free-market didn’t owe the region anything. For a while, coal-mining flourished there. Things change. If there’s anyone who doesn’t like it there, he or she is free to go elsewhere, just as capital did. If the capital had had nowhere else to go, well, maybe it would have thought of something new to do with Central Appalachia. It didn’t.

    Your psychology never changes, Mr. W. You’re always trying to prove the same thing: the South was right. This new kick of yours is just your latest attempt to salve your Southern pride: Dixie didn’t lose because it was a Caribbean-style slave region, which nobody wanted to have anything to do with; it lost because it relied too much on the free market–or whatever this latest hobbyhorse of yours is.

    Let’s look at something basic: The South didn’t even have to exist, just as the North didn’t have to exist, just as the Caribbean plantation zone didn’t have to exist. If Negroes had not existed, Europeans might not even have developed the Caribbean. On the other hand, maybe they would have developed it in a way different from the historical one. It’s the same with the South, with Appalachia, with everything. None of it had to exist at all.

    The obliteration of Caribbean slavery destroyed the Caribbean colonies that were based on it. That doesn’t tell us anything about the free market or about the virtue of slavery. If there were abolitionists who argued that the economies of those areas would be unchanged–or would even change for the better–if slavery were to be abolished in those areas, well, they were making a ridiculous statement, probably because they were trying to throw anything into the balance with their moral objection to slavery. Nobody can say what will happen to any kind of economic activity if even a minor condition of its existence is changed, much less a major one. Is there a sugar shortage? Are you experiencing a sugar shortage? Do we need slave-based sugar plantations in the Caribbean to meet the world demand for sugar? Does that show that the abolitionists were wrong?

    The same is true of Appalachia, the Deep South, the whole thing. Slavery–a major condition of the South’s economy–was destroyed, by the Civil War. That meant, not incidentally, that a large population of former slaves was now living amid its former masters, from whom it was racially distinct. We have no way of gauging how all these factors affected the South’s economic life after the war. The South might not even exist–might never have existed–if there had been no slavery. We have no idea how capital and markets and movements of people would have been different if the history of the South up to the conclusion of the Civil War had been different.

    You’re just being captious–and sophomoric. Look, you say: the sugar colonies of the Caribbean collapsed; that proves the North was wrong. Look: Lincoln said such-and-such one day–but then he said the opposite another day. That proves the North was wrong. Look: We were insufficiently Hamiltonian. That shows the North wasn’t right. If we’d been sufficiently Hamiltonian, we’d have been as strong and vital as the North, and then our slave society wouldn’t have been defeated by the Yankees.

    You lost because you weren’t strong enough. That’s all.

  14. I’m not big on oral history, but, from what I can gather from my own family and from others I’ve talked with, a big ante-bellum worry was that big city Northern criminals would dominate western Virginia if the North got their way which they did. Stonewall Jackson, among other said things to this effect.

  15. TA to this day:
    –has never paid back its principal loan from the Treasury.
    –does not pay the interest on the principle, which is essentially the same as running on a yearly subsidy.
    –sells some of the highest priced electricity in the region.

    How can you not call it a government fiasco?

    As this paper conclusively shows, the TVA created cheap electricity which spurred industrialization of the Tennessee Valley. It led to long term gains in manufacturing employment – which raised average per capita income – from 1933 through 2000. This did not happen in other areas where conservatives succeeded in blocking TVA-style regional development projects like the Arkansas Valley.

    http://emlab.berkeley.edu/~moretti/tva.pdf

    As for the price of TVA electricity in Tennessee in 2012, that’s due to more recent developments, above all else the late 20th century campaign against nuclear and coal-generated electricity and the Carter-era “conservation” schemes, which disproportionately impact Tennessee.

    The private sector in the area:
    –took no taxpayer money to fund
    –sells electricity cheaper than TVA

    The private sector in the area:

    1.) First, the Northern timber companies that clear cut the region created the massive deforestation and soil erosion that contributed to massive flooding in the Tennessee Valley. The TVA reversed the severe environmental damage caused by the free-market.

    2.) Second, the private sector failed to make the Tennessee River navigable from Knoxville to Paducah, thereby stifling economic growth in the region, and also failed to manage the flooding on the Tennessee River.

    3.) Third, the private sector failed to develop most of the commercial fertilizers which are used in America today, 60 percent of which are derived from TVA technology.

    4.) Fourth, the private sector failed to split the atom and create nuclear power, which the TVA and Oak Ridge National Laboratory accomplished during WW2.

    5.) Fifth, the private sector failed to eliminate malaria in the region, which 20 percent of the population of the Tennessee Valley suffered from in 1935.

    6.) Sixth, the private sector failed to bring electricity to the Tennessee Valley, and even after the TVA was vetoed twice by Coolidge and Hoover, less than 2 percent of residents had electricity compared to over 90 percent of the French, Germans, and Japanese.

    7.) Seven, the private sector had reduced the agriculture of the Tennessee Valley to sharecropping, most White farmers were tenants who had lost their land, and the only industry it brought to the region were Northern textile mills attracted by the lack of a maximum work week and cheap and abundant child labor. This retarded the economy of the Tennessee Valley which was one of the poorest areas in the South in 1935.

    8.) Eighth, the private sector created a low-tax, low-wage, low-investment economy which failed to attract high value industry – like the aerospace industry that exists there today, thanks to the TVA, NASA and Huntsville and Redstone Arsenal – which lowered average per capita income.

    9.) Ninth, the private sector dismally failed to invest in education, new technology and infrastructure in the Tennessee Valley. It did, however, create the privately-owned Northern railroad network which used discriminatory rates to crush economic growth in the Tennessee Valley.

    10.) Tenth, the private sector dismally failed to create comparable industrial growth in manufacturing in all the other proposed regions where TVA projects were blocked like the Arkansas Valley.

    Simply put, both mainstream historians and the people of the Tennessee Valley rejected these absurd, self-serving arguments. Everyone who lived there was capable of comparing and contrasting the Tennessee Valley before and after the TVA or with places like the Arkansas Valley where the magic of the free-market continued to retard economic development.

    “There are claims that TVA was also about flood control and maintaining navigable waterways, but nobody really seemed to care about those things. Here’s a snippet from …”

    I’m curious … why didn’t the private sector end the flooding of the Tennessee River, or make the Tennessee River navigable from Knoxville to Paducah, or industrialize and raise average per capita income in the region? Shouldn’t the private sector have accomplished all of this under the Coolidge and Hoover administrations which twice vetoed the TVA?

    “—-During his presidential campaign, Roosevelt claimed that private utilities had “selfish purposes” and said, “Never shall the federal government part with its sovereignty or with its control of its power resources while I’m president of the United States.”—-

    So I think that explains a lot of the motive.

    FDR’s motive was to modernize the economy of the Tennessee Valley and the TVA succeeded beyond anyone’s wildest expections. As I previously noted, the electricity generated by TVA dams fed Alcoa’s aluminum plants during WW2 and was essential to developing the atom bomb at Oak Ridge National Laboratory.

    http://emlab.berkeley.edu/~moretti/tva.pdf

    • Hunter,

      “Simply put, both mainstream historians and the people of the Tennessee Valley rejected these absurd, self-serving arguments. Everyone who lived there was capable of comparing and contrasting the Tennessee Valley before and after the TVA or with places like the Arkansas Valley where the magic of the free-market continued to retard economic development.”

      Because it was a wealth redistribution program from the rest of the country to TVA region that’s why. And until they start paying the interest on their loans, it is an ongoing wealth redistribution program to this very day.

      “I’m curious … why didn’t the private sector end the flooding of the Tennessee River, or make the Tennessee River navigable from Knoxville to Paducah,”

      Because the benefit was not worth the cost, that’s why. The same reason the gov shouldn’t have done it.

      “As I previously noted, the electricity generated by TVA dams fed Alcoa’s aluminum plants during WW2 and was essential to developing the atom bomb at Oak Ridge National Laboratory.”

      It would have been cheaper to have bought electricity on the open market.

      Again, even if you could convince me that TVA outperformed the private sector, it still would be the exception to the rule. Even a stopped clock is right twice a day.

      Why don’t you tell us all the projects you would do if you were president of the South–and don’t forget to attach a budget proposal, including where the money is coming from.

      • “Because it was a wealth redistribution program from the rest of the country to TVA region that’s why. And until they start paying the interest on their loans, it is an ongoing wealth redistribution program to this very day.”

        ATTN everyone:

        Before the TVA was created by FDR in 1933, it had been vetoed twice by Calvin Coolidge and Herbert Hoover. So how did the Tennessee Valley fare under the magic of the free-market?

        http://newdeal.feri.org/tva/tva06.htm

        – 94 percent of property owners and 98 percent of tenants did not have electricity.

        – 30 percent of property owners and 41 percent of tenants had no toilet facilities whatsoever (including outhouses).

        -65 percent of property owners and 78 percent of tenants had to travel at least 300 yards to get their household water.

        – 8 percent of property owners and 3 percent of tenants owned radios (usually battery operated).

        – 39 percent of property owners and 23 percent of tenants had phonographs (including record players that were operated with a hand crank).

        – 50 percent of property owners and 25 percent of tenants read newspapers.

        – 26 percent of property owners and 16 percent of tenants owned automobiles.

        – 7 percent of property owners and 4 percent of tenants owned trucks.

        I would call that a great success for the free-market. It made the Tennessee Valley one of the poorest parts of the South and one of the poorest parts of the country in the 1920s.

  16. HW: Having a past interest in one of the principals of the TVA (David Lilienthal; I knew his son, David, and daughter-in-law, Peggy who would both tell the most interesting dinner tales about the father), I’m curious to know how you can arrive, as you do, praising the achievement of a civil rights icon – David Lilienthal.

  17. Same kind of extractive economy occurred here in the Ozarks, hills were stripped of their timber, and the people left with the mess.Lead mining left areas polluted.To say this was just the free market going on, ignores a great many things.Its always wrong to behave this way, even if its the “free market”

  18. Don,

    There is a simple answer: while I believe the TVA was a great blessing for the Tennessee Valley in North Alabama, I live amid the disaster the Civil Rights Movement created in the Black Belt in South Alabama.

    All one has to do is compare and contrast Huntsville with Selma – the former one of the most high-tech metros in the country, the latter an economic basket case..

  19. TVA chairman Lilienthal was directly responsible for civil right advances in the North and South. His positive contributions in that regard are something you should be proud of, as well as his liberal hand at the helm of the TVA.

    Oy, such an irony.

    • Don,

      I have no problem believing the TVA helped Huntsville and Knoxville while the Civil Rights Movement harmed Birmingham and Selma. Similarly, while there were all sorts of great New Deal environmental programs that benefited Alabama, introducing kudzu to the South was definitely not one of them.

  20. The problem is that you can simultaneously disconnect the environmental enterprises aspect of the man from his civil rights work. Both were connected, no, rooted in liberalism and any attempt to separate the two is a dishonest disconnection.

    Liberalism isn’t a cafeteria menu that one may pick and choose from. Republican administrations repeatedly shot down the TVA. it wasn’t until FDR that the TVA got off the ground.

    You have liberalism to thank for the TVA, as well as civil rights.

    • Don,

      “Liberalism isn’t a cafeteria menu that one may pick and choose from.”

      Why not? Why can’t one believe n some ideas but not others, like some aspects of libertarianism, but not others?

      Doesn’t matter to me since I reject both aspects you mention and blame liberalism for both. Still curious though.

  21. “Why can’t one believe n some ideas but not others, like some aspects of libertarianism, but not others?”

    That’s why libertardianism has been left by the side of the road. It’s supposed adherents suffer from inconsistent thinking.

  22. Don,

    While I believe FDR’s foreign policy was a disaster, I also believe that the Second World War transformed the economy of the South in many positive ways. In the 1940s, average per capita income tripled in the South, however, Germany was destroyed in the process.

    Guess what? While I believe Lincoln’s foreign policy was an even bigger disaster, I will grant that Lincoln made some positive contributions to the South like the land grant colleges which became our state universities.

    Finally, I would have to say that Jeff’s views are more in line with the liberal tradition. FDR’s authoritarian development projects were a radical departure from American liberalism. Oh, and civil rights went nowhere under FDR. Truman, Kennedy, and LBJ destroyed the New Deal coalition in the South.

  23. Because the benefit was not worth the cost, that’s why. The same reason the gov shouldn’t have done it.

    Perhaps this is why 94 percent and 98 percent of property owners and tenants lacked electricity. According to free-market theorists, the benefits of economic development were not worth the cost.

    The sharecropping system, pellagra, hookworms, malaria, illiteracy, child labor, massive flooding, environmental damage, little investment in education or infrastructure and a low-income economy with an underdeveloped manufacturing sector was the way to go. The free-market system had literally left the people of the Tennessee Valley in the dark in 1935.

    Is it any wonder that the whole country turned against this absurd system after the 1929 stock market crash launched the Great Depression?

  24. It would have been cheaper to have bought electricity on the open market.

    If that were true, the atomic bomb would have been developed elsewhere.

    Again, even if you could convince me that TVA outperformed the private sector, it still would be the exception to the rule. Even a stopped clock is right twice a day.

    Isn’t it a simple matter to compare the economic performance of the Tennessee Valley with the Arkansas Valley where a TVA-style regional development project was shot down by Republicans in Congress?

    Why don’t you tell us all the projects you would do if you were president of the South–and don’t forget to attach a budget proposal, including where the money is coming from.

    Why don’t you tell us why China taking over North Carolina’s swine industry, retail trade, and tens of thousands of job losses in the textile industry was a win-win for your brother and fellow citizens?

    • Hunter,

      “Isn’t it a simple matter to compare the economic performance of the Tennessee Valley with the Arkansas Valley where a TVA-style regional development project was shot down by Republicans in Congress?”

      Well, it would be more statistically sound if you compared it to the average of all the areas that had proposals shot down, rather than just picking one. Even if that showed a benefit for the TVA area, it would still be an argument for wealth redistribution, not for the gov sector being superior to private sector for wealth creation–only redistribution.

      So when again is TVA going to pay all the money it still owes?

      You quoted me:
      “Why don’t you tell us all the projects you would do if you were president of the South–and don’t forget to attach a budget proposal, including where the money is coming from.”

      You replied:
      “Why don’t you tell us why China taking over North Carolina’s swine industry, retail trade, and tens of thousands of job losses in the textile industry was a win-win for your brother and fellow citizens?”

      Sure. It is a win-win because we get so much cheaper stuff.

      Let me ask you Hunter, do you sew your own clothes, or do you buy them from somewhere? If you buy rather than sew, then why is that? It is because it is a win-win for both you and the store when you buy rather than sew your own, even though you are spending cash from your pocket to pay the store.

      If you are spending more than you are earning at the store, then you have the option to:
      –earn more money.
      –start sewing more of your own clothes
      –do without new clothes.
      –simply go further in debt.

      Obviously the US gov chooses the fourth option.

      Now, I have answered your question, but you have not answered mine.

      • “Well, it would be more statistically sound if you compared it to the average of all the areas that had proposals shot down, rather than just picking one. Even if that showed a benefit for the TVA area, it would still be an argument for wealth redistribution, not for the gov sector being superior to private sector for wealth creation–only redistribution.”

        The study I cited above does just that. Why aren’t you boasting about the accomplishments of the free-market in the Tennessee Valley under Calvin Coolidge and Herbert Hoover? Sharecropping, pellagra, soil erosion, hookworms, malnutrition, illiteracy, flooding, child labor, malaria, and virtually no access to electricity in rural areas to name just a few?

        “So when again is TVA going to pay all the money it still owes?”

        How much did it cost to bailout Wall Street after financial deregulation. Come to think of it, what is the economic impact of blackouts in California?

        “Sure. It is a win-win because we get so much cheaper stuff.”

        It sounds to me like the Wal-Mart economy that I see all over Alabama.

        “Let me ask you Hunter, do you sew your own clothes, or do you buy them from somewhere? If you buy rather than sew, then why is that? It is because it is a win-win for both you and the store when you buy rather than sew your own, even though you are spending cash from your pocket to pay the store.”

        Before the magic of free-trade, we used to buy our clothes from workers in North Carolina’s textile and apparel industry. Instead of creating jobs in China, consumers in Alabama created jobs and tax revenue in North Carolina. In such a way, we didn’t go over a hundred billion dollars in the hole to China every year.

        “If you are spending more than you are earning at the store, then you have the option to:
        –earn more money.
        –start sewing more of your own clothes
        –do without new clothes.
        –simply go further in debt.

        Obviously the US gov chooses the fourth option.”

        There is a fifth option: since the trade deficit with China was caused by the WTO and free-trade, we could choose not to engage in free-trade and create jobs here, thereby avoiding the large trade deficit with that country.

        • Hunter,

          “How much did it cost to bailout Wall Street after financial deregulation. Come to think of it, what is the economic impact of blackouts in California?”

          Um. I thought they got in financial trouble because they were pressured to make so many low interest loans to blacks. Anyway, I don’t think they should have been bailed out. Bailing out is not an example of a free market, but of a subsidized market.

          “It sounds to me like the Wal-Mart economy that I see all over Alabama.”

          So now you have a problem with Walmart too? Are those Walmart jobs and all that cheap Walmart merchandise sucking us dry like coal, timber, textiles, and processing plants do? Most people are glad to see a Walmart coming to their area, but it appears you are against that too. What about Target and Costco? Are they as big a drain on us as Walmart or are they better?

          “Before the magic of free-trade, we used to buy our clothes from workers in North Carolina’s textile and apparel industry.

          First of all, there is no magic involved. Only math and nature.

          “Instead of creating jobs in China, consumers in Alabama created jobs and tax revenue in North Carolina. In such a way, we didn’t go over a hundred billion dollars in the hole to China every year.”

          Now earlier you were talking about how bad textiles were exploiting us. You claimed it was the evil North that sent the textile mills to NC because they were “extractive” industries that preyed on us.

          Do you understand that you have literally blamed free trade for bringing us textile mills and then turned around and blamed free trade for taking them away??!!

          You quoted me:
          “If you are spending more than you are earning at the store, then you have the option to:
          –earn more money.
          –start sewing more of your own clothes
          –do without new clothes.
          –simply go further in debt.

          Obviously the US gov chooses the fourth option.”

          You replied:
          “There is a fifth option: since the trade deficit with China was caused by the WTO and free-trade, we could choose not to engage in free-trade and create jobs here, thereby avoiding the large trade deficit with that country.”

          This is not a fifth option. I was making an analogy between the national level and the personal level to illustrate a point. The “fifth option” you have described is analogous to the second option, which was to sew your own clothes. Anybody can see this.

          Again, it’s like you’re not even trying to make cogent arguments anymore. You just complain about problems and blame them on free trade.

          • Jeff,

            “Um. I thought they got in financial trouble because they were pressured to make so many low interest loans to blacks. Anyway, I don’t think they should have been bailed out. Bailing out is not an example of a free market, but of a subsidized market.”

            What does that have to do with financial deregulation in the 1990s?

            “So now you have a problem with Walmart too? Are those Walmart jobs and all that cheap Walmart merchandise sucking us dry like coal, timber, textiles, and processing plants do? Most people are glad to see a Walmart coming to their area, but it appears you are against that too. What about Target and Costco? Are they as big a drain on us as Walmart or are they better?”

            Yes, I do.

            It is nothing more than the Chinese version of the company store. It creates low-wage jobs, sucks our small towns dry of retail trade, and puts us in debt to foreigners. In much the same way, Indians own all the hotels and gas stations now. Just ask for Mr. Patel from Gujarat.

            “Do you understand that you have literally blamed free trade for bringing us textile mills and then turned around and blamed free trade for taking them away??!!”

            Addressed above.

            “This is not a fifth option. I was making an analogy between the national level and the personal level to illustrate a point. The “fifth option” you have described is analogous to the second option, which was to sew your own clothes. Anybody can see this.”

            The enormous trade deficit with China is a product of public policy. Specifically, the WTO is to blame. Quit acting like this is “natural” or “inevitable” when trade policies designed by free-market theorists are to blame.

            Those who are curious just have to review the trade deficit as it has grown since China joined the WTO. Ditto South Korea. Ditto Mexico.

          • Hunter,

            You still haven’t responded to my challenge to:
            –define an extractive industry
            –give several examples of non extractive industries.

            So far poultry processing, textiles, Walmart, coal, timber industries are all extractive and making us poorer because they are sucking us dry economically.
            Should we just outlaw these industries?
            Should we send them to China so we can suck them dry?

            Since Walmart, Target, Costco, and Indian run gas stations are sucking us so dry, what stores should we shop at?

            What about Food Lion, Piggly Wiggly, Winn-Dixie, and Kroger? Are they sucking the economy dry also?

            Hunter, is the steel industry in South Korea extractive, because they have to import all the raw materials? Doesn’t this suck them dry and make SK poor? Aren’t they sending all their profits overseas?

          • Jeff,

            “Hunter,

            You still haven’t responded to my challenge to
            –define an extractive industry
            –give several examples of non extractive industries.”

            I’m surprised you are not familar with the concept of extractive vs. inclusive economic institutions. I defined the concept several comment pages ago and provided a link to a paper on the subject. The concept has been widely discussed in the mainstream and it is at the heart of Daron Acemoglu’s book Why Nations Fail:

            http://mobile.nytimes.com/2012/04/01/opinion/sunday/friedman-why-nations-fail.html?referer=

            “Co-authored by the M.I.T. economist Daron Acemoglu and the Harvard political scientist James A. Robinson, “Why Nations Fail” argues that the key differentiator between countries is “institutions.” Nations thrive when they develop “inclusive” political and economic institutions, and they fail when those institutions become “extractive” and concentrate power and opportunity in the hands of only a few.

            “Inclusive economic institutions that enforce property rights, create a level playing field, and encourage investments in new technologies and skills are more conducive to economic growth than extractive economic institutions that are structured to extract resources from the many by the few,” they write.

            “Inclusive economic institutions, are in turn supported by, and support, inclusive political institutions,” which “distribute political power widely in a pluralistic manner and are able to achieve some amount of political centralization so as to establish law and order, the foundations of secure property rights, and an inclusive market economy.” Conversely, extractive political institutions that concentrate power in the hands of a few reinforce extractive economic institutions to hold power …”

            “So far poultry processing, textiles, Walmart, coal, timber industries are all extractive and making us poorer because they are sucking us dry economically”

            I’ve already given you multiple examples which you have no problem identifying: the banana industry in Honduras, cotton in the Mississippi Delta, poultry processing in the Ozarks and Deep South, textiles in the Piedmont and coal mining in Central Appalachia. I’ve started an entire debate in a separate article on the extractive nature of coal mining in Central Appalachia.

            “Should we just outlaw these industries?”

            No, we should regulate them and make them less extractive. I’ve already pointed out that is what we ultimately did with coal mining and textiles.

            https://www.google.com/url?sa=t&source=web&rct=j&url=http://scholar.harvard.edu/files/jrobinson/files/why_regions_fail.docx%3Fm%3D1366831926&ved=0ahUKEwjC2cGBoLfJAhVCpx4KHXuqCBEQFggpMAI&usg=AFQjCNGR865zMBKHhpQal3CyZrgCZuSuiA&sig2=-6cw1tW0b8lYsXl8JZVWKQ
            “Extractive political institutions are made up of two important dimensions. First, they allocate political power narrowly. Second, they feature a central state that is not strong in the sense that it can provide key public goods. Countries differ in these dimensions.”

            “Should we send them to China so we can suck them dry?”

            China really is sucking us dry to the tune of about $350 billion last year alone and every year since it joined the WTO. The worst part of it is how we go into debt to buy “cheap” Chinese manufactured goods, which we could easily produce here, but choose not to. Instead, we mortgage the future of our children and grandchildren, create poverty and unemployment in our midst, and underdevelop our country.

            “Since Walmart, Target, Costco, and Indian run gas stations are sucking us so dry, what stores should we shop at?”

            Why don’t we just change our trade and immigration policies?

            “What about Food Lion, Piggly Wiggly, Winn-Dixie, and Kroger? Are they sucking the economy dry also?”

            I didn’t bring up grocery stores, but now that you mention it all of them are subsidized by the federal government through the SNAP EBT program and Big Ag is subsidized in countless ways.

            “Hunter, is the steel industry in South Korea extractive, because they have to import all the raw materials? Doesn’t this suck them dry and make SK poor? Aren’t they sending all their profits overseas?”

            1.) No, South Korea’s steel industry has made significant contributions to raising the standard of living in this country. According to free-market theorists, South Korea would have been better off if it had never built a steel, automobile, semiconductor, or consumer electronics industry. What was the cost of not following the law of comparative advantage and specializing in the export of seafood?

            2.) You are under the misconception that “extractive institutions” involve raw materials. That’s not what the term means although it is true that raw material industries like coal, bananas, and cotton have developed into an extractive mold.

            3.) No, they are using their surplus dollars to go on a shopping spree – for example, taking over the North Carolina hog industry – or to purchase our debt. As our banker, they have leverage over our government and we have to pay them more and more interest on the debt as the size of it accumulates.

          • Hunter,

            I asked you to give several examples of non-extractive industries.

            I’m still waiting.

            I actually did read about the book when you had me google “extractive economic institution” and I read a bit about it, but it seems pretty nefarious to me. For one thing Jared Diamond’s name kept coming up so that makes me pretty suspicious right off the bat. I’m also pretty suspect of anything with a positive review in NYT. Anyway, it’s just one book, so I’m not too inclined to put too much stock in it at this point.

            That’s a pretty long definition, but by the description you gave above, anything in the US would be inclusive compared to China. We actually have a democracy (with its problems) over here. We have all kinds of unions and laws to protect the worker from getting to freely negotiate his hours and wages, so how could an industry be extractive over here?

            The best I can tell, according to what you’ve pasted, extractive institutions are banned in the US and commonplace in China.

            “No, we should regulate them and make them less extractive. I’ve already pointed out that is what we ultimately did with coal mining and textiles.”

            This is against what you said above. We have the law&order, infrastructure, we have the regulations, min wage, etc, so how can they be extractive by the definition you gave?

            How will we ever export anything to China if you keep regulating everything we do here?

          • Jeff,

            “Hunter,

            I asked you to give several examples of non-extractive industries.

            I’m still waiting.”

            I already have above.

            “actually did read about the book when you had me google “extractive economic institution” and I read a bit about it, but it seems pretty nefarious to me. For one thing Jared Diamond’s name kept coming up so that makes me pretty suspicious right off the bat. I’m also pretty suspect of anything with a positive review in NYT. Anyway, it’s just one book, so I’m not too inclined to put too much stock in it at this point.”

            Lots are books are reviewed by the NY Times, you know.

            “That’s a pretty long definition, but by the description you gave above, anything in the US would be inclusive compared to China. We actually have a democracy (with its problems) over here. We have all kinds of unions and laws to protect the worker from getting to freely negotiate his hours and wages, so how could an industry be extractive over here?”

            As I have explained half a dozen times now, that depends on when and where you look in the United States. We do have environmental laws, worker safety laws, labor laws and so forth – NOW.

            “The best I can tell, according to what you’ve pasted, extractive institutions are banned in the US and commonplace in China.”

            In 19th and early 20th century China, yes.

            Today, China has an authoritarian government, but that government is committed to investing in infrastructure and economic development rather than simply enriching itself. While its methods are authoritarian, the result is that China and South Korea have been raising their standard of living.

            “This is against what you said above. We have the law&order, infrastructure, we have the regulations, min wage, etc, so how can they be extractive by the definition you gave?”

            As I have explained like a dozen times now, various industries in the US became less extractive due to those reforms. We regulated all sorts of industries in the 20th century. OTOH, free-trade forces American workers to compete with countries that don’t have those reforms, and that decimates sectors like textiles and apparel.

            “How will we ever export anything to China if you keep regulating everything we do here?”

            How will our standard of living be improved by forcing American workers to compete under free-trade with Vietnam’s wages or Bangladesh’s wages?

          • Hunter,


            I asked you to give several examples of non-extractive industries.

            I’m still waiting.”

            I already have above.”

            I’m only aware of the example of cars after WWII.

            “As I have explained half a dozen times now, that depends on when and where you look in the United States. We do have environmental laws, worker safety laws, labor laws and so forth – NOW.”

            I’m pretty sure you’ve called poultry processing plants extractive.
            But I’ll pretend you didn’t.

            By your definition it’s extractive unless there are all kinds of regulations, min wage and maybe unions.
            We all know these things drive up cost of production.
            Now there are two options:
            –Pay more and buy less
            –Buy from overseas
            With free trade consumers have the option to pay more for American or pay less for import.
            They have chosen to pay less for the imports.
            Hunter wants to take away that option and make us all pay more, but be able to afford less.
            Looks like he may have to discontinue his broadband service!

            “How will our standard of living be improved by forcing American workers to compete under free-trade with Vietnam’s wages or Bangladesh’s wages?”

            Simply the gain is greater than the loss. Hiring the work out to poor Bangladeshis is cheaper than maintaining your own private slaves.
            65 cents/hour x 12 hrs/day = $7.80/ day. You could not maintain a slave for that price and be able to get the same amount of work out of him/her.

          • Jeff,

            “I’m only aware of the example of cars after WWII.”

            We’ve already discussed how all industries in the United States – textiles, coal mining, cotton – became less extractive due to government regulation after the Great Depression.

            “I’m pretty sure you’ve called poultry processing plants extractive.
            But I’ll pretend you didn’t.”

            They’re not as extractive as they otherwise would be. The SPLC, for example, sued the poultry processing plant nearby in Bullock County, AL and OSHA also went after them around this time last year. For whoever is monitoring this page, this is the one thing y’all have ever done that I completely support.

            http://www.al.com/news/index.ssf/2014/10/alabama_chicken_producer_wayne.html

            “By your definition it’s extractive unless there are all kinds of regulations, min wage and maybe unions”

            Not necessarily.

            In some cases, industries will become less extractive for religious reasons, or because of the outlook of management, or more often to deter unionization and government regulation.

            “We all know these things drive up cost of production.
            Now there are two options:
            –Pay more and buy less
            –Buy from overseas”

            When you buy imports from overseas, your money flows to places like China and stimulates economic activity in China, instead of other states like North Carolina. The tax dollars that would have gone to a worker in North Carolina, instead of going to our government, which invests those dollars in education and infrastructure here, also flow to China.

            So what happens is that our government spends more money on unemployment and anti-poverty programs than on other investments that generate wealth because it has less money in the budget. Worst of all, the imports add to our enormous trade deficit with China, which puts our children and grandchildren in debt to foreigners like the Chinese who can live off the interest and snap up strategic sources of raw materials around the world.

            “With free trade consumers have the option to pay more for American or pay less for import.
            They have chosen to pay less for the imports.”

            They have chosen to invest in a foreign country. In doing so, they make things like poverty and unemployment worse in this country. They depress wages in this country. They undermine regulations which created our high standard of living. There is less money for education and infrastructure and our national debt grows.

            In such a way, free-trade sacrifices the long-term economic health of our country for short-term corporate profits and consumer goods. Those goods only appear “cheap” at the Wal-Mart. If it looks to good to be true, it usually isn’t “cheap” is very expensive for us over time.

            “Hunter wants to take away that option and make us all pay more, but be able to afford less.”

            As we develop economies of scale in this country, prices drop and wages will increase. There will be less debt, more jobs, less poverty and unemployment here. Because our money and tax dollars stay here, we will invest in our infrastructure and education and raise our standard of living instead of becoming more like Bangladesh.

            “Looks like he may have to discontinue his broadband service!”

            Why do countries like Japan and South Korea have excellent broadband? Because they are already doing what I have described. They are smarter than the free-traders.

            “Simply the gain is greater than the loss. Hiring the work out to poor Bangladeshis is cheaper than maintaining your own private slaves.
            65 cents/hour x 12 hrs/day = $7.80/ day. You could not maintain a slave for that price and be able to get the same amount of work out of him/her”

            Except that it is not.

            The displaced workers tend to find jobs in the service sector that pay less. Because they have less household income, they pay less in taxes, go into debt, and women enter the workforce. The surplus of workers in low-wage industries depresses wages. We become a poorer country of Wal-Marts and dollar stores dependent on foreigners for almost eveytbing we buy and to pay our bills. The economic rot is there for anyone to see.

          • Hunter,

            “We’ve already discussed how all industries in the United States – textiles, coal mining, cotton – became less extractive due to government regulation after the Great Depression.”

            Have you noticed that de-extractifying companies has a tendency to close down factories? Just asking.

          • Jeff,

            “Have you noticed that de-extractifying companies has a tendency to close down factories? Just asking.”

            Sure, when we engage in free-trade with countries where workers make 65 cents an hour and work 70 hours a week, that kind of competition will shutdown factories, but that is due to free-trade. All this proves is that free-trade undermines our standard of living.

  25. More here on China’s takeover of Smithfield:

    http://www.pbs.org/newshour/bb/whos-behind-chinese-takeover-worlds-biggest-pork-producer/

    Just look at the wonders free-trade has done for Southern agriculture and manufacturing in North Carolina! By putting North Carolina textile workers like Jeff’s brother out of business, China has acquired the North Carolina hog industry.

    “One year ago this month, a Chinese company bought America’s largest pork producer, Smithfield Foods. The $4.7 billion deal is the biggest Chinese acquisition of a U.S. company to date.”

    90 percent of free-market theorists said it was a win-win! They’re right … it was a double win for China!

    • Hunter,

      “More here on China’s takeover of Smithfield:

      http://www.pbs.org/newshour/bb/whos-behind-chinese-takeover-worlds-biggest-pork-producer/

      Well it’s discouraging to see that happen, but it’s encouraging to see that I’m not the only one who thinks it’s important to keep the food supply domestic. In other good news, they paid above market value, so that helps ease the pain a bit.

      It also affirms our competitive advantage in agriculture, since they bought Smithfield rather than outcompeting it.

      • “Well it’s discouraging to see that happen, but it’s encouraging to see that I’m not the only one who thinks it’s important to keep the food supply domestic. In other good news, they paid above market value, so that helps ease the pain a bit.

        It also affirms our competitive advantage in agriculture, since they bought Smithfield rather than outcompeting it.”

        Give the Chinese some credit: they destroyed North Carolina’s textile, apparel, and furniture industries, used the money to buy the hog industry, and employ North Carolina residents at all the Wal-Marts – essentially, China. Inc – which sell Chinese imports and gives them control over retail trade too.

  26. “How much did it cost to bailout Wall Street after financial deregulation.”

    Bail out? You mean make good on the loans for which the American majority voted to co-sign, because the said majority was of the view that the free market wouldn’t provide enough mortgages.

    • Richar Bird,

      “If economics worked how come all black countries are poor? They have half the world’s natural resources, half the world’s best farmland, yet without White aid they all starve. Why can’t economists save Black people from starvation?”

      Lack of human capital (brainpower). High crime, etc.

      “I would never trust an intellectual obsessed with an “-ism” to run anything. They would be so blind to what works, they would run it into the ground.”

      Good answer. I strive not to go the ism route myself.

      I have to concede that FM doesn’t give us economic security during wartimes, but for wealth creation, fm wins over gov sector hands down. The solution is to use a hybrid model as needed. No need to get baptized into one camp or the other.

  27. Hunter and Jeff.

    If economics worked how come all black countries are poor? They have half the world’s natural resources, half the world’s best farmland, yet without White aid they all starve. Why can’t economists save Black people from starvation?

    I smirk when I see National Socialist pseudo intellectuals arguing over Hitler’s economic theories, as if he was an economic genius, because Hitler had no interest in economics. As a layman he just fixed what needed fixing and got back to his lebensraum obsession, which is what lost him the war.

    I would never trust an intellectual obsessed with an “-ism” to run anything. They would be so blind to what works, they would run it into the ground.

  28. A fine comment by Mr, Bird – beware of those who govern with an ‘ism’ foremost in their mind…

    Yet, there is one ‘ism’ which I think has a place – ‘CONSTITUTIONAL – ism’

  29. In case my point wasn’t clear about Hitler. Germany was first out of the Great Depression, because Hitler wasn’t interested in economics. Take that economists!

  30. “What does that have to do with financial deregulation in the 1990s?”

    Is that an actual question, or just a rhetorical one?

  31. Jeff Davis is the sort of fellow who makes me feel that libertarianism ought to be forbidden by law.

    But as a sop to him, I’ll defend Wal-Mart. If we had a protectionist economic policy, it’s not like Wal-Mart would go away. Wal-Mart is the most efficient general purpose retailer, and it has all by itself raised American service sector productivity by a quarter in the past 20 years.

    There is no reason to shed tears over shuttered “mom and pop” stores (unless perhaps your mom & pop owned one). Those stores mostly sucked and were run by losers. I’m happy to patronize a good mom and pop store (generally the good ones get called boutique stores), but smallness by itself is no reason to lionize a business.

  32. “Those stores mostly sucked and were run by losers.”

    That’s quite a statement, Thorfinnsson. Probably not an accurate one.

    I happen to share Jeff’s free-market views, and I’d bet those mom-and-pop stores would still exist if there had been no New Deal and everything that has followed upon it.

  33. Hunter,

    You quoted me:

    “Hunter, is the steel industry in South Korea extractive, because they have to import all the raw materials? Doesn’t this suck them dry and make SK poor? Aren’t they sending all their profits overseas?”

    You replied:
    1.) No, South Korea’s steel industry has made significant contributions to raising the standard of living in this country. According to free-market theorists, South Korea would have been better off if it had never built a steel, automobile, semiconductor, or consumer electronics industry. What was the cost of not following the law of comparative advantage and specializing in the export of seafood?”

    According to the original post, they had to import the raw materials from Australia and be financed by Japanese. Why didn’t Australia suck them dry? Aren’t the Japanese bankers sucking them dry? Shouldn’t they keep it all in Korea?

    If they borrowed and imported to make an export and it worked, isn’t the SK story a testimony to free trade?

    I still don’t understand why our importing cheap bananas from Honduras keeps Honduras poor, exploiting them to our benefit with the extractive industry and all, but when we import cheap stuff from China, we are making China rich at our expense. Please explain.

    • “According to the original post, they had to import the raw materials from Australia and be financed by Japanese. Why didn’t Australia suck them dry? Aren’t the Japanese bankers sucking them dry? Shouldn’t they keep it all in Korea?”

      Good question.

      South Korea imports the raw materials for its steel industry from Australia. It launched POSCO as a state-owned enterprise. The government of South Korea set out to create a domestic steel industry and shielded it from foreign competition. By definition, POSCO should have failed and South Korean consumers would have been far better off listening to free-market theorists and importing their steel at a cheaper price from foreign countries like Japan or the US while specializing in their comparative advantage in seafood.

      In contrast, Birmingham’s steel industry which was privately owned, not a state-owned enterprise, failed because it was strangled by absentee owners and crippled by foreign imports. Even though Birmingham is the most geologically fortuitous place on earth to make steel, the State of Alabama recently gave ThyssenKrupp a billion dollars in incentives to build a steel mill in Alabama.

      http://blog.al.com/live/2011/04/alabama_state_and_local_aid_to.html

      “If they borrowed and imported to make an export and it worked, isn’t the SK story a testimony to free trade?”

      South Korea built its steel industry by engaging in strategic trade, not the sort of moronic unilateraI free-trade practiced by Americans. Because it lacks significant domestic iron deposits, South Korea imported raw materials from Australia at low rates, but it protected its own steel industry from foreign imports until it was internationally competitive.

      “I still don’t understand why our importing cheap bananas from Honduras keeps Honduras poor, exploiting them to our benefit with the extractive industry and all, but when we import cheap stuff from China, we are making China rich at our expense. Please explain.”

      As per the definition above, Honduras is a classic example of a country with extractive economic institutions. The United Fruit Company controlled the land, the government, and milked the country for generations. Wealth flowed out of the country to foreign investors while average per capita income stagnated for decades.

      In China, US corporations DO NOT control the Chinese government. Instead, they are forced to do business on China’s terms because the US can’t simply send in gunboats and practice dollar diplomacy against the world’s largest nation which possesses nuclear weapons like we used to in Central America.

      In the 19th century, it was a different story. Britain forced both free-trade and heroin on China at gunpoint. China was carved up into zones to be exploited by the Western powers. The same was true of India throughout much of its history, but that is no longer the case for the same reasons.

      Anyway, the reason is China is not Honduras is because it is actually independent and the government there, while draconian in many ways, is trying to systematically develop the country. Likewise, South Korea imposed draconian controls on foreign exchange and restricted individual freedom for the same of purchasing advanced foreign technologies.

      • Hunter,

        “South Korea imports the raw materials for its steel industry from Australia. It launched POSCO as a state-owned enterprise. The government of South Korea set out to create a domestic steel industry and shielded it from foreign competition. By definition, POSCO should have failed and South Korean consumers would have been far better off listening to free-market theorists and importing their steel at a cheaper price from foreign countries like Japan or the US.”

        No. The free market theory doesn’t predict they will fail based on that info alone. You are forgetting to account for regulations and wages. You already told us how poor SK was at the time, so I’m sure they were willing to work cheaper, and probably a lot less sundry regulations. This alone could have been enough to give them the free market advantage.

        Likewise there are (or at least used to be) lots of sewing plants in Mexico that took cloth made in US, had cheap labor sew it, then ship finished product back to US. Mexico doesn’t provide the oil or cotton or even the spinning and weaving–just the labor. But they are successful bc they have cheaper labor.

        Same thing goes for Vietnam/Bangladesh. They aren’t known for their fossil fuels or cotton industries. But they can provide cheap labor, and cloth is cheap to ship, so they now have a comparative advantage and are making good on it.

        • Jeff,

          “No. The free market theory doesn’t predict they will fail based on that info alone. You are forgetting to account for regulations and wages. You already told us how poor SK was at the time, so I’m sure they were willing to work cheaper, and probably a lot less sundry regulations. This alone could have been enough to give them the free market advantage.”

          According to free-market theorists, the state is supposed to be hopelessly incompetent at planning the economy and running industries like South Koreas’s steel industry, which is why those industries should be privatized. In this case, the state also picked winners and losers by shielding South Korea’s steel industry from foreign investment and international competition. Then there were the draconian capital controls on foreign exchange that severely curtailed consumer choice, state guided investment in foreign technology, as well as skillful management of South Korea’s currency.

          “Likewise there are (or at least used to be) lots of sewing plants in Mexico that took cloth made in US, had cheap labor sew it, then ship finished product back to US. Mexico doesn’t provide the oil or cotton or even the spinning and weaving–just the labor. But they are successful bc they have cheaper labor.”

          Let’s get another opinion. This excerpt comes from James C. Cobb in The New Encyclopedia of Southern Culture: Agriculture & Industry:

          “If the increasingly global mobility of industrial capital appeared to be a godsend to certain areas of the South, it seemed to be a curse for others. The $9.92 an hour earned by a sewing-machine operator in North Carolina hardly seemed extravagant – except to employers who knew that workers doing the same thing in Bangladesh were only taking home about 50 cents more for what could be a 70-hour workweek. Throw in the 1993 North America Free Trade Agreement, which opened up Mexico’s enormous pool of cheap labor to foreign garment and textile operations, and it was easy enough to understand why North Carolina lost 35 percent of its manufacturing jobs between 1996 and 2006 and 10 Southern states suffered losses of 20 percent or more. Jobs in the textile and apparel industry were seldom terribly renumerative, but those those had lost them often had little choice but to take pay cuts of 30 percent or more working as desk clerks and cashiers or in other such downscale service operations.”

          As the gallery can see, workers in Bangladesh make 53 cents an hour and those in Vietnam make 65 cents an hour. This is why people like Jeff want free-trade with Third World countries – he wants his fellow citizens in North Carolina to “compete” with people who work 70 hours a week for 53 cents an hour, and when that proves to be impossible, they lose their jobs, entire industries are destroyed, and displaced workers end up on the unemployment rolls or working for lower wages in the service industry.

          According to Jeff, his own brother was one of the people who reaped the rewards – he lost his job – of letting free-trade theorists manage international trade. Thankfully, the “cream” rose to the top and corporate investors somewhere made a lot of money.

          “Same thing goes for Vietnam/Bangladesh. They aren’t known for their fossil fuels or cotton industries. But they can provide cheap labor, and cloth is cheap to ship, so they now have a comparative advantage and are making good on it.”

          Bangladesh: 53 cents an hour for 70 hours a week. In a nutshell, this is what the free-market and free-trade would do to textile and apparel workers in North Carolina. Is that why we want to secede?

          • Hunter,

            “According to free-market theorists, the state is supposedly to be hopelessly incompetent at planning the economy and running industries like South Koreas’s steel industry, which is why those industries should be privatized.”

            Another lie. We make the claim that the private sector is generally superior to the public sector. We do not make the claim that it is impossible for the state to run a company, only that the private sector usually does it better. There are lots of state owned petro companies around the world, but they are all lagging pathetically in the fracking revolution which happened in the US due to private property rights and private sector oil companies.

            “Jobs in the textile and apparel industry were seldom terribly renumerative, but those those had lost them often had little choice but to take pay cuts of 30 percent or more working as deskbclerks and cashiers or in other such downscale service operations.”

            You are not counting all the cheap clothes we get as part of the trade. You keep doing this.

            *****Hunters strategy*****
            When defending state companies/projects, only count the benefit, ignoring cost.

            When complaining about free market, only count jobs lost, ignoring benefit of cheap stuff.

          • Jeff,

            “Another lie. We make the claim that the private sector is generally superior to the public sector. We do not make the claim that it is impossible for the state to run a company, only that the private sector usually does it better. There are lots of state owned petro companies around the world, but they are all lagging pathetically in the fracking revolution which happened in the US due to private property rights and private sector oil companies.”

            1.) Why would countries like Saudi Arabia need to engage in fracking? They aren’t past peak in conventional oil production.

            2.) Here in Alabama, the state government paid ThyssenKrupp a billion dollars to build a steel mill because the free-market and free-trade destroyed our indigenous steel industry.

            “You are not counting all the cheap clothes we get as part of the trade. You keep doing this.”

            When you look at the total costs of foreign imports (the trade deficit, the national debt, interest on the debt, unemployment, lost tax revenue), not just the price the consumer pays at the store, it is hard to say they are “cheap.”

            “*****Hunters strategy*****
            When defending state companies/projects, only count the benefit, ignoring cost.”

            In this case, the benefits have to be weighed against the total costs. The full price tag isn’t on display in the store.

            “When complaining about free market, only count jobs lost, ignoring benefit of cheap stuff.”

            The $350 billion dollar trade deficit with China over shit like toys, electronics, and textiles isn’t cheap. Future generations will still be paying for it when they are my age.

          • Hunter,

            You quoted me:

            “Another lie. We make the claim that the private sector is generally superior to the public sector. We do not make the claim that it is impossible for the state to run a company, only that the private sector usually does it better. There are lots of state owned petro companies around the world, but they are all lagging pathetically in the fracking revolution which happened in the US due to private property rights and private sector oil companies.”

            You replied:
            “1.) Why would countries like Saudi Arabia need to engage in fracking? They aren’t past peak in conventional oil production.”

            I didn’t say Saudi Arabia. I said *around the world*. State owned petro companies have not yet conquered fracking, and while they may eventually, the private sector is leading the way, by a very wide margin. OPEC is in major trouble today bc of the US private sector. Saudi is lucky to be sitting on top of cheapest oil in the world. And fracking is a quickly evolving science so soon, we may even be able to undercut Saudi Arabia. I’m not holding my breath, but it really could happen!

            “The $350 billion dollar trade deficit with China over shit like toys, electronics, and textiles isn’t cheap. Future generations will still be paying for it when they are my age.”

            The debt is a problem. As I said earlier, you have 3 options:
            –make it here without deregulation, but it will cost more and lower standard of living
            –make it here with deregulation so that we are competitive with China and keep our standard of living
            –find other key industries we are already competitive at and deregulate so they can grow even more, increasing our exports

            ***Free/cheap prison labor could be integrated into any of these plans.***

            Any of these 3 or hybridized combinations are possible solutions, but something has to give. You don’t get to have your cake and eat it too.

            I’ve already made my case for keeping some industries here for national security. I’m also not too worried about trying to compete in textiles, unless there is some disruptive innovation, since 65 cents an hour is literally cheaper than maintaining your own slave if somebody gave you one for free. I’d be open to making prisoners do textile work for free though.

            I think it should be a lot easier to keep and grow what we have than to bring back what has already gone. But I’m open to whatever.

          • Jeff,

            “I didn’t say Saudi Arabia. I said *around the world*. State owned petro companies have not yet conquered fracking, and while they may eventually, the private sector is leading the way, by a very wide margin. OPEC is in major trouble today bc of the US private sector. Saudi is lucky to be sitting on top of cheapest oil in the world. And fracking is a quickly evolving science so soon, we may even be able to undercut Saudi Arabia. I’m not holding my breath, but it really could happen!”

            Then who?

            Why would OPEC countries, which unlike the US, are not past their peak in conventional oil production need fracking? The US passed its peak in conventional oil production in the early 1970s. We were paying out of noses for oil imports in the 2000s. Needless to say, OPEC countries which are exporters of oil are not in our circumstances and have no need to exploit marginal deposits with fracking. Also, Saudi Arabia is killing fracking right now.

            “The debt is a problem. As I said earlier, you have 3 options:
            –make it here without deregulation, but it will cost more and lower standard of living”

            What does this even mean? Real wages have stagnated for decades while the national debt has soared to $18 trillion dollars. We are burdened by enormous household debt and women entered the workforce to compensate. It is free-trade that lowered our standard of living.


            –make it here with deregulation so that we are competitive with China and keep our standard of living”

            Lowering wages to the level of China or Vietnam would by definition lower our standard of living.

            ***Free/cheap prison labor could be integrated into any of these plans.***

            Why don’t you just say the NC of 2015 needs to revert to the NC of 1915? That’s what you are proposing.

            “Any of these 3 or hybridized combinations are possible solutions, but something has to give. You don’t get to have your cake and eat it too.”

            Since 99 percent of the trade deficit consists of things we used to make here, we should just reject free-trade.

            “I’ve already made my case for keeping some industries here for national security. I’m also not too worried about trying to compete in textiles, unless there is some disruptive innovation, since 65 cents an hour is literally cheaper than maintaining your own slave if somebody gave you one for free. I’d be open to making prisoners do textile work for free though.”

            Why don’t we just employ people in NC to make textiles and apparel like we did without any of this nonsense before NAFTA and the WTO?

            “I think it should be a lot easier to keep and grow what we have than to bring back what has already gone. But I’m open to whatever.”

            We can easily get rid of free-trade with a simple policy change.

            “–find other key industries we are already competitive at and deregulate so they can grow even more, increasing our exports”

            Why should we want to extend the stupidity of free-trade which already destroyed the textile and apparel industry to other industries which are even more important to our prosperity?

          • Hunter,

            “Why would OPEC countries, which unlike the US, are not past their peak in conventional oil production need fracking? The US passed its peak in conventional oil production in the early 1970s. We were paying out of noses for oil imports in the 2000s. Needless to say, OPEC countries were are exporters of oil are not in our circumstances and have no need to exploit marginal deposits.”

            LMAO! You don’t think they’d benefit from fracking? You don’t think they’d like to have more oil to export? They just got all the want and all they want to sell, no need or desire for more? You don’t think China would benefit from fracking?

            The US is set to become a major exporter of oil and gas if present trends continue.

            “Lowering wages to the level of China or Vietnam would by definition lower our standard of living.”

            You understand that lowering/abolishing the min wage is not exactly the same as forcing people to work for lower wages don’t you? People are free to earn more and businesses are free to pay more. I’m not arguing that we need to secede because of min wage, I’m arguing that in a newly independent country we’d be better off without it. If people are unwilling to work for less than a given amount, they don’t have to.

            Quoted me:
            “–find other key industries we are already competitive at and deregulate so they can grow even more, increasing our exports”

            You said:
            “Why should we want to extend the stupidity of free-trade which already destroyed the textile and apparel industry to other industries which are even more important to our prosperity?”

            Now you don’t believe we should export anything either??? Curious.

            Hunter, you are not even thining about what you type anymore. And this ongoing arguing is cutting into my twitter time, so I’m going to drop out at some point. Argue all you want, but I’ve made my cases and they still stand. You keep pretending I said stuff I didn’t and you keep bringing up stuff that I have already conceded, as if it were fresh material or something.

            Why don’t we just agree to move on to another topic?

          • Jeff,

            “LMAO! You don’t think they’d benefit from fracking? You don’t think they’d like to have more oil to export? They just got all the want and all they want to sell, no need or desire for more? You don’t think China would benefit from fracking?

            The US is set to become a major exporter of oil and gas if present trends continue.”

            These two graphs explain why the US developed fracking technology in the late 2000s:

            http://blogs-images.forbes.com/jessecolombo/files/2014/06/ENRG-US-Crude-Oil-Production-at-25-Year-High-01102014-lg.gif

            http://crudeoilpeak.info/wp-content/uploads/2013/10/US_oil_imports_OPEC_1973_Jul2013.jpg

            1.) US conventional oil production peaked in the early 1970s.

            2.) The US has been importing oil from foreign countries since the early 1970s.

            3.) By the mid-2000s, the price of crude oil had risen to such heights that it became profitable in the US to develop fracking technology to exploit marginal shale deposits.

            4.) It was the high price of oil in the US that made fracking possible. OPEC certainly had no reason to develop a technology that would bring about the present depression in the energy industry by lowering prices.

          • Hunter,

            Yes, let’s move on to something else and maybe get more good done.

            But I want to close by addressing your post above.

            It doesn’t matter that we were down from peak oil, or whether we were importing or not. It mattered that oil has a value and that the market for it is huge. Mitchell Energy developed fracking/horizontal drilling so they would have more oil to sell. It didn’t matter to Mitchell Energy whether the US imported or exported. It mattered to Mitchell Energy that they had more oil to sell, and they made a way to make it happen.

            Any other country would have liked to have fracking, except perhaps for Saudi Arabia which still has the cheapest oil despite fracking–but that may well change someday!

  34. “Inclusive economic institutions that enforce property rights, create a level playing field, and encourage investments in new technologies and skills are more conducive to economic growth than extractive economic institutions that are structured to extract resources from the many by the few,” they write.

    “Inclusive economic institutions, are in turn supported by, and support, inclusive political institutions,” which “distribute political power widely in a pluralistic manner and are able to achieve some amount of political centralization so as to establish law and order, the foundations of secure property rights, and an inclusive market economy.” Conversely, extractive political institutions that concentrate power in the hands of a few reinforce extractive economic institutions to hold power …”

    Liberal Prattle 101.

    • John B,

      “Liberal Prattle 101.”

      That’s it in a nutshell.
      They sure got their favorite keywords in the description:
      Inclusive
      Level playing field
      Pluralistic
      Distribute political power widely
      Using some variant of “many vs few” or “haves vs have nots”

      Again, it’s a pretty big tipoff that they even mention any association with Jared Diamond.

      • Jeff,

        “That’s it in a nutshell.”

        I’m confused.

        I thought classical liberal economics, libertarians, neo-liberals and so forth are all derived from the same liberal tradition.

  35. Hunter- excellent essay; the rapacious behavior of gluttons and usurers highlighted once again. So-called “economics” science is nothing but shell-game barkers fronting for politicians whoring out for the bankers. International Jewry pwned western corporate “ethics” centuries ago; modern zomboid “economics” apologists care nothing for the working classes who are tossed into the “resources” grinder: just another feedstock for the bottom line. Their bogeyman, “socialism” is used to frighten small children and retards away from the fact that they use the proletariat to prop up (socialism) worthless, out-of-date, and corrupt corporations who do nothing to build a nation- only tear it apart. Your research regarding that aspect of “reconstructed” American history which is too often ignored is appreciated; it is interesting that the “company town” model continued with displaced southerners and their progeny out west in the timber and mining towns, eg.

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