Central Appalachia’s Extractive Economy

By Hunter Wallace

The following excerpts come from The New Encyclopedia of Southern Culture: Agriculture & Industry:

“Most of the Appalachian coal mining around the turn of the century could be carried on as surface mining or by tunneling in short-term operations. When the mine played out, equipment, and often the buildings of a company town, were loaded on flat cars and moved to a new site. Appalachian coal mining thus tended to be a transient industry, worked by transients who followed the job from place to place, many of whom had themselves been displaced by timber- or coal-company land purchases. The emergence of large-scale timbering or coal mining displaced those persons who had engaged in the same industries on a small scale, either by squeezing them out of the market of by denying them access to natural resources they had previously exploited for their own profit, frequently as a complement to farming or some other activity. With no other source of income, these persons were either forced into subsistence farming or entered the labor market as transients. …


That most of the manufacturing centers in Appalachia, as well as the short-lived timber towns and almost all the coal towns, were company owned and controlled exacerbated this situation by making impossible the local mediation of labor and social conflict that occurred in other urban areas during the progressive era.”

Central Appalachia after 1900 is a classic example of the magic of the free-market creating an extractive economy that impoverishes and underdevelops an area over time.

It is easy to see how this happened: the aforementioned hucksters bought up the mineral and timber rights in Central Appalachia at firesale prices, which were then sold to Northern corporations, drove the people off the land and into the company towns, denied them access to their own natural resources, and exploited them as a proletariat as they moved from site to site, never investing much in any one area as the profits flowed northeast and out the region to Northern investors.

The company owned the rights to the land, the housing, and the company stores, which were the only locations where workers could buy goods with their wages paid in the company scrip. The schools, churches, police, judges, local government and state officials were all in the pocket of corporations. Even US Senate seats in Kentucky and West Virginia were bought and sold as commodities.

The political and economic elite created by the free-market system – through control of the land, timber, coal, and private railroads – used their power to maintain “a good bidness climate.” By that they meant wrecking the environment, corrupting the political system, keeping out the unions, blocking worker safety regulations, bringing in blacks and immigrants to keep wages as low as possible and profits for Northern investors as high as possible to maximize extraction.

They blocked economic diversification, kept taxes low, and starved the region of the investment in infrastructure and education that generates long term economic growth. Thus, when new mining technology like strip mining reduced the need for a large workforce in the coal mines, the people who were left there had little choice but to migrate en masse to the Great Lakes region. Instead of using their natural resources to develop their own economy, the extractive economy created by the free-market used the profits to develop Ohio, Pennsylvania, New York, etc.

“Turn-of-the-century tendencies toward vertical consolidation within industries, exemplified by the establishment of the Standard Oil Company, were extended horizontally across industries in Appalachia, yielding a pattern in which single corporations routinely controlled several industries at once – land development, timber and coal operations, transportation and marketing, and frequently all services needed to support the several sectors of their economic activity as well as those needed by their workers. Finally, although industrial development elsewhere in the nation generally has enriched all strata of the local economies by generating markets for additional goods and services, industrial development in Appalachia has often enriched only the local elites and has left the local economies highly vulnerable to the vagaries of market conditions. Historian David L. Carleton concludes that, today, areas of Appalachia remain “economic basket cases,” still dealing with problems left over from their earlier development.”

There’s a lot more in this vein, but you get the picture: the idea that the free-market was the ideal development model for Central Appalachia is laughable, and one that is not taken seriously by anyone but libertarians. In sucking the region dry of its economic lifeblood, the free-market created poverty and underdevelopment in Central Appalachia.

I’ve repeatedly used the term “Central Appalachia” because the old coal mining region is distinctly poor in 2015. The rest of Appalachia, which wasn’t as burdened by extractive economic institutions, is far more developed. Huntsville, Asheville, and Knoxville, for example, are quite wealthy. It is counterintuitive that West Virginia and eastern Kentucky should be so poor in light of their enormous mineral wealth, but when you understand how the free-market wrecked the area and retarded its economic development it makes sense.

Pittsburgh, which is the regional metropole, was wrecked by free-trade. That’s a story for another day though.

Note: In case this needs to be pointed out, the same people who settled Central Appalachia settled the entire region. Many of those who lived there later migrated to the Great Lakes region and the Sunbelt’s largest cities. Also, the video below illustrates the children who used to work in the coalfields in Central Appalachia before government intervention put an end to the practice.

About Hunter Wallace 11755 Articles
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25 Comments

  1. “[W]hen new mining technology like strip mining reduced the need for a large workforce in the coal mines, the people who were left there had little choice but to migrate en masse to the Great Lakes region.”

    This, I take it, was bad–because?

  2. What Brad’s pointing out, is that after the mineral wealth had been stolen, the thieves moved on leaving the industrial wreckage behind. This wreckage included more than just that of the extractive industries, but, also included ruined economies of an entire region, where people were collateral damage with little choice except to move.

  3. “What Brad’s pointing out, is that after the mineral wealth had been stolen, the thieves moved on leaving the industrial wreckage behind. This wreckage included more than just that of the extractive industries, but, also included ruined economies of an entire region, where people were collateral damage with little choice except to move.”

    I reject your entire statement, Earl, including your blithe use of the word “thieves.” What economy did the thieves “ruin”? The one they themselves had built? Is it somehow necessary that there be some kind of economic activity in that area–simply because there once was? The persons who were living there as the coal-industry reduced its labor force had “little choice” but to move? I ask again: Moving to the Great Lakes is bad–because?

  4. The “thieves” came in during & after the Civil War and basically took over the local & state governments, and, ran things for their benefit, not the benefit of the local people. At first this worked out to some extent because of a natural shortage of labor and the clannish self protective nature of the White population, that limited some of the damage for a time. But, then the “thieves” brought in a flood foreign labor, like the Italians, and Blacks to flood the labor market.

  5. The current group who are being thrown out of work in coal, power plants, aluminum, chemicals, and other related industries by federal regulation are not going to have the option of a job in the north in steel, autos, machinery. Those jobs are gone too.

  6. Let’s consider, Earl, an alternative history:

    Abraham Lincoln loses the 1860 election–to Hinton Helper. Helper, who has politically supplanted the pro-slavery faction in the South, has forged an alliance with Northern racists, who share his opposition to both slavery and the living of blacks among whites. Within twenty years of his election, the blacks remaining in the United States are a shrinking rump population whose members are, essentially, beyond reproductive age. All the others having been repatriated, so to speak, to Africa, the involvement of blacks with whites is slipping into the history books, where it is little more than an aspect of the Age of Exploration. Except for, maybe, a few folkways, of interest to ethnographers, there is little difference between North and South, whose populations have mixed and which are of equal vitality, industrially, scientifically, and financially. The two great centers of American capital are New York City and New Orleans. When burgeoning industry, North and South, cries for labor, any immigration by Italians and other riffraff is blocked, by the Congress, which remembers the pro-Anglo-Saxon sentiment of America’s greatest President, the late, forenamed Hinton Helper. On July 4, 1880, when the president signs the Anglo-Saxon Preservation Act, he does so on the marble steps of the Helper Memorial, in Washington, D.C.

    Are you happier? If I were you, I would be.

    • Seeing as how there were few, if any, blacks in Central Appalachia in 1860, and how that remains the case today, I don’t see what that has to do with the problems in eastern Kentucky and West Virginia. The place we are talking about is literally one of the whitest parts of the country.

      According to John, Central Appalachia should be an economic superpower because of its lack of blacks and storied history of free-market economics. You would think that the free-market would have made it better off than, say, Atlanta or the Mississippi Delta.

      The Mississippi Delta and Central Appalachia, which are the blackest and whitest parts of the South respectively, the flattest and most rugged, have similar problems because it stems from a similar cause.

  7. In reality. Breckenridge lost. Lincoln was elected, and the only time that George McClellan ever moved fast was to capture the Appalachian mountain passes.

  8. “Seeing as how there were few, if any, blacks in Central Appalachia in 1860, and how that remains the case today, I don’t see what that has to do with the problems in eastern Kentucky and West Virginia.”

    I didn’t mean to suggest there had been a black population in Central Appalachia. I just went off on an imaginary tangent, in which there had been no Civil War and the South hadn’t had had black-white proximity. As I’ve said, we really don’t know how different things would have been in the South–even outside the plantation areas–without all of that.

    “According to John, Central Appalachia should be an economic superpower because of its lack of blacks and free-market economics.”

    How do you figure that? My point was that if there came a point at which there was no longer a reason for economic activity in Central Appalachia in particular, what’s the problem if persons moved from that area to another one, where something was going on? You’re the one who spoke of a “[migration] en masse to the Great Lakes region” as if it were a move to some circle of Hell. What’s wrong with the Great Lakes region?

    As for Central Appalachia–that’s where Loretta Lynn grew up, isn’t it? Maybe the coal-mining world she knew is gone, but she left a beautiful image of it in “Coal Miner’s Daughter,” a song that will forever rank among America’s greatest cultural artifacts.

    In fact, I think you should listen to that right now …

    https://www.youtube.com/watch?v=f9eHp7JJgq8

    “I remember well the well where I drew water.” Brings tears to my sentimental eyes.

    • Re: John

      1.) This thread is about Central Appalachia which was never part of the plantation South. It is one of the whitest places in the country.

      2.) If Central Appalachia was racially homogenous and practiced free-market economics, which seems to be your ideal, then why should the people there have to move? Why wasn’t it thriving?

  9. “This thread is about Central Appalachia which was never part of the plantation South. It is one of the whitest places in the country.”

    I know, but still, it’s part of the South in a way. We can’t be sure, as I’ve said, that the economic problems that the Civil War and black-white proximity caused in other parts of the South didn’t implicate its economy.

    “If Central Appalachia was racially homogenous and practiced free-market economics, which seems to be your ideal, then why should the people there have to move? Why wasn’t it thriving?”

    I’m not sure that question makes any sense. You have to consider the whole. South Korea’s, like, smaller than Ohio, I think. You’re comparing South Korea, which is a single, sovereign country, to Central Appalachia, which is a part of the United States. What would it mean for Central Appalachia to be “thriving”? Is it a failure if it doesn’t have its own automobile industry and its own semiconductor industry? How far are you going to break this down? Is my neighborhood a failure because it doesn’t have its own Silicon Valley or a fashion industry to compete with that of Paris? Maybe you think it is. I don’t–or at least, I didn’t before Philadelphia’s racial change began to spread to it.

    America’s a big country. As whites migrated to it, from Europe, they spread into its various interesting areas. In some places, they built cities; in other places, they had more of a rural life or whatever. So–in Central Appalachia, before the coal companies came in, the whites were living a kind of rural life, I guess. At some point, in the age of steam power, some men with money decided to mine the coal there, and the rural communities turned into coal towns. Eventually, as the age of coal waned, those towns withered, the way, I guess, mineral towns out west became ghost towns or whatever. What happens at a point like that, when a particular economic activity is waning? I suppose different things can happen. If the place is, say, a desert island, or a comparatively small territory, like South Korea, well, maybe the persons there think of some new economic activity. As it happens, there was no need for Central Appalachia’s inhabitants to do that. They lived in a big country, where there were other activities, in other places, so they moved to those places. If there are some persons still living in Central Appalachia, well, maybe the life they have there is something with which they’re satisfied. Even in my own youth, when my part of Philadelphia was doing much better than it is now, it certainly wasn’t Beverly Hills. If some person from Beverly Hills had visited it, he or she would probably have been moved to pity, if not disgust: “How can people live like this?”–but it was a nice, average American neighborhood. It was “thriving,” as far as I was concerned.

    • Re: John,

      1.) First, as I said above, that area was never part of the plantation South. There was never a significant black population there. To my knowledge, the only blacks who were there during the era of slavery worked in some salt mines.

      2.) Second, Central Appalachia is even further removed from the cotton plantations of the Deep South. The closest thing to plantations in that area were tobacco farms and hemp production in the Bluegrass region. Obviously, slavery didn’t have the same grip on Central Appalachia, as those regions were Unionist strongholds.

      3.) Third, what sense does it make to blame blacks or slavery when much of eastern Kentucky and West Virginia didn’t even support secession?

      4.) Fourth, everything I have read from you suggests that deporting blacks and free-market economics is your platform. It seems to me that Central Appalachia represents an instructive lesson in the limitations of this platform. For an area largely devoid of blacks, it is about at the same level as the Mississippi Delta.

      5.) Fifth, don’t most places move on to other industries? Huntsville was a textile town before it became an aerospace leader. Birmingham is now a leader in insurance, banking and healthcare.

  10. “‘Is it a failure if it doesn’t have its own…’ – anything. and hence people had to leave.”

    You say that as if it’s self-evident, AnAnon. Obviously, I don’t think it is.

  11. PS Forty years from now, well, I myself will probably be dead–but maybe you, Mr. W., will be reading a magazine article about the nation’s economic powerhouse, Central Appalachia. “Four decades ago,” the article will start, “nobody would have thought etc. etc.” The article will tell of the early investors who saw opportunity of some kind where other persons saw only abjection.

  12. Re your points 1, 2, and 3, Mr. W., I’ve expressed the view that it’s not impossible Central Appalachia was economically connected, in a way, to the post-Civil-War South, even if slave-based plantations and a black population were never there; but fine, let’s say, no, that’s not true. We’ll construe the economic history of Central Appalachia as, essentially, independent of that of the plantation South. That will bring us to your points 4 and 5 …

    “For an area largely devoid of blacks, [Central Appalachia] is about at the same level as the Mississippi Delta.”

    “[D]on’t most places move on to other industries?”

    Well, maybe, yes, most places move on to other industries; I don’t really know whether most do. Regardless, some don’t. There are ghost towns in places like Arizona, aren’t there? These are, say, towns that grew up around metal mines that are no longer operative. If the sight of such towns bothers you, you could form a charitable organization, I suppose, that would knock them down and remove any vestige of them–but is it an indictment of the free market if they are no longer places of economic activity?

    Why do some persons remain in places like Central Appalachia and the Mississippi Delta after enterprise has died away? I don’t know. Some of my cousins probably wonder why I’m still in Philadelphia.

  13. Brad, thousands of Black scabs were brought into Appalachia by the boxcar load (literally) and deposited all over the region. Most of them ended up in Northern cities after they had been used and abused by the coal companies.

    The small number of Blacks in Appalachia today are the remnants.

    Interestingly, there are still remnants of the former slave populations in areas where coal was not mined.

  14. Brad, consider this, Appalachia was thinly settled in ante-bellum times, but, the people there knew they were sitting on a fortune in coal, oil, and natural gas. The question was, who would develop & control those resources? This was what the Civil War was about in Appalachia.

    The North won, and the results are evident, even today.

  15. “You say that as if it’s self-evident, AnAnon. Obviously, I don’t think it is.” – It is pretty self evident.

    “Mr. W., will be reading a magazine article about the nation’s economic powerhouse, Central Appalachia. “Four decades ago,” the article will start, “nobody would have thought etc. etc.” The article will tell of the early investors who saw opportunity of some kind where other persons saw only abjection.” – if it takes 200 years for a policy to finally deliver positive results, it is a bad policy.

  16. “The North won, and the results are evident, even today.”

    Yes–if the South had won, there wouldn’t be any whites there at all.

  17. “[I]f it takes 200 years for a policy to finally deliver positive results, it is a bad policy.”

    Every single square mile of the U.S. doesn’t have to be an industrial metropolis at every moment of the nation’s history.

  18. Bonaccorsi, you are making wild assumptions. Where Brad and I are talking facts.

    Sure, if the South had won a lot of Italians would be back in Italy stomping grapes today. Would that have been a bad outcome?

  19. “Sure, if the South had won a lot of Italians would be back in Italy stomping grapes today. Would that have been a bad outcome?”

    Not for Italy.

  20. “Every single square mile of the U.S. doesn’t have to be an industrial metropolis at every moment of the nation’s history.” – If people live there, there should be a reason for people living there. some kind of job creator if you will.

  21. “If people live there, there should be a reason for people living there. some kind of job creator if you will.”

    You’ve just stated the case backwards, AnAnon. When there was a livelihood to be made there, persons were living there. Maybe they were making a rural life, by, I don’t know, some sort of agriculture or hunting and fishing. When coal mining rose there, they did that; maybe the population even rose during the coal-mining phase. I really don’t know. Once that activity ceased, they moved on to a new life, elsewhere–or apparently, many of them did. You’re intent on construing that as an objectionable sequence of events; there’s nothing objectionable in it.

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