Southern Business and Southern Poverty After the Civil War

1. The "Southern Problem"
   1. Rampant Poverty (Per Capita Income 50 Percent of US)
   2. Backward, Oversized Agricultural Sector
   3. Low-Wage, Low-Valued-Added Manufacturing Sector
2. Why?
   1. The Legacy of Plantation Slavery
      1. Collapse of Regimented Labor
      2. Long-Term Disabilities
         1. Dependence on Raw Commodities Markets--Cotton
            1. Short-Run Advantage
            2. Long Run
               1. Mature Demand and Substitution
               2. A Declining Component of Economic Growth--Knowledge as an Increasing Component of Products
         2. Over-Specialization
            1. Low Human Capital--Slave (and White) Illiteracy
            2. Minimal Commercial Development
            3. Low Manufacturing Level
         3. Economic Polarization--The Postwar "Backwash" Effect
      3. The Persistence of the Old Regime
         1. White Landlords Still in Control of Land
         2. White Political Control of States
         3. A New Plantation System--The Tenant Plantation
            1. Small Plots
            2. Delayed Mechanization
            3. Disincentives to Improvement
            4. Monoculture
   2. The Record of Manufacturing
      1. The Good News
         1. Increased Pace of Industrial Growth
         2. A New Breed of Entrepreneur--The Southern Booster
      2. The Bad News
         1. Lack of Broad Entrepreneurial Skills
         2. Reliance on Low-Grade Resource Processing--Coal, Lumber, etc.
      3. Two Illustrative Southern Industries
         1. Tobacco--James B. Duke, the Southern Gus Swift
         2. The Quintessential Southern Industry: Cotton Textiles
            1. Easy to Get Into
               1. Prepackaged Technical Services
               2. Low Labor Skill Requirements--Child Labor
            2. BUT Poor Developmental Impact
               1. Continued Dependence on North
               2. Continued Overspecialization
3. The Story to be Continued