Wednesday, April 2, 2014

Chapter 2: Core and Periphery in the American Economy - Elizabeth Sanders

Because of its continual breadth, the United States has always encompassed within its boundaries several quite distinct regional economies. The original settlement of North Atlantic seaports and their role as entrepots for European commerce conferred an early preeminence on the eastern seaboard, and as the struggle over ratification of the Constitution revealed, the coastal cities (particularly their bankers and merchants) had political interests distinct from those of the rural hinterland. [see footnote 1, p. 422: Jackson Turner Main, The Antifederalists; Charles A. Beard, An Economic Interpretation of the Constitution.] Nevertheless, the development of regionally distinct economic systems (and intense regional political rivalries) was not clearly evident until the 1820s, with the emergence of conflict over slavery. [13]

Taking advantage of these emergent differences, New England's political representatives embraced the protective tariff, cheap land, and the military expenditures demanded by the western sections and turned these policies to their own region's advantage. [13] ~explains party split on the tariff

 ...the South's adherence to staple agriculture and slave labor doomed it to political isolation and economic backwardness. [13]

The Rise of the American Manufacturing Belt

...the cities most notably absent from those ranks were southern. With an economy based on the production of a staple crop, the South preferred to import its manufactures from the European nations to which it exported. Because of the low skill level and purchasing power of its population and the considerable self-sufficiency of the plantation system, there was no foundation for a modern industrial economy in most of the South. Transportation routes linked coastal ports to their cotton-producing interiors, with relatively little intercity contact. Thus southern cities participated in few of the technological and communication links forged among cities to the north during the antebellum decades and were increasingly isolated from the domestic industrial economy. [see footnote 8, p. 422: Sidney Ratner, James S. Soltow, and Richard Scylla, The Evolution of the American Economy, 192; Meyer, "Emergence of the American Manufacturing Belt," 147-49, 164-69: Pred, Urban Growth and City Systems, 167-70.] [15]

There were, and are, agricultural areas within the manufacturing-belt states, but they are dependent on the industrial cities for their raison d'etre and not the reverse. [16]

Because of these differences in city functions, the urban-rural distinction per se has limited explanatory power in American politics. The cities of the periphery backed their rural hinterlands on major national economic policy questions in the early twentieth century, and farm areas of the manufacturing belt were likewise carried along with the great metropolis--however alien they might find the social life of the city--in major debates on economic policy. [16]

Mixed and Nonindustrial Regions

~The Corn Belt~

 On the two-hundred-mile-wide strip of exceptionally rich prairie that stretches from eastern South Dakota and Nebraska through Northwestern Missouri, northern Illinois and Indiana, and western Ohio, there exists the greatest concentration of corn and meat production in the world. [see footnote 14, p. 422: McCarty, Geographic Basis of American Economic Life, 294-95.] Its proximity to the Great Lakes industrial cities again suggests an economic interdependency with the manufacturing belt, but this prosperous and productive farm area long ago exceeded the consuming capacity of proximate urban markets. By the early twentieth century, its truly national market encouraged political independence from dominant northeastern urban-industrial interests. [17]

Map 2.1 Economic regions of the United States. [18]

As a result, the corn-belt economy imposed a dual identity on the area's principal marketing center: Chicago. Not only a great industrial city, Chicago owed much of its economic dynamism to its relationship as banker, supplier, and distribution center for its agricultural hinterland. [see footnote 15, p. 423: William Cronon, Nature's Metropolis, esp. 81-147 and 303-9; John C. Hudson, Making the Corn Belt, 130-35.] This interdependency with the corn, hog, and cattle belt gave Chicago a different character--and Illinois a different politics--from New York, Massachusetts, or Pennsylvania. In Chicago, in contrast to most other American trading areas, neither the urban center nor the immediate hinterland has clearly dominated the region. [19] ~both Bryan & McKinley had party headquarters in Chicago

~The Periphery: Cotton, Wheat, Wool, and Mining Areas~

South and west of the manufacturing, dairy, coal, and corn districts stretches a vast area long characterized by its agrarian and extraction-based economic system. The oldest of these regions, from the standpoint of settlement, and the most truly "peripheral" to the modern industrial economy to the north was the cotton South. This region produced the nation's most valuable cash crop, more than 60 percent of which was exported in the early twentieth century. Other important crops included rice and tobacco--the latter also an important American export. Harold Hull McCarty's map of the cotton belt, published in 1940, needs only a slight tug of its northeastern boundary to match that on the drawing-room wall of a southern planter in 1860. Throughout the first third of the twentieth century, the political imperatives of the South were predetermined by its cotton economy. The South was "peripheral" because it was cotton. [19]

Economic Regions and Political Constituencies

Political rivalries and alliances rooted in the divergent economic interests of the old manufacturing belt, the agrarian / extractive periphery, and the diverse Midwest / Pacific regions were critical determinants of the scope and institutional structure of early federal intervention in economic markets. The essential structure of early federal intervention in economic markets. The essential economic differences must, then, be traced into the political constituencies of the representatives and senators who wrote the laws and oversaw their enforcement by the executive branch. The value of manufacturing is probably the single best indicator of economic system type in this period. Table 2.1 summarizes aggregate and per capita value added in manufacturing for states. It clearly distinguishes between the New England, mid-Atlantic, and Great Lakes states, which composed the industrial core of the country, and the southern, plains, and mountain states, which had minimal industrialization in the early twentieth century. [21]

Map 2.2 Industrialization by congressional district, 63rd Congress [24]

Map 2.3 displays the thirty-four economic subregions, shaded according to the level of (per capita) value added in manufacturing in 1919. Again, the Northeast-Great Lakes manufacturing belt stands out in sharp relief. The Cincinnati, Chicago, San Francisco, and Portland areas fall into the "diverse" industrial category, reflecting the extensive agrarian hinterlands that distinguish them from the more "autonomous" national and internationally focused cities of the industrial and commercial "core." [25]

Reflecting the importance of regional economic systems, a state is labeled "core" if the majority of its population falls within a trading area with at least $300 per capita value added in manufacturing, and so on. In the Senate, there were, in 1913, thirteen core states in the Northeast, Midwest, and Pacific regions, seven diverse states in the Midwest and Far West, and twenty-eight periphery states. [25]

All eleven states of the Confederacy were included in the periphery, along with most of Kentucky, Missouri, and the plains and mountain states. [25]

Map 2.3 Industrialization by trading area in the early twentieth century [26]

Though not a numerical majority, the South constituted the largest and, economically and politically, the most cohesive of the periphery's component regions. By virtue of its size and the intensity of its grievances in the national political economy, the South almost inevitably led the periphery voting bloc in Congress. However, as the voting tables will demonstrate, periphery cohesion was often disrupted by divergent interests in the national political economy, as well as by the powerful pull of party affiliation and the force of historical experience. [27]

Table 2.2 shows the distribution by state of farmers and workers in 1900. There are, of course, workers and farmers in all regions. The modest number of workers in the periphery shared many class interests with northern core workers; however, they were less ethnically diverse, and as recent migrants from the country (and with many relatives there), they likely did not sharply distinguish their interests from those of farmers, as did labor in the metropolitan core. This is one of the reasons why the Knights of Labor assemblies in the periphery were so occupationally diverse and why the Populists were so [27] comfortable with a farmer-labor alliance. Farmers, also, show regionally distinct orientations. [28]

Table 2.2 Farmers and Workers as a Percentage of the Employed Population over Ten Years of Age, 1900 [28]

The periphery agrarians were more bound to the fate of a single crop (whose price was set in a world market); more distant from crop marketing, storage, and distribution centers; more likely to be dependent on a single rail line and monopolistic or oligopolistic purchasers; more starved for credit in the long months between planting and harvest; and more vulnerable to drought and, especially in the warm and humid South, to insect damage. 
These were the conditions that predisposed periphery farmers to define their interests as antithetical to those of large industrialists, bankers, and railroads and to look to the national state for solutions to their difficulties. As their distress intensified in the 1880s and 1890s, they undertook a broad evaluation of changes in the late-nineteenth-century economy and of what those changes meant, not only for farmers but also for other vulnerable groups. In particular, the agrarians reached out to factory, mine, mill, and railroad workers, who shared both their vulnerability to concentrated economic power and their vision of a more decentralized and egalitarian society in which the producers of the nation's wealth would share more fully in its bounty. In the process, they constructed the most original and searching critique of industrial capitalism that American history has yet experienced and a political movement that mounted the broadest challenge to the foundations of the new economic system. But for an effective challenge, they needed allies who were similarly mobilized. [29] ~thesis

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