One battle the Confederate flag is still winning

By John Blake CNN July 11, 2015)

(CNN) — If you want to know what Southern heritage is all about, don’t follow the debate over the Confederate flag.

Follow the money, says Michael Lind, a historian and native Southerner.

While the Confederate battle flag may be coming down in places like South Carolina, there is one part of the Old South’s heritage that is becoming more popular.

“Southernomics,” an economic policy honed in the Old South, is spreading across the United States, says Lind, author of “Land of Promise: An Economic History of the United States.”

The Old South didn’t just give the nation the Confederate flag, “Gone with the Wind” and mint juleps. Its leaders refined the practice of exploiting workers, busting unions and being stingy with investments in public services. Each tactic was designed to create a desperate and powerless workforce that could be exploited by Northern and overseas businesses, Lind and other historians say.

White supremacy was never the driving force behind Southernomics — then or now. Greed and class domination were, says Lind, a fellow at the New America Foundation in Washington, a left-leaning think-tank, and a contributor to POLITICO magazine.

“You have to address race, but you can’t address race only,” Lind says of the flag debate. “You have to address class and the economic system. Even if you got rid of racism, the Southern economic model still exists. It’s unchanged.”

That model is a part of Southern heritage that few people talk about. But it as much of a part of the Old South as the region’s stately antebellum mansions, some historians say.

“You could draw a line from the antebellum South to the economics of the South today,” says Jerald Podair, a history professor at Lawrence University in Wisconsin.

“From the time of the Southern plantation owners, there have been a small group of people in the South who hold the power economically and they don’t really distribute the wealth that’s created in a democratic way,” says Podair.

How government became the problem

Some of the most vicious political fights we have today have their origins in the Old South.

Consider the debate over “Big Government” vs. “trickle-down economics.” That argument didn’t start with President Ronald Reagan, who once declared: “Government is not the solution to our problem; government is the problem.”

His rhetoric could have been taken from the playbook of the Redeemers, a movement led by pro-business Southern politicians in the late 19th century who vowed to undo the racial and economic reforms unleashed by post-Civil War Reconstruction, which lasted from 1865 to 1877.

Reconstruction was a traumatic experience for some Southerners. It represented the nation’s first attempt to construct an interracial democracy. Newly freed slaves earned the right to vote, civil rights laws were passed and blacks were elected to Congress and state legislatures throughout the South.

The notion that the nation’s government should help those who couldn’t help themselves didn’t exist in the South before the Civil War, historians say. Reconstruction changed that. The federal government built the first public schools in the South, which educated poor whites and blacks, as well as public hospitals and roads. It even created the nation’s first national health care system for freed slaves.

The Redeemers, though, eventually gained control of most Southern statehouses and pledged to reduce the size of government. As the federal government withdrew resources for Reconstruction, the Redeemers defunded public schools, closed public hospitals and halted road construction, all while cutting taxes for the wealthy plantation owners, the “1-percenters” of their day.

The notion of investing in workers and infrastructure was alien to the Redeemers, says Douglas R. Egerton, author of “The Wars of Reconstruction.”

“It was not on their agenda,” Egerton says. “They ran for office on the promise of cutting back and spending less.”

The Redeemers wanted to create a cheap labor force and low-tax environment throughout the South to entice Northern manufacturers to relocate to their region, says Egerton, a history professor at Le Moyne College in Syracuse, New York.

“They are the ones who are making promises to Northern money men: There’ll be no unions. This will be a free range for Northern capital,” Egerton says.

Breaking the spirits of workers?

Many Southern industrialists and political leaders are making the same promises today, says Lind.

Their pattern is the same as that of the 19th century Southern elite — weaken workers’ power and lure corporations with promises of low taxes and minimal regulation, Lind says.

Measures that would make life easier for ordinary workers — guaranteed health care, unemployment benefits, minimum wage laws — are all opposed under Southernomics because they make workers less dependent on their employers, Lind says.

“If you have free universal health care and free education supported by public school taxes, then you have more bargaining power with your bosses,” Lind says. “But if everything is privatized, and ordinary Americans have to pay for everything through their wages, then they’re at the mercy of their employers. If the workers know they’ll be ruined if they lost their jobs, they’re not going to be uppity. You want to break their spirit.”

The South may be the most difficult region in the country for workers to get uppity.

Every Southern state is a “right-to-work” state, which means it has laws that make it more difficult for unions to organize. And though there is a national movement to raise the federal minimum wage, there are still five states that have refused to adopt a state minimum wage. All of them — Alabama, Louisiana, Mississippi, South Carolina and Tennessee — are in the South.

Less worker power may be one reason the South is often touted as a “business-friendly climate.” Some Southern governors like former Texas Gov. Rick Perry have openly boasted about traveling to other states to poach businesses with promises of low taxes.

The South has consistently been rated by CEOs as the best region to do business in, according to Chief Executive magazine.

In its 2015 annual survey, the magazine asked CEOs which states were the best and worst for business. The top five most business-friendly states were all in the South, the survey revealed. (Texas was No. 1, followed by Florida, North Carolina, Tennessee and Georgia.)

Supporters of the Southern economic model say that businesses move to states with a more stable labor environment and that more business means more jobs with higher wages. They also say that right-to-work laws actually help unions by forcing them to work harder to retain members.

Yet greedy CEOs can’t be blamed alone for the spread of Southernomics. The Northern economic model — strong unions, higher wages, robust government spending on education and public employee pensions — faltered in the 1970s and early ’80s under the onslaught of foreign companies that were willing to pay cheaper wages and give fewer benefits.

But studies of the South suggest that while it may be a good place for business, it isn’t necessarily good for people’s health and welfare.

Southern residents have the lowest healthy life expectancy of any U.S. citizens regardless of race, according to the Centers for Disease Control. The region also has the worst child poverty — 12 of the 15 states with the highest child poverty rates are in the South. And Southern states have the highest rate of citizens without health insurance.

There are often tradeoffs when states invest so much in attracting corporations, says Podair, the Lawrence University historian.

“You’re going to have a state government apparatus that is going to be providing less and less to people,” Podair says. “There’s no better example than looking at Southern states like Mississippi. The quality of life for the average citizens in these states is lower.”

Slavery by another name

The Old South has long pioneered other ways of exploiting workers besides weakening their bargaining power, Lind and other historians say.

After slavery ended, some Southern business leaders moved on to exploiting children.

During the late 19th and early 20th centuries, millions of children across the country were forced to work in factories, textile mills and mines. The forced labor stunted their growth and kept many away from schools. Factory owners preferred children because they were cheaper, more submissive and less likely to strike.

A national movement to end child labor caused many Northern businesses employing children to relocate to the South. Southern industrialists became so invested in child labor that when Congress passed a law in 1916 banning child labor, a group of Southern textile mill owners went all the way to the Supreme Court to get the law declared unconstitutional in Hammer v. Dagenhart, until child labor was outlawed in U.S. v. Darby in 1941.

Southernomics also developed a way to exploit workers through the justice system.

In his Pulitzer Prize-winning book, “Slavery by Another Name,” Douglas A. Blackmon recounts how Southern law enforcement officials routinely arrested poor blacks on trumped-up charges such as selling cotton after sunset. When those arrested could not afford to pay their bond, they would be leased out to private businesses that would work them for free.

Not caring about the color of the serfs

The desire for cheap labor was never confined to Southern business leaders. Northerners profited from slavery and other forms of economic exploitation in the South, defenders of the Old South often point out.

But what is it about the antebellum South that made it so receptive to some of the most ruthless forms of capitalism in U.S. history?

Some of that answer has to do with the ambivalent relationship some Old South leaders had with capitalism itself, says Podair.

Antebellum Southern planters often argued that they “took care” of their slaves and poor whites like they were members of their family, while Northern capitalists chewed through workers and discarded them when they were no longer of any economic use, Podair says. The South’s unease with a free-market economy translated into a desire to control the labor force as much as possible, he says.

“In a feudal society — and the South was in many ways just that well into the 20th century — labor is controlled,” Podair says. “It cannot be free or the entire social structure will collapse. There are still residues of this even in the South today.”

The South’s economic heritage was also shaped by the character of the original colonists in the South, Lind says.

The North was settled primarily by middle-class farmers and small business owners. Southern states like Virginia and South Carolina were settled by English aristocrats who purchased vast tracts of land. They had a feudal vision of governing and treated workers like peasants, Lind says.

Southern plantation owners in the 17th century initially experimented with white indentured servants as farm workers but gradually started enslaving blacks because they were easier to identify when they ran away, Lind says.

After slavery ended, Southern leaders were content to exploit white tenant farmers and child laborers. Some even experimented with bringing in indentured servants or “coolies” from Asia after the Civil War, Lind says.

“The Southern upper class never really cared what color the serfs were,” Lind says.

Southernomics doesn’t care what color the serfs are today either, he says.

Though the Old South may have lost the military battle during the Civil War, Lind is concerned that it is winning the battle on the economic front. He says more states outside the South are adopting the region’s economic model: passing “right-to-work” laws, slashing taxes to attract corporations and pulling back on investing in public services like public schools and infrastructure.

He calls this process the “Southernization” of the American economy and says it’s ultimately not about racism.

“The ongoing power struggle between the local elites of the former Confederacy and their allies in other regions and the rest of the United States is not primarily about personal attitudes. It is about power and wealth,” Lind wrote in an essay for Salon entitled, “The South is Holding America Hostage.”

A border battle has already broken out between two neighboring Northern states that embody two different visions of governing: Minnesota and Wisconsin.

Under Republican Gov. Scott Walker, Wisconsin has followed a script honed in the Old South: Walker reduced taxes for the wealthy, weakened unions, rejected Obamacare, opposed raising the minimum wage, and declared the state was “open for business” to entice corporations.

Under Democratic Gov. Mark Dayton, Minnesota took another route. Dayton raised taxes on the wealthy, raised the state’s minimum wage, accepted Obamacare, and signed an agreement with a union representing state homecare workers that gives them more money and more power.

Both men were elected in 2010 in the wake of the Great Recession. Walker was facing a $3.6 billion deficit and 9.8% unemployment. Dayton had a $4.7 billion deficit and 7% joblessness.

Today, Minnesota has a $1.3 billion surplus; Wisconsin has an estimated $2 billion deficit; Minnesota has the fifth lowest unemployment rate at 3.8%; Wisconsin’s is ranked 17th at 4.6%.

Defenders of the Southern model, though, say look beyond those states. They say the low-tax, right-to-work approach attracts more corporations and creates more jobs. They point to Texas, which has added about 1.1 million jobs since 2008 — while the country as a whole has added 3.3 million, according to one estimate. Some describe the state’s success as the “Texas miracle.”

The Confederacy may have surrendered on the battlefield in 1865, but the battle over Southernomics persists in other parts of the country, Lind says. Even if every Confederate flag was removed from the South, and every racist purged, the nation could still be left with an economic model from the Old South that deliberately keeps ordinary workers weak, dependent and scared.

He says the nation could become “a nationalized Confederacy with progressive trappings.”

“Progressives may win on creating a non-racist society, but they may lose with the creation of a cheap labor society,” Lind says.

If that happens, those who are nostalgic for the Old South may finally be able to fulfill at least some parts of the famous vow made by defenders of Southern heritage.

The South will rise again.

TM & © 2015 Cable News Network, Inc., a Time Warner Company. All rights reserved.

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