Postbellum Economic History

Discussion of the Coincidence of Reallocation of % National Income to Sectors of the Economy in Postbellum Times .vs. Incarceration Rates of Farm Labor due to Cotton Price Fluctuations

Dennis Rees

Economic conditions are determined by many micro and macro-economic factors including monetary and fiscal policy, the state of the global economy, unemployment levels, productivity, supply and demand for commodities and manufactured goods, and many other influences. To assess a particular economy at a moment in history it is important to have access to as many of these data points as possible. Unfortunately, as one goes back in time fewer and fewer of the measures are available for comparison to later measures. This makes evaluation of historical economics with respect to current times an imprecise endeavor.

The data begins to be comparable and available in postbellum America. We find a lot of data in the Bicentennial Edition: Historical Statistics of the United States, Colonial Times to 1970. Beginning in 1869 we find comparisons of % distribution of national income or aggregate payments, by industry, in current prices: 1869 to 1968.[1] When making comparisons therefore we can judge how sectors of the economy reacted to some of the macro and micro-economic factors and changed the attribution of %’s of GDP to the various sectors.

Specifically, we find that the % in the agricultural sector was diminishing in the period from 1869 to 1900.[2] In a comparison of the data from this period we find that the % of national income for Agriculture and Services sectors diminishing as well while the other sectors are stable or increasing. Mining, Manufacturing and Finance sectors seem to have benefited disproportionately in terms of % of national income to the sector.[3] How can we explain some of this dislocation of national income? What was happening to agriculture after 1868 that might explain these dramatic changes?

One answer may be found in the rates of incarceration of Black males in Southern states after 1868. Martha Myers found in her article, “Economic Conditions and Punishment in Postbellum Georgia” in the Journal of Quantitative Criminology, “Time-series analysis provides evidence that declining cotton prices increased the rate at which both black and white males were incarcerated.”[4] Both the decline in Cotton prices and the increased incarceration of Black males at a 10 to 1 rate compared with White males may provide insight into our above question. The incarceration of farm laborers in the South who were then ‘hired out’ by the county, and paid nothing, tended to reduce the share of national income associated with agriculture. According to the Historical Statistics of the United States, the economy in terms of GDP in 1869 was only $10.9 Billion with agriculture being about 38% of the total.[5] Over the next few decades Black males incarcerated were predominantly low skilled farm laborers and were incarcerated at a rate of 10 to 1 over Whites, and generally for much longer terms. Prior to the passage of the Federal Aid Road Act, in the early 1900’s, prisoners in the south were mostly ‘rented out’ to farms as laborers with the payments going to local authorities primarily to the benefit of government, it is possible that this transfer of payments from one sector to the other affected the allocation percentages.

Within the scope of this essay, we do not expect to prove this thesis conclusively, but to discuss its possibility. What we would need to know is how many farm workers there were in total in 1868-69, how many were incarcerated in the south, and what the agriculture payroll per farm worker was at that time. This exercise would yield a metric that approximates the potential farm payroll for incarcerated workers. We could then compare that figure with the total agriculture payroll and gain a % that may have been withheld from the market due to incarceration. A related topic, but beyond the scope of this paper to inspect would be the inverse relationship of Cotton prices with the incarceration of Black workers that may have been a regulating mechanism on numbers of Black laborers in agriculture.

We find from the data and analysis presented by Myers[6] “a decline in cotton price produced simultaneous as well as delayed increases in the rate at which black males were incarcerated. We also learn that declines in cotton price drove migration of black laborers from the South to the North in search of manufacturing jobs. The possibility of the incarceration of black farm laborers in the South tended to reduce farm payroll and redirect payments to government while not necessarily taking the labor out of the pool due to ‘renting out’ prisoners to landowners. The combination of migration (change to Manufacturing occupations) and incarceration was a factor in reduction of agricultural payroll in the US 1868-1900.

The discussions above bring up some answerable questions that with more research will become apparent. Several facts are established in the literature and statistics leading to the conclusion that as cotton crops declined, incarceration rates increased, and migration to Northern manufacturers dislocated Southern agricultural workers. The workers incarcerated did not leave the pool of available agricultural workers, they just ceased to be paid and instead the county government collected payment effectively changing the sector of the economy receiving the allocation of payments. These facts possibly explain some of the reduction of % of national income going to the agriculture sector of the economy as well as some of the increase in % allocated to Government. As always, more research and analysis are necessary.

Bibliography

Bicentennial Edition: Historical Statistics of the United States, Colonial Times to 1970. 1-11-f-national.pdf (census.gov)

Irwin, James R. “Farmers and Laborers: A Note on Black Occupations in the Postbellum South.” Agricultural History 64, no. 1 (1990): 53-60. Accessed July 8, 2021. http://www.jstor.org/stable/3743182.

Myers, Martha A. “Economic Conditions and Punishment in Postbellum Georgia.” Journal of Quantitative Criminology 7, no. 2 (1991): 99-121. Accessed July 7, 2021. http://www.jstor.org/stable/23365744.

[1] Bicentennial Edition: Historical Statistics of the United States, Colonial Times to 1970. Series F. 216-225

[2] Ibid., 216-225.

[3] Ibid.

[4] Martha A Myers, “Economic Conditions and Punishment in Postbellum Georgia.” Journal of Quantitative Criminology 7, no. 2 (1991): 99-121.

[5] Bicentennial Edition, Series F, 125-129.

[6] Myers, Economic Conditions, 107-8