Published by EH.NET (December 2000)

Lee J. Alston and Joseph P. Ferrie, Southern Paternalism and the American

Welfare State: Economics, Politics, and Institutions in the South

1865-1965. New York: Cambridge University Press, 1998. xii + 170 pp.

$49.95 (cloth), ISBN: 0-521-62210-7.

Reviewed for EH.NET by Craig Heinicke, Department of Economics,

Baldwin-Wallace College, Berea, Ohio.

Why was political power in the American South summoned in defense of a

“…complex system of reciprocal duties and obligations that had bound

agricultural employers and their workers, the elaborate but often unspoken

protocol of paternalism…” (p. 1)? What led that system to disappear, and why

was the defense of paternalism abandoned almost overnight, after having

persisted for close to a century following the U.S. Civil War? In this

important book, Lee Alston and Joseph Ferrie not only address the complexity

of southern paternalism, but also carry forward the task suggested by their

title — explaining how southern political interests affected the timing and

expansion of the “welfare state” legislative program in the U.S.

The authors argue that paternalism, also familiar as the “patron-client”

relationship, reduced transactions costs in labor-intensive southern

agriculture. Paternalism is said to be characterized by an implicit contract

wherein landowners provided a multitude of benefits to workers. Workers

responded by supplying “good and faithful labor,” including a long-term

commitment to the landowner. Cheaper to landlords than the available

alternatives, paternalism thus helped to sustain the agricultural economy of

the South for nearly a century after the disappearance of slavery in the U.S.

By contrast, “welfare state” programs would have substituted for the

landlord-as-benefactor and eroded such traditional relations.

The book’s first two chapters examine the inner workings of paternalism, as

well as its subtle contradictions in this setting. Among other matters the

authors consider the provision of medical care, protection from racial

violence directed at African-Americans, and agreements to “stand good” for

certain tenants in the face of creditors, as devices to ensure self-monitoring

by workers. That southern elites took great pains to preserve the system is

demonstrated by the political power invoked to defeat or co-opt welfare state

legislation such as the Social Security Act (chapter three) or the Farm

Security Administration (chapter four) that would weaken the social ties of

the traditional system. On the other hand, politicians supported the federal

Bracero program that had few direct benefits to southern elites but which

served to deter outmigration to western cotton regions (chapter five).

The sudden disappearance of this system is examined in chapter six. Here

Alston and Ferrie argue that “plowing up” paternalism resulted when machines

invaded agriculture and reduced the costs of monitoring and turnover and thus

the need for paternalism from the landowner’s perspective. The unemployment

associated with declining demand for labor also replaced the “efficiency wage”

feature of paternalism with one more akin to that of an industrial setting. At

this stage of political history, southern senators and congressmen still held

key positions in committees where the legislative agenda was set. Despite

their continued political power, they began to withdraw their opposition to

welfare state legislation, as the economic imperative of paternalism declined.

Once cotton agriculture was mechanized, southern politicians began to favor

the types of programs they had earlier resisted, programs that accentuated

outmigration. Workers who had benefited from paternalism despite their

distaste for many aspects of the system (deference by blacks to white

landlords, for instance), also no longer found a reason to buy into the


To make its arguments, the book uses mainly documentary and “circumstantial”

evidence, and, less often, quantitative data. Alternative explanations are

considered throughout. Racism and ideology, for example, may explain some part

of the absence of federal welfare expenditures funneled through southern

states in the 1930s. Still, the effort to exclude agricultural workers from

the Old-Age Insurance and Unemployment Insurance portions of the Social

Security Act, for instance, requires more than racism to explain it.

Alternative explanations also make it difficult to understand the expansion of

federal welfare programs in the 1950s and 1960s and the absence of southern

resistance to that expansion (pp. 58-59). The authors show the inadequacy of

such alternative explanations, and consistently demonstrate the explanatory

power of institutions and paternalism.

Among the unresolved questions raised by the book, is the degree to which

paternalism was a self-conscious attempt to elicit work effort and long-term

commitment, and the extent to which it was mainly the result of custom, its

manifestation seen by landlords as their “duty.” At one point Alston and

Ferrie argue that the more landlords appeared as beneficent, the more likely

they were to receive loyalty and hard work in return (p. 24). Yet one wonders

how effectively landlords could manipulate the system. Perhaps it does not

matter. Even if workers did not view landowners as charitable, they may have

responded to seemingly well-intentioned acts with increased work effort,

sensing that doing otherwise meant risking valuable necessities that could not

be purchased readily in the market. On the other hand, the legitimacy of the

system was at stake and any sense that magnanimity was false could undermine,

even if it would not destroy, the foundations of the social system. This

tension remains unresolved in the book. Since motives are not observed but

outcomes are, this is perhaps the best that can be achieved.

An unresolved question of a quite different nature involves the effect of

mechanization on monitoring costs. How great were the reductions in monitoring

and turnover costs wrought by the tractor and the mechanical cotton picker? If

the cost reductions were large enough that they led to the disappearance of

paternalism, why was great energy not devoted to reducing these costs? Perhaps

it was. After all, after World War II both public and private agents devoted

substantial resources to reducing the labor content in cotton cultivation and

to mechanizing the harvest in the South. Alston and Ferrie’s work suggests the

question of how large transactions costs were relative to the cost of the pure

labor input. The assumption of exogenous technology means this issue never

receives full attention. Some assessment of the matter and measurement of the

transactions costs savings — admittedly a difficult undertaking — might

bolster their paternalism hypothesis. Yet despite these unresolved questions,

the authors’ clear presentation and careful consideration of the evidence

produce a convincing argument in the end.

The range of the historical evidence used by Alston and Ferrie, and the

inevitable paradoxes that emerge, suggest that interpretations of such

evidence will vary. My guess is that economists will be more sympathetic to

the authors’ interpretation than others, but traditional historians will also

find much of merit here, as well as, perhaps, some points of contention. My

own view is that if disagreements emerge, this wouldconstitute a strength

rather than a weakness of the book: we need a fuller debate over these issues,

particularly given the relative silence among economic historians on the

abrupt disappearance of the plantation system compared with the attention

focused on earlier periods in southern history. Alston and Ferrie’s book not

only directs our attention to this relatively neglected period, but also

applies what has become the “new institutional economics” to questions well

suited to that framework. The compelling clarity of their central argument

means that we will learn all the more from dissertation topics and other

research projects that will most certainly follow their lead.

The main argument of the book is skillfully presented and convincing. The

approach, which reaches beyond economics and history and into the disciplines

of political science and sociology, remains fresh and innovative, despite the

book’s “long gestation” (p. xi) period. The book performs several valuable

services for the economic historian. First of all, it informs us on an

important case study in which informal but powerful institutions are

interwoven with those of formal political power. While acknowledging

ambiguities, the authors are able to sustain their main line of argument. The

authors also move us decisively forward on the matter of “?the demise of

plantation paternalism, a socioeconomic system that had endured the better

part of a century” (p. 98). We know that labor-intensive agriculture vanished

in the South, but we have here an explanation for why the entire set of

informal institutions vanished with it, and vanished so extraordinarily

quickly. Finally, as contemporary electorates and leaders sift through and

debate the merits of the welfare state and its role in “mixed” economic

systems, we benefit from the insights of Alston and Ferrie. We are shown a

case where political power imbalances and a set of legislative rules combined

at one time to thwart, and then later to promote a wide ranging legislative

program — a program whose effects have been widespread and long lasting, but

the permanence of which is anything but assured.

Craig Heinicke, Associate Professor of Economics at Baldwin-Wallace College,

is engaged in on-going research on the mechanization of cotton agriculture in

the U.S. South, labor markets and African-American migration during and after

World War II. For a recent example, see “Southern Tenancy, Machines and

Production Scale on the Eve of the Cotton Picker’s Arrival,” (1999), Social

Science History, 23, 3 (Fall).