Matt’s pretty much the best blogger out there, but this isn’t quite right:

This is, of course, but a small slice of the larger southern politics tradition which has always insisted since the end of the Civil War that cheap labor and a low-tax, low-service, high-inequality social and economic system are the key to prosperity. This approach left the South perennially poorer than the rest of the country, but over the past couple of decades this made-in-dixie failed approach to economic development has come to dominate national policy. Not coincidentally, during this period the United States has begun to fall behind high-wage, high-service, low-inequality northern European countries in terms of average living standards.

One point I’d make is that the low tax, etc., approach to policy strikes me as a very suburban set of preferences, and it unsurprisingly enjoyed early success in places like California, from which it spread to the rest of the country (sowed by Reagan). There are enough complements between that ideology and southern priors that the whole mess has worked well in many southern areas, particularly the new sunbelt, suburban growth metropolises, but I don’t think it’s right at all to call this the south’s gift to America.

The other thing is that this the Southern approach to industry wasn’t rooted in tradition. It was rooted in desperation. As of the early 20th century, the south had had an entirely different and separate socioeconomic and demographic history than the rest of the country. It was desperately poor, and its agriculturally based economy was a shambles. Technological changes and market shifts were making thousands of already marginally attached workers unnecessary, and so young men and women, black and white, were leaving the region just as fast as they could.

Political leaders were faced with a stark choice — provide employment or watch their constituencies emigrate en masse. But this was no choice at all. Governments around the south attempted to attract employers, and they did so based on the only advantages they had — extremely cheap white workers and a willingness to waive as many taxes and fees as they could. And so small plants began to locate themselves around the south.

Incentive-based recruitment was not a new idea, nor was it smoothly adopted around the south. Places like North Carolina, which already had a small industrial base, were loath to adopt such policies, while many northern jurisdictions  (some of which had used incentives to compete against each other) retaliated as best they could against southern poachers.

Now I don’t mean to argue that this wasn’t a very short-sighted, and ultimately counter-productive policy. It was. The jobs had very low human capital requirements and value added. Firms often negotiated exclusivity clauses, which prevented self-sustaining agglomerations from growing up. And localities sacrificed spending on other priorities, including education, to finance incentives. And ultimately, the firms that had moved to the south for low labor costs decamped for still cheaper labor markets abroad, leaving all those sad mill towns John Edwards likes to talk about.

But most of these places had little choice. It was beg for factories or die.

There should have been an alternative path, and indeed, one did grow up in the second half of the century. Federal government efforts to break down Jim Crow finally opened the southern labor market to the rest of the country, while a handful of foresighted southern metropolitan areas invested, often with the help of the government, in incentives for research and technology businesses — sectors that helped lay the groundwork for sustainable development. As job growth in the south took place, southern cities continued to enjoy competition based on low costs of living — particularly where taxes and housing costs were concerned.

Anyway, these are complicated stories, and it’s just not right to chalk up southern policy choices to some kind of nefarious hate for government, at least at the outset.