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Reviewed by:
  • The New Economy of the Modern South
  • Raymond A. Mohl
Michael Dennis , The New Economy of the Modern South (Gainesville, FL: University Press of Florida 2009)

Historically, the American South was integrally linked to a global economy. Tobacco growers in the 18th century and cotton planters in the early 19th century relied on European markets for economic prosperity. In this powerfully argued book, historian Michael Dennis makes a strong case that political and economic elites in the late 20th-century South embraced a new version of globalization. The new southern globalizers promoted unregulated markets, pushed policies that helped deindustrialize older industries, and at the same time, provided lucrative incentives in recruiting Asian and European companies to southern states. This is the "New Economy," according to Dennis, one that owed much to the dominant political and economic ideology of the Reagan Revolution of the 1980s and that matured at the state level in the Sunbelt South in the 1990s. The market-oriented policies of southern states ultimately had devastating consequences in the 1990s, namely massive job losses, wage declines, racial inequalities, weakened labour protection, minimal environmental regulation, and a worsening social infrastructure in education and health care. Touted by conservative politicians and businessmen as a rational response to changing global markets, the new southern economy, in Dennis's analysis, produced disastrous results for working-class and middle-class southerners.

Dennis's book provides a detailed analysis of the new economy in Virginia, a case study of the origins and consequences of the wider free-market revolution that brought new forms of globalization to the Sunbelt South. Dennis argues that Virginia exemplified the larger trends shaping the southern economy at the end of the twentieth century. These trends ranged from rapid population growth, a diversified economy, business favouritism, and conservative politics to anti-union traditions, reduced government regulation, and racial disparities between whites and blacks. The "social contract" implicit in the regulated economy established during the New Deal years was under attack. As these changes took place, Virginia's economy was shifting from traditional manufacturing, such as textiles, to computer and information technology industries, especially in the northern counties near Washington, D.C. Business leaders throughout the state were adapting to new technology in order to lower labour costs, speed up production, [End Page 251] and increase output and profit. Business restructuring, downsizing, outsourcing, job losses, and reduced benefits often resulted. Along the way, companies sought to undermine union power and curb government economic regulation. They established a business trade organization, the Virginia Initiative, in 1990 to promote public policies favourable to the business community. Business leaders and economic development professionals crafted a strategy to attract high-tech companies and overseas manufacturers, especially in the auto industry, to the state. Ironically, while Virginian business elites opposed state regulation and intervention, they also sought government subsidies and incentives to promote economic growth. In part, Dennis traces the success of Virginia's pro-business agenda laden with tax breaks and corporate incentives to the dominant conservatism of the state's politicians, both Democrats and Republicans. Even as far back as the New Deal era, Virginia's Democratic leaders pursued conservative policies, and they never felt entirely comfortable with the social liberalism of the party in the Kennedy and Johnson years. In the 1980s, Democratic governors funded popular transportation and education programs, but ignored progressive social programs. Douglas Wilder, elected in 1989 as Virginia's first black governor, embraced the neo-liberal program, advocating fiscal conservatism, law and order legislation, cuts in welfare, and privatization of public entities such as highways and prisons, as well as incentives to attract European companies to Virginia. By the 1990s, Dennis writes, as Virginia elected Republican governors George Allen and Jim Gilmore, the two parties were "converging on common ideological terrain." (209) The new Republican governors pushed ahead on pro-business, anti-labour, anti-liberal programs that were popular with the state's voters, especially the more than 500,000 mostly middle-class people who moved to Virginia in the 1990s, settling mostly in northern counties such as Fairfax, Loudoun, and Arlington, and the city of Alexandria. Republican politicians incorporated elements of the Religious Right into their...

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