The Public Nature of Private Industry in Confederate Georgia

The domination of capital is the prerequisite of free competition.

—Karl Marx, Grundrisse

The worth of a State, in the long run, is the worth of the individuals composing it . . . . A State which dwarfs its men, in order that they may be more docile instruments in its hands even for beneficial purposes—will find that with small men no great thing can really be accomplished.

—John Stuart Mill, On Liberty

During the Civil War the Confederacy undertook a remarkable, state-mandated industrialization which made possible a protracted war against one of the world's preeminent industrial powers. The new nation encouraged manufacturing in two ways. First, the Confederacy embraced direct state ownership of indispensable industries, especially ordnance and munitions factories. Second, Richmond promoted private enterprise with numerous official goads and incentives. This article concentrates on the latter process within one relatively industrialized Deep South state. At first Georgia entrepreneurs took full advantage of government inducements to build a robust private industrial economy. But the government exercised an extraordinary degree of control over this "private" sector. Confederate jurisdiction over labor sources and transportation meant that businesses were thoroughly dependent on the government. As companies showed themselves unable or unwilling to meet state demands, the government denied them access to workers and railcars and invoked its prerogative to impress supplies and whole businesses. Through these means the Confederacy came to dominate private industries almost as fully as government shops.

The historical assessment of Confederate industrialization has generally fallen into one of two rough categories. The first emphasizes rigid state control of the industrial economy. "To industrialize an agrarian country," Raimondo Luraghi writes, "means nothing less than introducing and achieving therein an industrial revolution that elsewhere had been accomplished in a matter of years, decades, if not centuries—and to do it walking across history with 'seven-league boots.'" The rapid industrialization of a predominantly agrarian society, be it the Confederacy, Soviet Russia, or Meiji Japan, requires strict government direction of the economy. Furthermore, the vigorous growth of private enterprise may challenge the power of landed elites. According to Luraghi the South had to limit the function and power of private businessmen. ¹

In recent years other scholars have refined their understanding of the role of the Confederate state. Some have argued that the South's wartime about-face should not surprise. "It would appear that the South's opposition to the North's industrial and commercial policies provided the impetus for both the region's opposition to a strong central state in the Union and support for a centralized Confederate regime after secession," social scientist Richard Franklin Bensel has written. "Southern support for a strong Confederate and a weak American state (before and after the Civil War until the end of Reconstruction) can . . . be viewed as a consistent strategy intended to minimize the anticipated deleterious impact of the northern industrial program on the plantation South." In other words, slaveholders acted rationally according to their class interests when they repudiated their former attachment to individual rights. In the case of Virginia, moreover, William Blair has argued convincingly that the citizenry desired an activist state. As in so many instances before and during the war, planter class interests dovetailed with the popular will. Finally, Douglas Ambrose has demonstrated that statism was a surprisingly vital element of antebellum Southern thought. All in all, it is not surprising that the Confederate South would pursue a statist course. But what of the many wartime industries funded by private capital? Could this large, ostensibly independent economy have been a mere adjunct of the Confederate government? ²

Some historians say no. Exemplified best in Mary A. DeCredico's work on wartime Georgia, the second way of thinking about Confederate industrialization stresses the contributions of urban entrepreneurs. Citing the work of Joseph Schumpeter, DeCredico maintains that the entrepreneur "creates new situations that precipitate socioeconomic change. A prerequisite to such actions is social approval...