The CSA in the Great Depression

Suppose the Confederate States of America won the Civil War and remains a sovereign nation to the present day. The Confederate Constitution provides a strict separation of powers and limits the President to a single 6 year term.

When the Great Depression begins in 1929 (same as IOTL), how would the CSA get the country out of it? If there is a "New Deal", what would that be like? And would there be any political realignments (assuming existence of a two party system)?
 
Well, there wouldn't be any programs on the scale or nature of the New Deal. There is not enough information in your WI to make an educational fictional guess about the Confederate economy. It can't be establish even if such a government as the CS would adopt Keynesian principles.
 
Does the CSA expand westward as the US did? Who are its trading partners and are they a preferred point for immigration? Did they build an industrial base or did their economy stay largely agrarian after the Civil War? Did they keep slavery or did they abolish it?
 
Of course, this all ignores potential butterflies released by the fact that the CSA is independent which might prevent the Great Depression from happening at all.

World War One may not happen, for example, or it may happen differently, which would effectively derail the train of events which led to the Great Depression in OTL. One such scenario...the CSA enters World War One in 1914 on the side of the Allies, while the Union remains neutral. The extra manpower provided by the CSA might be enough to force an early end to the war. A war that ended in say, 1916, would be far less ruinous to the economies of the nations involved, making them much less susceptible to a sudden collapse as occurred in OTL 1929.
 
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I'm thinking that they'd only solve it by WW2 coming along.

They'd have it even worse than the US did, because they'd be anti-Keynesian - they would've seen it as a plot to help the little guy, because it involves giving money to the poorest, whom have fewest saving, and hence must spend immediately. The South, of course, was mostly an aristocratic society.

And, they would probably've seen less Great Moderation following the Depression, I think, because they likely would've had less interest in regulation, because they were more inclined to let the aristocrat get rich than regulate him, I think.
 
Also, one of the things that led to the collapse besides borrowing on margin was the trade barrier or the tarriff the U.S. had and war reparations owed the U.S.
 

Xen

Banned
I wonder if it is possible for Congress to give the President emergency powers to deal with the situation? Perhaps we will see some sort of fascist or socialist revolution, and a Confederate Civil War.
 
How do we know if they are anti-Keynesian they will have a worst time? Is a Keynesian telling us this? If one believes in government intervention than any government non-intervention is unacceptable from their point of view and they would naturally believe that the worst will happen since their is no other possible solution than government intervention.
 
How do we know if they are anti-Keynesian they will have a worst time? Is a Keynesian telling us this? If one believes in government intervention than any government non-intervention is unacceptable from their point of view and they would naturally believe that the worst will happen since their is no other possible solution than government intervention.
Considering that the New Deal was only mildly and unintentionally Keynesian, and the fact that Keynes himself was a harsh critic of the idiosyncratic nature of the New Deal, you're talking bollocks.
 
Considering that the New Deal was only mildly and unintentionally Keynesian, and the fact that Keynes himself was a harsh critic of the idiosyncratic nature of the New Deal, you're talking bollocks.

The question was would the Confederacy be worse off without the equivalent of the New Deal. Why would there be a reason to believe that it would be?
 
The question was would the Confederacy be worse off without the equivalent of the New Deal. Why would there be a reason to believe that it would be?


actually I think you're barking up the wrong tree, even without a "new deal, a nation needs a strong unified strategy to deal with the economic problems to dig itself out of the depression. Take the banks for instance, in a surviving CSA there is little chance for the government to enact the changes that the US government did IOTL, this could be catastrophic as people take far longer to restore their faith in them which of course would be a major obstacle to any kind of recovery. Really, even without all the government spending you still need a strong federal government in order to set economic policy for the whole nation, something which was highly unlikely to happen in a surviving CSA.
 
The problem with the CSA as I remember it is that each state had its own economic system per say; no money from one state could be used in another state. Taxes from Georgia could only be used to pay for improvements and government projects in Georgia, no where else. Therefore, unless this mentality severely weakens, it is very unlikely that the government is going to be able to take any decisive action.

Therefore extremism begins to rise as the government seems to do nothing for the people, though it would notably be among the African American population. Slavery would likely be dead at this point, and so they are workers now that can be fired and replaced. In this kind society, it is likely that as Whites are laid off, African Americans will be laid off so that the Whites can still work, and anything the government does try to do will be to the benefit of the White population (the voters).

This massively unemployed African American segment will radicalize, and they will take drastic actions if it means they will be able to survive another day. The outlook is quite grim, but that is how I see it.
 
actually I think you're barking up the wrong tree, even without a "new deal, a nation needs a strong unified strategy to deal with the economic problems to dig itself out of the depression. Take the banks for instance, in a surviving CSA there is little chance for the government to enact the changes that the US government did IOTL, this could be catastrophic as people take far longer to restore their faith in them which of course would be a major obstacle to any kind of recovery. Really, even without all the government spending you still need a strong federal government in order to set economic policy for the whole nation, something which was highly unlikely to happen in a surviving CSA.

Alright, you bring up a very good point here. The lack of a strong central government. Off the top of my head I wish I could remember the entry about the Depression from the WI novellete 'If the South Had Won at Gettysburg'. However, without a strong central government wouldn't the mindset of the population, raised to look out for themselves perhaps, be different than OTL?
 
The problem with the CSA as I remember it is that each state had its own economic system per say; no money from one state could be used in another state. Taxes from Georgia could only be used to pay for improvements and government projects in Georgia, no where else. Therefore, unless this mentality severely weakens, it is very unlikely that the government is going to be able to take any decisive action.

Therefore extremism begins to rise as the government seems to do nothing for the people, though it would notably be among the African American population. Slavery would likely be dead at this point, and so they are workers now that can be fired and replaced. In this kind society, it is likely that as Whites are laid off, African Americans will be laid off so that the Whites can still work, and anything the government does try to do will be to the benefit of the White population (the voters).

At least during wartime there was Confederate currency printed, if there would be one 'dollar' for the nation after is up to speculation. I don't necessarily see where extremism begins to rise if the government seems to be doing nothing for the people. Are you refering to the Confederate government or the State government? In most instances the individual should be looking towards their respective state government first and foremost.
 
At least during wartime there was Confederate currency printed, if there would be one 'dollar' for the nation after is up to speculation. I don't necessarily see where extremism begins to rise if the government seems to be doing nothing for the people. Are you refering to the Confederate government or the State government? In most instances the individual should be looking towards their respective state government first and foremost.

Both. The federal government can only help with taxes from that same state, while the state government would have its own funds. Basically, the money is not able to be diverted down to the states that need it most, partly because the states that do have the funds do not want to pay for it. In regards to extremism, I mean that among the African American population which is looked down upon, is refused many basic rights, and now is largely unemployed, there will be problems and developments that could get out of hand.
 
Given that many of OTL New Deal programs were detrimental to the poor, especially blacks, it is possible that a Confederacy politically controlled by the planters, merchants and a hand full of monopoly industries would have passed very similar collection of "relief efforts." See FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression by Jim Powell for an in depth look at the effects of price controls, cartels, minimum wages and mandatory collective bargaining. Measure's like this could have easily been passed on a state for state basis if a Great Depression hit the CSA.

On the other hand without a centralized banking and economic policy some states could try different things. This would provide a better chance at formulating policies that actually worked and some states would recover faster. Yet, it would still be harder for the CSA. Given that their lowest wage laborers would almost certainly not have a chance to vote there would be essentially no effort to relieve their plight. Also, as a primarily an export economy with a far smaller domestic market the CSA would not be able to recover until their markets in Europe also recovered.

But with a POD some time prior to 1865 there is no reason to believe that a Great Depression would occur in a manner similar to the one that we know. Yes, all economies have an up and down cycle so some type of recession/depression will happen. What this will look like and how best to handle it is impossible to tell without having a full TL.

Surprisingly, though I completely agree with David S. Poepoe. A centralized New Deal like set of government programs are not the only or event the best ways to overcome economic adversity.

Benjamin
 
Alright, you bring up a very good point here. The lack of a strong central government. Off the top of my head I wish I could remember the entry about the Depression from the WI novellete 'If the South Had Won at Gettysburg'. However, without a strong central government wouldn't the mindset of the population, raised to look out for themselves perhaps, be different than OTL?


well, that's neither here nor there. IOTL the feds ordered a bank holiday for government book keepers to go in and make sure all the banks were solvent. Then the ones that were healthy were re opened, and the ones that weren't stayed closed. Then FDIC was established. This was all done in response to the fact that nobody had faith in the ability of banks to protect peoples money. This is what caused the runs on the banks and was one of the primary factors behind the depression.

Without the ability to restore confidence in the banks, the ability of the confederate economy will just not be able to function, since their primary source of capital(depositors cash) won't exist. Self reliance is immaterial, confidence in banks, as well as other financial institutions is far more important. Although I hate to cite the works of H turtledove, a depression era CSA will most likely bear a strong resemblance to Weimar germany during the great depression. Worse yet, if the dust bowl happens as well it could make things even worse, even with some form of industrialization between the ACW and the depression, chances are that the CSA will still be very agrarian, probably far more than OTL US was at the time, making the impact of the dust bowl far worse on the economy.
 

Wolfpaw

Banned
Given that many of OTL New Deal programs were detrimental to the poor, especially blacks, it is possible that a Confederacy politically controlled by the planters, merchants and a hand full of monopoly industries would have passed very similar collection of "relief efforts." See FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression by Jim Powell for an in depth look at the effects of price controls, cartels, minimum wages and mandatory collective bargaining. Measure's like this could have easily been passed on a state for state basis if a Great Depression hit the CSA.
Powell's views should be taken with a large grain of salt. He's a hardcore libertarian fellow at the Cato Institue whose primary influences have been Milton Friedman and Ludwig von Mises. Powell's also faced criticism for neglecting to show both sides of the story, along with at times lapsing into post hoc ergo propter hoc fallacy by ignoring the fact that if something happens after something else, it does not prove causality.

I'm not saying Powell's book doesn't have some good points, but, again, it would be wise to maintain some healthy skepticism and suspicion of partisan leanings/ideological dogmatism on the author's part when reading FDR's Folly.
 
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