Endowing the Resources: Technology and Changing Prices in the U.S. South

Barbara Hahn, Texas Tech University

Endowing the Resources: Technology and Changing Prices in the US South Barbara Hahn, Texas Tech University b.hahn@alumni.unc.edu Land, labor, and capital -- the primary factors of production -- have human histories. While some schools of economics treat factor prices as determined by their essential characteristics, the prices of resources are generally understood to have changed when circumstances changed. Such circumstances may include fresh or faltering demand for the goods produced from the resources, or changing technologies that demand different quantities of that specific factor in production. This paper sketches cases, gathered from the nineteenth-century U.S. South, of resources whose value has changed. Economic historians have established that slaves’ prices in the American South mirrored the price of the cotton they produced. The value of land in regions of Virginia and North Carolina that grew Bright Leaf tobacco also increased as the methods that produced the desirable varietal solidified after the Civil War. And of course capital—the manmade economic factor—is subject to change when stock prices, interest rates, or ownership changes. Infrastructure and banking during the Civil War provide bracing examples. The paper then focuses on the case of changing land values in the postbellum Bright Leaf tobacco regions. It examines the causal relationship between rising land values and the spread of technologies that made tobacco bright (and valuable). It argues that Bright Tobacco’s cultivation, curing, and marketing methods were both the cause and the effect of the value of this natural resource. Emancipation, and new arrangements for and costs of labor, also contributed to the adoption of new methods for getting the crop sold on an annual calendar. The interrelated, multi-directional causes of rising land values is typical of technological change, and indicate the difficulties of using prices to explain the success or failure of new technologies.

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 Presented in Session 41. Technology, Politics, and Rural Labor in the 19th and 20th Century South