Cotton, the Oil of the Nineteenth Century: Important Lessons of History
Dattel, Gene, The International Economy
What if you discovered that a foreign country had deliberately attempted to jeopardize millions of jobs in one region of the country? No, this was not an OPEC oil embargo designed to counteract American support of Israel. The target was in fact England, the instigator was the Confederacy, and the strategy involved the curtailment of cotton exports during the Civil War.
In 1861, the newly formed Confederate States of America, attempting to force England into the Civil War as an ally or as the instigator of a compromise that would acknowledge Southern independence, unanimously adopted King Cotton diplomacy. The South cut off England's supply of cotton, the essential fuel for the British textile manufacturers.
In the nineteenth century, cotton was comparable in power to oil in today's global economy. Its political clout paralleled that of oil as described in Daniel Yergin's Pulitzer Prize-winning book, The Prize: The Epic Quest for Oil, Money and Power: The West understandably fears the political and economic power of oil and chaffs under its dependency on the Middle East, Russia, Nigeria, and Venezuela. We speak in emotionally charged language--an "energy crisis"--yet we pay scant attention to the impact, both devastating and constructive, of King Cotton, the most important determinant of American history in the nineteenth century. Cotton prolonged America's most serious social tragedy, slavery, and slave-produced cotton caused the American Civil War, our bloodiest conflict which almost destroyed the nation. Slavery was on the road to extinction before the cotton gin intervened to blindside the goals of the Founding Fathers.
The cotton/oil analogy begins with the same players producer and consumer--and a similar dynamic of dependency and monopolistic (or oligopolistic) suppliers. On the eve of the American Civil War, Britain, the most powerful nation in the world, relied on slave-produced American cotton for over 80 percent of its essential industrial raw material. English textile mills accounted for 40 percent of Britain's exports. One-filth of Britain's twenty-two million people were directly or indirectly involved with cotton textiles. The British textile industry was concentrated in one region, Lancashire, and Britain was thoroughly vulnerable to a disruption in the supply of cotton.
"No industry," Eric Hobsbawm writes, "could compare in importance with cotton in the first phase of British industrialization." The young Karl Marx, in 1846, wrote unambiguously about the significance of cotton and the relationship between cotton and slavery: "Without cot ton, you have no modern industry... Without slavery, you have no cotton." The British were rightfully alarmed about their precarious dependency. Blackwood's Magazine in 1853 bemoaned the fate of "millions in every manufacturing country in Europe within the power of an oligarchy of planters."
The South reveled in its allegiance to King Cotton. After all, slave-produced cotton accounted for almost half of America's exports before the Civil War. Nobel Prizewinning economist Douglass North dubbed cotton, "the major independent influence on the evolving pattern of [American interregional trade]." Slave-produced cotton provided the export surplus the young nation desperately needed to gain its financial "sea legs," brought commercial ascendancy to New York City, was the driving force for territorial expansion in the Old Southwest, and fostered trade between Europe and the United States. No other commodity or industry acquired such regal status. Cotton was the leading American export from 1803 to 1937.
No one would have taken the South seriously without cotton; the South would not have taken itself seriously without cotton. Cotton gave enormous credibility to the American South, just as oil or natural gas confers status to the Middle East, Russia, and Venezuela.
South Carolina Senator James Henry Hammond, in 1858, famously and arrogantly questioned whether England or "any sane nation . …