Sectional Industrialization

Few scholars have done more to elucidate the relationship between democracy and economic development in the United States and its corresponding regional—or “sectional”—antagonisms than Richard Franklin Bensel, the Gary S. Davis professor of government at Cornell University. Among Bensel’s published works are Sectionalism and American Political Development, 1880-1980 (1984), Yankee Leviathan: The Origins of Central State Authority in America, 1859-1877 (1990), and The Political Economy of American Industrialization, 1877-1900 (2000), all of which introduce key arguments about the course of US political economy that remain critical to understanding the evolution of the two-party system and its cross-class coalitions.

The first book measures key moments of “sectional stress” between the industrial core of the United States and the parts of the country that were traditionally agrarian and underdeveloped before the postwar decades. In his treatment of the House of Representatives as an institution which primarily represents “trade delegations,” Bensel demonstrates that a fundamental core-periphery dynamic persisted over the course of the twentieth century even as the South industrialized and the geographic poles of the Republican and Democratic parties reversed. In particular, he tracks the rise and fall of the Democratic Party’s bipolar coalition and the party’s deepening support for the most economically advanced regions of the US, anticipating today’s polarization between large, prosperous metropolitan areas and rural and peri-urban counties. 

In Yankee Leviathan, Bensel shows how the Civil War and the Union’s victory under the leadership of the early Republican Party modernized the federal government and its infrastructural power. Party-state control over national economic policy, he argues, secured the hegemony of Northeastern manufacturers and finance capital as well as the political-economic integration of the Western frontier. In The Political Economy of American Industrialization, Bensel further explores how the Republican Party forged a “developmental coalition” that provided the popular support required of rapid industrialization and the creation of a national, if starkly unequal, “home market.” The linchpin of this coalition was a “tariff complex” that melded together different sectoral, regional, and class interests across the North in spite of pronounced conflicts over monetary policy, labor rights, and corporate regulation.

His latest book, The Founding of Modern States (2022), marks a turn toward political theory and comparative politics.  It compares democratic state formation in Britain, the United States, and France with the emergence of nondemocratic states in the Soviet Union, Nazi Germany, and the Islamic Republic of Iran.

In this interview, Bensel presents his framework for the political construction of economic development in the US, highlighting in turn the feedback loops between the policy commitments of political elites and the regional distribution of political and economic power. 

An interview with Richard Bensel

JUSTIN VASSALLO: What drove you to the field of American political development, and particularly, the focus on economic development and sectionalism? 

Richard bensel: When I started graduate school in 1973, I was very interested in rational choice theory. I wrote a dissertation on the rules of the House of Representatives—a political economy interpretation with a strong institutionalist bent, considering how rules shape politics. I had trouble publishing that sort of work at the time, though this approach later became more widespread. 

This helped lay the ground for my first book, Sectionalism and American Political Development, 1880–1980, which studied the relationship between institutions and the larger political economy of parties. The book focuses on macro politics, and shows how the House of Representatives has played an important part as an evidentiary source—a register, that is—of sectional interests and coalition formation. But the broader project was about sectionalism. 

What is sectionalism? I give an empirical definition based on coalitions in the House of Representatives. At the most basic level, it is an orientation towards regional interests and an interpretation of those interests in primarily economic terms. Put otherwise, it is a political-economic approach to the maintenance of coalition politics. The construction of those coalitions takes a geographic and ideational form, and those elements do occasionally come up in the book. But the approach generally challenges the notion that ideology—be it liberalism, conservatism, or something else—forms the substrate of American politics. Rather, ideological contestation itself has largely been generated out of sectional interests.

In the US, sectionalism depends on several factors. One is the vast geographical expanse of the country, which has necessitated a high degree of economic specialization and differentiation. Political economy could not be uniform throughout the US, and that has generated different interests in the national economy, which have been filtered into different parties and institutions. Sectionalism is unlikely to play as much of a role in a small country like the Netherlands or Denmark, for example. In the US, the historical poles of sectional competition have been the Northeast and the Deep South. 

JV: Your framework introduces socially complex developmental coalitions that comprise different interests. They are sectoral but they are also expressed in terms of class, which complicates a simplistic labor vs. capital understanding of development. The regional specialization you just described shapes the process of state formation and the evolution of the party system. One interesting example of that is your discussion of the pre-New Deal Republican Party as a political catalyst of economic development. Can you talk us through that historical moment?

RB: After writing Sectionalism and American Political Development, I wanted to go back and look at the dynamics that created the sectionalist patterns from 1880 to 1980. That is what led me to write Yankee Leviathan. There, I approach the US as a developmental case facing the enormous challenge of southern separatism—that is, the South wanting nothing to do with the program for economic development put forward by the North. That is because they were an agrarian cotton export economy rooted in slavery and the preservation of slavery. The North was still underdeveloped, but it had an industrial orientation and the beginnings of an industrial infrastructure. Its ideological position was based on a political-economic calculation: it was incompatible with the developmental program of the North. Even if the North were willing to entertain the survival of slavery, it was unlikely to survive in a capitalist industrial economy. 

The Republican Party was an interesting amalgamation of all kinds of impulses. One of them was free labor, another was industrial protectionism, and another was pro-immigration. Those elements came together to oppose the South, and in so doing it also came to oppose slavery. The Republican Party was not an intentionally designed vehicle for Northern industrial development; it was also a bottom-up phenomenon. I agree with Eric Foner that the Republican Party was a creature of the Northern capitalist economy, but I would add that it is also the product of voters responding to that complex of interests and possibilities. Notably, this party excluded the South, and in most southern states Lincoln wasn’t even on the ballot.

The South remained agrarian even after the abolition of slavery. Both class and race politics played into this. The Republican Party decided to enfranchise the freedmen—now available to counter southern planters—and attempt to protect them through Reconstruction. But eventually the southern whites come back into power. This meant that the upper classes in the South were all Democrats, while the lowest classes, the freedmen, were Republicans.

This is the reverse of what happened in the North. There, the upper classes were Republicans, and, to the extent that workers and immigrants were aligned to the major party system, they were Democrats. Within the northern working class, there were, of course, many divisions—key among them, religious—that undermined labor solidarity. That being said, northern politics largely turned on the tariff and military pensions, both of which aligned much of the native-born, Protestant, industrial working class with the sectional interests of their employers against the South. So, this disjunction in cross-regional class coalitions frustrated the sort of class-based politics we would expect in national politics.

The lower-classes in both regions were subordinated to their respective upper classes and the latter, in turn, dominated their respective national party organizations. In sum, the national bases of the party system were incoherent in terms of class interests and, thus, lower-class insurgencies had no way, in a sectionally polarized politics, of shaping, or even entering, national political competition. Working-class parties were always going to be small and, accordingly, so was their contribution to the national debate.

Once these southern whites came back into power, they posed a problem for northern development because their interests were contrary to that of the North. They had to be bought off somehow, they had to be assuaged. In the Political Economy of American Industrialization, I argued that the bargain was struck via the Supreme Court; it legitimated segregation in the South and struck down civil rights legislation. That was the concession to the South in exchange for the development of a national market. This national market gave rise to national industrial corporations that finally, by 1900, could compete in the international market. You can’t find an open declaration of this bargain, but it was a tacit agreement between the parties. 

That in part explains how the developmental coalition was facilitated. The unique combination of democracy and rapid industrial development was not the product of virtue but of the compromises born out of political-economic considerations. On the one hand, this tacit agreement was a fairly transparent accommodation of sectional interests: the North got market-centered industrial expansion and the South received political autonomy, which facilitated upper-class dominance. On the other hand, American industrial expansion rested, in very important ways, on the political and social suppression of southern freedmen.

JV: In Yankee Leviathan and The Political Economy of American Industrialization, you argue that the tariff-policy complex which emerged in the early 1860s had few, if any, equals in the nineteenth century. How did it affect the pace and scope of economic development?

RB: There were at least three major effects of the tariff. The first is obvious: tariff protection was for industry. And the reason it was for industry and not agriculture is because the US was exporting—not importing—agricultural products, so the tariff was no use for those. During the Civil War, American industry was shielded, primarily from British, but also from European competition. And this is an example of how a policy creates the interests that sustain it; when the tariff was implemented, there wasn’t enough industry in the North to constitute a major interest, but the tariff itself created it. Part of the reason for this was that industrialists saw opportunities for investment. The other part was the need for revenue during the Civil War. The financial viability of the war effort induced a very complex system to receive tariff revenues: they were paid in gold, which went into the treasury. The gold was used to pay the interest on bonds which were issued in greenbacks. But the dividend coupons were paid in gold, so once the gold came back out it was brought back in through tariff revenue. This cycling served the need for revenue, including the revenue needed to issue the bonds that also funded the war effort.

The national bank system was developed in order to create a market for Union debt which the banks were required to hold as a reserve when they issued their own currency. The investors who owned these banks became, in the first instance, strong supporters of the Union war effort because the value of the government bonds they held depended on northern victory. But they also became, once the war ended, opponents of a radical reconstruction of the South because that would have entailed continued military expenditures in the region.

After the Civil War, tariff revenue was still important, not only to redeem Union bonds and return to the gold standard, but also to pay the pensions of veterans. These, of course, were Union veterans, none of whom were southerners. This complex developmental engine reinforced and furnished the base of the Republican Party in the North with the tariff protecting industrial expansion, funding Union war debt, and paying for pensions for Union veterans. At their peak, for example, Union pensions accounted for around 40 percent of the federal budget

By 1880, this tariff lost some of its significance as a form of sectional redistribution from the South to the North. This is because at that point, the South was just too poor to generate wealth for anybody. The only thing the South had were cotton exports, which were needed to earn foreign exchange. They were used by the Treasury to redeem its own bonds and remain on the gold standard. 

This was a great system for Northern interests, but it was not one which anyone sat down to design. It was the result of different institutions finding their own role to play in the economy. The courts extended the national market, the executive branch maintained the gold standard, and Congress constructed tariffs to the political advantages of the Republican Party. The question is, could the Republican Party have taken a different course? Personally, I am a little bit of a determinist, and in Yankee Leviathan, I suggest the Republican Party was the only kind of party the North could have produced at that point.

JV: Parts of your books, as well as your wife Elizabeth Sanders’ book, The Roots of Reform, raise this question of coalition formation among workers and farmers during the late nineteenth century and Progressive Era. Do you have your own thoughts on why industrial workers didn’t rally behind William Jennings Bryan in 1896? 

RB: As presidential candidate for the Democrats in 1896, Bryan had an impossible coalition to maintain. The crucial support necessary to win the election all came from the South. And in the South, where many were already disenfranchised, labor was out of the picture. There were poor whites still voting, but they were not industrial workers. The other problem was that the Populists in the South were oriented towards a market connection between tenant farmers, sharecroppers, and merchants, all of whom cared about cotton prices. In the West, Populists were oriented towards the infrastructure through which yeoman farmers marketed their crops. These farmers owned their own land, they were independent producers, so they didn’t identify with labor. In the industrial North, workers were concentrated on the wage bargain itself. Across regions, very different interests dominated, which made it hard for them to talk to one another. 

Bryan looked for the common denominator. Although there were planks on labor injunctions in the Democratic national platform, it was ultimately the silver campaign that became the unifying element. The silver producers were willing to fund this campaign. The problem is that if Bryan had won in 1896 and the US shifted to the silver standard, the American dollar would have depreciated by 40–50 percent. That would have been a catastrophe for a major element of the Democratic Party: New York City financial elites, who were pro-free trade and pro-gold. This would have probably thrown the US into a deep depression. Considering this possibility, industrial workers moved against Bryan, and they voted against a strong labor program because of the larger implications of Bryan’s approach to political economy.

To some extent during the Great Depression and the New Deal, the Democrats did what the Republicans did during the Civil War: they implemented national policies to create the interests that sustained them. The New Deal was an opportunity for doing that.

JV: Turning to the Progressive Era, your book on sectionalism contains quotes in which Republican politicians and their supporters paint the Democrats as this irredeemably sectional bloc. To what degree did Northern perceptions of the Democratic Party inhibit the latter’s growth in industrial centers of the Northeast and Midwest before the New Deal realignment? 

RB: There were several things that the industrialization program generated. One of them were trusts that were becoming undeniably big and a major force in national politics, and people were afraid of them and their influence. Progressivism comes to represent a number of alternative ways of responding to this challenge.,. At this point, the old tariff-military union pension system is also deteriorating. American industry doesn’t need tariffs, and Civil War pensioners have all died; it is vanishing as this force that might countervail this hostility to the trusts. The problem is how to incorporate this “taming of the trusts” in a party system that continues to be sectional. The Democratic Party, not Wilson but his party in Congress, wants to tame the trusts by breaking them up, by developing rigid, clear rules for legitimate combination and have them operate through the entire economy. That is the position of the Southern wing. The Northern Republican position is that monopolies are bad, but we can deal with them on a case by case basis. It’s a more accommodating, elite-centered response. Then, there are progressives within both parties, but particularly the Republican Party in the Midwest, that take a position of regulation as opposed to law [i.e. the extensive legislative program of Southern Democrats] or the accommodationist approach. They [all] converge on the hostility towards the trusts, but diverge on the solutions. These different responses arise out of the traditional political economies of the sections. Southern Democrats do not trust the central state, they want firm rules–laws–that can’t be reinterpreted by the courts and by government regulators]. That’s the only way they will contribute to the growth of central state authority. 

The Midwestern progressives like regulation because of their experience with railroad commissions, and the reconciliation of transportation charges with the different needs of railroads and shippers. They are comfortable with commissions and this notion of a regulatory commitment to the public interest. And the national Republicans represent an elite negotiating style. They are used to national, state authority and discretion. No one has ever had a good model for the Progressive Era. Elizabeth Sanders comes closest

But the Progressive Era runs into World War One, which eliminates the impulse to respond to the trusts. Southern Democrats oppose intervention in the war, though Wilson is strongly in favor. He becomes increasingly aligned with the interests of finance capital, which has overextended itself funding the European powers. This becomes a disaster for the Democratic Party, particularly in the North. At this point, progressivism becomes increasingly agricultural in nature and it becomes a backward-looking, retrograde interest in the view of the North that is opposed to industrialization and urbanization. 

JV: I want to jump ahead a bit, to the last four or five decades. The last few chapters in Sectionalism and American Political Development outline the quasi-bipartisan sectional coalitions of the 1970s . Which alliances formed, and what conditions in the national and world economy led to these temporary alliances prior to the hyper-partisan, regional polarization that now exists? Is what we see today actually sectionalism, or something different?

RB: The 1965 Voting Rights Act undercut the Southern Democratic Party by enfranchising black voters in the Deep South. This was a bet by the northern Democratic wing of the party that they could do without the white South. They also wrongly believed that national class coalitions would form. When black people were enfranchised, they voted exactly as northern Democrats had expected, which did generate some progressives in the South. However, it also drove the expansion of the Republican Party. Southern politics was adjusting to the incorporation of Black voters, and Democrats there became more accommodating in national politics as Black voters began to pursue political power under the protection of the federal government.

By the 1970s, the federal government was very different to what it had been in the 1930s. There were now vast social welfare programs that had been, in a sense, liberated from sectional dynamics thanks to the money coming from Washington.

Nevertheless, stagflation and other challenges generated regional pressures that in turn became new sources of disunity in both parties. During this period, Boll Weevil Democrats maintained formal membership in the Democratic Party while negotiating quite attractive policy alliances with the Reagan wing of the GOP. In the North, Gypsy Moth Republicans entered into the Northeast-Midwest Congressional Coalition in occasional partnership with Tip O’Neill Democrats. During the energy crisis and urban redevelopment of the 1970s, regional interests were often nakedly on display as congressional coalitions fought over the distribution of federal assistance. This was a time when national political parties were redeploying their respective sectional bases: the Republicans reorienting toward the South while the Democrats became increasingly dependent on the northeast and Pacific Coast littorals.

The expansion of the southern, very conservative, often racist wing of the Republican Party appalled many northern Republicans. That’s a major reason for the emergence of the Gypsy Moth Republicans; they felt free to vote against their national party when it took extreme positions. Just as northern and southern Democrats were facing divisions, so were Republicans in the North and South. This was a major change in the sectional bases of the two parties, a major reversal of the historical alignment that had persisted for over a century. 

The status of sectionalism today is complex. We have red states and blue states, and the differences in their political-economic positions are very stark. In some regions, communities have become very concerned with the terms and conditions of their own reproduction. It is clear these communities are interpreting the national economy in terms of the durability of cultural values, social institutions, family structure, and so on. Cultural questions are back on the agenda in a way that they haven’t been been in the past.

JV: Do you have any thoughts on the strategic protectionism of the Biden administration?

RB: First of all, I don’t think it is nearly as important in the scheme of long-term development as past policies have been. Biden’s policies tend to be contingent and discretionary, rather than rigid developmental policies. But the Biden administration is very clearly committed to furthering the interests of those parts of the advanced industrial economy that are aligned with the Democratic Party. That increasingly tends to be the high-tech and social media sectors. It’s a bit like [Theodore] Roosevelt and the trusts—you can talk down to them, scold them, but are you really going to go after them? The answer is no. Any Democratic administration is going to favor these interests in the long term.

Then we have the opposing interests. The major exporters in the US are still farmers. It’s wheat, soybeans, a bit of cotton. These are massive industries that persuade some Republicans to back free trade. However, the federal and, to a lesser extent, state governments fund a vast social-welfare system that has removed a large portion of the citizenry from the rigors of the private economy. Most Social Security recipients, for example, are free to live wherever they wish and, while they are certainly concerned with the size of their pensions, they tend not to be particularly interested in their regional economies. These recipients are thus free, for the most part, to support policies without reflecting on the economic impact they would have on their particular region.

JV: The problem for the Democratic Party seems to resemble that of the Republicans at the turn of the twentieth century: how to keep these midwestern states, the remnants of the industrial base in the US, in a Democratic coalition. Tim Ryan, the most protectionist Democrat in the modern era, lost pretty decisively in his Senate race in Ohio, but this program of reshoring and boosting renewables seems to have some potential. 

RB: Currently, industrial labor is much more contingently aligned with the Democrats than was the case before the repolarization of the party system. Workers are torn between the promise of reshoring industrial jobs and their communities. Some workers believe that their communities are being undermined by the Democrats policies. White industrial labor in the North is still a pivotal player in all of this because of how instrumental they are to the future of the private economy. However, one of the problems facing industrial labor is that it appears to have become a very expensive coalition partner for both political parties and it is not easily incorporated into either national coalition. In fact, I’m not sure most northern industries outside of hi-tech really believe that reshoring incentives are strong enough to invest in plants that operate for thirty years. And if they don’t believe in them, they won’t do it. And if they won’t do it, they won’t create the interests necessary to sustain them. I’m very skeptical that a few new plants here and there are going to reshape national politics.