Why Nations Fail: The Origins of Power, Prosperity, and Poverty

until 1877. Northern politicians, with the help of the Union Army, engineered some social changes in the South. But a systematic backlash from the southern elite in the guise of support for the so-called Redeemers, seeking the South’s redemption, re-created the old system. In the 1877 presidential election, Rutherford Hayes needed southern support in the electoral college. This college, still used today, was at the heart of the indirect election for president created by the U.S. Constitution. Citizens’ votes do not directly elect the president but instead elect electors who then choose the president in the electoral college. In exchange for their support in the electoral college, the southerners demanded that Union soldiers be withdrawn from the South and the region left to its own devices. Hayes agreed. With southern support, Hayes became president and pulled out the troops. The period after 1877 then marked the real reemergence of the pre–Civil War planter elite. The redemption of the South involved the introduction of new poll taxes and literacy tests for voting, which systematically disenfranchised blacks, and often also the poor white population. These attempts succeeded and created a one-party regime under the Democratic Party, with much of the political power vested in the hands of the planter elite.
    The Jim Crow laws created separate, and predictably inferior,schools. Alabama, for example, rewrote its constitution in 1901 to achieve this. Shockingly, even today Section 256 of Alabama’s constitution, though no longer enforced, still states:
    Duty of legislature to establish and maintain public school system; apportionment of public school fund; separate schools for white and colored children.
    The legislature shall establish, organize, and maintain a liberal system of public schools throughout the state for the benefit of the children thereof between the ages of seven and twenty-one years. The public school fund shall be apportioned to the several counties in proportion to the number of school children of school age therein, and shall be so apportioned to the schools in the districts or townships in the counties as to provide, as nearly as practicable, school terms of equal duration in such school districts or townships. Separate schools shall be provided for white and colored children, and no child of either race shall be permitted to attend a school of the other race.
    An amendment to strike Section 256 from the constitution was narrowly defeated in the state legislature in 2004.
    Disenfranchisement, the vagrancy laws such as the Black Code of Alabama, various Jim Crow laws, and the actions of the Ku Klux Klan, often financed and supported by the elite, turned the post–Civil War South into an effective apartheid society, where blacks and whites lived different lives. As in South Africa, these laws and practices were aimed at controlling the black population and its labor.
    Southern politicians in Washington also worked to make sure that the extractive institutions of the South could persist. For instance, they ensured that no federal projects or public works that would have jeopardized southern elite control over the black workforce ever got approved. Consequently, the South entered the twentieth century as a largely rural society with low levels of education and backward technology, still employing hand labor and mule power virtually unassistedby mechanical implements. Though the proportion of people in urban areas increased, it was far less than in the North. In 1900, for example, 13.5 percent of the population of the South was urbanized, as compared with 60 percent in the Northeast.
    All in all, the extractive institutions in the southern United States, based on the power of the landed elite, plantation agriculture, and low-wage, low-education labor, persisted well into the twentieth century. These institutions started to crumble only after the Second World War and then truly after the civil rights movement destroyed the political basis of the system. And it was only after the demise of these institutions in the 1950s and ’60s that the South began its process of rapid convergence to the North.
    The U.S. South shows another, more resilient side of the vicious circle: as in Guatemala, the southern planter elite remained in power and structured economic and political institutions in order to ensure the continuity of its power. But differently from Guatemala, it was faced with significant