America's destiny lies in the New South Y'all Street is replacing Wall Street

Through the 18th century, the South was central to the American economy. Charleston, an epicentre of the slave trade, was the most prosperous town south of Philadelphia, while South Carolina was among the richest colonial provinces. That wealth allowed the region’s white population to be the wealthiest of the pre-revolutionary era; and self-proclaimed cotton kings to become Old World aristocrats in the swamps and plantations of the New. Stroll the streets of Charleston and you can still see this legacy today. There are elegant mansions, decorated with art, and with silverware imported from Britain. Yet somewhere nearby, their slaves huddled in windowless rooms, forced to suffer the heat and humidity of the South in chains.

It’s ironic that the war the rebels started at Fort Sumter would ultimately destroy the South. That shot heard around the world, courtesy of the Charleston militia in April 1861, would prove no match for the emerging industrial might of the free states in the North. Under blockade from the vastly superior US Navy, buoyant cities like Charleston, Savannah and New Orleans all shrivelled, as the cotton routes to England slammed shut. In 1865, Charleston fell, alongside Fort Sumter. Columbia, the state capital, was razed.

Not that things would improve once the guns fell silent. The Civil War left the South in deplorable shape, becoming in the memorable words of one author the “problem child” of America. Deprived of their slaves, the cotton kings were ruined. Meanwhile many normal Southerners, particularly after Reconstruction, worshipped the memory of the Confederacy while embracing its racist ideology. Across the South, Confederate memorials dotted the landscape; as recently as a few decades ago, Stars and Bars flags were common. All the while, Southerners worshipped Robert E. Lee and the “lost cause” while the beneficiaries of Ulysses S. Grant’s victory dominated the country’s economy, cultural and political life from New England to Oregon.

Here’s another irony: it would be the federal government, and the New Deal it promulgated, that ultimately started the South’s recovery. Roosevelt’s funding of roads, bridges and ports finally prodded the region into the 20th century. Often backed by Southern Democrat politicians, the scale of this assistance was monumental: in South Carolina alone, New Dealers created the state park system, hung telephone lines, and worked with farmers on soil conservation. The industrial boom of the Second World War also brought bases and vast manufacturing facilities. In Louisiana, to give one example, upwards of 30,000 New Orleanians worked at the Higgins boatyard, producing the thousands of landing craft needed to start the liberation of Europe on D-Day.

Through the Fifties and Sixties, meanwhile, industry began relocating to the South, where unions were weak and costs lower. An influx of go-getting outsiders helped too, remote as they were from the Old South and its neuroses. One good example is John Paul Rousakis, Savannah’s Greek-American mayor for five terms from 1970. Rousakis played a critical role in reviving Savannah’s waterfront, helping preserve what may well be the most beautiful urban landscape in America. Houston, for its part, enjoyed the services of Bob Lanier, a product of blue collar Baytown. Embracing progressive, pro-business policies, Lanier took full advantage of the city’s burgeoning oil industry.

Another newcomer would transform Charleston. An Irish Catholic, Joseph P. Riley was mayor of the city for four decades. Cultivating the support of newly enfranchised African-Americans, as well as local business elites, he turned a declining, crime-infested city into a model of urban renaissance. Riley improved law and order by appointing Reuben Greenberg as police chief in 1982. Another riposte to the South’s racial cliches — he was a half Jewish, half black Houstonian — Greenberg both reclaimed the streets and beclowned Charleston’s remaining substrate of white nationalists. After personally leading the protection of a Ku Klux Klan march, the men in white pillow cases were sure never to return.

Change happened at the state level too. From Texas to Florida, many belatedly began mimicking their Northern rivals: bringing minorities into leadership positions; financing the growth of major universities; building first-class industrial parks. “The development model has turned on its head,” noted Christopher Lloyd, president of the Site Selection Guild, adding that they’re borrowing the same Californian model that proved so successful in the second half of the last century.

No less important, this legacy has continued into our own time. From manufacturing to professional services, sectors long centred in California and New York have ventured south. According to a recent analysis by Zen Business, indeed, Texas and Florida are now the country’s high-growth hotspots, while they also attract the most tech workers. That’s unsurprising: from HP Enterprise to Oracle to SpaceX, many of America’s biggest firms have relocated to Texas.

Even finance, practically synonymous with Manhattan, is drifting south. Attracted by hot weather and sandy beaches, many bankers have made their home in Miami, even as Dallas lately dethroned Chicago as the second financial centre in the country. Entrepreneurs have even started raising funds to build a new stock exchange in Texas. Their goal? Replacing Wall Street with Y’all Street.

Beyond the South’s own pro-business policies, the relative decline of places like Chicago is telling in other ways. Between soaring taxes and draconian climate change rules, Democratic strongholds in the North seem desperate to bankrupt themselves. No wonder one recent study found that the best states for industry are generally found in the southeast, even as America’s fastest growing ports are places like Corpus Christi (Texas) and Mobile (Alabama).

Not that Dixie’s economic revival can only be traced through industrial output. For just as Rousakis and Riley reshaped and modernised their cities, millions of other Americans found their land of opportunity in the once-distressed South. In 1861, when Fort Sumter was attacked, the South was home to barely nine million of the country’s 31 million residents, and even that included 3.5 million slaves. Today, though, the former Confederacy boasts 40% of the US population, up from less than a third in 1950. This trend has accelerated since the pandemic. By 2023, population growth across just five Southern states, exceeded that of the other 44 combined.

Once again, the North slumps as the South soars. New Jersey, Illinois and New York have since all lost people since 2000, even as Texas gained three million. This isn’t just a function of internal migration either: three Southern cities — Miami, Dallas and Houston — have seen their foreign-born populations rise more than anywhere else. No less striking, these trends seem set to continue over the years ahead. In a recent survey identifying the five best regions for young job seekers, four were in the South, even as Southerners are more likely to have children than their Northern peers.

Apart from anything else, these demographic shifts are exploding old stereotypes. What started with Reuben Greenberg is just as true today: by some accounts Houston is the most diverse city in the country, while African-Americans are returning to the region their grandparents fled during the Great Migration. Overall, minorities generally enjoy higher incomes and home ownership levels here than elsewhere. And whatever Brooklyn liberals might imagine, the South is now among the least segregated parts of the country. To be sure, class divides exist. But in Charleston, successful African-Americans can be found eating at some of the swankiest restaurants, often with white friends. Like low country cuisine, encompassing African, English and Caribbean influences, this is a city that feels more racially harmonious than Northern towns from Milwaukee to Buffalo.

More to the point, these comings and goings are conjuring a political storm. More people means more representation in Congress, and more electoral votes. And if current trends continue — and the South continues to rise and places like Illinois keep falling — Dixie will have 30 more seats in the House of Representatives than it did in the Seventies. Once that happens, it will again emerge as the country’s strongest political region, a role it hasn’t enjoyed since that long-lost world of frock coats and slave markets.

Not that we need to wait for redistricting to spot the South’s political heft. After all, a second Trump administration would surely draw strength from the region’s ascendancy. Trump himself is now a typical Floridian — from Queens — and J.D. Vance hails from the essentially Southern culture of Appalachia. More to the point, likely boosts in defence and space spending under a Republican president would supercharge the region yet further, as would pro-manufacturing policies using tariffs and tough trade deals to replace foreign products with domestic alternatives. There’ll also be pressure to develop policies that help the less successful Southern states such as Louisiana and Mississippi, not least given they’re such Republican strongholds.

Given her probable plans to bailout profligate Northern states, a Harris presidency would probably be less good for Dixie. Then again, the region’s demographic fortunes offer opportunities to Democrats too: as both Jimmy Carter and Bill Clinton so vividly proved. In this New South, a dynamic, multicultural region with ample hope for the future, liberals could gain much by opposing strict bans on abortion, especially if they dump unpopular virtue-signalling around things like migration. To put it differently, then, the South’s revival may yet dovetail with a much-needed return to the political centre. Given the region’s turbulent past, that would be the most welcome irony of all.

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Joel Kotkin is a Presidential Fellow in Urban Futures at Chapman University and a Senior Research Fellow at the Civitas Institute, the University of Texas at Austin.

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