This chapter turns again to David Potter, who argued compellingly that American exceptionalism emerged neither from a practical, nonideological political genius nor a prevailing faith in an inherited ideology, but rather from the influence of widespread and enduring economic abundance on the American character. Potter’s People of Plenty argued that the broad availability of abundance became the nation’s single most defining characteristic. Potter’s argument proved especially convincing during the broadly shared prosperity of the post-World War II years. Yet Potter’s explanation never quite accounted for the enduring postbellum poverty of the American South that lingered long enough for President Franklin Roosevelt to label the South the “nation’s no. 1 economic problem” in 1938. Additionally, as the nation’s economic growth slowed significantly and inequality worsened since 1980, there are new reasons to question whether Potter’s argument can remain influential if growing economic inequality and the related class anger persists or worsens.

After the Civil War, the American South seemed to be the exception to American exceptionalism. As the late British historian Eric Hobsbawm asserted, after the end of Reconstruction, the South remained “agrarian, poor, backward, and resentful; whites resenting the never-forgotten defeat and blacks the disfranchisement and ruthless subordination imposed by whites when reconstruction ended.” Confederate defeat and the emancipation of slaves left the American South faced with the challenge of embarking upon the “Age of Capital” while largely bereft of capital. This chapter focuses on how the southern capital shortage turned much of the rural South into a “vast pawn shop” with financing for planting crops coming from a mortgage on a crop not yet produced. As beggars for capital, the American South became the ragged stepchild of the industrializing American economy, an economic backwater controlled by outside capital. Active economic legacies of the capital-starved South still haunt the region’s economic landscape in the form of underdeveloped human capital.