Why are states, even states that border each other, so different? Kentucky and Tennessee–neighboring states–Became states at exactly the same time. Yet they went in two different directions. This Chapter Explains Why?

The Chapter also develops this history’s fundamental premise that states are the core level of government around which American economic development evolves. States Matter. Today there are fifty different state systems through which the fifty-first national system attempts to herd, usually unsuccessfully, in a given direction. It is also an important step in understanding how America’s regions developed, and how within each state sub-regions appear.

Finally this Chapter lays the foundation for understanding the formation of new states as they are settled by different migrations in different periods of time. The very first states settled by the first trans-Appalachian migration were Kentucky and Tennessee. Their history will suggest certain themes, concepts, and core dynamics which underline the development of new state policy systems from 1792 to the present-day. How states are born as policy systems will go a long way in answering the first two questions.

These three questions-dynamics are the fundamental–Macro–Concerns of this Chapter. They are critical to providing context, meaning, and understanding of how economic development evolved to the present day.

But they are not the only reasons this chapter should be read.

There are a host of ideas, concepts, themes, and basic foundational dynamics that will be introduced to the reader–all of which will be picked up in subsequent chapters, and when combined will be important to our understanding of American history and the role, purposes, characteristics, goals, and dynamics of American economic development.

In no special order the reader after reading the chapter will have insight and introduction to concepts, themes, and dynamics such as:

  • That economic development grew up in an environment that was poorly institutionalized (state-building) and predates the establishment of America’s rule of law and its basic political and economic systems. The birth of the American democratic republic and its industrial-finance capitalist system took much longer than commonly realized, and the impact of that greatly affected the evolution of our history. There will a lag between these young states and the original thirteen states in their economic and political development. The original states on the whole will enjoy a head start and leadership over new states for a number of decades.
  • Perhaps unanticipated will be the consequences of so-called “Indian-fighting” on economic and political development of the trans-Appalachian Like Joshua conquering Canaan, the First Southwest was cruel, yet a moral crusade on both sides–producing conqueror and conquered in the end. Native American resistance was intense, and more successful than appreciated today. The polarizing moral and legal complexity induced by white European/Black slave migration requires a new concept to allow us to concentrate on its economic development and political legacy. We call western movement Settlement-Conquest in which two peoples and cultures struggle for mastery of what each perceived as “their” land. Both sides strove for “site-control”, and elements on both sides attempted to find ways to coexist. Settlement-Conquest and site control may be the single most critical impact on trans-Appalachian political and economic development in these earliest years of our history. The variation between states will be noticeable as will its effects on subsequent economic and political development.
  • State-building and institutionalization took longer, involved much experimentation, and was profoundly divisive and culturally-politically polarizing. What we saw on the national level in te last chapter was just the beginning of even more radical polarization at the state level. As we observe each state’s drive to statehood, and the setting up of their initial policy system, it is inescapable that individual personalities, political and policy entrepreneurship, or simply dominant leaders and individuals will take each state down its future path. Again exposing the important of elites to economic and political development, we shall also see their effects on non-elites, the masses. Cultures will form ideologies and adopt partisan affiliations and the beginnings of a clash of cultures will be observable even in these years.
  • In these first decade of our American Early Republic very distinctive state policy systems and economic bases developed from the first great trans-Appalachian migration. We label them the Frontier Policy System and Frontier Economic Base. They, and their derivatives, are anything but modern yet they dominated and consumed nearly all of the our first one hundred years. Despite a discernible lack of modernity, they left a heritage, a legacy that shaped, not determined, what followed.
  • The “real action” in American history, despite what is taught in textbooks, was at the state and local level during the Early Republic period. Thirty-six new “western” states were formed and admitted to the Union after 1789, That story explains more about us as a people, and how and why politics, culture, and economic base developed as it has since that time. The First Southwest was the most brutal, controversial, and critical period of westernization in our entire history–and the most unknown.
  • Westernization requires its own strategies of economic development–and that means the original states will be able to pursue others. Already in 1789, there will be huge differences in the ED/CD strategies and goals between the two. Western (trans-Appalachian) states will necessarily rely primarily on land assembly/subdivision and homesteading. The primary economic developer in these First Southwestern states will be the Early Republic real estate developer–the so-called land speculator. The prime customer will by the homesteader, and the budding or aspiring plantation owner.
  • A real estate nexus will crystallize and form the core dynamic behind economic and political development. Land and the the 1790 American Dream will be the core drivers of growth. The most amazing phenomenon will be the “land rush” or the “bubble”. That phenomenon will exert considerable impact on economic and political development–and its after effects the most enduring and impactful legacy on future American ED. We shall lay the foundation for what will be the western initial Mainstream ED strategy (Land Assembly/Subdivision), and the first Community Development strategy: homesteading.
  • Our two states will provide evidence of a particular style of policy system, founded on the values and political/economic structures of Virginia’s Tidewater. While Tennessee and Kentucky will respond differently, due to their distinctive drives to statehood which were shaped by the different migration flows and the actions of its dominant political actors, a certain commonality will also emerge. That Tidewater policy system will over the next decades shape the formation of adjoining states such as Ohio, Illinois, Indiana, and Missouri–reaching into Kansas. That impact will be felt (albeit on a lesser intensity) on future “Cotton Belt” states such as Georgia, Alabama and Mississippi.
  • More critical to our economic development history is that the two most impact leaders-philosophers of the first half of the 19th century will arise from Kentucky and Tennessee. Each will form a political party–and one will will dominate American national government–and the Civil War– through the mid-century. Henry Clay (Kentucky) and Andrew Jackson (Tennessee) will each devise their own policy systems and approach to economic development. As such these two approaches will exert a surprising continuity with the present day, but also do much to explain the course of our economic development history through the Civil War.
  • Finally, observing the birth of these two states will lay the foundation for understanding the course of each state’s subsequent economic and policy development–again, to the present day. It will perhaps be surprising to see that major aspects of current day intra-state dynamics were evident from the beginning of statehood. We shall see sub-regional economic bases, and a “little sort of political cultures” also develop very early, and will be able to observe city-building arising from the different settlement flows and migrations. Again prominent individual policy actors, city-builders, will make their appearance, and their legacy will be noticed.


States Differ From Each Other Producing Variation Across States in Economic-Community Development

Most of us common-sensically accept states are alike in some ways, but distinctive in others. Still contemporary political/policy paradigms stress  similarities, both good and bad, and usually uncover them through aggregate statistics. “Municipal” problem-identifying, ED policy strategies, and a never-ending landslide of rankings usually result from analysis of the top 100 “metro” (i.e. SMSA) areas. Having discovered these entities have different “temperatures”, we designate some artificial, i.e. ideological temperature as “normal”, and set out to bring the sub-normal jurisdictions up to proper ideological snuff. We know how to do this because we are, after all, economic development professionals. This top-down focus on similarities where dissimilarities from the norm are corrected only strengthens the case for nationalization (weakening the case, of course, for federalism), and produces what I call the one-size-fits-all ED strategy (for example, clusters, branding,  and knowledge-based innovation), nation-level planning,  and, of course, national level institutionalization.  This history takes a different approach.

It is the differences among states that convey personality, more accurately describe a state’s ongoing dynamics, and offer greater insight into the why things happen. In my mind, economic development is inherently place-driven. A history that concentrates on sub-national economic development it is the differences among and between places that count. They offer the greatest insight, but to uncover them one needs to look at them from a bottom-up state/city specific perspective, conducted over extensive periods to time. A snapshot may describe what is–but offer little insight why–and presumably is soon out of date and sadly consigned to an ignored box or photo album.

Memories are often cruel, bitter-sweet, haunting, and so most of us recast them to better cope with our on-going needs and purposes. The box of snapshots becomes almost a threat to our recast sense of the past. That is why our chapter reconstructs the passage to statehood and initial policy system so extensively, at a level of detail that tries to bring us back to what was–not what we remember it. It is not comprehensive, and it is imperfect and incomplete, but I hope it is fair and adequate to bring the reader back to the realities confronted in this long-lost period of time. I hope it properly introduces us to those past economic developers on whose shoulders we stand. Economic strategies and programs are made by people at a particular period of time to accomplish goals they thought important–what you think today did not enter into their minds–they did not know what lay waiting in the future.

So by default this is a bottoms-up history of American ED. Part 1 picks up selected colonial trends/dynamics and integrates them into the formation of our Early Republic in 1789–and then takes us through its first decade until 1800.  No where will that be more apparent than in this chapter which describes how (and suggests some whys) the first two spanking brand new trans-Appalachian geographies became our first post Republic states: Kentucky and Tennessee.

Given that our federalism is two-level: national and state, early-on our legal system has defined local (sub-state) governments are “creatures of the states”. Necessarily, the path to understanding sub-state, municipal or regional policy systems runs through and from the states. So our first stop in this history is understanding the initial the primeval sub-national policy system: the original, the very first, the initial state-level policy system. In that the fourteen original states (I include Vermont in this) traced their institutionalization back several hundred years, we have not attempted to delve too deeply into their primeval policy system–if such actually existed. But Kentucky and Tennessee offer us an opportunity to see the new federal republic’s first official expansion, the formal admittance of new states. Over the next 120 years, they would admit thirty-four more–and after 1958 still two more. Of course this history will not attempt to describe each, but an intensive look at the first two can offer a methodology, an approach of how to do so–or how not to do so. You pick.


Catch-Up With Past Chapters as they Apply to Kentucky and Tenneseee

Up to now our Part 1 has focused more on the development of our federal government, and the macro-political cultural-economic dynamics underlying its initial formation. The U.S. way be a federal republic but it is also a nation-state, and the top-tier of our policy system hierarchy is the national policy system. The previous national policy system proved inadequate to its reformers, the Revolutionary War’s Founding Fathers Federalist Tribe who in 1787 began a process to set up a stronger national government to cope with a very hostile and changing globe and to establish a framework with sufficient authority/sovereignty to effectively coordinate the diverse states in ways to promote growth and prosperity, while insuring individual freedom and autonomy. That Federalist Tribe took over that national government in 1789 and began to establish that governance and economic framework.  The nationalist-level drive which called for an aggressive federal government role in state and local economic development quickly generated (starting as early as 1791) a huge push-back and an almost instinctive cultural backlash that degenerated into an elite-mass counter-institutionalization at the state level. We will be able to capture some of that in our review of Kentucky/Tennessee’s path to statehood and their initial state policy systems/politics.

To help us understand that this module examines the creation of two new states in pre-1800 America: Kentucky and Tennessee. Interestingly, both are “southern”, at some level they share a similar political cultures (Tidewater and Scots-Irish), literally they border on each other–sharing the huge “burden” of a trans-Appalachian location–and their quest for statehood simultaneous. They both were bastions of the Democrat-Republican Tribe, and indeed the two future feuding leaders of 1811-1850 national American politics (for example, Kentucky’s Henry Clay and Tennessee’s Andrew Jackson) came from these states and were active in the later years discussed in this chapter. For all these similarities, the reader who makes it through this chapter will discover they established noticeably different state policy systems, state constitutions, and headed down two different historical paths.

These two states are literally the “pioneers” in the 19th century westernization of America–the drive to the Pacific, and the settlement of our transcontinental interior. At the time, commentators thought of them as “the Southwest”. They were America’s first Southwest. They, along with Ohio (which will be described elsewhere) trail-blazed the formation of a state political culture, policy systems, writing state constitutions the aggregate of which constituted a rudimentary instruction manual for others. Having said all this, I must reiterate, that as we shall discover each state bushwhacked its own path, confronting its own configuration of political  culture, geographical realities, opportunities, personalities and problems–resulting in forming their own distinctive state-level approach and heritage which their local policy systems will incorporate as significant inputs into their own. States matter! They matter in considerable measure because they are different from each other, as well as similar. The ED role of cities, municipal communities, and counties in economic development will vary accordingly. Can I irritatingly say “they each are in a different place”.

Again, the lesson learned is that from America’s get-go states were different, and so would be their individual cities and municipalities. Differences would accumulate a critical mass and lead to our Contemporary Era’s melange of urban and state economic development approaches, tendencies, and nature–and an often frustrated federal government still attempting as Washington and Hamilton did to provide some sort of national order through national leadership. The more things change, it seems, the more they stay the same. That policy and value-based morality play has served as the backdrop for much of our two hundred and fifty year history of American economic development. I am tired just thinking about it. Time for a bourbon.

The Road Map Through the Modules in this Mini-Series

The reader will discover there are at present thirteen (not including this module) modules in Chapter 4, Kentucky and Tennessee: the first American Southwest. Collectively, they are probably more than any of you ever want to know about pre-1810 Kentucky and Tennessee. But they will provide the core of my answer, as to why states are different. They never were identical, and their unique geographical locations, flows and composition of their migratory flows which exhibited a 1790’s Big Sort dimension, the interplay of personality, charisma of their leaders and even serendipity instinctively and inevitably led them, and each state to follow, down their more or less distinctive paths through our history. States like all living organisms share much that is fundamental and compelling but their behavior, style, and “personality” they develop themselves. We can see this, I think, relatively easily in this two-state case study. That each state differs makes them by default the core policy system in our history of American economic development. How they coalesce into larger regions, the South for example is another matter for another chapter. Hint: shared economic bases and congruent cultural development are key.

The first two modules in the chapter are encapsulations of the major concepts and findings of the entire chapter organized into a narrative. Lacking the enormous detail of the other modules, they inescapably are “cheat sheets” for those who don’t need or want the detail. In the detail are the stories, the tall tales, and narrative that describes what was actually happening.  The hope is the two conceptual chapters will provide insight into what to look for, how to interpret, and a good sense of how these chapter observations fit into a larger picture that this history is developing.  The second conceptual module fleshes out the infamous, too-many-moving-parts Chapter One Model which serves as the framework for this history–and why it evolved as it did.

The following eleven modules can be grouped into four sequential categories: each state’s distinctive location-settlement-migration-culture pattern, the path to each state’s statehood, their distinctive state constitutions, and finally, a ten year look at the initial state-level policy system/key issues. Time for another bourbon?

There is a problem that runs throughout this chapter. Its like looking for “Waldo”. Where is economic development in all this?

First of all, the great bulk of this chapter relates to the establishment of the state’s first, its initial policy system. Why are we reading about policy systems and their formation at the state level?

In my model of American ED, economic development is first and foremost an output from a state, local, or federal jurisdictional policy system. Economic development is whatever the relevant policy system says it is. It defines what urban renewal or knowledge-based ED is, who does it, what body of law it operates within–and usually pays for much of it. Economic developers sarcastically refer to the process by which all this is done as “politics”, but the policy system processes are much more complicated than just politics, even if one includes office politics. ED competes with, and often interrelates with other policy areas (education, criminal justice, national defense, health care, energy and climate/environment). It is the policy systems that navigates these different policy area agendas–setting priorities, ignoring, and getting things right or wrong.

There may well be a professional and academic body of knowledge and experience that transcends borders and policy systems, but said and done, it is the individual policy system that defines, interprets, sets priorities, and allocates/approves resources–and inescapably its success and failure is tied to the “place” it occupies, the particular economic base its serves, and to the clash of political cultures, which like Macavity or Mistoffelees the Cat in Webber’s “Cats”, lurks in the policy-making shadows causing all sorts of good and bad things to happen, but always eludes final capture.

The module introduces that policy system story, and it is far from our last word on the subject. The formation of the state’s initial policy system is comparable to the reader’s birth. It is the sine qua non without which nothing happens. I was supposedly premature; I suspect both Kentucky and Tennessee were also. If you were not born, I suspect you would not be reading this. Without the formation and first initial state policy system, it has no future. Circumstances associated with, and related to, the initial state policy system “bent” the twig that eventually becomes the adult tree.

The Context Underlying the Settlement Nexus, Drive to Statehood, State Constitutions, and the External Environment of the Initial Policy System

Bluntly, as fascinating as it may be, the detailed history (and geography) of this period is not our principal concern. Our focus is restricted to the purposes of our ED history which center on (1) settlement (a euphemism for state/city-building and the initial development of policy systems), (2) formation of a state policy system, (3) demographic migration and formation of a political culture, and (4) insights into impacts of this period on our larger history. The events in this module overlap the Revolutionary War/Articles of Confederation, and the two Washington and John Adam’s administrations–but in our last module in this mini-series we will extend that time frame to 1819 so we can finish our thoughts on these matters.

The next module is focused on “settlement” which sets the time line, introduces the players and the problems/opportunities they faced. Little appreciated when a city or state is two centuries old, the initial settlement, the placement of urban centers, and their initial economic base were derivatives of geography, topology, the modes of transportation of the period, and the motivations/occupations/values/culture of the initial settlers–usually themselves a derivative of their past. Our present day house, our current policy system, rests on the land they selected and and foundations constructed. Whatever happened after them falls under the notion of “improvements”. The reader might suspect that I am also detailing these two state’s contribution to the collective and unplanned urban hierarchy of the Early Republic United States, the Second Act in the development of American regionalism (the first being our First Big Sort).

The next focus is on the distinctive drives to statehood and the formation of their first policy system and state constitutions, the fifteenth and sixteenth states,  the  second and third states admitted to the post-1789 American Republic. (Vermont was the fourteenth, 1791). Kentucky was immediately outside of the Northwest Territory–and that in itself constitutes an important insight relevant to our history. Kentucky and Virginia were different from most future States in how they entered the Union; they were broken off from states in the original thirteen–what we call succession statehood. North Carolina and Virginia handled succession very differently, and that really mattered in the formation of the new state’s policy system. Post settlement evolution in the Northwest Territory proved significantly different from states outside its boundaries. Kentucky/Tennessee, enjoyed or suffered a different future path than Ohio and other states we associate with the Great Lakes Midwest which were internal to the Northwest Ordinance of 1787.

The module provides a brief and rudimentary salient history of the the process of settlement as applied to our model. Another very critical, and morally controversial dynamic will prove extremely important in this time period to settlement, and the formation of state/local policy systems: the degree to which Native Americans in the different locations entered into the state policy system evolution. Two other dynamics will profoundly affect the settlement period: (1) conquest of Native Americans by European-American settlers and their governments; and (2) the meddling of foreign powers in the fragile American independence. While few would ever think that “Indian fighting” and Indian Removal affected the overall course of American ED, it did–not only for the Native American, but for the invading European settler as well. Lost in the stories of the American West, with Sitting Bull and General Custer, we will see the more horrific struggle of Little Turtle, and Dragging Canoe and General Le Clair, Daniel Boone, Richard Henderson.  James Robertson and John Donelson, with Henry Knox and “Mad” Anthony Wayne implementing President George Washington’s (and John Adams/Thomas Jefferson’s) Native American policy in the background.

Also in the background but every bit as impactful is the land boom that characterized and inevitably accompanied, the spasmodic migration bursts that populated the western settlements. When few or no political-economic structures exist, settlement and the planning behind settlement is hap-hazard at best. Planners call off your ideological dogs; frontier planning is pre-capitalist, almost spontaneous, affected by topography, and often based on prior urban examples relevant to its initial settlers. Planning amidst a population surge, and a land boom without zoning or even an office to file ones land claims, and the realities of an Indian attack is not even an afterthought. We shall develop in the course of this chapter the rise of a MED strategy, land assembly, promotion and subdivision and a flip side of the coin CD strategy, homesteading. Hidden within these two ED strategies is a contrasting approach to state-building and institutionalization which supplements discussion from earlier chapters.

Never really mentioned in most of our textbook is the role of foreign nations, Spain, Britain and France, in the initial trans-Appalachian settlement–and formation of state policy systems. Both states it turned  out flirted with foreign nations and considered becoming a separate nation–and that become a backdrop to the bizarre (Vice-President) Aaron Burr–James Wilkinson (Commander-in-Chief of the U.S. Army) conspiracy to do the same–a conspiracy that sucked a great deal of the policy area and politics of these early state policy system–leaving precious little supply for economic development. Kentucky and Tennessee in this mini-series might be better understood as emerging developing nations, buffeted by foreign powers and economic power that permeated state-policy-making until resolved by the overlapping 1803 Louisiana Purchase and the impeachment trial of the Vice-President. You won’t find this stuff in an Ohio or New York history book. Only after deal ling with this mess, did each of these states seriously begin state-building/institutionalization and created set up their financial and fiscal systems and institutions, the preconditions for future state and local economic development. In so doing they lagged other states by sixteen years.

Finally, city, state and economic base-building had some very unique problems in these two states and these problems divided Jackson from Henry Clay. Oh, as an afterthought, there was the War of 1812, which affected these two states differently from Massachusetts and New England.  One can see the beginning evolution of North and South in trans-Appalachian migration. The British 1763 Proclamation Line made trans-Appalachian migration “illegal”, and was of little concern to the North’s coastal ports, but immense salience to settlement of the South, personified in migration to Kentucky and Tennessee. The two regions were affected differently and they behaved and reacted differently–as did each of their political leaders, Clay and Jackson. Jackson’s victory in 1814 saved New Orleans, and opened up the Mississippi River for both Kentucky and Tennessee, and the steamboat, and constituted a fundamental element of their future economic base-building. Neither state are full-time members of the soon to develop Cotton Belt because of their geography and the economic opportunities that resulted. Slavery–and its abolition– as the South’s peculiar institution, played very complex in these two states–differentiating them from their Deep South counterparts in the Confederacy. Don’t confuse either of these two states with South Carolina, Alabama, Mississippi, or even Florida and Georgia

How does economic development fit into all this? Not well, by any definition of economic development which is tied to urbanization and industrialization. In 1790, America possessed an overwhelmingly agricultural economic base (about 90%), and Salem Massachusetts, my home town, was the nation’s eighth largest city–with less than 10,000 population. Swampscott her neighbor, tenth with about 8,000. I shall refer to Kentucky’s and Tennessee’s non existent cities as the “lost cities of Cibola”–look for it.

Agricultural economic base-building was its only key dynamic and that was determined by historical inertia, the skills of the migrants, and their cultural preferences for hinterland, non urban homestead farming. In these very early years, it was homestead farming, not plantation that propelled the agricultural base, and land speculation drove homestead farming. As to formal economic and community development strategies and programs–good luck in finding them. I am tempted to insert there is something akin to Maslow’s hierarchy of needs in American ED. Safety and security needs both preempted and precluded the employment of ED strategies. Ineffective site control by both Virginia and North Carolina, and the federal government as well, meant others, more secure and mature, provided minimal ED programs and assistance. Let’s not overthink all this: 1770-1800 Kentucky and Tennessee settlement was pioneering into the hostile and isolated wilderness. What is important for us to glean from this is how these years and their accompanying dynamics affected the formation of the policy systems that eventually came into existence. From that we can better understand the why of future ED strategies and paradigms.