BOARD OF DIRECTORS Edward Lopez, Western Carolina University President Karen Palasek, Barton College Vice President Andrew Taylor, North Carolina State University Secretary Jenna Robinson, Martin Center for Academic Renewal Treasurer, Fellowship Director Adam C. Smith, Johnson & Wales University Managing Director Roy Cordato, John Locke Foundation Journal Editor Peter Calcagno, College of Charleston Workshop Director Mitch Kokai, John Locke Foundation Board Member Jack Sommer, University of North Carolina - Charlotte (Retired) Board Emeritus Classical Liberals in the Carolinas (CLC) was organized for the express purpose of bringing together classical liberal scholars in the Carolinas region. In order to continue to grow the organization and expand its programming, CLC relies on the generosity of like-minded individuals and scholars who believe in its mission. Please consider donating to their fund at www.classicalliberals.org. Copyright © 2020 by Classical Liberals in the Carolinas, Inc. Printed in the USA by Westmoreland Printers Incorporated. Permission is granted to reproduce articles published in this journal, so long as reproduced copies are used for non-profit educational or research purposes. For all reproduction purposes, permission must be obtained from the Editor. Articles in PEC are double blind refereed. Submissions are being accepted through clc. submittable.com. POLITICAL ECONOMY IN THE CAROLINAS 2020 l Vol. 3 FROM THE EDITOR Letter from the Editor Roy Cordato l 5 The Political Economy of the Carolinas Considered Historically: An Introduction Robert Whaples l 7 ARTICLES Classical Liberalism and the History of Economics in the Carolinas Robert Whaples l 11 The Carolinian Economy Through Two World Wars Lee A. Craig l 35 A Brief History of Urbanization in North and South Carolina RJaya Jha & s Fred H. Smith l 52 Narrowing the Income Gap between the Carolinas and the Nation by Getting the Brains in the Right Places Bruce Yandle l 67 Sticky Expenditures in Local Government: Evidence from Marco Lam & s North Carolina Counties Thomas D’Angelo l 84 BOOK REVIEWS Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All by Dierdre McCloskey George Leef l 106 America’s Revolutionary Mind: A Moral History of the American Revolution and the Declaration That Defined It by C. Bradley Thompson Mitch Kokai l 110 Is Capitalism Sustainable? by Michael Munger Peter Boettke l 114 NOTES & COMMENTARY Economic and Personal Freedom in the Carolinas Jason Sorens l 117 Economic Calculation in the Socialist Commonwealth: Applying Hundred Year Old Wisdom Paul Cwik l 124 POLITICAL ECONOMY IN THE CAROLINAS EDITOR Roy Cordato, John Locke Foundation MANAGING EDITOR Adam C. Smith, Johnson & Wales University SENIOR EDITORS Richard Ebeling, The Citadel James Otteson, Wake Forest University Andrew Taylor, North Carolina State University EDITORIAL BOARD Peter Calcagno, College of Charleston Stephanie Crofton, High Point University Peter Frank, Wingate University Daniel Hammond, Wake Forest University Bradley Hobbs, Clemson University Petur Jonsson, Fayetteville State University Edward Lopez, Western Carolina University Rob Roy McGregor, University of North Carolina Charlotte Zagros Madjd-Sadjadi, Winston Salem State University Steve Margolis, North Carolina State University Kelly Markson, Wake Tech Community College Michael Munger, Duke University Randall Parker, Eastern Carolina University Craig Richardson, Winston Salem State University Robert Salvino, Coastal Carolina University William Sandberg, University of South Carolina Jane Shaw, James G. Martin Center for Academic Renewal Terry Stoops, The John Locke Foundation Richard Stroup, North Carolina State University Timothy Terrell, Wofford College Robert Whaples, Wake Forest University Bruce Yandle, Clemson University (Emeritus) 4 POLITICAL ECONOMY IN THE CAROLINAS FROM THE EDITOR Dr. Roy Cordato, Editor John Locke Foundation, Raleigh, NC North Carolina State University Welcome to volume 3 of Political Economy in the Carolinas, the peer-reviewed academic journal of Classical Liberals in the Carolinas. In this issue we are featuring a symposium on the economic history of North and South Carolina, edited by Professor Robert Whaples of Wake Forest University. This is the first issue of PEC to feature such a symposium, and we hope that this kind of coming together of experts, focusing on a single topic, can be a regular feature going forward. We want to thank all of the authors that were willing to contribute to this symposium. It is an honor for our journal to host such highly regarded scholars. We especially appreciate Professor Whaples’s willingness to edit this symposium. It is a huge undertaking that requires approaching potential authors, making sure deadlines are met, and editing all of the papers once they are received. In addition to this, he also found time to contribute an essay of his own to the discussion. If our plan to have more issues like this one in the future is to succeed, we will need more scholars like Professor Whaples to help us. If you have an idea for a symposium issue of the journal and are willing to take on the work of assembling and editing the collection of papers, please let us know. While we are highlighting the symposium, the rest of the work of the journal goes on. To round out the “Articles” section of the issue, we have a paper by Marco Lam and Thomas D’Angelo on the nature of local government expenditures and its implications for local government decision making. The focus of the paper is on North Carolina counties. In addition, we have two interesting essays in our “Notes and Commentary” section. The first is by Jason Sorens (Saint Anselm College), examining the status of personal and economic freedom in the Carolinas, and the second is by Professor Paul Cwik (Mount Olive University), commemorating the centennial of Ludwig von Mises’s classic 1920 article “Economic Calculation in the VOL. 3 . 2020 5 Socialist Commonwealth.” Lastly, we have our book-review section, which features reviews of new books by Bradley Thomson, Mike Munger, and Deirdre McCloskey. Reviews are by Mitch Kokai (the John Locke Foundation), Peter Boettke (George Mason University), and George Leef (Martin Center for Academic Renewal), respectively. In addition to thanking Professor Whaples for his work on the symposium, I also want to, once again, extend my thanks to Managing Editor Adam C. Smith for all of his hard work in making sure that the real nuts-and-bolts work of putting together a publication like this gets done. As always, we are grateful to all of those scholars who are willing to act as referees for our submissions. Without them our journal couldn’t exist. And lastly, we’d like to extend our gratitude to the John William Pope Foundation for its continued financial support of the journal. 6 POLITICAL ECONOMY IN THE CAROLINAS THE POLITICAL ECONOMY OF THE CAROLINAS CONSIDERED HISTORICALLY: AN INTRODUCTION By Robert Whaples In its first two volumes, Political Economy in the Carolinas addressed an intriguing array of current policy issues—including highway construction, nuclear power projects, craft beer brewing, charter schools, college athletics, antimonopoly laws, and judicial elections. In addition, it has shown a clear regard for the importance of thinking historically. This historical thinking is implicit in James Otteson’s (2018) opening essay in the journal’s inaugural volume, “Intellectual Diversity and Academic Professionalism,” which proposes that modern universities return to the methods of inquiry that have actually advanced knowledge, those pioneered in the ancient Greek city-state of Milos—namely, inquiry that is anchored by verification and falsification, rather than partisanship. This historical approach is epitomized by Richard Ebeling’s note “Classical Liberalism’s History, Heritage, and Relevancy to Our Times” (2018). Ebeling traces the historical development of classical liberal ideas: the crusades to end slavery and advance civil liberties, economic freedom, political freedom, and international peace. These ideas were articulated by thinkers such as John Locke, David Hume, William Blackstone, Edward Coke, Adam Smith, John Stuart Mill, the framers of the American Constitution, and Thomas Cooper. Thomas Cooper? Thomas Cooper, president of South Carolina College (now the University of South Carolina, or USC) was the author of Lectures on the Elements of Political Economy (1826). Ebeling quotes his ideas on free markets and free trade at length in his essay. Cooper is a springboard for the symposium in this issue of Political Economy in the Carolinas, whose goal is to trace the history of the economics profession in the Carolinas and the history of the Carolinas’ economies. The symposium begins with my own essay, “Classical Liberalism and the History of Economics in the Carolinas.” The essay notes that although it has been “marked by a wide diversity of approaches, economics in the Carolinas has demonstrated a VOL. 3 . 2020 7 strong classical liberal tradition.” It begins with Thomas Cooper and his successor at South Carolina College, Francis Lieber, who continued Cooper’s tradition of attacking tariffs and who wrote an economic indictment of slavery, which caused him to lose his position at the college. The essay surveys the economists at the five R1 (doctoral) departments in the Carolinas—USC, Clemson, North Carolina State, Duke, and the University of North Carolina at Chapel Hill—from the beginning of each program up