Cotton Reigned Until Slavery Was Outsourced

Bayard & Holmes

~ Jay Holmes

Today, Western nations are forced to consider the price and flow of crude oil in all foreign policy decisions concerning the Middle East. From Algeria to Iran, Oil is King. However, back in 1861, petroleum was not yet a major commodity for world markets. Instead, a major commodity was cotton.

America’s South had developed an important economic position in world markets by harvesting and exporting cotton to European markets. In 1860, the United States exported over four million bales of cotton to Europe, with each bale weighing 500 pounds.

 

Girls Picking Cotton
Image by Keystone View Co, public domain
Located at NY Public Library

 

The largest importer of US cotton exports was Great Britain.

American cotton was one of the two major ingredients in profitable textile mills in England. The other critical ingredient was cheap labor, and the UK had plenty of that, as well.

The cash that flowed into the South allowed it to import goods from Northern factories, mills, and foundries. The cotton formula was simple, and the Southern states had the long growing season and four million slaves to make cotton farming highly profitable. Many Southern leaders saw themselves as key players in the global market. As far as they were concerned, cotton was essential to Europe’s economy.

Today when we look back at the Civil War, we might wonder why the less-populated, less-industrialized South would have considered a war with its Northern neighbors.

In 1860, Southern states had a population of nine million citizens and nearly four million slaves. The Union population was twenty-two million. The Northern states could boast of having ten times as much manufacturing production as the South. And, in particular, Southern states produced almost no military equipment or firearms.

To add to the disparity, the Northern states operated with a single, standard railroad gauge covering nearly 98% of Northern routes. An engine in New York could, and did, run just as easily in Michigan. In the South, one symptom of “states rights” parochialism could be seen in its railroads. It had railroads but no railroad system. An individual investor built in any fashion that he saw fit. An engine in Virginia would not only not work in Mississippi, it likely wouldn’t even be able to traverse the state of Virginia. That lack of cooperative planning and central regulation haunted the South throughout the duration of the Confederacy.

On the eve of the American Civil War, the North had the guns, the manufacturing capability and the manpower. The South had cotton and four million slaves.  When the odds are considered, the North would have seemed to have a clear advantage.

 

Women Picking Cotton
Image by J.N. Wilson, public domain.
Located at NY Public Library.

 

However, the South was counting on three factors not normally reported in censuses and almanacs.

First, it was counting on fighting a defensive war, and it had no need to invade the North. The Union army would have to invade the South to recapture it and force its re-entry into the Union. Given the weapons available in 1861, being outnumbered two and a half to one was considered an even match. Trained military leaders with Southern sympathies would not have encouraged secession from the Union if a secession would have required “conquering” Northern states.

Second, and more subtle, the Southern leaders calculated nearly correctly the unwillingness of “lazy city folks” in the North to enter military service and campaign in the South to free slaves that, in the South’s estimation, most of them cared nothing about.

The third “ace up the sleeve” was the 1861 equivalent of an OPEC oil embargo. The South knew, or thought they knew, that European nations would not tolerate an interruption in cotton trade. In weighing the odds for war, many Southern leaders were confident that Europe would threaten intervention and coerce the US to accept the Confederacy’s independence. Guns, ammunition, and the massive mountains of manufactured goods required to feed the glutinous gods of war would flow from Europe like oxen to the sacrificial altar.

That was the plan, anyway.

 

Southern Belle
By Erich Correns, public domain.

 

 

Somewhere between the certainty of a bright Confederate future and Appomattox Courthouse, something went wrong for the South.

On a pleasant spring day on April 12, 1861 amidst a carnival atmosphere with well-dressed, picnicking revelers, Confederate General Pierre Gustave Tautant Beauregard ordered his artillery to open fire on Union-occupied Fort Sumter in the Charleston harbor in South Carolina. A merry time was had by all except for Union Colonel Anderson and the men trapped in the fort.

After thirty-four hours of bombardment, Anderson was allowed to withdraw his men by way of a Union Navy ship, and in exchange for safe passage, the remains of the fort were surrendered to the Confederacy. Beauregard was hailed as a Caesar by the jubilant picnickers and by their cousins across the South. Four hellish years and 630,000 dead Americans later, the spring picnic seemed somewhat less splendid.

 

Gate to Gettysburg local cemetery, which became a battleground.
Image public domain.

 

The Southerners had calculated the odds of defensive action correctly.

Their basic suppositions about the size of the Union forces needed were accurate enough. What was less accurate was their supposition that Northern couch potatoes would not fight. They did. Even after suffering the horrendous casualties while attacking prepared positions at numerous battles, the North still managed to fill the ranks of the Union Army and equip it.

The Southerners had not calculated that Northerners would be willing to pay such a high price in blood to defeat the Confederacy. They were wrong, and the South’s mighty monarch King Cotton had an accidental hand in assisting Union Army recruiters.

The Confederacy was not altogether surprised at England’s reluctance to send its navy to defeat Union Navy blockade of its ports. However, the South was accustomed to life in a democracy and was prepared to coax the Parliament and Queen into seeing the “Southern light.” Southerners knew that Queen Victoria considered slavery an abomination and was reluctant to defend the interests of wealthy slave owners in a fight against the US, so the South played the Cotton Card. . . . It stopped exporting cotton to England.

An island nation with mothers who can’t cook, artists who can barely paint , and army officers who buy their commissions does not come to rule the waves by being stupid. Great Britain saw that Southern move coming.

 

Cotton bales at Bombay port in 1860s.
Image public domain.

 

Great Britain had been at the trade game for a long time, and they were good at it. Unlike the British Army, the British Navy was a well-run meritocracy, and it communicated well with British governments and merchant marine by way of its Admiralty staff. In 1860, a bumper crop of cotton glutted the markets, and England was organized and disciplined enough to invest substantial long term capital in stockpiling it.

Also, far from London, and even farther from the cotton fields of the South, British colonial officials in Bombay saw an opportunity in the chaos caused by the anticipated cotton embargo. The Bombay area had the perfect climate and soil for cotton growing. It also had something better than slaves. Great Britain had cheap, disposable workers who showed up willingly and worked for less than it cost to operate an American slave. England outsourced its need for the Southern slave labor to India, Egypt, and Africa.

While the shortage of cotton imports from the Confederacy did hurt England, and thousands of English laborers were laid off, the problem was short-lived.

Interestingly, even after losing their textile jobs, the British working class remained strongly anti-slavery and pro-Union. Thousands of unemployed Irish, English, and Germans immigrated to the Northern US. Waiting for them on the docks were Army recruiters promising citizenship and bonuses to enlistees. By 1863, many Union regiments had immigrant majorities in their ranks.

Cotton production in India, Egypt, and Africa grew quickly.

By 1863, England had little concern for what happened to the mountains of cotton bales being stockpiled in the Confederacy. The guns, ammunition, and gold were not forthcoming for the South from Europe except at high prices. Cotton was, in fact, not quite king after all. It was nothing more than a commodity.

 

Bombay Cotton Merchant
Image public domain.

 

Across the South and at Gettysburg, Pennsylvania, gravestones mark the resting places of silent witnesses to a war fomented in ignorance and arrogance.

Cotton, the plantation elites, and the American President who had to fight almost more against his Northern cohorts than against the Confederates, are all gone. The great-grandsons of the slaves remain, and, although the reconstruction and social evolution have yet to be completed, the Union remains, as well.

*   *   *   *   *   *   *   *   *   *   *   *   *

Jay Holmes is a veteran field operative and a senior member of the intelligence community. His writing partner, Piper Bayard, is the public face of their partnership.

To follow Bayard & Holmes, sign up for the Bayard & Holmes Covert Briefing, or find them at their site, Bayard & Holmes. You may contact them in blog comments at their site, on Twitter at @piperbayard, on Facebook at Bayard & Holmes, or by email at BH@bayardandholmes.com.

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The F-16 Offer to India — India Might Refuse It, But Pakistan Can’t Ignore It

Bayard & Holmes

~ Jay Holmes

For the last few years, military and foreign policy aficionados around the world, not to mention very excited governments and corporate accountants, have been following the Indian government’s fighter procurement plans.

The process has been more dramatic and colorful than the average major defense purchase. Given the profit potential of any contract to supply modern fighters to the Indian Air Force (“IAF”), we would expect fierce competition from fighter jet manufacturers accompanied by massive propaganda campaigns from both government and corporate sources. We would not be disappointed.

 

UAE F-16 Block 60 Similar to F-16 Block 70 Offered to India Image public domain, wikimedia commons

UAE F-16 Block 60
Similar to F-16 Block 70 Offered to India
Image public domain, wikimedia commons

 

The technical aspects of the competition have been debated by millions of passionate aviation “experts.”

Unfortunately, most of those “experts” either have no experience in piloting or aerospace engineering, or they work for companies connected to the competition. My purpose in publishing this article is not to add to the technical and political debates. My hope is to consider some interesting geopolitical/geo-corporate questions that have arisen from the long and dramatic procurement process. My spellchecker is resisting the term “geocorporate,” but I fear that the time has come when the term is both fair and depressingly relevant.

The IAF wants a new fighter.

It wants a fighter that is better than their current hodgepodge mix of aircraft from a slew of countries and manufacturers. For both domestic and foreign political reasons, the IAF also wants guarantees of parts and weapons availability without interference from the governments where the aircraft is manufactured each time the political climate changes in those governments.

For domestic political reasons, the Indian government wants major technology transfer and local work cost offsets of 50%.

For those who are not acquainted with industry jargon, that means the Indian government wants the ability to use the same or similar technology to produce the same or similar products, and it wants half of the cost of production to be spent in India.

The serious competitors for India’s fighter deal were France’s Dassault Rafale, the Eurofighter Typhoon, and Sweden’s Gripen. Other competitors offered their products but were, justifiably, seen as dark horses in the race for the huge contract.

US Boeing half-heartedly offered the F-18 Super Hornet, but perhaps did so with the hope of eventually convincing the IAF to consider them for use on future Indian carriers. The F-18 would not seem to be ideally suited for the IAF’s particular requirements.

US Lockheed Martin offered the F-16 C/D. Given the age of the airframe design and India’s desire for a massive technology transfer, it seemed unlikely that India would choose the F-16. It didn’t.

Russia straight-facedly tried to offer up everything in their inventory, along with a few things not actually in their inventory.

Given the IAF’s torturous troubles in dealing with Russian aircraft companies Mikoyan and Sukhoi on previously purchased fighters, there seemed little chance of the IAF choosing a fighter from Russia. The IAF has been sold too many lemons over India’s decades of purchasing Russian military equipment, and the Russians have refused to uphold warranty promises. Russia may have saved money in the short term by screwing India on these deals, but in the process, it pretty well lost a customer.

The IAF has been pleased with the performance of the Dassault Mirage 2000s that they previously purchased from France.

The Mirages have performed well for it. Also, when the rest of the West embargoed weapons sales to India in response to nuclear weapons tests or conflicts with Pakistan and China, France continued to supply weapons and parts to India. Naturally, India has remembered this. Likewise, the IAF is confident that unless it starts bombing the very best restaurants and art museums in Paris, Dassault will remain willing to take their cash.

Without even considering technical arguments, the Swedish Gripen relies on critical parts from other nations, making it unlikely. Getting those nations to agree to a Swedish export of their technologies to India was going to be about as easy as getting all of France to switch to a Swedish cuisine diet. If you’ve ever eaten in Sweden, you will recognize this proposition as absurd humor.

Note to Swedish people: I like you. You are lovely people. Most of your food sucks.

But back to fighter planes…

The Eurofighter Typhoon might have met the technical requirements set forth by the IAF, but India would be at the mercy of the governments of Germany, the UK, and Italy for parts and weapons if they ever tried to do something crazy with those Eurofighters like perhaps fight with anyone. The Eurofighter, like the Grippen was a bad political choice.

In January 2012, to nobody’s real surprise, the Indian Government announced that the Dassault Rafale had won the competition for the huge contract of 126 multirole fighters.

It was a slam dunk for Dassault. Almost. As my grandma told me, the devil’s in the details.

Dassault was anxious to deliver the Rafales. The IAF was anxious to receive them. I was not going to hold my breath waiting for the first Rafale to be delivered to the IAF.

The small matters of price and warranties remained to be settled. Dassault vacillated on the price as India pressed for more technology transfer.  The pricing started high, then got lower, then got higher again, then lower, etc. As the months and years passed, the first Rafale fighter was never delivered because the parties could never agree to details on price, warranty, and technology transfer. Unlike the average American tourist in Paris, the IAF was willing to argue about the bill.

Finally in March 2014, India and France announced that the first 18 aircraft would be delivered to India in flying condition – off the rack, so to speak – at a cost of $200 million + per fighter. Another 108 would be 70 percent built by HAL Corporation of India. The 18 seemed to me like a very high priced improbability, and building more with 70% construction by Hal in India struck me as more fanciful than home fusion generator trash disposal units.

In April of 2015, India indeed announced that the purchase had advanced to the long anticipated “Hell no, we won’t buy any” stage of the negotiations.  No cash, no new fighters, nothing.

And then Lockheed Martin slipped in and knocked on the back door with a very interesting proposal.

Lockheed Martin offered to move its entire production of F-16s to India if India would upgrade the order to the F-16 Block 70 model.

Instead of technology transfer debates, Lockheed Martin will let India build the fighters on a Lockheed Martin system installed for less than $30 Million per fighter.

And as grandma would say, again, the devil is in the details.

Lockheed Martin can propose all they want, but the US government will have to completely agree to all the details of any transfer of F-16 technologies and production to India.

Many US allies fly the F-16.

Some fly newer, recently-built versions and will be flying them for a long time. In fact, without any new orders, Lockheed Martin will be busy turning out F-16s for at least another year to satisfy current orders. Neither Lockheed Martin nor the US government wants to aggravate these allies by telling them to get their parts from India.

The Pakistan Air Force flies F-16s.

For Pakistan, which is in a state of perpetual low level war and near-war with India, hating India is central to its dogma. How many parts will India send to Pakistan? Maybe a few nylon seat covers and some cool looking decals. That’s about it. In effect, Lockheed Martin is telling the Pakistan government to piss off.

The Lockheed Martin offer is not officially coming from the US government.

If John Kerry visited Pakistan tomorrow, he would swear to them that he loves Pakistan, roots for the Pakistani national cricket team, loves Pakistani food, and that some of his best friends are Pakistanis. John would not believe any of it, and neither would anyone in Pakistan.

Though the Lockheed Martin proposal has not yet received US government approval, it’s hard to believe that the Lockheed Martin tail is wagging the US government dog.

The Lockheed Martin proposal to India represents a major shift in US foreign policy toward both India and Pakistan. Is the US finally accepting that Pakistan has never been and never will be anything like an ally? Are we offering a closer relationship to India?

My guess is that Lockheed Martin and India will not conclude the deal in its current form. At this point, the proposal can be withdrawn for any number of reasons, but the message to both India and Pakistan will stand. India might not take the Lockheed Martin offer seriously, but Pakistan must.

US-India Alliance — The Joker in the South China Sea Poker Game

Bayard & Holmes

~ Jay Holmes

One of the most important US-Asia relationships is that of the US and India. Like the US, India has no territorial claim in the South China Sea. However, because of its size and its location on oil trading routes, India has the potential to greatly impact any strategic balance in the South China Sea region.

 

US Pres. Obama & India Prime Minister Modi Image by Pete Souza, public domain.

US Pres. Obama & India Prime Minister Modi
Image by Pete Souza, public domain.

 

The US is the oldest democracy. With approximately 1.3 billion people, India is the largest democracy.

India’s population is currently only slightly smaller than that of the People’s Republic of China, and it is trending to surpass Communist China in 2028. Both countries’ national economies have grown substantially during the past twenty years, but Communist China’s economic growth, much of it fueled by the US and other Western consumers, has outstripped India’s by nearly three times. Indian politicians and business leaders are aware of that, and their desire to increase trade with the West is impacting foreign policy debates in India.

While India has no territorial claim in the South China Sea region, it needs to freely navigate the South China Sea to reach markets in South Korea, Japan, the Philippines, and elsewhere.

Freedom of navigation in that region directly impacts India’s ability to increase exports and potentially import energy and food. As a result, what happens in the South China Sea matters in the corporate boardrooms of Mumbai and in the homes of the Indian people, giving India a keen interest in the region.

Historically, the US and India have always maintained civil, if not always friendly, relations, and most Americans and Indians hold favorable views of each other in spite of the two nations’ other alliances.

Shortly after its independence, India established strong diplomatic relations with the USSR, and the USSR, now Russia, has traditionally been India’s biggest supplier of technology and military hardware. India’s close relations with Russia were driven by two major factors. One factor was India’s continuous multi-border disputes with China in conjunction with Moscow’s break with Communist China during the East-West Cold War. The other factor was, and remains, Pakistan.

Pakistan vacillates between near-war and low-intensity war with India.

That constant hostility has at times been much larger in the minds of Pakistanis than in the minds of most Indians, but coupled with terror strikes by Pakistani-controlled groups, the continuous enmity makes it impossible for Indians to ignore US military aid to Pakistan.

In spite of this, most Indians are willing to establish an equitable peace with Pakistan.

For Indians, the center of the universe is not located anywhere in Pakistan. For many important Pakistani power brokers, the center of the universe must continue to appear to be in India. By remaining in or near a state of emergency, the Pakistani intelligence establishment and some Pakistani military leaders have been able to maintain an inordinate and unhealthy influence over Pakistani politics.

Given India’s conflicts with China and Pakistan, along with US support for Pakistan, it’s easy to understand how India built strong ties with Russia.

This may be changing somewhat, but don’t expect a complete halt to the import of Russian military equipment. India has shown a desire to reduce its reliance on Russian military hardware, but its goal is not to replace Russian suppliers with Western suppliers. Its goal is to replace Russian suppliers with Indian suppliers. The trick is, of course, developing adequate Indian suppliers.

With a massive labor surplus and high unemployment in India, the political pressure to “buy Indian” is now a major factor in Indian politics.

And remember, unlike Communist China, India is a democracy, and the public’s concerns drive foreign and domestic policies. As in other democracies, that linkage is never as direct as the voters would prefer, but no Indian politician can ignore major domestic concerns and survive in office.

Ideally, India could do whatever is needed and take however long it needs to accommodate the powerful “buy Indian” agenda. Unfortunately, India is not in an “ideal world,” but rather in a world that finds them next door to Pakistan and the People’s Republic of China – a very “un-ideal” neighborhood, indeed.

India has access to European military equipment. To the displeasure of the ruling Pakistani junta, India has now also been granted nearly the same level of access to US-made military hardware as that enjoyed by close US allies. At the same time, for a variety of well-founded reasons, Pakistan has been facing more difficulty in acquiring high tech US military hardware.

To the displeasure of US military suppliers, India has yet not showered cash on them. Deals with the US and other Western suppliers are announced with much fanfare. Those deals usually die at the cash register with far less fanfare.

In one concrete sign of closer US-India relations, India and the US are “cooperating” in the construction of new Indian aircraft carriers and other new Indian Navy ships. What “cooperating” will end up looking like precisely is difficult to say, but if real cooperation occurs in these projects, then that may be a clear indicator of growing ties between India and the US.

It’s not surprising that in a nation of 1.3 billion people, not everyone agrees about the direction that Indian foreign policy should take.

China and Russia’s willingness to improve their relations enough to forge a massive natural gas deal has many Indians wondering about the possibility of improving relations with China and eventually receiving much-needed natural gas from Russia via Chinese pipelines. China is currently paying much less for Russian natural gas than India is paying for Middle East natural gas.

On paper, the concept of a Russia-China pipeline looks good to India, unless that paper is being viewed in China.

China had a huge motive for accepting a gas deal from their old enemies to the north. China feels fragile and insecure about its short term and long-term energy needs. And it should. Increased energy costs could throw the Chinese economy into near chaos. Helping India gain access to cheaper natural gas would make India a competing consumer for Russian natural gas. It would also help India realize its dreams of military modernization, and it would help that country compete for a larger share of Western export markets. China wants to help India improve its military and its economy about as much as I want to live in Syria – not one damned bit.

Overall, we will likely see closer economic and military ties between the US and India, but it will not happen overnight.

Most Indians are politically rational. They neither wish to become “pro-American,” nor “pro-Western.” They simply wish to find a way to be effectively “pro-Indian.” India’s desire to pursue a pro-Indian agenda in no way conflicts with US or European goals in Asia.

While it is unlikely that India will want or be able to exert much military influence in the South China Sea over the next decade, India remains a critical factor for any Chinese military strategy. Just as India needs to freely navigate the South China Sea, China even more critically needs to navigate the Indian Ocean.

The world champion diplomatic double talkers in Beijing love pretending to ignore India’s influence in Asia. That plays well to the captive Chinese audience, but not so well in the geopolitical reality. India’s slowly growing strength in the Indian Ocean will act as an indirect but strong deterrent to Communist China’s escalation of hostilities in the South China Sea.

In our next article we will consider the overall geopolitical realities in the South China Sea.