In a Marketplace article discussing the South’s habit of providing tax incentives to businesses, UGA historian James Cobb said the practice started “after the agricultural economy was pretty much rend asunder by the Civil War.”
The Spalding Distinguished Research Professor in the Franklin College of Arts and Sciences, Cobb said Southern states then began providing incentives as a way to attract outside capital. The freebies were meant to be temporary, according to Cobb, but then northern regions started doing the same thing.
“And then, in the last generation, the global labor market has become so competitive that it’s been very hard to sort of ditch the subsidy approach,” said Cobb, a faculty member in the history department.
Cobb also said that there is a point in which governments become so business-friendly that there are no incentives left for everybody else.
“You throw over so much in public expenditures in various things, including education, to keep taxes down, that you reach a point of it being self-defeating,” he said.
