PATERNALISM IN AGRICULTURAL LABOR CONTRACTS IN THE UNITED-STATES SOUT- IMPLICATIONS FOR THE GROWTH OF THE WELFARE-STATE

We examine paternalism as an implicit contract in which workers trade faithful service for nonmarket goods. Paternalism reduced monitoring a nd turnover costs in cotton cultivation in the U.S. South until the me chanization of the cotton harvest in the 1950's. Until then, the effec tiveness of paternalism was threatened by government programs that cou ld have substituted for paternalism; but large Southern landowners had the political power to prevent the appearance of such programs in the South. With mechanization, the economic incentive to provide paternal ism disappeared, and Southern congressmen allowed welfare programs to expand in ways consistent with their interests. 033, P16)