Country Capitalism: How Corporations from the American South Remade Our Economy and the Planet

About this Episode

Guests

The rural roads that led to our planet-changing global economy ran through the American South. Acclaimed scholar Bart Elmore explores that region's impact on the interconnected histories of business and ecological change. He uses the histories of five southern firms—Coca-Cola, Delta Airlines, Walmart, FedEx and Bank of America—to investigate the environmental impact of our have-it-now, fly-by-night, buy-on-credit global economy.

Drawing on exclusive interviews with company executives, corporate archives and other records, Elmore explores the historical, economic, and ecological conditions that gave rise to these five trailblazing corporations. He then considers what each has become: an essential presence in the daily workings of the global economy and an unmistakable contributor to the reshaping of the world's ecosystems. Even as businesses invest in sustainability initiatives and respond to new calls for corporate responsibility, Elmore shows the limits of their efforts to “green” their operations and offers insights on how governments and activists can push corporations to do better.

Panel:

Bart Elmore, Professor of Environmental History and Core Faculty, Sustainability Institute, The Ohio State University.
Nicholas Breyfogle (Moderator), Associate Professor of History and Director, Goldberg Center for Excellence in Teaching, The Ohio State University.
 

Cite this Site

Bart Elmore , "Country Capitalism: How Corporations from the American South Remade Our Economy and the Planet" , Origins: Current Events in Historical Perspective
https://origins.osu.edu/index.php/listen/history-talk/country-capitalism.

Transcript

Dr. Nicholas Breyfogle
Welcome to Country Capitalism: How Corporations From the American South Remade Our Economy and the Planet, brought to you by the History Department and the College of Arts and Sciences, the Ohio State University, and the magazine Origins: Current Events in Historical Perspective. My name is Nick Breyfogle. I'm an associate professor of history and director of the Goldberg Center for Excellence in Teaching, and I'll be your host and moderator today. Welcome to everyone. And thank you for joining us. Today we're privileged to welcome world renowned historian Bart Elmore, who will talk to us about the impact of the American south on the interconnected histories of business and ecological change, who use the histories of five southern firms, Coca Cola, Delta Airlines, Walmart, FedEx, and Bank of America to investigate the environmental impact of our habit-now, fly-by-night, buy-on-credit global economy. Drawing on exclusive interviews with company executives, corporate archives and other records, Elmore will lay out for us today the historical, economic and ecological and ecological conditions that gave rise to these five trailblazing trailblazing corporations. He then considers what each has become an essential presence in the daily workings of the global economy and an unmistakable contributor to the reshaping of the world's ecosystems. Even as businesses invest in sustainability initiatives and respond to new calls for corporate responsibility, have a moral point to the limits of their efforts to green their operations, and offer insights on how governments and activists can push the corporations to do better. Let's take a moment to get to know our speaker. Bart Elmore studies the past to understand how we can live more sustainably on this planet. A native of Atlanta, Georgia, Bart is professor of environmental history, and a core member of the Sustainability Institute at The Ohio State University. He's the author of the book is Citizen Coke: The Making of Coca Cola Capitalism from 2015, a global ecological history of the world's biggest soft drink brand from his hometown. From 2016 to 2018. He was a Carnegie Fellow at the New America Foundation in Washington, DC. And he finished his second book in 2021 Seed Money: Monsanto's Past and the Future of Food. And this has led him to the book he'll be talking about today, Country Capitalism. I should also note that he was one of the recipients of the first of the first Dan David prize for historians. With that introduction, let me mention the plan. Professor Elmore, will open up with a presentation on the history of how the rural roads that lead to our planet changing global economy ran through the American South. And then he'll take your questions, and we'll open things up for discussion. If you're interested in asking a question, please write it in the q&a function at the bottom of your screen on Zoom. We'll do our best to answer as many questions as we can. We've received several in advance. We'd also like take a moment to acknowledge that the land The Ohio State University occupies is the ancestral contemporary territory of the Shawnee Potawatomi, Delaware, Miami, Peoria, Seneca, Wyandotte, Ojibwe, and Cherokee peoples. Specifically, university resides on land ceded in the 1795 Treaty of Greenville, the forced removal of tribes through the Indian Removal Act of 1830. We want to honor the resiliency of these tribal nations and recognize the historical context that have and continue to affect the indigenous peoples of this land. Now, let me pass you over to Professor Bart Elmore, who will take us on an exploration of Country Capitalism. Over to you Professor Elmore.

Dr. Bart Elmore
Thanks a lot, Nick, this is such a pleasure to be with everybody. And I'm gonna pull up the slide deck here. As we begin this journey to understand the history of the American South and its place in the larger economy and our planet and what a pleasure it is to just get to connect and to talk about this book with with you all I think it's one of the best parts about writing a book is getting to have conversations about the research and interviews that you've done. This was a project that took several years to complete but in so many ways was one that started for me as a young kid growing up in Atlanta, Georgia, as Nick mentioned, and seeing this kind of radical change in our economy and in our global economy, that also had pretty big environmental impacts. I can remember as a kid growing up in the 80s and 90s, in Atlanta, you know, coming down Interstate 75-85 through town and seeing the orange smog alerts that indicated to me even as a young person that we were kind of living in a system that was slightly out of balance. And I think I spent a lot of time as a young kid also in the outdoors of the American South. I went up to the Appalachian Trail in North Georgia, I became a big whitewater paddler. And part of that was because it was an escape from the, you know, the bustling city that I grew up in. And but I think those experiences gave me an appreciation for the environment made me want to become ultimately years later, and environmental historian and, and to tell the stories that you see in the book, so for me, in a way, this is this is a book Country Capitalism, that's about going home. And it was something I might have written years ago, but finally had the opportunity to do so recently. So I'll try and unpack how we got to this whole story. And why these companies, you know, one of the things that happened when I went off to grad school was I studied the history of the American South very closely. I went to the University of Virginia, and was interested in actually the history of southern public schools, I had taught at public schools in the American South and had been really struck by the lack of resources and the kind of the condition of a lot of these schools. And so I went to kind of understand how Jim Crow, how segregation, how race and inequality helped to shape the world in which I grew up in. And through that process, I found this field of environmental history, that now Nick and I belong to. It's a field that goes back to the 1970s started as a response to the modern environmental movement. If we're going to write history, we might want to think about how nature is a part of all these stories, not only shaping the course of human events, but also being shaped by human action, and therefore in ways shaping history in a kind of cyclical way. And I was hooked. So I began exploring the history of the American South from an environmental angle. And this book is a product of that: looking at five southern companies that had an outsized influence on our economy and our planet. When I studied the history of the American South, just to think about why these companies, why talk about Coca Cola, Delta Airlines, Walmart, FedEx, and Bank of America. I was picking companies that certainly wasn't cherry picking, I was trying to see what were some of the largest corporations that came out of the south. Walmart being the largest corporation in the world at one point in the story, Delta Airlines being the largest airline, at one point in the world, Bank of America being at one point, the largest bank in the world, now headquartered in Charlotte, North Carolina. FedEx, of course, revolutionized the air express delivery, coming out of Memphis, Tennessee. Coca Cola, of course, needs no introduction, you can even see the Spencerian script here. And it's on the cover of the of the book is meant to suggest that almost everyone knows the Coke brand. But the question was to say what's missing from the story of the history of the American South and the economy. And it turned out to me that we were missing a lot of stories about retail, aviation, finance, in which southern companies played a big role in shaping the contours of of those industries. If you don't buy the book, and just want to kind of know the big takeaway, I think the the main finding of the book was that the rural roads to our Amazon, and I put Amazon in quotes, economy went straight through the American South. And that, in fact, when we think about Jeff Bezos and the Amazon economy on which we all depend now, this kind of express delivery, fast, quick, Internet enabled commerce, that in fact it has roots in a southern economy. And so that's what I want to explore today and not talk not only about those roots, but also about the ecological implications of all that. And I'll start, I won't talk about each of the companies. But I will offer three examples from the book that I think are illuminating, as anyone does when they're writing their third book, I actually went back to a company I had already written about to start the book. And I focused on the history of Coca Cola, which you can see here on the cover of Time magazine in 1951, of what a telling photo here representative of the fact that Coke had become a truly global brand, you know, force feeding the world a spelt, I don't know, eight, six ounce Coca Cola. And Coke had really made it on the global stage. And in fact, if you think about it today, it's a company that's been able to find its way into the smallest niche markets that you can possibly imagine. In fact, I would challenge all of you just to think and look around you how far away you are from a Coca Cola product. You know, the goal that Robert Woodruff who ran the company in the 1920s, all the way through the 1980s, he was called the boss of the company, name was Robert Woodruff, he actually went to my high school, talk about the personal connections to the stories, he said in the 20s, that he wanted Coca Cola to be, quote, within arm's reach of desire. And, boy, I think they may not have achieved that entirely but it's pretty darn close today, no matter where you are, you can get in cold Coke almost instantaneously. And that was the model that Coca Cola pushed, that became, in some ways, the envy of other industries. This ubiquity, not only in cities and urban areas, but the ability to get your product into the smallest rural countryside markets, which is why I call this book Country Capitalism, because what unites all of these firms is that they saw the countryside, they saw rural or less urban areas, as an asset to business growth, not as a hindrance to it, but something that if you could figure out how to get your products there, you could really revolutionize the global economy in the world. And they wrote about this, that term country is, I think, a contested term, and I understand that. But if you go back to the archives, people inside Coca Cola, say this very deliberately, if we can just get this in the country, then boy, could this be a big business. And they figured out how to do it. Here is the entire salary staff of Coca Cola in the 1890s, the entire salaried staff on the front steps of the headquarters of Coca Cola. And it's a remarkable picture, not only because it shows you part of the stories that are uncovered in this book of Jim Crow, and the fact that segregation even in these images, you can see a black employee here, kind of segregated even in this image from the rest of the the establishment here here, you can see Asa Candler, who is the person who incorporated Coca Cola in the 1890s. I think this is Frank Robinson here, who helped to create that Spencerian script that we all now depend on, to do identify Coke products for us. But this was in the heart of the Jim Crow era when the strictest and most retrograde social institutions were being adopted in the American South. And you can see that even in this image, black employees in this case, often we're doing the hardest and hottest work inside these factories that were cooking the syrup, and kettles and in some ways, a very intensive and labor intensive work. But this is the entire salaried staff. And I think it tells you something about the reach of this company, even in the 1890s. They're already by this point in every single state in the entire country. And they've done this by creating a very sleek and nimble business strategy by remaining at arm's length from much of the costs associated with producing and distributing their product. What made Coke great over the years was that it didn't own things. It really figured out how to develop a business strategy that was all about kind of being a broker in the economy, a middleman. Yes, they made syrup. But they didn't own sugar plantations in the Caribbean that provided them the sugar they needed. They didn't own decaffeination plants that would provide the caffeine for this company, even though it became the largest consumer of caffeine on the planet. And I should say the largest consumer of sugar on the planet by the 19-teens. Rather it remained at arm's length and so too on the distribution end of the business, it didn't own its bottlers. Instead, it relied on independent bottlers all around the country who took out loans. In the early years, there was about $2,000 to $3,000, to build their own bottling plants. And there, they would pay for the trucks and the workers, and even the water. 80% of the finished product was something not sourced by Coca Cola, it was provided by the distributors themselves. Robert Woodruff would recognize that this model was valuable when he took over the company in the 1920s, saying, you know, you can make a lot of money, this is one of his quotes, as long as you don't care who gets the credit. And you see this model here working in the sense that you have a fairly small salaried staff, and yet, they're operating all the way around the country, in part because they're using this independent franchise system, ultimately, to help spread this product. Now this was right before bottling bottling is going to take off, most of Coca Cola is being actually sold as syrup to soda fountains in those early years, the 1890s. But that bottling system, again, where bottlers paid for the trucks and the bottles and all this, meant that you could spread even faster and into the countryside in the rural areas, and hit those markets and expand your business at a rapid pace. So I start with Coke, because I think they modeled a system of finding ways to make money in rural places, to make that a kind of mantra of its business, that ubiquity, that arm's length of desire, that you could argue is the kind of model of Amazon today, in terms of that instant gratification, buy it, you got it right there at your door. But of course, this kind of instant gratification has big costs. And I think in each chapter, the goal was to try and think about what are some of the big costs we don't think about when it comes to that arm's length of desire model. And in Coke's case, I'd written a lot about the environmental history of Coke and another book I'd written, but I had not focused on the story of refrigeration. And here, you can see a big, big story, it turns out that cokes single largest impact on climate change comes from it's global warming chemicals that are used in its refrigeration, and the energy that's used to refrigerate all those Cokes everywhere. And note that history matters here: I don't think you can solve the sustainability problems of the future without using history. Because what you see in the 20s is this mantra of arm's length of desire, Coke needs to be cold. Think about all the signs some of you may remember written on and painted on the main streets of America, cold Coke five cents. That cold, which we may take as a grant for granted, didn't have to be so, right? Coke can actually keep very well. It's very acidic, you can leave it on a shelf. In fact, you can buy it at Kroger in many cases when it's not cold. But the point for this company was to find ways to make sure Coke was cold and available to be drunk immediately at the point of sale, even in the smallest rural markets. But that, keeping Coke cold on every corner store in every rural town, has a huge footprint. And it became 35% of their total greenhouse gas emissions. Their single largest contribution to climate change is from refrigeration. And so in this chapter, I trace out the story of how Coca Cola used HFCs, hydrofluorocarbons, beginning in the 1990s, when chlorofluorocarbons, CFCs, were banned because they were causing a hole in the ozone layer. Coke, like many companies switched to HFCs, hydrofluorocarbons, which had a global warming potential 1000 times higher than carbon dioxide, which we think of as the quintessential greenhouse gas. But it turns out that HFCs, are 1000 times more potent as a greenhouse gas. And when they switched to HFCs, they were having a huge impact on global warming, as these chemical compounds leaked from their machinery, or when the machines were retired, you know, ending up in the atmosphere and causing major climate issues. Of course the electricity was part of this, too, keeping all those refrigerators on 24/7, 365 days a year. But what I was able to do is get inside the company talk to the former Chief Sustainability Officer of Coke Cola, the engineers who worked on refrigeration, you'll see that story in the book. And what's fascinating is how they tried, they were told, and they admit in the book, that there were other options available in the 1990s other than HFCs. In fact, and this may surprise you, the option that most people proposed were hydrocarbons, isobutane, for example, which could be much less of a global warming potential impact. But there was another issue with that which is that it was flammable, and while Germany and other manufacturers and more kind of countries that were pushing for environmental regulations did switch to isobutane, and hydrocarbons in their refrigeration units, Coke balked at it in part because of country capitalism. The engineers made it clear to me that they were concerned that if they put isobutane, or hydrocarbons in their refrigeration units in rural communities where there weren't a lot of technicians that can handle and maintain those machines, they might explode because, like I said butane and these chemicals are flammable, unlike HFCs. So it turns out that operating in rural areas, represented a hinderance to Coca Cola in terms of which type of refrigerant they were using, one that had a much bigger global warming potential with HFCs. But they saw it as less dangerous, given that they were operating in more country markets. Now, I talked about how they switched ultimately, in the 2000s, to try and began in part because of Greenpeace, which you see here, pushing Coca Cola to get rid of their HFC coolers, they began to switch to, if you can believe it, CO2-based refrigerators that use carbon dioxide as their Chief refrigerant over time. And then ultimately switching to isobutane and other hydrocarbons, once the technology they felt was safe enough for them to use. And that's what Coke has done, they've begun switching away from HFCs in recent years, but they've had a huge environmental impact just because of trying to keep cold and all these different markets. And one of the things you'll see in the book is an exchange between me and the former Chief Sustainability Officer of Coca Cola where I say, did you ever consider, you know, maybe not what refrigerants to put in your refrigerators, but whether you should have those refrigerators in every market turned on? In other words, might you rethink this mantra of arm's length of desire, could you may have radical greenhouse gas savings just by not having Coke cool in every single market, and thinking about where you really need things to be cool, and where potentially, you know, a consumer could take that home or buy it and purchase it and bring it back? These things, by the way, were seen as kind of non starters in the conversation. But I believe for those of us who think about sustainability in a hard way, there are huge gains that can be made there. Just by questioning does Coke need to be cold and all these different markets. Now, the second part of this book looks at a logistics revolution that was happening in retail. And my second example I want to give you before I go to the third is the history of Walmart, which started in the small town of Bentonville, Arkansas in northwest Arkansas, in the first Walmart big box store was launched in 1962. And I show you this picture because environment is all about it. The ecosystem of the American South, it turns out, helped to nurture some of the most advanced logistics innovations that our economy has ever seen. And here you can see the 1981 Walmart shareholders meeting on Sugar Creek, which is just north of the town of Bentonville, Arkansas, where Walmart was founded and where it's headquartered currently, it's a small town in Northwest Arkansas. And you can see Sam Walton here, who's in, well it's confusing if you're a paddler, as I am, you'll notice that the canoe is actually turned the wrong way. So even though Sam Walton's in the back, he's actually sitting backwards in the canoe, no matter the point here is that Sam Walton is here with his wife, Helen, who is that the front and it's telling because this is what Sam Walton wanted. He wanted to bring these analysts from New York, these investors, and they had a camp out on this creek for their shareholders meeting. But he loved that he believed that the real nature of Bentonville was what made Walmart what it was, in fact, he loved to wear these truckers hats, you know, as a symbol, that kind of connection to rural America. He was the youngest Eagle Scout, according to his friend to earn an Eagle Scout honor from the Boy Scouts in Missouri when he was a young kid. He loved to camp but so did Helen. And they took these analysts out on this camp out and the Wall Street Journal writing about this couldn't understand it, you know, how is it that such a big company can come out of such a rural place? Sam Walton loved this, of course, he didn't like the fact that most of the folks got really drunk because they were afraid of the coyotes and the snakes. And I think there was an owl that who did it night and everyone got kind of freaked out, and apparently they drank to try and deal with their anxiety and forever after this actually Walmart shareholders meetings were dry. And if you talk to any of the executives, they lament this that, you know, most of the shareholders meeting became a lot lot less fun, in part because of the failure of this camping trip. But the point here is that you see in this image, a really important story, that the environment mattered when it came to shaping Walmart, the whole reason that Sam Walton and Helen Walton are in Bentonville in the first place, which is this in the Ozarks and the hill country there in these more rural communities is because Helen loved the outdoors. She told Sam Walton, who worked for JC Penney and wanted to go make it big and retail in the big cities, maybe Chicago, she said, we're not moving there. We got to go to a place that has access to the outdoors because I love the outdoors. And I'm not moving with you to some big city. And Sam Walton, who was a big hunter and a quail hunter, they connected on this. And he agreed, they picked Bentonville in part because he talked about it, he said, I could get great quail hunting in 40 different states in that location. In other words, the reason that they're going to create this empire where they are is in part by their own environmental interests in a place that's not so urban, not so, you know, a city landscape. And yet it turns out that being in Bentonville mattered. Here you can see it just in case to kind of orient yourself in Northwest Arkansas here. This is the Ozarks, the hill country of the Ozarks, their winding roads, hilly country, that was the key to what made Walmart different right down to the strategy for how Sam Walton went about his business. He would drive around on these roads, to his little stores that were Butler brothers, little five and dimes when he was just getting started 1950s, and he said in his biography, he talked a lot about the environment. He said, I got tired of driving around as you can see the cursor here going back and forth on these little roads, and he would get kind of carsick probably going on these winding roads through these hills, that he ended up getting his pilot's license. And that was a huge deal, because in the 1960s, he was up in the air and flying around as the interstate highway system that you see here was being built, he was able to see that growth was moving outwards. And that you could get in the head of the growth and build a store where you can become the market and see the market developing from the air. He said he was about two decades ahead of many retailers and seeing the retail landscape from the air, but if it weren't for the hill country of the Ozarks, he wouldn't have been up in the air looking at retail that way. And the key thing for Sam Walton is that he figured looking at this road networks and seeing it from the air that he could cite these big box stores with 10s of 1000s of square feet in towns that had 2000 people in it. That's what made Walmart different, folks, from Target in Minneapolis. Or if you go up to Kmart in Detroit, they both started the big box stores like Kmart and Target which was part of Dayton Goods Store in Minneapolis. They start the same year as Walmart, 1962, when the first big box store of Walmart is created in Rogers, Arkansas, which is right next to Bentonville. 1962 is the year that Target and Kmart and Walmart all launched, the difference was that they weren't looking at these rural markets, they didn't think you could go into a town of 4000, 5000 people and generate millions of dollars in revenue. You don't have enough people. I mean, how are you going to do that? But Walton saw it, he saw that people could drive 50-60 miles, if you if you provided cheap enough goods from those little towns, they'll come in to your Mecca, that is Walmart and come back out to their homes. They'll drive far distances to those retail centers. And he proved that you can have this big box model in rural America. But what's key to the story here is that that led to a logistics revolution. Because Walton pointed to geography as the key factor that helped Walmart develop its winning way. He says this, we were forced to be ahead of our time and distribution and communication, developing satellite systems that were state of the art, computer networks that would allow them to to be able to sophisticatedly service all those rural small towns, and vast networks across very distant distances, they had to be ahead of their time in terms of logistics and technology and computer systems. Because as he puts it here, our stores were sitting out there in tiny little towns, and we had to stay in touch and keep them supplied. Folks, when Jeff Bezos, and I'll come back to this in a second, starts to create Amazon, he flies to Bentonville because he knows that this is the company that's figured out the logistics and from a computer and satellite system technology to kick goods into the small, smallest rural markets, but it wouldn't have happened but for the geography, but for the rurality of Bentonville in the first place. Watch what Walmart does see, it doesn't bump out into those bigger cities. It starts in the small towns of the American, South and Midwest. And it grows boom, out from that center. And yes, by the 1990s, it's going to become a truly national brand in the sense that it's in every single state, you can see that Vermont, there it is, is the last state to hold out. They had, they'd fought hard, Vermont did, including, Ben and Jerry's, Ben and Jerry of the ice cream dynasty, fought really hard to prevent Walmart from coming in and the 1990s. But you'll see around 1996-97, those Walmart's are going to be cited there. So rurality was an asset, and in fact, Sam Walton would say in his biography, he said, You know, one of the things that made us great is we were just hiding out there in those hills. You know, we were away from the competition, and you can see it here, just growing. While people thought, I don't think that's a great market, turns out that it was the prime market for that kind of retail model. And then, of course, it became becomes this national brand. The problem, and I'll talk about from the environmental angle is that it was very hard to for our laws, the Clean Air Act and the Clean Water Act, to regulate Walmart. Most of the things that Walmart gets regulated for is you know, the size of their parking lots and the runoff storm water from their parking lots and things like that, when the bigger environmental impact that Walmart's having is this, of course, transnational global network of trade, that our laws can't really regulate, you know, there's not a really good way of trying to assess Walmart's larger environmental footprint that comes from all the cargo traffic that comes from across the globe, largely with China, that Walmart's involved in, and one of the things I'm suggesting in this book is we need new laws that recognize the power of Walmart and Amazon that might regulate these conduits of capitalism a bit more effectively. Alright, and I think I'm going to be running up on time. So let me finish with FedEx. This is my last example from the book, when we think about the American South at the center of a logistics revolution, that changed the world. If you don't know FedEx, was started in Memphis, Tennessee, in the 1970s, and it was started by a guy named Fred Smith. Interestingly, I was able to get an interview with Fred Smith, actually his son, but through him, I was able to get a contact via email, and I can come back to that in our conversation if you're interested. But here's a company that really revolutionized air express delivery, operating out of the American South, and it's no surprise, why they were in Memphis. They chose this location on purpose, because they saw it as the center of gravity of the small package market. Yes, you had big airlines that were going from New York to San Francisco and you know, big planes that were going overnight to different places. But in terms of the middle of the country, and especially that small package market, you didn't really have that kind of infrastructure in place, you needed a air express delivery system to be created that was servicing those places. And you can think about today, if you live in a small town or small community, you can often get a FedEx truck into your town. FedEx loves to have these pictures of mountains and rural road as part of their branding because they can get things almost anywhere. But that was deliberate that it'd be in Memphis because of where it was located. It could get to the West Coast, it could get goods from the West Coast, but it could also get into these markets, that perhaps we're not getting the same type of air traffic that these other big cities were getting. And it was very deliberate that it was in Memphis. The environment matters here. They looked at different sites for their hub for this model. And they thought, well, maybe Chicago. The problem is you've got ice up in Chicago, that makes it very difficult to have that hub and spoke model. If you're looking from the south, they wanted to be far enough north that they weren't getting hit by increasingly, you know, as we think about climate change, the hurricanes and tropical storms. Memphis was deliberately chosen because of the environmental factors and because of its geographic factors, and being able to hit certain markets in the middle of the country, and it was a hub and spoke model. You know, the idea here is that if you were sending a package from Charleston, West Virginia, I don't know to, you know, maybe Spartanburg, South Carolina, it went this way. Charleston to Memphis by 11pm at night. It was then sorted what's called the Sort at the big hub in Memphis onto another plane and then it would go out to wherever Spartanburg or Greenville. Now you can think about this from an ecological standpoint and think about the greenhouse gas footprint of sending goods this way and then this way, but it was a model that made sense economically. And it was a model that you'll see in the book that was built on another company, Delta Airlines, that started in Atlanta, Georgia, that created that hub and spoke model that probably drives most of us crazy. Whenever you land in Atlanta, Georgia, and you've got to hustle through that airport, that model of hub and spoke, let's bring him into one big city and then bring them out to the major metropolitan areas, Delta was a pioneer in that in the commercial aviation age. 1955, they were the ones that really kind of modeled that hub and spoke model. And why? Because they were operating in the south, just to get enough traffic and these more rural portions of the South, they had to bring people in from those smaller southern towns. So you can lament this, by the way, when you're sitting in Hartsfield International Airport, you see so many people there. But FedEx feeds off that hub and spoke model. You'll see in this book that the stories are connected, and say why don't we do that for packaging, and it turned out to revolutionize our logistics world. I'm almost at time here. So let me just finish with this last two slides. In this last chapter, or this chapter on FedEx, one of the things I'm trying to get us to understand environmentally is that most of the ways in which these companies are kind of assessing their environmental footprint is through metrics of efficiency. Here, you can see it very clearly, this is their 2020 annual report. And you can see that FedEx is lauding the fact that they have reduced their aviation carbon emissions intensity by 30%. But I want you to pause for a second, when you look at this, you're thinking 30% reduction in carbon emissions. That sounds great.

Dr. Nicholas Breyfogle
Professor Elmore has frozen off in his office. So I'm just going to jump in for a moment. And hopefully he'll come back on. Let me also just note that just kind of for some up and coming things that the History Department and the Clio Society will be doing, we'll be doing a great talk, I think probably November, on, on kind of European medieval history, and which I think you might find very interesting, we'll be doing another talk in January on kind of Jewish War Brides and the kind of history of Jewish royal brides internationally, which I think will be really interesting. We got a lot more great stuff coming your way. The talk that Professor Elmore has given today is one that he's that is based upon this new book that he's done, called Country Capitalism: How Corporations in the American South Remade Our Economy and the Planet that comes out of UNC Press. It's really a great book and a very easy and an enlightening read and amazing way to, to kind of explore these stories. And there we go. I think he's back. I was just plugging your book. So you were mid sentence, my friend when when the lights went out on your end?

Dr. Bart Elmore
Well, thank you, I'm looking forward to the conversation. Basically, with carbon emissions intensity, the issue here is that most of these companies are using this metric of, you know, total greenhouse gas emissions over the revenue generated by the firm. That's what intensity means, it's a ratio. And what's happening is companies are saying, Look, our intensity is going down by 30%. But what's happening is their revenues are often going up, which allows them in this ratio to allow their greenhouse gas emissions to go up as well. And that's the kind of greenwashing, the kind of metrics of efficiency that aren't telling us the whole story, that when you actually look at the the intensity, and look at absolute emissions over the same period, they're going up. And so I think, you know, one of the lessons of the book, and that's where I was ending, is that we really have to confront these, these terms, and suggest that there's better ways of showing what's really happening, measuring our absolute emissions, as opposed to our full emissions over time. So I'll pause there, and I'm looking forward to the conversation. Thank you so much for listening to me.

Dr. Nicholas Breyfogle
Thank you so much for that fascinating talk. And we're glad to have you back after technical difficulties. And so again, if you're interested in asking a question for Professor Elmore, please go ahead and pop it into the into the Q&A. We've had a couple that have come in while he was talking. Let me take a question that actually was submitted by somebody as part of registration, which is a really big one for you to kind of start on, but is, so I think they were reading your bio. How are sustainability and history related? How does environmental history differ from a simple exploration of the past?

Dr. Bart Elmore
Well, I love those questions because I frankly, tell my students here at Ohio State that I don't, I have a lot of students and Fisher, that come to our classes in environmental history, I should note that we have eight plus environmental historians in our department. And thanks in part to folks like Professor Breyfogle, who helped to build the program here at Ohio State, that we think of ourselves as probably one of the premier places to do this kind of work. And so we're really delighted that business, not only business students, but businesses have come into our classes, to engage in conversations with us, because I think they recognize that sustainability as it's often taught in business schools is almost ahistorical, it's as if there's no backstory to how we got here, you know, there's a new technology, great, let's use this without kind of considering, well, how might we use history to think about whether this technology is going to work or not. And so I think the beauty of what we're doing, I think, here in Ohio State is, is merging the fields of business and environmental history, and trying to have in real time conversations, where we're willing to meet with people that have business and say, let's open the hood here, and look at this from a historical angle. And what lessons from the past help us think about how we can solve these sustainability problems moving forward. Time and time again, and I think Nick would agree with this, in our classes, we find that there are examples of better ways forward from the past. There are also examples of ways and things to be wary of when you think about technologies in their deployment. So the long and short of it is for anyone out there that's interested in this and has a business for example, or wants that support, we're really trying to become a place where we're open to those conversations, where we'd love to invite you in and look at, you know, we did this with Kroger recently where we looked at kind of their, their strategies, and they opened their kind of sustainability metrics up to us. And then we had at it and said, Well, here's some of the issues that we see from a historical angle that you might be missing given that there's a larger, you know, there's a larger patterns that you can see when you're looking at businesses on a larger scale over time. So I didn't know this existed so for for anyone who asked that question thing, feeling like, Oh, I feel like I missed something. I think this is a field that a lot of people are still learning about. But we're here. And we're excited to kind of engage in those conversations.

Dr. Nicholas Breyfogle
It's a fabulous promo of what environmental history can do, and the insights that it can offer. Let me ask you two questions that have come in, just in the last in the last hour, one very small, or one very focused, I should say. And one quite a bit bigger. So the first one was in the photo that you had of the of the whole kind of Coke employees standing on the steps. There's one child there, in the front of the photo, and one of the folks in the audience was really interested to know him. Do you know who that boy was? Is that boy an employee was that somebody might be working there, is it? And then the bigger question is, I mean, you you've laid out all of these these kinds of strategies and approaches to, to kind of business historically. There's also a question here, what would a model, what kind of model would be a good strategy today? The person asking, since I hear a lot of people saying business should own the means of production. What would be a good business strategy? And I think particularly, I mean, both from a business perspective, but from an ecological perspective as well.

Dr. Bart Elmore
Yeah, that's great. The first I do not have the answer to. I do not know exactly who that young child is. But I will tell you that it's not surprising to me. And I think for those of us who teach American history and labor and business history, you know, we often stressed that there's no Fair Labor Standards Act yet passed, that would be 1938, where officially we'd see, you know, federal bans on child labor in the United States. If you think about that '38. Of course, there were exemptions, of course for agriculture, in part because of lobbying and things like that, for those certain industries. So, you know, to look back at the late 19th century, and to see this, it may be jarring for us, but in fact, more common than not in many cases. I'm thinking also of images I often use of textiles in the American South, and how many children were often employed in those very dangerous jobs in those spaces. So in a way, I guess it seems almost quotidian to see it as a historian because it's a sad truth that so many children were employed and often in dangerous jobs. As to the strategies of all have this, you know, and I want to stress something that I didn't get to put a fine point on. When I say that the Amazon economy is linked to the stories that I've suggested here, I'm not trying to just say it's tangentially, like, they kind of did some pretty interesting things, and therefore, Amazon has similar models. I mean, Jeff Bezos, as I said, who started Amazon in the 1990s, he had worked at D. Shaw, which was a big hedge fund manager in New York, he understood finance, he was very smart person, I'm not trying to take credit away for him. But if you read any of his writings, he takes credit away from himself. He says, I did not build this, which is kind of surprising for a person who otherwise does say, somewhat arrogant things, like, I'm gonna fly to space and do all sorts of interesting things. But, but in fact, when you look at his writings, he says, Look, I didn't build this. I built this on top of the infrastructure. And where was that infrastructure? Turns out, it's in the South. You know, he goes to Bentonville in the 1990s, I was reading his stories. And I was struck by this by the time I got to the end of this journey of research, how connected all these stories were to Amazon. He comes in to Bentonville, he reads Sam Walton's biography, you know, it's kind of an admirer of this model. And then not only does he do that, he hires much of his original staff from Walmart, because he knows that they have the skills and techniques, so much so that Walmart moves to sue them for taking their top talent. And then if you look at their first warehouse out in the Pacific Northwest, who's there, this Amazon warehouse, one of the people managing it as a FedEx employee, it turns out that the model of this kind of Swift delivery, let's figure out how you do it. It's nice to think of it on paper and to think Bezos kind of dreamed this up because the internet had emerged and he was there. But if you really look at the details, he's in these rural places of the American South, he's hiring people from there, because this is where it started. So back to the model. I think this was the model that made a lot of sense, but I think it's also a model in a lot of ways about being a conduit of capitalism, as opposed to the kind of vertically integrated model that I think the questioner is right to suggest, is often taught in business schools is kind of a strategy for ensuring that you're reducing your transaction costs. These are all terms, you know, that would be used or reducing your risk and in certain areas, or finding ways to have a certain competitive advantage. But when you look at the long history of businesses in the American economy, one of the things that you see with Coke is that they have they remained KO, a stock that most people want to purchase. And one of the reasons they're so profitable, even today, even though they were starting in 1886 is their resiliency, the ability and nimbleness because you do not own things to be able to pivot to whatever is cheaper and more better way to run your business. A great example is high fructose corn syrup. You know what people miss when they don't understand Coke's model and they think of it as more vertically integrated, that is to say, owning and operating every aspect of the business. They forget that when high fructose corn syrup came out, Coke just pivots. And they can; they don't own sugar plantations in Brazil. They don't own sugar infrastructure. One of the great things about not owning is being able to pivot. Caffeine, you know, Monsanto was Coke's caffeine supplier in the early part of the 19th-20th century. They provided most of the caffeine for Coca Cola. But then in the mid 1950s decaf coffee took off. People got concerned about drinking too much caffeinated coffee, where do you think all that caffeine went from decaf coffee turns out, it went into the soft drink industry. And coke switched their contracts some of their contracts from Monsanto to Maxwell House of General Foods. And I have this letter from Monsanto saying, Whoa, whoa, whoa, whoa, we've been doing business for 40 years together, what's going on? And Coke Woodruff says, you know, it's just business, because that's how they pivoted. And I think, yeah, you can look at US Steel, you show me the profitability of US Steel, and some of these companies that in the 70s, when a lot of these textbooks were being written, it looked like the model, vertically integrate own and operate everything Standard Oil model own even the timber, you know, that makes the barrels that hold the oil. Yeah, do it all. Turns out, I don't know about some of those companies, all obviously still is very profitable. But a lot of the companies you'll see at the top are kind of the brokers in the economy. They're conduits, they're ones that have found a way not necessarily to make an own all this stuff, but to be kind of the channel of it. And so I see that as a very different model than what a lot of folks who've written about.

Dr. Nicholas Breyfogle
we have a comments come in from, from John Pugh who says, you talked about the problem with metrics like those used by FedEx in terms of reduced carbon emissions, and that it doesn't really tell us whether gross emissions have increased or decreased. Or it seems to me that, as John Pugh ,there is a much greater problem when talking about tons of carbon emission. That being we have no idea of the absolute environmental impact or even relative to other companies or nations impact of those emissions. In other words, it seems to be simply a number without context. And I'm curious what your what your thoughts might be in response to that, to that comment from John.

Dr. Bart Elmore
I think it's related to our upcoming trip, Nick. Nick and I are part and we should just flag this because I think it's something for people to know about, we're going to be leading the first kind of study abroad delegation of students from Ohio State to the UN Climate Summit in Dubai this year. And we're our hope is to continue this process moving forward, we've been very fortunate to have the support of so many different institutions on campus to do this this year. But one of the things I think we're talking with the students about is the very limitation that you're talking about that, in part, the reporting, a lot of this is voluntary. You know, a lot of it is still, especially when it comes to scope three emissions, most companies generally just kind of balk. Like, if you look at Walmart's statements about their scope three emissions, they'll say, we can't really track them. And what are those? Well, you got your scope one emissions, which are the emissions directly associated with what you own. So like, the stores and their trucks and the emissions that they're generating, Walmart itself. The scope two emissions or emissions that are associated with, and this may be familiar to the questioner, but it just for everyone else, scope two is associated with the energy that is being bought. So kind of indirectly, what are the emissions of you know, is it a coal power plant that's providing the energy to your facilities? Scope three, though, is the bigger and most important for somebody like Walmart, because it's all the emissions associated with the suppliers. And they call them indirect but it turns out that Walmart, you know, is the pulse, the heart is making it all happen. And so, and you'll see in their reporting, well, we can't really track down all of our scope three emissions, it's very wishy washy, and there's nobody really holding firms accountable, to ensure that we can see those full emissions. And I think it goes back to rules, meeting rules, and I get that we think that internationally, you know, this may be impossible to start establishing firm, kind of third party regulators that can come in and say, No, we want to see your emissions, show us your books, and holding folks accountable for this. Right now, that's just not happening. scope three is kind of people are saying that they're reporting it, but it's all on voluntary basis. A lot of it's very wishy washy, and I don't think we're going to see progress, as you said, until we can start comparing and seeing and these companies feeling the pressure to be held accountable in those areas. And right now, if you can believe it, that's not how it works. Even at the Climate Summit we're going to, it's all about peer pressure. It's a lot about voluntary. Most nations are providing their own voluntary kind of standards. And there's not a lot of penalties if you don't meet those standards. So I think we're going to be waiting for some time until we start putting some rules in place that say, No, you need to meet this standard. You know, enough about intensity. Here, we want to see those scope three emissions, and we want to see what whether you're hitting them or not.

Dr. Nicholas Breyfogle
I think we have time to sneak in one more question. And this one, I mean, has to do with kind of the impact of the kind of history you've discovered. And the story you're telling here that, you know, your goal as a historian is to be able to help people, you know, see their work, they see their way forward to a more sustainable future on our planet. And I'm wondering what you would, based upon what you've what you found in this book, what would you say to businesses and to policymakers that they should be doing moving forward in response to what you found here?

Dr. Bart Elmore
One thing I'd say is that if we wait for companies to do this on their own internally, we're going to be waiting for some time. I think that's something I've learned not just from writing this book, but for spending a decade and a half writing about businesses. And that's not to say there aren't good people inside the company, I've even met some of the same people inside these companies who are, you know, boldly committed. And I don't question that to sustainability, they really want to do something big from inside these companies. And yet, when you talk to these folks, you can feel the pressures of that short term quarterly kind of mindset of we've got to meet these targets, and so even though we want to do this big ambitious thing, we might just kind of, you know, do this in a piecemeal fashion. The reality is that right now ESG, which gets a lot of attention, it's all voluntary. It's all by businesses making their own choices of how they want to commit to it, and what the metrics are going to be and kind of designing those metrics in many cases themselves. The problem with that is that we're just not getting there. There was a study that I've often cited that came out from Bing Consulting in 2019 that said, that, looking at some of the top companies, 300 companies in the economy, and looking at their sustainability promises over the last several years, what's the success rate of them actually meeting their promises when it comes to environmental pledges, things like net zero, things like that. And what this study found in 2019, was that there was a 4% success rate when it came to businesses meeting their sustainability targets. That's a 96% failure rate, and if there's any students in the audience, if you get 96% of the questions wrong on the exam, I think we have to say that's an F, you know, I don't think we can kind of get there. And I think that's a product of what I said earlier, Nick, what I've learned is that if you don't put rules in place, and this goes to policymakers and us as citizens to vote for those policies, we're not going to get where we need to go, you have to put the pressure, the squeeze on the industry to say you got to meet this standard. Here's the cap, here's the line. And if you don't do that, we see this 4% success rate, which sounds good, and that's the problem, you'll read things in the Wall Street Journal say they promised this, and oftentimes the press will just fall away from that. It's as if they did it. You see this with Walmart a lot. They're committing to this. And then they're this green business, they get all these green accolades. But then they never actually do it. You'll see this in the book where they do thi,s huge praise, press falls away, I'm still there. And I'm saying they didn't do it, you know. So I think rules in place, especially when it comes to scope three that say, here's what you can do, meet this standard, or face penalties, is unfortunately where we're at given the stakes of climate change. And last thing I'll say on that is we just went to Byrd Polar Center saw the ice caps, cores, got to talk about the science. The pace with which this is happening is now so we need much more aggressive policymaking. And I know we have a divided Congress, but I think we as citizens have to demand more to create the rules that are going to make this all work.

Dr. Nicholas Breyfogle
Thank you so much, Bart. And thank you all in our audience for joining us today and for your excellent questions. I think we are grateful to Bart Elmore, for sharing his expertise, and the amazing stories of American business and the environment. Please join me in giving him a virtual round of applause. Thank you, sir. I'd also like to thank the College of Arts and Sciences, especially Alex tackling the Department of History, the Goldberg Center and Origins: Current Events in Historical Perspective for their support. Again, many thanks to all of you for joining us today. Stay safe and healthy, and we look forward to seeing you next time. Thanks so very much. Bye bye.

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