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South Carolina, at times beleaguered and under attack, stands proud but not untroubled, a state that has made much progress but still feels it has some distance to go. Within living memory, this state looked like an underdeveloped country: Beneath a thin veneer of rich people, it was among the poorest of states, with income levels less than half the national average and with high levels of illiteracy and disease. South Carolina was founded by planters from Barbados and even today there are reminders of the West Indies--the semitropical climate, the lush foliage and trademark palmettos, and the billions of damage from hurricanes. But economically and culturally, South Carolina is now clearly part of the booming South Atlantic region from Maryland to Florida, filling up with new retirement condominiums, factories and office buildings, giant shopping centers, growing robustly in the 1990s.

South Carolina started off with a plantation economy built on the swampy Low Country below the Fall Line, where the great 18th and 19th century planters built rice paddies and cultivated exotic crops like indigo in the days before cotton was king. The great wealth of these Low Country planters was destroyed by the Civil War which they, more than any other Southerners, provoked. But their pride and way of life continued as did that of former slaves. As late as 1940, 43% of South Carolinians were black, most living in conditions inconceivable today. South Carolina's economic growth started only in the 1920s, with that lowest-wage of industries, textiles. Mills were built in the Up Country above Columbia, hiring poor whites (never blacks) from the hardscrabble farms in the area. Politics remained a rough business, with harsh appeals to racial fear and economic envy, and with limited participation: in 1940, just 99,000 South Carolinians voted for president, 96% of them Democratic--the highest Democratic percentage in the nation. In the 1946 Democratic primary, the year Strom Thurmond was elected governor, only 271,000 people voted in a state of more than 2 million.

Now this once underdeveloped country has joined the First World: The 2000 Census counted 4 million South Carolinians, 30% of them black, 2% Hispanic. Personal incomes rose 40% in the 1990s, up toward national levels, and poverty fell sharply; health standards are as good as those in the rest of the nation; educational achievement still lags, though not nearly so much as before, with 80% of white and 65% of black adults high school graduates; homeownership is above the national average. South Carolina was helped for some years by the military bases clustered around Charleston, by the big textile mills around Greenville and Spartanburg, and by the outmigration of Low Country blacks to big cities of the Northeast. Then, starting in the 1970s, South Carolina became the most aggressive state in the South in attracting new industry. It advertised its business climate (the nation's lowest rates of unionization), its taxes (low) and its willingness to meet local employers' needs (very high). It enticed French and German firms to set up major operations in the Piedmont and the Low Country, a process capped when BMW in 1992 built its first U.S. assembly plant off I-85 in Spartanburg. From 1960 to 1990 international investment in the state grew from $80 million to $16.4 trillion. But even more typical are the decisions of hundreds of small employers to open plants, rent offices and create jobs in what has become one of America's more vibrant economic environments. South Carolina keeps losing textile and apparel jobs, but has gained many more not from government-subsidized big plants but from expansion of existing businesses.

As South Carolina's economy grew, it slowly, sometimes grudgingly, overcame its heritage of slavery and racial segregation. Starting in the 1950s, fewer people were kept from voting by the poll tax, and turnout surged as South Carolina became competitive in the presidential elections of 1952, 1956 and 1960. Clemson University was peaceably desegregated during the governorship (1959-62) of Ernest Hollings; most South Carolina whites opposed integration, but not with the violence of Alabama and Mississippi. Then the Civil Rights Act of 1964 and the Voting Rights Act of 1965 ended legal segregation of public accommodations and workplaces and brought blacks suddenly into the electorate. This changed the political balance. Senator Strom Thurmond, who set a record filibustering a civil rights bill in 1957, started appointing black staffers and a black federal judge in the late 1960s and early 1970s. But politics still cleaves the electorate along racial lines: In 2000 whites voted 69%-27% for George W. Bush and blacks voted 91%-7% for Al Gore. South Carolina is still grappling with the controversy over the Confederate battle flag, flown over the state Capitol since 1962. Successive governors--Republican David Beasley and Democrat Jim Hodges--favored taking it down; the NAACP organized a boycott of the state; longtime Charleston Mayor Joe Riley Jr. led a 120-mile march on Columbia. Finally in May 2000 the legislature voted to fly the flag not from the Capitol, but from a 30-foot pole on the Capitol grounds, while an African-American history monument would rise nearby. The state NAACP was still not satisfied, and announced the boycott would continue. But in January 2003, when Democratic candidates for South Carolina's February 2004 presidential primary said they would have a hard time observing the boycott while campaigning in the state, the president of the state NAACP said, "We're not going to hold it against them."

Until the 1960s, South Carolina was an inward-looking state, with few people except military personnel moving in. That has changed as the economy has grown. Most of the newcomers are white, with conservative attitudes but less feeling for the state's ancient traditions; there have as yet been few immigrants and the population was only 2% Hispanic and 1% Asian in 2000. The fastest growth in the 1990s came in coastal resort areas around Hilton Head and Myrtle Beach and in suburban counties outside Columbia and just south of Charlotte, North Carolina. This growth has reduced the black percentage to 30% in 2000, well above the national average of 12% but far below the near-majority of the 1940s. Politically, this changed has helped move South Carolina toward the Republicans. But that change might not have occurred without the efforts of two individuals. One was Strom Thurmond, who had voted for Franklin Roosevelt at the 1932 Democratic National Convention, but who switched to the Republican party in September 1964 and provided critical votes to nominate Richard Nixon at the 1968 Republican National Convention. South Carolina voted for Barry Goldwater in 1964 and Nixon in 1968 and has only voted once--and narrowly--for a Democrat since then (Jimmy Carter in 1976). The other individual was Carroll Campbell, elected governor in 1986 and 1990, who with the aid of Lee Atwater built a Republican party capable of electing statewide officials and majorities in the legislature. In 1988 Campbell and Atwater, by then George H. W. Bush's campaign manager, set up the early Republican primary, on the Saturday before Super Tuesday, which enabled George H. W. Bush to clinch the Republican nomination that year; it did the same for Bob Dole in 1996 and, against John McCain's strong challenge, for George W. Bush in 2000. In 1989 Campbell and Atwater seemed to be Thurmond's heirs. But Atwater died of a brain tumor at 39 in 1991. In 1994 Campbell helped his protege David Beasley win the governorship and supported Thurmond's campaign for an unprecedented eighth Senate term. It was widely assumed that Campbell, making good money as a Washington lobbyist, would be appointed to fill Thurmond's seat if it should become vacant. But Beasley was defeated for reelection in 1998 and in 2001 Campbell announced that, at 61, he was battling Alzheimer's disease. Thurmond served out his eighth term as he had the other seven and as a United States senator celebrated his 100th birthday in December 2002.

South Carolina politics now belongs to a new generation, with the vivid exception of Senator Ernest Hollings, who after 36 years as a junior senator--the longest in history--became senior senator when Thurmond's term expired in January 2003. The state continues to be heavily Republican, though Democrats have been competitive and cannot be counted out. In 1998 Hollings was reelected to a sixth full term by a 53%-46% margin over Congressman Bob Inglis, and Democrat Jim Hodges upset Beasley 53%-45%. Beasley was hurt by his switch on the Confederate battle flag and by his opposition to video poker. But in 2000, voters went Republican up and down the line: George W. Bush carried the state 57%-41% and Republicans, after a party switch, took control of the state Senate 24-22; they already had a majority in the state House. Bush carried the Greenville metro area 65%-33%, the Columbia-Aiken metro area 57%-41%, the Charleston metro area and the coastal counties 56%-42% and the rest of the state, with its rural black-majority counties and lingering Democratic tradition, 52%-46%. In 2002 the Republican trend continued. Republicans had a fierce primary and runoff for governor, and the surprise winner, former Congressman Mark Sanford, who moved to the state as an adult, beat Hodges 53%-47%. In the race to succeed Thurmond Democrats put up an attractive and articulate candidate, College of Charleston President Alex Sanders. But Congressman Lindsey Graham, famous after his lead role in the impeachment of Bill Clinton, won 54%-44%. Interestingly, both Sanford and Graham had actively backed John McCain in the 2000 presidential primary, when most party leaders backed George W. Bush. Republicans won six of the eight downballot races and won majorities of 25-21 in the state Senate and 73-51 in the state House.