The act of
dueling was often condemned by public figures throughout
early United States history and seen as unnecessarily violent and instigated by trivial matters. For example, to pinch someone's nose was an insult grave enough to challenge to a duel for it symbolized the unmasking of a liar. Contrary to the perception that the act of dueling occurred at the "drop of a hat", there were real economic forces that drove one to challenge another or accept a duel. However, the concept of "defending one's
honor" was not quite as abstract and idealistic as often imagined – losing "honor" often had pecuniary disadvantages that made defending one's honor a somewhat rational decision, even at risk of being physically harmed or even killed. Dueling to protect one's
credit or honor was partly a response to the underdeveloped credit markets of this region and time period.
Personal credit in the South In the
Southern US, whose economy was mostly agricultural (including
plantations) and production cycles were longer-term than those of their manufacturing-oriented
Northern counterparts,
planters were often highly leveraged and dependent on personal credit to carry them through to the harvesting and sale of their crops. The assets of plantation owners were largely
illiquid, their
estates holding value in the form of
real estate and
slaves. Thus, preserving personal credit was important to the livelihoods of planters. Given that Southern credit markets were rather opaque until the early 20th century – lenders could not readily view an applicant's
financial statement—having a reputation as "honorable" was almost essential to obtaining approval for loans. In addition, transaction costs were high during this period; therefore, perceived personal integrity or good character was viewed as likely to honor one's contracts and debts. Thus, the word
honor was nearly culturally synonymous with
creditworthiness. The long-term economic penalties for having one's reputation ruined included limited access to
capital and diminished political influence. Lending institutions did not punish debtors for participating in duels. A planter might risk a devaluation of his assets as a result of turning down a duel – with the loss of his honor – which would harm the lender as well. In the case that a debtor accepted a duel challenge and lost, the lender could expect an honorable man to honor his debts posthumously by paying back the owed amount with interest as his
estate was
liquidated. ==Rise in state capacity==