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The Economics of the Civil War
LewRockwell.com ^ | January 13, 2004 | Mark Thornton and Robert Ekelund

Posted on 01/13/2004 9:01:35 AM PST by Aurelius

Dust jackets for most books about the American Civil War depict generals, politicians, battle scenes, cavalry charges, cannons[sic] firing, photographs or fields of dead soldiers, or perhaps a battle between ironclads. In contrast our book {[url=http://search.barnesandnoble.com/booksearch/isbnInquiry.asp?userid=2XGHOEK4JT&isbn=0842029613&itm=7]Tariffs, Blockades, and Inflation: The Economics of the Civil War Mark Thornton, Steven E. Woodworth (Editor), Robert B. Ekelund[/url]features a painting by Edgar Degas entitled the "Cotton Exchange" which depicts several calm businessmen and clerks, some of them Degas’s relatives, going about the business of buying and selling cotton at the New Orleans Cotton Exchange. The focus of this book is thus on the economic rationality of seemingly senseless events of the Civil War – a critical period in American history.

What caused the war? Why did the Union defeat the Confederacy? What were the consequences of the War? The premise of the book is that historians have a comparative advantage in describing such events, but economists have the tools to help explain these events.

We use traditional economic analysis, some of it of the Austrian and Public Choice variety, to address these principal questions and our conclusions generally run counter to the interpretations of historians. In contrast to historians who emphasize the land war and military strategy, we show that the most important battle took place at sea. One side, the blockade runners, did not wear uniforms or fire weapons at their opponents. The other side, the blockading fleet, was composed of sailors who had weapons and guns but they rarely fired their cannons in hopes of damaging their opponents. Their pay was based on the valued of captured ships. Historians often have argued that the Confederacy lost because it was overly reluctant to use government power and economic controls, but we show the exact opposite. Big Confederate government brought the Confederacy to its knees.

Some now teach that slavery was the sole cause of the Civil War – an explanation that historians have developed in the twentieth century. However, this analysis does not explain why the war started in 1861 (rather than 1851 or 1841) and it fails to explain why slavery was abolished elsewhere without such horrendous carnage.

We emphasize economics and politics as major factors leading to war. The Republicans who came to power in 1860 supported a mercantilist economic agenda of protectionism, inflation, public works, and big government. High tariffs would have been a boon to manufacturing and mining in the north, but would have been paid largely by those in the export-oriented agriculture economy.

Southern economic interests understood the effects of these policies and decided to leave the union. The war was clearly related to slavery, but mainly in the sense that Republican tariffs would have squeezed the profitability out of the slave-based cotton plantation economy to the benefit of Northern industry (especially Yankee textiles and iron manufacturing). Southerners would also have lost out in terms of public works projects, government land giveaways, and inflation.

The real truth about wars is that they are not started over principle, but over power. Wars however, are not won by power on the battlefield, but by the workings and incentives of men who go to work in fields and factories, to those who transport, store and sell consumer goods, and most especially to the entrepreneurs and middlemen who make markets work and adapt to change. This emphasis and this economic account of tariffs, blockade and inflation, like the focus of Degas’s "Cotton Exchange" reveals the most important and least understood aspect of war.


TOPICS: News/Current Events
KEYWORDS: dixie; dixielist
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To: Ditto
It was justified for the most BASIC reasons....(My Yankee Neighbors are trying to SHOVE their ways down my throat)

Interference in one's business is a BASIC offense!
181 posted on 01/15/2004 4:20:08 PM PST by TexConfederate1861 ("Dixie and Texas Forever")
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To: Ditto
Stand Watie is not insane....just unforgiving.
182 posted on 01/15/2004 4:22:25 PM PST by TexConfederate1861 ("Dixie and Texas Forever")
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To: CIBGUY
Ft. sumpter was within the boundaries of the Confederacy. the Union troops that occupied it were given every opportunity to pack up and skidaddle...they chose to remain.

And why shouldn't they remain? Fort Sumter was the property of the U.S. Army, built with federal funds on property deeded to the government by the South Carolina legislature, and located in the harbor of a city in the United States. The South Carolina government and the Davis regime had no legal claim to it whatsoever. They had every right to be thereNext case!

183 posted on 01/15/2004 5:17:22 PM PST by Non-Sequitur
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To: CIBGUY
Ft. sumpter was within the boundaries of the Confederacy. the Union troops that occupied it were given every opportunity to pack up and skidaddle...they chose to remain. Next case!

Your neighbors got together and declared your property to be within the boundaries of their property, and have given you every opportunity to leave. Then they start shooting at your house.

184 posted on 01/15/2004 7:05:34 PM PST by Poohbah ("Beware the fury of a patient man" -- John Dryden)
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To: TexConfederate1861
....(My Yankee Neighbors are trying to SHOVE their ways down my throat)

Did you borrow that excuse from the Mexicans you stole your land from Tex?

185 posted on 01/15/2004 7:33:41 PM PST by mac_truck (Aide toi et dieu l’aidera)
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To: Vision
Do a google search on the Pottawatamie Creek Massacre. There should be several sites that describe what happened.
186 posted on 01/15/2004 10:15:54 PM PST by GOPcapitalist
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To: Non-Sequitur
He sent both.

...hence the problem. He tried to resupply with warships, which he knew would not be permitted in.

Because their demands were unacceptable. The so-called negotiators were there to gain recognition of the legitimacy of the southern rebellion, something Lincoln would not do.

He did not have to give them recognition - only meet with them informally, allow them to make their case, make his own in return and hope that war could either be averted, or if not averted, minimized and limited. Buchanan met with the confederates informally without conveying any official recognition. Lincoln could have easily done the same.

187 posted on 01/16/2004 12:12:41 AM PST by GOPcapitalist
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To: rebelyell
All we wanted was to be left alone..

So does a purse snatcher.

Walt

188 posted on 01/16/2004 12:21:13 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: hosepipe
Why did almost ALL confederates that never owned slaves go to war..? ..State rights... which were suborned more and more by the north.. thats why..

Southern interests dominated the federal government for decades prior to the ACW.

The election of Lincoln, or anyone opposed to slavery, showed that power waning, so the slave power tried to bolt.

Walt

189 posted on 01/16/2004 12:25:33 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: Jim Noble
They have encouraged and assisted thousands of our slaves to leave their homes.

This was just a flat lie by the South Carolinians,BTW.

Walt

190 posted on 01/16/2004 12:27:40 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: carton253
But, these men seem to be in the minority when you look at the overwhelming negative reaction in both the North and South to the Emancipation Proclamation.

President Lincoln dragged the country along on the emanciation issue. That's why Frederick Douglass indicated that, taking everything into consideration, Lincoln was "swift, zealous, radical and determined," on the issue.

Walt

191 posted on 01/16/2004 12:31:55 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: GOPcapitalist
Lincoln launched his war in April. Neither house reconvened until July.

As you well know, the Congress was not -scheduled- to reconvene until December. President Lincoln called them back early for a special session.

President Lincoln -expected- the rebellion to have collapsed by July.

He really did think that loyal Union men in the south would reassert themselves and depose the traitors. That is partly why he was willing to force a confrontation at Fort Sumter.

Walt

192 posted on 01/16/2004 12:39:06 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: Non-Sequitur
Davis needed a war worse than you claim Lincoln did. He knew that his rump 7 state confederacy had neither the free population or the industrial base to thrive.

Bruce Catton made the point, and "The South Versus the South" by Dr. Freehling also makes the point that once the border states were secured to the Union, the south was absolutely doomed.

The war was decided in the first year.

Walt

193 posted on 01/16/2004 1:05:39 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: carton253
It seems to me that you resent any post that dares suggest that the North might be responsible or culpable for any part of the Civil War. You have put 110% of the blame on the South.

It takes two sides to start a war.

What the north wanted was for the laws to be obeyed. Lincoln even urged that the Fugitive Slave Act be obeyed.

Notherners -wouldn't- allow the government to be thrown down by traitors. That was clearly the motivation of the northern soldiers - and Lincoln also.

Notherners in 1861 gave what Dr. McPherson called "an eagle-scream of patriotic fury."

And the war came.

Walt

194 posted on 01/16/2004 1:12:28 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: GOPcapitalist
The simple fact is that without Lincoln's fleet there would have been no bombardment. It was the direct and causal instigating event.

Who fired the first shot?

President Lincoln maneuvered the rebels into opening hostilities. But he didn't shy away from a confrontation. He sincerely thought the rebellion would collapse if firmly opposed.

One point that ought to come out is that opposition to secession in the north was not well focused in early April. Life went on in the north; who cared much what the south did? As is often mentioned, New York City seemed to support secession.

But once the rebels fired on Old Glory, it galvanized the nation, one author has suggested, much in the same way that the attack on Pearl Harbor did.

There was a large and active anti-war movement in the U.S. prior to 12/7/41. The next day, it was gone.

So President Lincoln's actions got him what he wanted -- he thought.

Walt

195 posted on 01/16/2004 1:19:48 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: Aurelius
The Republicans who came to power in 1860 supported...big government.

My how history repeats itself.

Lincoln's legacy is not that he "saved the Union," like many of his devoted worshippers so claim, but rather the ravenous government that is destroying the Constitution.

196 posted on 01/16/2004 1:32:33 AM PST by A2J (Oh, I wish I was in Dixie...)
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To: exmarine
I haven't seen any historian make a good case yet that the southern states could not legally secede from the union.

The Supremacy Clause makes the laws of the United States the supreme law of the land.

One of those laws is the Militia Act of 1792, as amended in 1795.

That act gives the power to the president to put down rebellion or insurrection.

The act is referenced by the Supreme Court as having that function in its Prize Cases ruling in the 1862 term.

Now --Jefferson Davis-- saw the power elsewhere.

Here is how Davis was interpreting the General Welfare Clause:

"Conscription dramatized a fundamental paradox in the Confederate war effort: the need for Hamiltonian means to achieve Jeffersonian ends. Pure Jeffersonians could not accept this. The most outspoken of them, Joseph Brown of Georgia, denounced the draft as a "dangerous usurpation by Congress of the reserved rights of the states...at war with all the principles for which Georgia entered into the revolution."

In reply Jefferson Davis donned the mantle of Hamilton. The Confederate Constitution, he pointed out to Brown, gave Congress the power "to raise and support armies" and to "provide for the common defense." It also contained another clause (likewise copied from the U.S. Constitution) empowering Congress to make all laws "necessary and proper for carrying into execution the foregoing powers." Brown had denied the constitutionality of conscription because the Constitution did not specifically authorize it. This was good Jeffersonian doctrine, sanctified by generations of southern strict constructionists. But in Hamiltonian language, Davis insisted that the "necessary and proper" clause legitimized conscription. No one could doubt the necessity "when our very existance is threatened by armies vastly superior in numbers." Therefore "the true and only test is to enquire whether the law is intended and calculated to carry out the object...if the answer be in the affirmative, the law is constitutional." --Battle Cry of Freedom, James McPherson P.433

Note that quote from J. Davis: "provide for the common defense"? Ouch. Surely if Jefferson Davis could raise troops on this basis, Abraham Lincoln could. The relevant language in the Constitution and the rebel constitution is identical.

After all, the U.S. Constitution is the supreme law of the land.

Confederate apologists strain at the gnat and swallow the camel:

"The subject is the execution of those great powers on which the welfare of the nation essentially depends. It must have been the intention of those who gave these powers, to insure, their beneficial execution. This could not be done, by confining the choice of means to such narrow limits as not to leave it in the power of congress to adopt any which might be appropriate, and which were conclusive to the end. "

--John Marshall, Chief Justice, writing in McCullough v. Maryland, 1819

In fact, ol' J. Davis sounds like he had acopy of McCullough in his back pocket when he wrote Governor Brown of Georgia.

Guess he lost it after the war.

To call these people heroes (not that -you- did) is grotesque.

Walt

197 posted on 01/16/2004 1:39:33 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: WhiskeyPapa
Who fired the first shot?

The USS Harriet Lane - one of the ships in Lincoln's fleet.

198 posted on 01/16/2004 1:39:47 AM PST by GOPcapitalist
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To: exmarine
Can you show me the law where it says a State that joined the Union voluntarily cannot also leave voluntarily?

The Militia Act of 1792, as amended in 1795 precludes unilateral state secession.

The Judiciary Act of 1789 requires that "controversies of a civil nature" between the states be submitted to the Supreme Court.

As you can see, the Federalists acted quickly to solidify the power of the national government.

Walt

199 posted on 01/16/2004 1:44:00 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: WhiskeyPapa
As you well know, the Congress was not -scheduled- to reconvene until December.

And as you well know, many in Congress rightfully believed that war was just around the corner and expected without any reason for doubt that they would be immediately reconvened if it broke out while they were away. In fact they spoke of this almost daily in the March 1861 special session of the senate.

War broke out not long after the Senate went home, in large part because that is when Lincoln started actively agitating over the southern forts. He got his war only two weeks later yet waited until July to bring Congress back. The only reasonable explanation is that he did not want Congress there to interfere while he was waging his war.

200 posted on 01/16/2004 1:45:08 AM PST by GOPcapitalist
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