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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: WhiskeyPapa
He wasn't so concerned about upholding that oath a couple of months later, when he suspended habeas corpus.
221 posted on 01/16/2004 4:00:06 AM PST by aristeides
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To: WhiskeyPapa
Why not? Because you don't like the outcome?

I certainly do not like the fact that an avoidable war occurred that killed some 600,000 Americans.

222 posted on 01/16/2004 4:01:14 AM PST by aristeides
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To: aristeides
And Lincoln was getting advice from Seward not to force a showdown. Advice that he rejected.

Seward was very influential player. Before 1860, he had a lot more national noteriety than Lincoln did. As Secretary of State, early on, he tried to "play" Lincoln.

Seward's big foreign policy idea was to force a war with Great Britain and thereby unite the American people. I don't know if history records what Lincoln thought of this idea specifically. Surely he thought it was totally cracked.

Walt

223 posted on 01/16/2004 4:03:21 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: aristeides
He wasn't so concerned about upholding that oath a couple of months later, when he suspended habeas corpus.

Lincoln addressed this, although discussing another subject.

"I did understand however that my oath to preserve the constitution to the best of my ability, imposed upon me the duty of preserving by every indispensible means, that government--that nation--of which that constitution was the organic law. Was it possible to lose the nation, and preserve the constitution? By general law life and limb must be protected; yet often a limb must be amputated to save a life; but a life is never wisely given to save a limb. I felt that measures, otherwise unconstitutional, might become lawful, by becoming indispensible to to the preservation of the of the Constitution, through the preservation of the nation. Right or wrong, I assumed this ground, and now avow it..."

The issue of whether the president may or may not suspend the writ has not been definitively answered to this day.

Walt

224 posted on 01/16/2004 4:07:21 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: aristeides
And Lincoln was getting advice from Seward not to force a showdown. Advice that he rejected.

"Firing on that fort will inaugurate a civil war greater than any the world has yet seen...At this time it is suicide, murder, and will lose us every friend in the North...You will wantonly strike a hornet's nest which extends from mountains to ocean, and legions now quiet will swarm out and sting us to death. It is unnecessary; it put us in the wrong; it is fatal." - Robert Toombs to Jefferson Davis, April 1861

It looks like Lincoln wasn't the only one to go against the advice of their Secretary of State. Presidents are in office to make decisions, and not do exactly what their cabinet wants them to do. Lincoln listened to his cabinet, let them debate the issue, but in the end he did what he thought was the right thing to do.

225 posted on 01/16/2004 5:33:23 AM PST by Non-Sequitur
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To: aristeides
And Lincoln obligingly gave it to them.

And what would have happened had the Davis regime refused to take the bait and not oppened fire? If they had allowed food to be landed at Sumter? What would the outcome of all that have been? In your opinion, of course.

226 posted on 01/16/2004 5:56:35 AM PST by Non-Sequitur
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To: lentulusgracchus
According to my sources, in Charleston harbor it was on April 3rd, 1861, when Confederate batteries opened on the schooner Rhoda H. Shannon. In Virginia waters, it was on May 9, when the U.S.S. Yankee fired on Virginia militia batteries located on Gloucester Point, blows between Virginia and the United States having not yet been exchanged.

Hostile actions on the part of the confederacy and the Commonwealth of Virginia predated both of those dates. The first hostile action occured on December 27, 1860 when the South Carolina militia seized federal property in Charleston. It continued through the following months: seizing arsenals, forts, mints, post offices, government property of all types. It included firing on the Star of the West. It only culminated in the firing on Sumter.

In Virginia militia forces were on the way to seize the arsenal at Harper's Ferry even before the vote on secession, and weeks before the exchange of gunfire on March 9th.

227 posted on 01/16/2004 6:10:19 AM PST by Non-Sequitur
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To: aristeides
I certainly do not like the fact that an avoidable war occurred that killed some 600,000 Americans.

It takes two to tango, as they say. Should not some of your anger be directed at the Davis regime for not avoiding the war that you claim Lincoln was instigating? Or was Davis just too stupid to see through Lincon's trap?

228 posted on 01/16/2004 6:14:36 AM PST by Non-Sequitur
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To: WhiskeyPapa
But even shortly after the war, people didn't want that. Even the orchestrator of the assasination trials, Stanton, didn't want it. It was he with whom the president took issue at the 14 April '65 meeting where treason trials were discussed.

Oh yes, the benevolent victors. What do you have to say about the 12 years of post-war hatred and oppression by the radical republicans - like Stevens? The people probably didn't want that either. Treason trials very well may have prevented any re-union. And there is no codified law that says that secession is unconstitutional or illegal. You need codified law to have a trial like that. There was none. If you say there was, then cite it.

229 posted on 01/16/2004 6:32:36 AM PST by exmarine ( sic semper tyrannis)
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To: WhiskeyPapa
The insurgent armies mostly melted away, riven with desertion.

That's a laugh. It was the federal armies that ran time after time. McDowell, Pope (the miscreant), Burnside, Hooker - all went scurrying back with their tail between their legs. Both sides had plenty of deserters, but it is remarkable to view Lee's barefooted scarecrows - outnumberd 3 to 1 administering defeat after defeat on the union armies. Washington was trembling at the specter of Jackson marching on it (which he wanted to do!). Very early in the war, Jackson (the most brilliant general in the civil war by most opinions) wanted to take the war to the enemy - Davis would not allow it. It's only speculation, but if Jackson had been allowed to do this early in the war, I believe he would have wreaked havoc on northern states with his maneuver warfare, and the outcome of the war may have been different.

230 posted on 01/16/2004 6:37:31 AM PST by exmarine ( sic semper tyrannis)
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To: WhiskeyPapa
As you can see, the Federalists acted quickly to solidify the power of the national government.

Forced union is contrary to the principles of Christian self-government and voluntary union. The idea of union began with the Puritans in 1643. Union is based on the principle of brotherly love, and when it is forced from above, it becomes tyranny. That's my opinion. But then, a central govt. naturally seeks more power for itself, as we have seen the behemoth grow to epic proportions of late, to a point where federalism is virtually dead.

231 posted on 01/16/2004 6:42:27 AM PST by exmarine ( sic semper tyrannis)
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To: WhiskeyPapa
The Supremacy Clause makes the laws of the United States the supreme law of the land.

Tell that to Lincoln to followed no written law when he suspended Habeus Corpus. Does the law apply only when it is convenient? Apparently so. Tell that to the judges today who constantly trample the Free Exercise rights of its citizens. We are a nation of laws not men who can arbitarily do whatever they want or selectively enforce whatever laws they want.

I really don't care what you think to tell you the truth. I know where you are coming from, and I don't care about your opinions about the south. The north committed many evils. That is a plain fact. So spare me your diatribes against the evil south.

232 posted on 01/16/2004 6:45:37 AM PST by exmarine ( sic semper tyrannis)
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To: WhiskeyPapa
By the way, I am not a confederate apologist. However, I admire some of their leaders like Jackson and Lee - who were better generals than any the north had.

Unlike you, I realize that the north was not pure as the driven snow. They were evil in many respects. Need a list? Lincoln, in his 2nd inaugural, even suggested that the judgement of God fell on the ENTIRE NATION, not just the south.

233 posted on 01/16/2004 6:47:17 AM PST by exmarine ( sic semper tyrannis)
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To: Ditto
Another hint: When starting a revolution, be sure you can win it.

Ridiculous statement. The founders had no arms and no ships when they broke from the most powerful nation on earth. They had no chance to win! Yet, they did win because THEY PUT THEIR TRUST IN GOD, and clearly, they believed that GOD won the Revolution for them, as Washington and Franklin and the Congress declared.

The civil war was not a noble war. It was the result of the failure of the founders to deal with slavery in 1787. They made a big mistake, and the nation paid for its transgressions in blood. Lincoln said the judgment of God fell on the ENTIRE NATION and obviously it did. The north suffered greatly during the war, albeit not as much as the south.

234 posted on 01/16/2004 6:51:03 AM PST by exmarine ( sic semper tyrannis)
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To: Poohbah
Apples and oranges! You're trying to apply contemporary standards to issues that were well settled in the early 1800's, a time when each state was acknowledged by our own Federal government as "sovereign" powers. Each state had it's own Constitution, legislature, judicial and executive branches. The Federal government's "power" at that time was limited to the coining of money, the establishment of tariffs, the protection of member states against foreign invasion. There was no "law" that prohibited any state from secession! If you look at the 10th amendment you'll note that the Framers gave the states much more power and autonomy than they did a central government. The 13th amendment didn't take effect until 1865. The 14th amendment wasn't ratified until 1868. So, at the time the South seceeded, there was no inherent "right" of the Northern people to "invade" the South to "force" them to remain in the Union, which of course it did. When the 13 Colonies decided to "secede" from the empire of Great Britain, there was no question that they had the "right" to do so, at least in their opinion. When the Southern states took the same action it was for exactly the same reason. Each of the 13 Colonies were created by Great Britain, not by any act of the Colonists. Each had its own governor, appointed by the King. When the Colonists decided to "secede" from Great Britain the Colonists confiscated property, that up until that time, was the property of Great Britain. The idea that all power or sovereignty must be in the hands of one agent(The King), and not divided among many is a throwback to the erroneous notion of the "divine right of Kings". The issue of slavery was a by product of the Civil War. Lincoln, by his own admission, would have kept slavery if in doing so he could preserve the Union. Not only had Southerners elected their own legislators in each colony by 1700, but also by early 1776 ALL royal governors had been removed from office and replaced by governors chosen by the people or their representatives. These actions all took place before the Declaration of Independence was signed. The following is a list of the royal governors and the dates of their removal by the people of the South: 1. Virginia-Gov. John Dunmore -June 1775; 2. North Carolina Gov.J. Martin August 1775; 3. South Carolina Gov. W. Campbell, early 1776 and 4. Gov. James Wright, January 1776. The theory that the Declaration of Independence formed the "Union" and that this document called the states into being cannot be justified by historical facts. You can read it till the cows come but you won't find any such phrase in it.
Nowhere in the Constitution is there a statement about "perpetuity". Too many people simply don't do their homework when it comes to issues that are controversial and even more refuse to change their position when the facts refute their arguement. I guess the old axiom that "history is what the winner says it is" still holds true.

Each and every day a very powerful central government eats away at the rights of it's citizens. The Constitution is no longer a viable or even a reliable protection against government. We have abdicated our individual rights by permitting judicial activism, by allowing the Courts to restructure our basic protections against an obtrusive and out of control government. Just look around you and try the tell me that you have them same degree of protection FROM your government that you had a year ago, because that's what the Constitution is all about. it wasn't designed to protect government, it was designed to protect you against government. I assume you're interested in the subject of your "rights", and that being the case I'd recommend that you pick up a copy of a book titled "The South Was Right" by James and Walter Kennedy, Pelican Press 4th Edition. Sit down and read facts as opposed to formulating your opinions on the assumptions of others or teachers who only repeat what they've been told, doing no independent research on their own.. You'll at least have the benefit of looking at the issues from the other side.
235 posted on 01/16/2004 8:02:36 AM PST by CIBGUY (CIBGUY)
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To: Ditto
The fiasco and idiocy of Reconstruction was driven by radical republicans.
236 posted on 01/16/2004 8:05:15 AM PST by exmarine ( sic semper tyrannis)
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To: Ditto
It was just the northerners who did that? You better read some more history my friend. Start with the Trail of Tears.

No, it wasn't just the north, but it speaks to the hypocrisy of their so-called principled stand against the oppression of slaves, doesn't it? Yes, no way around it. And it was former northern generals who finished off the last of the Indians. I give you Sheridan and Crook.

237 posted on 01/16/2004 8:07:46 AM PST by exmarine ( sic semper tyrannis)
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To: Ditto
BTW. In 1860, the north did not demand the south treat their slaves in any particular manner. Most people and politicians in the north didn't give a damn about southern slaves. The only thing that Lincoln told the south was that he would block expansion of slavery to the territories. Now I have already posted Robert Toombs words from Dec 1860 and he explaned quite clearly why that simple, non-offensive policy of stopping the expansion of slavery outside the south was in fact a serious threat to southern wealth and social structure.

I agree, but would add that the anti-slavery movement was a Christian movement that began in the colonial days. The Northwest Ordnance - a Christian political document - banned slavery in the new territories at that time, and slavery was banned from all the New England states. You are right - most non-christians didn't give a flip about slaves... or indians.

238 posted on 01/16/2004 8:19:09 AM PST by exmarine ( sic semper tyrannis)
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To: Non-Sequitur
Pull the other one, it's got bells on it. You, my friend, are as pro-south as they come.

Then you know me better than I do. Spare me your ignorant personal judgments. Alot of people on these threads talk about the war as if the north was pure as the driven snow - baloney! That is my point. The north committed many evils. Care to deny it? Was the south pure evil? No. So, get off of your black and white bandwagon.

239 posted on 01/16/2004 8:21:51 AM PST by exmarine ( sic semper tyrannis)
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To: exmarine
Of course you're absolutelycorrect.
240 posted on 01/16/2004 8:24:20 AM PST by CIBGUY (CIBGUY)
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