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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: Non-Sequitur
My belief is that he got bitten by a Yankee when he was a baby. But that's only a guess.

I thought maybe he got hit by a Lincoln.

381 posted on 01/19/2004 8:10:31 AM PST by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: CIBGUY
As of this date no one has been able to explain why it was perfectly acceptable for the Colonists to secede from Great Britain, but deny that same option to the Souther states from the Union.

Tom Jefferson gave that explanation quite nicely in 1776.

Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. --Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain [George III] is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

What no one has explained on these threads is the "Tyranny" that the South was experiencing in 1860 that justified rebellion. Trust me, I have asked hundreds of times, and never get an answer other than "damnyankees".

Comparing the Patriots of 1776 with the Slaveocrats of 1861 is obscene!

382 posted on 01/19/2004 8:25:44 AM PST by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: GOPcapitalist
[mac] A better question might be why you think Jefferson Davis is unrelated to a conversation about Big Confederate Government?

[gopcap] I never stated that he was unrelated to this article.

Thus, it would seem that someone offering criticism of Lincoln (and only Lincoln) on a thread whose stated theme is "Big Confederate Government" is engaging in the Tu Quoque ad-hominem you delight in squawking about.

Thanks for the clarification.

383 posted on 01/19/2004 9:24:33 AM PST by mac_truck (Aide toi et dieu l’aidera)
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To: Non-Sequitur
(*sigh*) Do I really have to define 'sarcasm' to you?

No, we all know that it is implied on all your posts.

Say, I was rooting through a long old editorial from the New York Daily News dated April 23, 1861, and found some stuff bound to make you scoff. I'll excerpt some of the editorial for you. The editorial was made in response to a speech by Senator Baker of Oregon at a Union rally in New York City. Senator Baker had said:

I propose to go to Washington and beyond! It may cost 750,000 lives; what then? We have them." [Great cheering] "I am not speaking the timorous words of peace. I speak to kindle a spirit of manly, determined war." [Cheers]

Now from the editorial responding to Senator Baker:

It is madness to pretend, as a number of speakers did at the "Union" meeting, that the South had commenced this war upon the North. She has not yet sent a man from off her own slaveholding soil for invasive purposes. Does she want war? For months her people abstained from attacking the forts whose guns were turned on their own soil; and it was not till the U.S. flag waved over men who came to man the very guns that menaced her that her people were compelled to fire on it. Where in the history of revolutions, do we find a hostile and obnoxious force, completely at the mercy of an enraged people, supplied month after month by them with provisions?

Fort Sumter was as much a source of distrust and mortification as the Trojan horse was to Laccoon. Yet no attack was made upon it till the administration sent armed ships to provoke war.

Commissioners were sent to Washington to treat for peace, but they were not even recognized. Southern statesmen beseeched the North to secure them their constitutional rights, to compromise and make a fair division of the Territories. But the Northern States would not accede. They would not (with a single exception) even repeal their personal liberty laws...

You at the North who have refused to make peace are those who make war. You who have violated the constitution over and over again, and would now force your construction of it upon the Southern people instead of accepting the decision of the Supreme Court of the land; you who would force that grand charter of peace, compromise, and concession upon Southerners by the aid of bullets and gunpowder, what a sorrowful sight it is to behold our most prominent men bowing before the whirlwind of popular excitement commenced in this city by a mob of pickpockets, Wide Awakes, and Tribune men, and teaching the excited populace that the Union must be preserved by force.

Now comes a part you'll really like. </ sarcasm>. Though the editors didn't intend it this way, the following statement can be applied to the South as well as the North, but in different ways.

What madness it is to shout that the integrity of the Union, the prosperity of the people, the strength of the Government depends on the subjucation [sic] and degradation of an unwilling people.

That's true whether said of the North or said of the South.

The editorial even touches on tariffs.

The cotton spinners of New England and the ironmasters of Pennsylvania saw that while their country was falling to pieces there was something for themselves to pick up in the scramble. The Treasury was empty and the Southern members were no longer present to protect the taxpayer from the sorded schemes of private extortion, under pretense of raising necessary revenue. ...

It was not within the limits of probability that the seceding States should be reclaimed, even if the new tariff had not created a fresh barrier between the greedy manufacturers and the cotton planters. No serious politician can suppose that even if other causes of quarrel were removed, Louisiana and Mississippi would submit to iniquitous taxes which were only imposed when their own Senators and Representatives had retired from Congress.

The Union could stand on its own without the South.

The North has within itself sufficient population and resources to constitute a Power of the first order; and the greatest danger at present consists in the possibility of a Middle Confederation. If the free States could form a separate Union, the great producing districts of the Northwest would ultimately overrule the selfish and suicidal cupidity of the Atlantic provinces.

That is maybe a twentieth of this long editorial.

A few months later, the Lincoln administration ordered the postmasters not to deliver the Daily News and so shut the paper down.

384 posted on 01/19/2004 9:35:16 AM PST by rustbucket
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To: Ditto
But to the south, especially the slaveocracy who understood the economics of slavery far better than any northern politician, locking the rapidly expanding slave population within the confines of the existing slave states posed a deadly economic and social threat that would bring about their downfall within a generation or two.

I think you put your finger on the southern economic viewpoint. However, where is the evidence that the economic policies adopted by the north were designed to hurt the south?

385 posted on 01/19/2004 9:44:29 AM PST by mac_truck (Aide toi et dieu l’aidera)
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To: Non-Sequitur
I'll get off of mine as soon as you fall off of yours. You claim no bias, no leanings towards one side or the other.

No one is 100% free of bias. I think secession was a mistake, and that slavery is wrong (just as most of our founders did). However, I tire of the revisionist PC blather that "North Good, South Bad." It's just not an accurate historical perspective on the Civil War. Americans fought that war with each other - with good men on both sides and some bad men on both sides.

386 posted on 01/19/2004 10:11:48 AM PST by exmarine ( sic semper tyrannis)
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To: mac_truck
However, where is the evidence that the economic policies adopted by the north were designed to hurt the south?

None that I know of. The policies surely would, and in fact did, benefit the north and the entire nation through industrialization and the remaking of the agricultural sector through improved transportation between farm and city. The 40 years after the war saw the greatest economic expansion in the history, including any 20th century expansion. I have seen no evidence that any policy was intended to or in any measurable way, would have 'harmed' the south other than the expansion of slavery.

The issue of Free soil, was vital to the north and a poison pill to a south that rejected industrialization and instead invested its wealth in slave property. The wealthy elite of the south could not see or accept the necessity for economic change. They liked thing just the way they were.

387 posted on 01/19/2004 10:28:08 AM PST by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: rustbucket
A few months later, the Lincoln administration ordered the postmasters not to deliver the Daily News and so shut the paper down.

Thus becoming one of the tens of thousands of newspapers shut down on Lincoln's personal orders. In case you didn't notice, that was sarcasm, too.

388 posted on 01/19/2004 10:34:08 AM PST by Non-Sequitur
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To: exmarine
..with good men on both sides and some bad men on both sides.

Finally something we can agree on. I was beginning to think that Abraham Lincoln was the only bad man on either side.

389 posted on 01/19/2004 10:39:12 AM PST by Non-Sequitur
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To: WhiskeyPapa
"Whatever you think of it, it is a commonly held interpretation."

As a result of Lincoln's successful interpretation and FDR's solidification into law, it has become "commonly held", although I wouldn't think the American people would support such absolute power in one person, even though they have done exactly that by their silence and complicity...

Note also that the Militia Act of 1795 leaves when to call out the militia to the judgement of the president.

So, is that the answer to my question "Does that give him carte blanche to discard individual's and state's rights as well"?

390 posted on 01/19/2004 10:50:27 AM PST by Veracious Poet (Cash cows are sacred in America...how else are career politicians gonna get their golden parachutes?)
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To: Non-Sequitur
I don't believe Lincoln was a bad man - I think he was an unusually good man, but who made some mistakes. My main beef with him is his taking Constitutional power into his own hands. However, it is wrong to second guess this man too much as he was in a very unique, dangerous and explosive situation. I sympathize with the South in certain respects, but I also sympathize with the North in certain respects. I am torn, just as the country was torn. In fact, I admire Lincoln in many ways and I also like him.

Without him, the North would have have won the war. I believe slavery needed to end, but I am not sure that 660,000 Americans had to die to accomplish that. I believe the War was a judgment on a country that had abandoned its reliance upon God. I believe another judgment is coming.

391 posted on 01/19/2004 10:55:49 AM PST by exmarine ( sic semper tyrannis)
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To: Veracious Poet
So, is that the answer to my question "Does that give him carte blanche to discard individual's and state's rights as well"?

Clearly, the answer is NO. No man is a law unto himself - that's why we have the U.S. Consitution. It is superior in force to ANY man.

392 posted on 01/19/2004 11:06:12 AM PST by exmarine ( sic semper tyrannis)
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To: Ditto
The wealthy elite of the south could not see or accept the necessity for economic change. They liked thing just the way they were.

This is true. It is similar in some respects to the economic situations in Mexico and South America up until about WW II, however, the south did have some factories and I believe it would have changed eventually on its own- the commodity of cotton would have tanked just as coffee, silver, etc. repeatedly tanked in Brazil and Mexico. These countries were commodity driven. The culture of Spain and Portugal emphasized landowning and status, not entrepeneurship or progress or reinvestment of wealth (as was the case in Britain). So, there were no voices for industrialization until mid-20th century. To a spaniard, to work with the hands was considered to be dirty and beneath them.

393 posted on 01/19/2004 11:15:07 AM PST by exmarine ( sic semper tyrannis)
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To: Non-Sequitur
Thus becoming one of the tens of thousands of newspapers shut down on Lincoln's personal orders. In case you didn't notice, that was sarcasm, too.

If you say so How many were there?

Check the following web site out. It reports on some of the newspaper suppressions by the Lincoln Administration including some by Lincoln's own order: (The Despotism of Abraham Lincoln).

394 posted on 01/19/2004 11:15:53 AM PST by rustbucket
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To: exmarine
My main beef with him is his taking Constitutional power into his own hands.

Faced with a situation not of his own making, trying to deal with a crisis the level of which had been faced by none of his predecessors, Lincoln did what he had to do to perform what he saw was his primary duty - preserve the Union whole and undivided, and uphold the Constitution. He did not deliberately take a single action that he knew to be unconstitutional or illegal. His actions were subject to review by the Supreme Court, and that court does not seem to have agreed with your analysis.

Without him, the North would have have won the war. I believe slavery needed to end, but I am not sure that 660,000 Americans had to die to accomplish that.

Perhaps you need to direct your ire at those who launched the war that killed 660,000 Americans in order to protect their institution of slavery?

395 posted on 01/19/2004 11:18:05 AM PST by Non-Sequitur
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To: exmarine
"Clearly, the answer is NO. No man is a law unto himself - that's why we have the U.S. Consitution. It is superior in force to ANY man."

Hmmm...well, it seemed Lincoln was "a law unto himself" in that he not only suspended many aspects of the Constitution, he governed by decree completely in contradiction to the powers delagated to the office of the president.

Do you need examples or are you aware of the history of Lincoln's rule?
396 posted on 01/19/2004 11:20:43 AM PST by Veracious Poet (Cash cows are sacred in America...how else are career politicians gonna get their golden parachutes?)
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To: rustbucket
Ah yes, Crown Rights Books. Interesting that you would post a link to something called 'The Despotism of Abraham Lincoln' on a thread for an article talking about the despotism of the Jeff Davis regime.
397 posted on 01/19/2004 11:21:47 AM PST by Non-Sequitur
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To: Veracious Poet
Do you need examples or are you aware of the history of Lincoln's rule?

Some examples would be nice.

398 posted on 01/19/2004 11:22:36 AM PST by Non-Sequitur
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To: exmarine
I believe the War was a judgment on a country that had abandoned its reliance upon God.

So did Lincoln

If we shall suppose that American slavery is one of those offenses which, in the providence of God, must needs come, but which, having continued through His appointed time, He now wills to remove, and that He gives to both North and South this terrible war as the woe due to those by whom the offense came, shall we discern therein any departure from those divine attributes which the believers in a living God always ascribe to Him? Fondly do we hope, fervently do we pray, that this mighty scourge of war may speedily pass away. Yet, if God wills that it continue until all the wealth piled by the bondsman's two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said "the judgments of the Lord are true and righteous altogether".

With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation's wounds, to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations.

LINCOLN'S SECOND INAUGURAL ADDRESS


399 posted on 01/19/2004 11:23:49 AM PST by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: Veracious Poet
I don't need examples. I am aware. Suspending Habeus Corpus was UNLAWFUL. We are a nation of laws, not men. There is no defense for that - none. The Constitution is not a suggestion - IT'S THE LAW OF THE LAND. The Bill of Rights CANNOT BE LEGALLY SUSPENDED. There is no way to legally defend that. If it is okay for Lincoln to suspend Constiutitonal protections, then it sets a precedent for anyone to do it. All they have to do is come up with some lame justification.

Did you see what Tommie Franks predicted? He basically said that in the event of a catastrophic terrorist attack, he believed that the Constiution would be suspended and a military dictatorship enforced. TYRANNY OVER CHAOS! Be afraid.

400 posted on 01/19/2004 11:29:21 AM PST by exmarine ( sic semper tyrannis)
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