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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: exmarine
Of course, only Congress can declare war, but no one follows that constitutional rule anymore either.

Haven't since Jefferson went after the Barbary Pirates in 1802. How many more examples do you want? Invading Florida under Monroe? Various Central American exploits? The West African Squadron? Those are in just the first 30 years or so under the Constitution.

Or maybe you're reading of the Constitution isn't so sharp either. (If you have read it at all.) You might try to understand the legal difference between a war and a declaration of war. There are lots of wars that are never declared, usually for good reason, but if one is declared, only Congress can do it. Congress ultimately has the purse strings and can end any war, declared or not, when they choose, or fund any war, declared or not, as they choose.

The funding is the constitutional mechanism. The declaration is a formal statement to the international community, equal to a treaty. It is not a Constitutional requirement for a state of war to exist. Never was.

441 posted on 01/19/2004 1:53:00 PM PST by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: exmarine
This can be suspended, obviously, albeit not by the President.

The question of whether or not a president can suspend habeas corpus has not been determined. And that is not only my opinion, but the considered opinion of the current Chief Justice as well.

442 posted on 01/19/2004 1:53:34 PM PST by Non-Sequitur
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To: Ditto
There are lots of wars that are never declared, usually for good reason, but if one is declared, only Congress can do it. Congress ultimately has the purse strings and can end any war, declared or not, when they choose, or fund any war, declared or not, as they choose.

You make a good point, and Congress did go along with Korea, Vietnam and Iraq sans a declaration of war. That's the problem...they give the President too much power in this area. The case has been made by many commentators that war should have been declared in Korea, Vietnam and Iraq. The lack of a declaration in Korea and Vietnam led to a lack of a winning strategy and exit strategy. When war is declared there is more accountability. In the case of the War on Terror, we still have not identified the real enemy ("islamic" terrorists), just the method - "terrorists".

But, you are right. The President can only do what the Congress lets him do - as the power to fund wars is vested with them. The problem is that Congress hasn't been doing its job.

443 posted on 01/19/2004 2:13:16 PM PST by exmarine ( sic semper tyrannis)
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To: Non-Sequitur
Where does it say that the President cannot suspend habeas corpus if the events warrant it?

I'll have to say that you are right, since Congress went along with it.

444 posted on 01/19/2004 2:17:32 PM PST by exmarine ( sic semper tyrannis)
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To: Non-Sequitur
Truce until after you read the following article. Enjoy.

http://www.freerepublic.com/focus/f-news/1060580/posts
445 posted on 01/19/2004 2:22:01 PM PST by rustbucket
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To: exmarine
You make a good point, and Congress did go along with Korea, Vietnam and Iraq sans a declaration of war. That's the problem...they give the President too much power in this area.

Other than creating problems that come into play under a formal declaration of war (i.e. blockades of trading partners, requirements for different relationships with nations in a formal state of war, shipping regulations, etc.,) I really fail to see how a formal declaration would have changed anything in Korea or Vietnam. A congressional declaration of war does not magically turn bad leadership into good leadership or biased news coverage into truthful coverage. But it can kick-in diplomatic problems that make the job even more difficult. Without the formal declarastion, other nations can wink at the facts, which is often to our advantage. And it's not just problems that can arise under international law. Check the exemptions on your life and property insurance policies. A formal declaration is not simply a formality.

446 posted on 01/19/2004 2:33:00 PM PST by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: rustbucket
Eh, you just posted it because the squirrel in question was a grey squirrel. If it had been a Yankee squirrel you wouldn't have given it a second look.
447 posted on 01/19/2004 2:36:15 PM PST by Non-Sequitur
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To: Ditto
A congressional declaration of war does not magically turn bad leadership into good leadership or biased news coverage into truthful coverage.

A declaration of war carries with it (historically) a full commitment to VICTORY, something that was decidedly lacking in Korea and Vietnam. The lack of a declaration is symptomatic (in my opinion) of a lack of resolve and leadership in Congress. Johnson conducted the war (with MacNamara), and Congress did not hold him accountable for his lack of victory or lack of sound strategy.

448 posted on 01/19/2004 2:38:07 PM PST by exmarine ( sic semper tyrannis)
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To: rustbucket
I bow to Walt on the timeline, but the point remains. Congress affirmed Lincoln's actions. Merryman was not hung, nor did he rot in prison. He was released after Maryland settled down.

But you have to acknowledge my other point. If suspending the writ in the North was so bad, was it equally as bad in the south where they did the exact same thing? If Lincoln and Congress are to be condemned, isn't the same true of Davis and the Confederate congress?

449 posted on 01/19/2004 2:44:40 PM PST by Ditto ( No trees were killed in sending this message, but billions of electrons were inconvenienced.)
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To: exmarine; Non-Sequitur
I'll have to say that you are right, since Congress went along with it.

If Presidents have the power to suspend habeas corpus, why did Congress specifically authorize Lincoln to do so later in the war? Answer: Lincoln didn't have the right, and Congress recognized that he didn't.

Congress was not doubt aware of Chief Justice John Marshall's words in Ex parte Bollman and Swartwout: "If at any time, the public safety should require the suspension of the powers vested by this act in the courts of the United States [i.e., the power of awarding the writ], it is for the legislature to say so. That question depends on political considerations, on which the legislature is to decide; until the legislative will be expressed, this court can only see its duty, and must obey the laws."

450 posted on 01/19/2004 2:44:51 PM PST by rustbucket
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To: Ditto
Without the formal declarastion, other nations can wink at the facts, which is often to our advantage. And it's not just problems that can arise under international law. Check the exemptions on your life and property insurance policies. A formal declaration is not simply a formality.

In my opinion, we should either fight wars to win or not fight them at all. As Sherman said, "War is all hell." I believe we would have won Vietnam if the politicians would have turned it over to the military. And it would not have dragged on and on as it did, and there would have been no domestic backlash if people saw REAL victory. Instead, the FAILED policy led to a huge domestic backlash, the cheapening of American lives, the cheapening of lives of the South Vietnamese as they fell to the communists in 1975. Tet was a disastrous defeat for the enemy, yet the lack of commitment turned it into a victory. I have no doubt that a Declaration of War carries with it a commitment to victory.

451 posted on 01/19/2004 2:46:14 PM PST by exmarine ( sic semper tyrannis)
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To: rustbucket
Apparently, the Congress didn't have will to oppose the President on it, which was their duty to do.
452 posted on 01/19/2004 2:52:55 PM PST by exmarine ( sic semper tyrannis)
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To: exmarine
The Congress that met on July 4, 1861 and approved the suspension of habeas corpus was in a sense a packed Congress without representatives of the South. The Upper South had seceded -- and thus lost its representation in the U.S. Congress -- in response to Lincoln's measures in connection with Fort Sumter. Perhaps the prospect of having such a packed Congress was part of the reason Lincoln was not so averse to seeing a war start.
453 posted on 01/19/2004 3:05:23 PM PST by aristeides
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To: Ditto
But you have to acknowledge my other point. If suspending the writ in the North was so bad, was it equally as bad in the south where they did the exact same thing? If Lincoln and Congress are to be condemned, isn't the same true of Davis and the Confederate congress?

Lincoln exceeded his powers. Where did I condemn the US Congress?

As I remember, the Confederate Congress authorized the suspension of the writ for certain periods of time. Davis restricted suspensions of it to just those authorized time periods (I think but could be wrong).

Check out Bouvier's Law Dictionary, 1856 Edition (Bouvier). It says, in part (based on Chief Justice Marshall):

16. The habeas corpus can be suspended only by authority of the legislature. The constitution of the United States provides, that the privilege of the writ of habeas corpus shall not be suspended unless when, in cases of invasion and rebellion, the public safety may require it. Whether this writ ought to be suspended depends on political considerations, of which the legislature, is to decide. 4 Cranch, 101. The proclamation of a military chief, declaring martial law, cannot, therefore, suspend the operation of the law. 1 Harr. Cond. Rep. Lo. 157, 159 3 Mart. Lo. R. 531.

454 posted on 01/19/2004 3:08:54 PM PST by rustbucket
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To: rustbucket
Retired Justice Curtis (one of the dissenters in Dred Scott) emphatically approved Taney's reasoning in Merryman that only Congress could suspend habeas corpus.
455 posted on 01/19/2004 3:17:39 PM PST by aristeides
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To: aristeides
Thanks. Also Justice Story said the following (quoted in ex parte Merryman):

"It would seem, as the power is given to congress to suspend the writ of habeas corpus, in cases of rebellion or invasion, that the right to judge whether the exigency had arisen must exclusively belong to that body."

456 posted on 01/19/2004 3:25:55 PM PST by rustbucket
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To: rustbucket
If Presidents have the power to suspend habeas corpus, why did Congress specifically authorize Lincoln to do so later in the war? Answer: Lincoln didn't have the right, and Congress recognized that he didn't.

Or the answer could be that the issue of who may suspend it is not resolved. The writ can be suspended in cases of rebellion and/or invasion when the public safety warrants it. Both reasons imply a sense of urgency and when Congress is not in session the it stands to reason that the President should take steps necessary for the public safety in such cases. After all, the Constitution does not say that a vote of one or both houses is necessary. It doesn't say that legislation is required. It is unclear on the how's and who's of the suspension.

Congress was not doubt aware of Chief Justice John Marshall's words in Ex parte Bollman and Swartwout...

The Chief Justice's opinion was well known and an indication that he no doubt believed that only Congress can suspend the writ. For what it's worth, I agree with Chief Justice Marshall on the matter. And if the matter had ever gone before the Supreme Court, or if it does in the future, then is is possible that the whole court will agree with the writ can only be suspended by Congress. But until that happens then the question of whether or not the president can constitutionally suspend the writ of habeas corpus is still unresolved. No matter what you or I believe.

457 posted on 01/19/2004 3:38:06 PM PST by Non-Sequitur
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To: exmarine
Apparently, the Congress didn't have will to oppose the President on it, which was their duty to do.

Apparently you aren't aware that it is the Supreme Court which determines what is constitutional and what is not, not Congress.

458 posted on 01/19/2004 3:40:49 PM PST by Non-Sequitur
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To: rustbucket
Lincoln exceeded his powers. Where did I condemn the US Congress?

In reply 429. The Ex Parte Milligan case resulted from actions taken under the act of Congress approved on March 3d, 1863, and titled "An Act Relating to Habeas Corpus and Regulating Judicial Proceedings in Certain Cases." Condemnation of the actions relating to that are a condemnation of Congress as much as the President. Maybe moreso.

459 posted on 01/19/2004 3:44:41 PM PST by Non-Sequitur
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To: rustbucket
The habeas corpus can be suspended only by authority of the legislature.

"The question of whether only Congress may suspend it has never been authoritatively answered to this day, but the Lincoln administration proceeded to arrest and detain persons suspected of disloyal activities, including the mayor of Baltimore and the chief of police."

Chief Justice William Rehnquist

Walt

460 posted on 01/19/2004 4:49:28 PM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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