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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: bjs1779
Well Non-seq, it simply means that I think you are a liberal that thrives to subvert the Constitution of this country...

Gee, and all this time I thought we had this great thing going based on mutual respect for each other. </sarcasm>

781 posted on 01/24/2004 5:06:39 AM PST by Non-Sequitur
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To: GOPcapitalist
It doesn't need to. That much is logically presumed and inherent to any act of Congress, which by its own nature must be legislative.

Ah, so we are talking implied powers. In Article I, the Congress is explicitly mentioned on only 8 clauses but you 'logically presume' that it applies to the remaining clauses as well. Should we 'logically presume' that a state could enter into a treaty, alliance, or confederation; grant Letters of Marque and Reprisal; coin money; emit bills of credit; make anything but gold and silver coin a legal tender; pass a Bill of Attainder, ex post facto law, or law impairing the obligation of contracts; or grant a title of nobility if Congress passed a law allowing them to?

But while we're on the subject, let me ask you a question on an slightly unrelated matter. Since Article IV, Section 3 states that Congressional approval is required for admitting new states and for any change in status such as combining, splitting into two or more states, etc. then couldn't we 'logically presume' that congressional approval would be needed for leaving the Union altogether? I already know the answer to this but it should be amusing to see your explanation. Have at it.

782 posted on 01/24/2004 5:18:28 AM PST by Non-Sequitur
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To: GOPcapitalist
Oops. Nine clauses. It was early.

By your definition. It's interesting to note that the founders found the need to constantly state that congressional approval was needed for this and that legislation was needed for that all through Article I. Why is that. Do you suppose that they didn't realize that Article I, Section 1 governed all clauses? At least, according to you and your 'logical presumptions'.

Your arguments on habeas corpus are of the exact same character as the "meaning of is" and the "definition of what constitutes sex" in a Clinton deposition...

Are you suggesting my arguements are similar to your definition of tu quoque? That it means whatever I want it to mean at the time?

783 posted on 01/24/2004 6:38:05 AM PST by Non-Sequitur
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To: Non-Sequitur
That's the best you got? I'll repeat my claim. Not a single foreign government recognized confederate independence.

Sigh. The Supreme Court of the US disagrees.

Cherokee Nation v. State Of Ga., 30 Pet. 1 (1831), Chief John Mashall, "This bill is brought by the Cherokee nation..."

"The counsel have shown conclusively that they are not a state of the union, and have insisted that individually they are aliens, not owing allegiance to the United States. An aggregate of aliens composing a state must, they say, be a foreign state. Each individual being foreign, the whole must be foreign."

Same casue, justice Thompson, "The terms state and nation are used in the law of nations, as well as in common parlance, as importing the same thing."

Elk v. Wilkins, 112 US 94 (1884), Justice Gray wrote, "The provision of the act of congress of March 3, 1871, c. 120, that 'hereafter no Indian nation or tribe within the territory of the United States shall be acknowledged or recognized as an independent nation..."

784 posted on 01/24/2004 6:47:20 AM PST by 4CJ (||) Support free speech and stop CFR - visit www.ArmorforCongress.com (||)
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To: 4ConservativeJustices
Sigh. The Supreme Court of the US disagrees.

So now it's the Supreme Court that determines what constitutes recognition by a foreign government? I thought you said Congress does that.

785 posted on 01/24/2004 6:50:17 AM PST by Non-Sequitur
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To: Non-Sequitur
So now it's the Supreme Court that determines what constitutes recognition by a foreign government? I thought you said Congress does that.

SIGH. No, the decisions cited by the US Supreme Court hold that the Cherokee Indians are a NATION, a foreign NATION. The Cherokee NATION did recognize the Cofederate government.

786 posted on 01/24/2004 8:46:12 AM PST by 4CJ (||) Support free speech and stop CFR - visit www.ArmorforCongress.com (||)
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To: Non-Sequitur
Ah, so we are talking implied powers.

No. We are talking about the logical application of explicit powers. While clauses in Article I generally do not self-identify their power as being an act of legislation, we know that to be the case with virtual logical certainty for the reasons that (a) they are explicitly given to congress and (b) that is what congress does.

In Article I, the Congress is explicitly mentioned on only 8 clauses but you 'logically presume' that it applies to the remaining clauses as well.

No presumption is necessary. Article I, Section 1 states so explicitly for ALL of them.

Should we 'logically presume' that a state could enter into a treaty, alliance, or confederation; grant Letters of Marque and Reprisal; coin money; emit bills of credit; make anything but gold and silver coin a legal tender; pass a Bill of Attainder, ex post facto law, or law impairing the obligation of contracts; or grant a title of nobility if Congress passed a law allowing them to?

That clause is not a power but a caveat against the assumption of a power possessed by Congress. But since congress cannot generally delegate its power, no. A state could not do that so long as it was still in the union.

But while we're on the subject, let me ask you a question on an slightly unrelated matter. Since Article IV, Section 3 states that Congressional approval is required for admitting new states and for any change in status such as combining, splitting into two or more states, etc. then couldn't we 'logically presume' that congressional approval would be needed for leaving the Union altogether?

Nope. That is a contrary assumption without basis or support (sort of like proving from a negative). It also defies what could be concluded from the application of your exact same line of thinking to Article VII, which provides for uniltateral ratification of the constitution by the states without any corresponding approval in Congress.

787 posted on 01/24/2004 8:49:37 AM PST by GOPcapitalist
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To: Non-Sequitur
It's interesting to note that the founders found the need to constantly state that congressional approval was needed for this and that legislation was needed for that all through Article I.

Really? Cause I just looked at section 8 and only see congress specifically stated once - in the first clause. The next 17 outline various powers of Congress, yet not one of them specifically reads "Congress shall..." like the first. By watching your judicial theater of the absurd one could conclude off of that fact that Congress does not have the sole power "To establish Post Offices and post Roads" or "To define and punish Piracies and Felonies committed on the high Seas" since the constitution is "silent" on whether or not each individually belongs to Congress. Do you suppose that they didn't realize that Article I, Section 1 governed all clauses?

Actually, it would seem that they did considering that 17 out of 18 enumerated powers are listed without specific mention of Congress, only the first reading "Congress shall..."

788 posted on 01/24/2004 8:56:06 AM PST by GOPcapitalist
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To: WhiskeyPapa
[Walt] When you were on active duty, were you willing to apply superior force?

Even now, as USN (Ret) I am willing to apply superior intellectual force to former USMC.

However, I do not invoke a military conquest as a signal of righteousness. Such a conclusion would elevate a lot of tyrants to righteousness.

789 posted on 01/24/2004 11:51:15 AM PST by nolu chan
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To: nolu chan
WP isn't smart enough to make a "legal arguement". all he does is post long, boring, mostly off-point pieces of LYING, REVISIONIST tripe of the usual sort promulgated by the worst of the damnyankee propagandists.

frequently, what he posts does NOT support his contentions.

thus my conclusion that he does NOT understand much of what he posts.

free dixie,sw

790 posted on 01/24/2004 12:56:00 PM PST by stand watie (Resistance to tyrants is obedience to God. -T. Jefferson)
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To: GOPcapitalist
We are talking about the logical application of explicit powers.

Powers are either explicitly stated or they are implied. Since nothing in the Constitution explicitly states who may suspend habeas corpus then you are implying it.

Article I, Section 1 states so explicitly for ALL of them.

Where?

But since congress cannot generally delegate its power, no. A state could not do that so long as it was still in the union.

Congress delegates its power all the time. So they can allow the states to do that if they simply pass legislation stating so?

That is a contrary assumption without basis or support (sort of like proving from a negative).

See? I knew it would be a hoot.

791 posted on 01/24/2004 6:10:18 PM PST by Non-Sequitur
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To: Non-Sequitur
Powers are either explicitly stated or they are implied. Since nothing in the Constitution explicitly states who may suspend habeas corpus then you are implying it.

Your premise is once again false. Congress is explicitly stated in Article I, Section 1, which defines its own application to extend over the rest of the that article. Since the habeas corpus clause is indisputably within that article it is governed by Article I, Section 1.

Where?

"All legislative Powers herein granted shall be vested in a Congress of the United States"

Once again, exactly what do you not understand about this clause?

Congress delegates its power all the time.

They do, but they aren't supposed to and at times when they step over the line with more eggregious cessions of power they get struck down on a separation of powers ruling.

792 posted on 01/24/2004 7:37:17 PM PST by GOPcapitalist
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To: stand watie
thus my conclusion that he does NOT understand much of what he posts.

Good sir, I believe your observation is quite correct.

793 posted on 01/25/2004 1:18:48 AM PST by nolu chan
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To: Non-Sequitur; 4ConservativeJustices
[Non-Seq] I'll repeat my claim. Not a single foreign government recognized confederate independence.

Arguably, your claim may stretch too far. It may possibly be shown that Confederate independence was shown without showing the establishment of full diplomatic relations.

Right after the events at Fort Sumter, Lincoln declared a blockade of the ports of the deep South. Almost immediately, Great Britain declared its neutrality.

Lincoln soon declared a blockade of the ports of the upper South.

In his special message of July 4, 1861, one may see Lincoln revising the history of what he had done: "a proclamation was issued for closing the ports of the insurrectionary districts by proceedings in the nature of Blockade." In point of fact, Lincoln had twice announced a blockade with no mention of any closing of the ports.

A closing of the ports is a domestic action. A blockade is an international action. The recognition of Confederate independence arose with the British declaration of neutrality. In international law, neutrality was defined as "The state of a nation which takes no part between two or more other nations at war with each other."

Not until the war was won was it possible to truly admit the error and correct it and actually announce a closing of the ports -- on April 11, 1865. At the time of this proclamation, Secretary of the Navy Gideon Welles said: "This was a step which I had earnestly pressed at the beginning of the rebellion, as a domestic measure, and more legitimate than a blockade, which was international, and an admission that we were two nations."

It could be argued that the British declaration of neutrality (and all other such declarations of neutrality declared by other nations) recognized the CSA as an independent nation, flowing from Lincoln's proclamation of a blockade which, no doubt unintentionally, proclaimed to the world Lincoln's admission that the CSA was a separate nation.


Bouvier's Law Dictionary, 1856 Edition

NEUTRALITY, international law. The state of a nation which takes no part between two or more other nations at war with each other.

2. Neutrality consists in the observance of a strict and honest impartiality, so as not to afford advantage in the war to either party; and particularly in so far restraining its trade to the accustomed course, which is held in time of peace, as not to render assistance to one of the belligerents in escaping the effects of the other's hostilities Even a loan of money to one of the belligerent parties is considered a violation of neutrality. 9 Moore's Rep. 586. A fraudulent neutrality is considered as no neutrality.

3. In policies of insurance there is frequently a warranty of neutrality. The meaning of this warranty is, that the property insured is neutral in fact, and it shall be so in appearance and conduct; that the property does belong to neutrals; that it is or shall be documented so as to prove its neutrality, and that no act of the insured or his agents shall be done which can legally compromise its neutrality. 3 Wash. C. C. R. 117. See 1 Caines, 548; 2 S. & R. 119; Bee, R. 5; 7 Wheat. 471; 9 Cranch, 205; 2 John. Cas. 180; 2 Dall. 270; 1 Gallis. 274; Bee, R. 67.

4. The violation of neutrality by citizens of the United States, contrary to the provisions of the act of congress of April 20, 1818, 3, renders the individual liable to an indictment. One fitting out and arming a vessel in the United States, to commit hostilities against a foreign power at peace with them, is therefore indictable. 6 Pet. 445; Pet. C. C. R. 487. Vide Marsh. Ins. 384 a; Park's Ins. 'Index, h. t.; 1 Kent, Com. 116; Burlamaqui, pt. 4, c. 5, s. 16 & 17; Bunk. lib. 1, c. 9; Cobbett's Parliamentary Debates; 406; Chitty, Law of Nat., Index, h. t.; Mann. Comm. B. 3, c. 1; Vattel, 1. 3, c. 7, SS 104; Martens, Precis. liv. 8, c. 7, SS 306; Boucb. Inst. n. 1826-1831.


OFFICIAL RECORDS: Series 3, vol 5, Part 1, page 107

(Union Letters, Orders, Reports)

VII. April 11, 1865.-Closing certain ports.

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA:

A PROCLAMATION.

Whereas, by my proclamations of the nineteenth and twenty-seventh days of April, one thousand eight hundred and sixty-one the ports of the United States in the State of Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi, Louisiana, and Texas were declared to be subject to blockade; but whereas, the said blockade has, in consequence of actual military occupation by this Government, since been conditionally set aside or relaxed in respect to the ports of Norfolk and Alexandria, in the State of Virginia; Beaufort, in the State of North Carolina; Port Royal, in the State of South Carolina; Pensacola and Fernandina, in the State of Florida, and New Orleans, in the State of Louisiana;

And whereas, by the fourth section of the act of Congress approved on the thirteenth of July, eighteen hundred and sixty- one; entitled "An act further to provide for the collection of duties on imports, and for other purposes," the President, for the reasons therein set forth, is authorized to close certain ports of entry:

Now, therefore, be it known that I, Abraham Lincoln, President of the United States, do hereby proclaim that the ports of Richmond, Tappahannock, Cherrystone, Yorktown, and Petersburg, in Virginia; of Camden (Elizabeth City), Edenton, Plymouth, Washington, New Berne, Ocracoke, and Wilmington, in North Carolina; of Charleston, Georgetown, and Beaufort, in South Carolina; of Savannah, Saint Mary's, and Brunswick (Darien), in Georgia; of Mobile, in Alabama; of Pearl River (Shieldsborough), Natchez, and Vicksburg, in Mississippi; of Saint Augustine, Key West, Saint Mark's (Port Leon), Saint John's (Jacksonville), and Apalachicola, in Florida; of Teche (Franklin), in Louisiana; of Galveston, La Salle, Brazos de Santiago (Point Isabel), and Brownsville, in Texas, are hereby closed, and all right of importation, warehousing, and other privileges shall, in respect to the ports aforesaid, cease, until they shall have again been opened by order of the President; and if, whole said ports are so closed, any ship or vessel from beyond the United States, or having on board any articles subject to duties, furniture, and cargo, shall be forfeited to the United States.

794 posted on 01/25/2004 2:19:59 AM PST by nolu chan
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To: nolu chan
Arguably, your claim may stretch too far. It may possibly be shown that Confederate independence was shown without showing the establishment of full diplomatic relations.

No, I'll stand by my position that not a single nation recognized southern independence, or considered it to be a sovereign nation and that included the Lincoln Administration. The universally accepted standard for sovereignity is acceptance of that fact by the other nations of the world. Not a single nation bestowed official recognition of the Davis regime as the legitimate government for the southern state. Every government in the world viewed the Civil War as what it was, a rebellion, a domestic issue for the U.S., and refusing to take sides did not automatically convey recognition.

795 posted on 01/25/2004 4:01:53 AM PST by Non-Sequitur
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To: GOPcapitalist
Your premise is once again false.

Once again we are at the point where something is false just because you say it is.

I understand it completely. I just believe that your claim that if governs every single word in every single clause in every single section of Article I is ridiculous.

They do, but they aren't supposed to and at times when they step over the line with more eggregious cessions of power they get struck down on a separation of powers ruling.

Again, because you say so?

796 posted on 01/25/2004 4:08:39 AM PST by Non-Sequitur
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To: nolu chan
In his special message of July 4, 1861, one may see Lincoln revising the history of what he had done:

Let's quote some more of that.

"This is essentially a people's contest. On the side of the Union, it is a struggle for maintaining in the world, that form, and substance of government, whose leading object is, to elevate the condition of men -- to lift artificial weights from all shoulders -- to clear the paths of laudable pursuit for all -- to afford all, an unfettered start, and a fair chance, in the race of life. Yielding to partial, and temporary departures, from necessity, this is the leading object of the government for whose existance we contend."

A. Lincoln 7/4/61

Walt

797 posted on 01/25/2004 4:35:27 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: Non-Sequitur
That's the best you got? I'll repeat my claim. Not a single foreign government recognized confederate independence.

Let me get this straight. Whatshisname is putting forth the Cherokee Indians as a sovereign nation?

Well, that's no more ridiculous than the rest of the crap he spouts.

Walt

798 posted on 01/25/2004 4:41:44 AM PST by WhiskeyPapa (Virtue is the uncontested prize.)
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To: Non-Sequitur
Once again we are at the point where something is false just because you say it is.

No Non-Seq. Your claim is false because ANY reasonable reading of the constitution and the founding fathers says so. I simply make note of that circumstance.

I understand it completely.

Evidently you do not as you are still playing Clintonian word games.

I just believe that your claim that if governs every single word in every single clause in every single section of Article I is ridiculous.

Straw man. It governs only what it says itself to govern: the powers contained within that article.

Again, because you say so?

Nope. Again because that was the original intent of the founding fathers. If you do not understand why then you are not qualified to comment on this subject matter.

799 posted on 01/25/2004 10:44:39 AM PST by GOPcapitalist
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To: Non-Sequitur
No, I'll stand by my position that not a single nation recognized southern independence, or considered it to be a sovereign nation and that included the Lincoln Administration.

You have made a career around here in standing by factually unsupported and extreme assertions, so this is no surprise. It remains, however, as 4CJ has shown you that at least three major indian nations formally established diplomatic ties with the confederate government and signed alliances with their cause. If you dispute their ability to do so then please explain why indian several nations formally declared war upon Hitler in 1941 and 42?

It has also been shown repeatedly that the confederacy established a form of diplomatic relationships with the Vatican. This included having sent at least three formally appointed diplomatic envoys there, all of which were successful in obtaining diplomatic access. In one of these cases the vatican secretary of state personally extended diplomatic protection to the confederate envoy after Lincoln's men in Rome tried to have him detained. It also includes multiple letters of correspondence to the confederacy by the vatican diplomatic chief and one from the pope himself. The papal letter formally refers to Jefferson Davis as the President of the CSA and a letter from Cardinal Antonelli references them as a nation.

The universally accepted standard for sovereignity is acceptance of that fact by the other nations of the world.

Actually, the truest form of sovereignty is a de facto condition within its own government, of which the confederacy indisputably had. Diplomatic recognition is a de jure extension that occurs among nations, though it is not always an accurate representation of where sovereignty exists since it is contingent upon political considerations. Case in point: Many nations of the western world withheld diplomatic relations from mainland China for some 25 years after it's government became communist. In its place they recognized the old government that had relocated to Taiwan. Diplomatically speaking, mainland China did not exist to them and the government whose domain did not extend beyond the tiny island of its exile was formally recognized to control the entire nation of China. Practically speaking however, we know for a fact that communist mainland China was there the whole time exercising its own sovereignty over itself and, no matter how much we didn't like that, we also knew this wasn't goign to change anytime soon. Another case in point: after the Soviets siezed control in Russia most western nations did not recognize their regime for a good decade or so. They still recognized the old regimes as legitimate even though the Czar was dead, Kerensky was in exile, and the bolsheviks were in control of the government. Did that mean that nobody governed Russia for the entire 1920's? Did that mean that the notorious regimes of Lenin and Stalin never happened? Heck no. They were there in fact whether or not the west recognized them in diplomacy.

Every government in the world viewed the Civil War as what it was, a rebellion, a domestic issue for the U.S.

That is not true. Lincoln viewed it as a rebellion, but the rest of the world generally viewed it as a war between two belligerent powers and stated their neutrality within that war.

800 posted on 01/25/2004 11:06:25 AM PST by GOPcapitalist
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