I’ve never understood this argument that the South produced all the value in the American economy. Yet, at the same time, most Southerners were just poor farmers who didn’t own slaves and didn’t care about slaves.
The argument seems to be that the 1 percent of the Confederacy would have consumed more than the entire North. How many European goods could the big planters have actually bought?
Nobody said that. The South produced 75% of all export value. Meaning the South produced 75% of all the goods exchanged for European money coming into the Country.
What makes this important (among other things) is that the Federal government was entirely funded by this incoming European money produced by Southern exports. In other words, the South was paying for 3/4ths of the cost of running the US Federal government.
At this time, Northern population was 20 million. Southern population was 5 million. The 5 million were creating 75% of the money to pay for the Federal Government. The 20 Million in the North were only creating 25% of the money to fund the Federal government.
I know. It's a nutty theory, but apparently it's the only one DL has got, so he's very attached to it.
You're right that the much larger free population of the North imported more foreign goods than the smaller population of the South, and you're right that there was only so much that the small population of rich plantation owners could import.
But I guess the idea is that Northerners couldn't have imported anything if Southern slave owners didn't bring in scads of foreign money from exported cotton. What that ignores is that markets are self-regulating mechanisms. It's not the case that if the cotton channel is blocked there's no other way of acquiring foreign currency or foreign goods. The market and the cost of goods, supply and demand adjust to changes elsewhere in the system.
US imports declined in 1861 because of the war, but largely recovered by the war's end. After the war imports wouldn't be as large relative to GDP as they had been before, but the government didn't go bankrupt because of it. That's because the country and its economy was never as wholly dependent on cotton as the secessionists believed. There were other ways of paying for foreign goods, and domestic production was no slouch either.
The other thing that he ignores is trade between the North and the South. The South bought things from the North and used the funds they got for the cotton to pay for it. The pounds and francs and marks planters got for their cotton probably never made it down to Alabama or Mississippi. What could you do with foreign money down there. Rather, they probably remained in banks in the cities where they could be used for other purposes.
But Diogenes believes that somehow Southern planters had some moral right to all the money cotton brought in -- even after they'd spent the money to buy other things. It's the ultimate case of having your cake and eating it too. It's not hard to understand why a wealthy slaveowner might think that way. Why anybody in the 21st century peddles that theory is harder to figure out.