[Ask the Gulch] Could capitalism have circumvented the US Civil War? What if the relatively capitalist, market-oriented northern states had let slave-holding south secede, discover the full cost of holding slaves in an increasingly industrialized world?
Posted by bubah1mau 2 years ago to Ask the Gulch
The industrial north could not compete with industrial Europe and the feds were imposing
high tariffs on imports to increase domestic sales and greatly increase tax revenues.
A free market would have allowed Americans to continue to buy less expensive foreign products.
If the south was allowed to secede they would have been able to continue to buy less expensive
European goods and northern industry would have suffered financially.
As for slavery, I think that it would have declined over time (in a seceded confederacy without a war)
because other methods of farming production were becoming more efficient than slavery.
That is how slavery ended in many other places.
Human slavery was (and still is) wrong.
No one should have to give up his production (or his liberty) by force, by fraud, or by involuntary legal servitude.
I worked at a prison for 21 years. I sure as hell don't want to live in one, knowing I could still be punished like that for the free-thinking way I shall always think.
Never thought I would live to see what I knew would be coming.
Additionally, I seem to remember that paper also predicting that there would have been less racial strife since slavery wasn't just about one race as we are currently taught.
What did they do? They depopulated Ireland and enslaved over half the population - especially males. People talk about the Great Potato Famine but it had nothing on England's slave trade in white, Irish slaves.
African slavery is the song and dance. The honest truth is the poor are and always have been enslaved in one manner or another.
"Saint Peter don't call me 'cause I can't go..."
But let's also paint an accurate picture of the North: they didn't really industrialize until AFTER the civil war. They had begun the process via designs for large looms and such being memorized and then rebuilt in the northern states, but the primary industry of the North was still agriculture until the early 1900's. See the Oxford History of the United States.
There were several keys to the booming economies of the North which the South didn't have.
1) Port facilities. There were large ports especially in Boston and New York, but along most of the Northern East coast which facilitated much shipping and commerce both domestic and international. Why did New York City become the hub of cotton trade even though Charleston, South Carolina was the nearest port which actually shipped bales? New York had a much more extensive harbor and so more ships went there - especially those carrying information. This also extended to ship-building facilities, of which the South had none.
2) Newspapers. The South had very few newspaper publications of significant distribution, where newspapers from New York were frequently carried all over the nation. There were significant courier networks established just to relay information from New York down even as far as New Orleans in only two days. But there was no "intelligence" or news hub in the South.
3) Railroads. The South had no steelworks and relied heavily on unimproved roads and waterways to get their products to market. Thus the masses of agricultural products the South produced were limited in their distribution and market access. This was also a primary reason the North was so successful when war broke out along the Western fronts (along the Mississippi) - they could ferry troops and supplies by rail. It was also one of the reasons the South's forays into the North were so counter-productive; they had to forage to feed their troops.
4) Canals. The North had invested heavily in the construction of canals which afforded economical transportation of large amounts of commodities including grain. The South had almost no investment and relied heavily on natural river transport - especially the Mississippi river.
5) Economic diversity. The North didn't have cotton or indigo or coffee or sugar cane, so they had to diversify their economy. They made it much more resilient. When the English looms and the warehouses which supplied them filled up, the price of cotton dropped precipitously and with it the financial fortunes of a dependent South. (What many also don't know is that while the North technically instituted a blockade of Southern shipping, it wasn't particularly effective. The larger problem was that there just weren't enough commercial ports.)
6) Hard money assets. Going into the Civil War, the proceeds of cotton sales were providing for more than adequate hard currency for the Southern Economy. After the price of cotton dropped to 1/10th its former levels (just prior to the war), the South could no longer bring in enough gold to run its economy. And with Britain refusing to give loans to the Confederacy and mandating payment in hard currency, their ability to purchase the ocean-going vessels they needed but couldn't build strangled their international commerce far more than did the Northern blockades. A lack of hard currency forced the South into issuing and then promptly devaluing paper currency. In the last year of the war, the South was so strapped for cash that they began confiscation of hard money assets from their own people. This was seen in their lack of uniforms and even ammunition.
7) Saltpeter. This crucial component in gunpowder had to be shipped in from abroad, as the South could not mine it domestically. The North, on the other hand, could manufacture its own gunpowder.
8) Firearms - especially cannons. What many do not know was how militarily strategic was the raid on Harper's Ferry just as the war broke out. The South had no ability to manufacture its own firearms - especially cannons - without that facility.
10) Immigration. Again, the shipping harbors came into play, as the vast majority of immigrants came through Ellis Island. (What many may not know is that about half of all immigrants promptly turned around and went back to their countries of origin.) But this huge influx of people not only spurred the Northern economies - especially in the fledgling factories - but also tipped the scales of representation in the House of Representatives to where anti-slavery states held the majority for the first time. The Southern States' move to secede was as much a recognition of this fact: that slavery from a political standpoint was doomed circa 1856. Though the import of slaves had been sunsetted a half-century prior, now the entire institution had a ticking clock.
There were two other significant costs that were born by the north that did nothing to improve American culture or increase the amount of economic freedom (laissez-faire capitalism) enjoyed by Americans:
1) Mass conscription. Initially, northern politicians entered the war believing it would be over in a matter of weeks. There were abundant volunteers initially: farm boys eager for adventure, community/business leaders eager for glory. But that faded with Fredericksburg and Chancellorsville. When Lincoln instituted the draft, a lot of the "glory" of war somehow vanished.
https://billofrightsinstitute.org/ess...
2) The character of US money changed. Until the war years, US dollars were freely convertible into silver or gold, but as the war dragged on, the US Treasury couldn't raise taxes to fund the war, so they started printing/issuing non-convertible "greenbacks" in 1862 to pay for war goods. This required a "legal tender" law that made it a criminal offense to refuse to accept them in trade. (They of course depreciated compared to coin despite this law.) Another aspect of the "Greenback" legal tender was to outlaw competing currencies that had circulated for hundreds of years in the Americas--especially the Spanish "pillar dollar" or "piece of eight" minted in Spanish colonies such as Mexico, Peru, and what is now Bolivia. This was done allegedly to make greenbacks pass easier in trade.
https://www.nber.org/papers/w5381
One additional aspect of conditions in the north upon receiving the ever burgeoning casualties list, and costs of the war, was for the first time to make an appeal to "God" explicit on larger monetary denominations. Before 1964, there was no "In God We Trust" motto on any US coinage or monetary instrument. But the government of a nation so aggrieved, so challenged, pulls all stops in trying to maintain public support, even with appeals to the supernatural, and circulating the optimistic myth that there is universal conformity in society regarding religious belief (or non-belief).
To make a long story short, the north had to turn its back on the liberal ideal of laissez-faire capitalism in order to fight the Civil War--at least as it was largely fought on southern turf. This was perhaps the most terrible cost of the Civil War in my opinion.
Prior to the Civil War, government had never been such a big factor in the economic lives of American people. After the War government would play an increasing role in people's everyday lives, even as the stunted remnant of capitalism that survived allowed ingenuity to bring prosperity and generally improving material living conditions.
I would add that nowhere is this more fatal and forgotten than in the loss of the Old West. Not the “Wild West” but the era preceding it.
Prior to the CW, the west was essentially anarcho-capitalism. The federal government had sent there in case relations with the natives went poorly but strictly avoided any sense of governing. The result was a collection of organizations that had their own laws and judicial systems. None had a geographical monopoly and you could leave one and, I’d they agreed, join up with another. When cross jurisdictional disagreements happened the two jurisdictions would work out an agreement. Crime was low and quickly ramped down on, disputes weren’t common between jurisdictions, and by every measure we’ve been able to cobble together from then they were doing a stellar job of it.
I say cobbled together because much of that history has been lost. You see, after the CW the federal government went full in on running things and not being hands off anymore out west. The first territory after the CW the U.S. conquered was the Old West. And the people inhabiting it were Americans and native Americans.
Slaves were "human machines".
By 1799 Eli Whitney had invented the first mechanized farm implement, the cotton gin.
Within 40 years both John Deere and McCormick had invented the plow and the reaper.
It was only a matter of time before the North completely mechanized farming.
The Civil War killed off 500,000 men of reproductive age. Without that horrible loss, the evolution of machines would have caused an agricultural revolution hence eliminating slavery.
The Civil War was unnecessarily fought.
A free market will always sort things out - the question is when will it happen, not if.
Let's go back to the cotton gin example. Without it, cotton producers had to rely on long-staple cotton which didn't grow in many places, thus naturally limiting the application of slavery. The cotton gin enabled the massive growth of slavery because it made short-staple cotton profitable and short-staple cotton had a much wider growing area. With the cotton gin we see an example of technology that bolstered an economy based on slavery rather than the other way around.
In modern times, we have several communist nations (which effectively employ slave labor) which have been going strong for 60+ years. Yes, the USSR collapsed due to a technological war, but China, Cuba, North Korea and others all continue, not to mention the Arab states which are effectively monarchies. And no one can doubt that China is currently pretty solid.
I don't think that markets drive government but the other way around.
Markets don’t have to drive government, and indeed generally don’t. What a market would do in this case it what it had in some areas - eliminate it from an economic perspective first. Ig nobody with influence or power is interested in keeping slavery alive because those people had to bow to natural economics pushing away from it, either it just falls off or someone submits a bill to which nobody effectively objects to and it passes. Because it is people driving, not markets themselves.
That all said, there is a case to be made that the violent means used is similar to the violent means used to stop Nazism in WW2. You can crush the government using and ideology but that doesn’t mean you’ve crushed the ideology. In countries that didn’t have a violent push they didn’t have the acrimonious follow ups that places where violence was the solution have/had. Because defeating someone militarily may get your putative end goal on paper, but the real work of social change wasn’t allowed to play out. As a result, it could be argued, we have the problems we do today.
Probably no bigger modern-day example of this than Iraq. And though there were lots of people who proudly displayed blue fingers showing they voted, what have they actually voted into power? An Iranian (Shiite) government.
Just emphasizes to me that our nation's founding really was an anomaly and not an outgrowth of any natural economic processes. Our ancestors wanted a market economy and the freedoms that went with it and opted to install a government in harmony with those principles. (Then they warned us that they wouldn't be easy to keep.)
At first factory work was done by very young children. That eventually changed as machines improved and child labor was frowned upon.
Yes, slavery increased for a time however perhaps one of the 500,00 dead souls would have invented the combine...