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Economics is a major factor in warfare because a country's economy is a major factor in determining a country war-making potential. This is the less true of short wars, it is much more the case of longer wars of attrition. And the American Civil War was very much a war of lengthy war of attrition. And as country's industrialized in the 19th century, industry became increasingly important in warfare. This is important in understanding why the northern states won the War. It is not the only reason, but certainly a very important part of it. The North's larger population and growing industrial power were vital to the Union victory.
It is also important in understanding the sweep of American history now under attack by woke voices in academia and popular culture. Slavery was the major cause of the War, but not fully understood today is that slavery is but one form of forced labor. It is the most egregious type, but only one type. And over the seven millennia or so of civilization, it has not been the major type of forced labor. The principal type of forced labor was creating a landless peasantry when agriculture was the principal source of wealth.
This did not change for mankind until the American Revolution (1776-83). It was the new American republic that first established a democratic republic and an economy based on free labor. The United States was created a system in which for the first time in history the people who owned the land actually owned it.
Critics of America today contend that the country was founded on slavery. 【Hannah-Jones】 This idea could not be more wrong. Now the systen creatted by the founding fathers was not perfect, only 90 percent of the population befitted from this system. But after seven millennia, getting 90 percent of the system right seems an enormous step forward. But it us true that a little more than 10 percent of the population was enslaved which was perpetuated because slavery was left for each state to decide. And that slavery and the cotton it produced was important economically, but it was never the dominant part of the American economy. The Civil War itself refutes this idea. America was founded on freedom. Southern slavery was a minority institution. And throughout the Ante-Bellum era it was the northern free states that were the most dynamic and economically vibrant era. It was here that major inventions were made, most universities founded, and American industry grew. The South languished as an agricultural backwater. And the Civil War showed clearly that a system based on slave labor could not compete with free labor. The United States benefited greatly by its linguistic and cultural ties even after separating politically as a result of the Revolutionary War (1776-83). Along with immigrants from Germany and other industrializing countries, America quickly acquired advances being made in Europe. A growing economy during peace time was able to pay off the debts incurred during the 19th century wars, even the enormous debt resulting from the Civil War. The Civil War proved to be one of the new American Republic's greatest fiscal tests. The Federal Government under the stewardship of Treasurer Salmon P. Chase, was careful to maintain a sound fiscal footing and pursued prudent fiscal and tax policies. The Confederacy with far fewer options and resources pursued reckless fiscal policies.
Economics is a major factor in warfare because a country's economy is a major factor in determining a country war-making potential. This is the less true of short wars, it is much more the case of longer wars of attrition. And the American Civil War was very much a war of lengthy war of attrition. And as country's industrialized in the 19th century, industry became increasingly important in warfare. This is important in understanding why the northern states won the War. It is not the only reason, but certainly a very important part of it. The North's larger population and growing industrial power were vital to the Union victory. America, however was still a rurl and agriculturalmcountry. Th great majority of the popularion still lived in rural areas and agricukture was very important in both the North and South, but especially in the South.
It is also important in understanding the sweep of American history now under attack by woke voices in academia and popular culture. Slavery was the major cause of the War, but not fully understood today is that slavery is but one form of forced labor. It is the most egregious type, but only one type. And over the seven millennia or so of civilization, it has not been the major type of forced labor. The principal type of forced labor was creating a landless peasantry when agriculture was the principal source of wealth.
This did not change for mankind until the American Revolution (1776-83). It was the new American republic that first established a democratic republic and an economy based on free labor. The United States was created a system in which for the first time in history the people who owned the land actually owned it.
Critics of America today contend that the country was founded on slavery. 【Hannah-Jones】 This idea could not be more wrong. Now the systen creatted by the founding fathers was not perfect, only 90 percent of the population befitted from this system. But after seven millennia, getting 90 percent of the system right seems an enormous step forward. But it us true that a little more than 10 percent of the population was enslaved which was perpetuated because slavery was left for each state to decide.
And that slavery and the cotton it produced was important economically, but it was never the dominant part of the American economy. The Civil War itself refutes this idea. America was founded on freedom. Southern slavery was a minority institution. And throughout the Ante-Bellum era it was the northern free states that were the most dynamic and economically vibrant era. It was here that major inventions were made, most universities founded, and American industry grew. The South languished as an agricultural backwater. And the Civil War showed clearly that a system based on slave labor could not compete with free labor.
The United States benefited greatly by its linguistic and cultural ties even after separating politically as a result of the Revolutionary War (1776-83). Along with immigrants from Germany and other industrializing countries, America quickly acquired advances being made in Europe. The British origins was a great advantage to the United States. It meant that among the immigrants to America were Britons with a wide range of technical skills. Along with them, the American commitment to free market capitalism and the rule of law created the stable conditions for foreign investments. The British were especially active. The British-based legal system facilitated economic development and guaranteed contracts. And the free market outlook of most Americans prevented Government interference which had impeded economic development in many European countries. While the British legal tradition was vital for America, the Revolution was also necessary for America's own industrial revolution. This was Britain saw America as an adjunct for the British economy. America's role to provide agricultural products and raw materials and to serve as a market for British manufactures. Laws restructured the development of American manufacturing. This was only possible after America achieved its independence. American policies toward public schools also resulted in a well-educated population. These factors combined with abundant natural resources created favorable conditions for the spread of the industrial revolution to the United States. This set the foundation for the United States emergence as the most technologically advanced country in the world. Especially important was the availability of cheap energy. Initially this meant seemingly inexhaustible forests and rivers, but as the industrial revolution developed immense coalfields and then oil fuel America's industrial expansion. Even before the Revolution (1776-83) America had constructed a substantial merchant fleet, but inland commerce was at first dependent on rivers. This changed with the construction of first canals and than railroads.
The economy of the North and South were both most rural and largely agricultural when the Unite States was founded (1780s). Gradually the economies began to develop along different lines. Commerce, finance, and manufacturing, and manufacturing were already more developed in the northern states and increased more rapidly in the North. Industrialization began to develop (1820s) and grew much more rapidly than in the South. The first industry was textile mills, benefiting from the expanding cotton production in the South. A major factor was the coming of the rail roads (1830s). This led to the development of heavy industry, iron and steel was needed for the rails, bridges, and locomotives. And the railroads greatly facilitated the transport of the necessary raw materials and farm produce. This primsrily occurred in the northern states. Agriculture remained the major sector of the economy and most American still lived in rural areas, although cities were growing rapidly and urbanization increased with every decade. The North was also an engine for innovation and invention. Capitalism drove the economy. There was a steady drive for increasing productivity in sharp contrast to the South where slave labor meant there was little incentive to innovate and invent. The economic expansion of the United States was well underway at the time of the Civil War. The War proved to be a huge stimulus. Surprisingly with so many men mobilized for war, production not only was not adversely affected but actually increased substantially, both agricultural and industrial production. Agricultural production increased to unheard of levels, despite the mobilization of men and the loss of production from the 11 states seceding from the union--a remarkable achievement. Increasing prices were a factor. In addition, improvement in farm equipment and the invention of labor saving machinery helped to increase productivity. This enabled the Union to not only feed and equip the massive army mobilized, but to fully meet civilian needs. As a result, the Union military and civilian population was not only well fed, but the armies were well equipped and supplied. Of particular importance was the production of artillery that played such an important role in Civil War battles. .Industrial production was already substantial, but the War resulted in an enormous expansion of industrial production.
At the time of the Revolution the vast majority of the American colonies were rural. This was especially the case of the southern states. The primary cash crop for nearly two centuries was tobacco. Cotton was not yet an important crop. There was a demand for it, but the labor required to separate the seeds made it uneconomical to grow. This changed when Eli Whitney invented the cotton in (1793). Notably Whitney was a northerner from Massachusetts. America was becoming a nation of inventors, but most of these inventions came from the North. His invention changed the economic history of the South. Cotton was in great demand in Britain as the Industrial Revolution was unfolding. At the time it was believed that slavery was a dying institution. Cotton tragically turned it into an economically productive institution. And as the southerners moved west from South Carolina to Texas, cotton became the major cash crop. Fortunes were made on plantations growing cotton with enslaved workers. There were other crops, but none approached the importance of cotton and very little industrial activity occurred. Cotton proved both a huge success and curse. Cotton northern textile mills and America's most valuable export becoming the raw material for the European textile industry. Slave labor while creating fortunes for the important planters meant that that the economy unlike the North was not generating innovation and invention, this the white people without slaves did not prosper like the northern population. . There was no way to increase the efficiency and productivity of slave labor. The south was locked into a system of simply maintaining the system as exists though militias created to deal with any attempted slave rebellion. It was not, however, a sustainable system. Cotton leached the nutrients from the soil so planters had to seek new land. This drive for new slave states would be resisted by the Northern public which became increasingly involved in the Abolitionist Movement. The result would be secession and Civil War.
A growing economy during peace time was able to pay off the debts incurred during the 19th century wars, even the enormous debt resulting from the Civil War. The Civil War proved to be one of the new American Republic's greatest fiscal tests. The Federal Government under the stewardship of Treasurer Salmon P. Chase, was careful to maintain a sound fiscal footing and pursued prudent fiscal and tax policies. The Confederacy with far fewer options and resources pursued reckless fiscal policies. President Lincoln commented as the War began to wind down that the Civil War "has produced a national debt and taxation unprecedented, at least in this country (1864). The war effort increased the public debt 15 times (1861-65). This was balanced by tax increases. A Federal income tax was introduced. The rates were low, but it was a major innovation in Federal policy which had primarily been financing itself through import duties. The rate was percent on income above $800 and 5 percent on those living outside the country (1861). Congress revived the rates the following years, 3 percent tax on income beyond $600 and 5 percent on earnings over $10,000. The income tax covered about 25 percent of the cost of the War. 【Hormats】 All kinds of other taxes were introduced such as excise taxes on photographs. Chase, oversaw the creation of both the first federal currency--the greenback (1862) and a national banking system (1863). A standardized currency enabled the United States to issue some $500 million in war bonds. The banks provided a market for these bonds. The Confederacy in sharp contrast pursued a ruinous fiscal policy. The Confederate Treasurer was not an easy assignment. There were two men who filled the position: Christopher G. Memminger (1861-64) and George A. Trenholm (1864-65). Both men faced the same problem of other Confederate cabinet officers, but in especially string terms because money was involved. The Southern states succeeded from the Federal Union under the banner of states rights. They feared the Federal Government would force major changes, of course on slavery. They thus were not anxious to accept controls by the new Confederate central Government. The member states did not want to give up revenue authority. Thus the Confederacy attempted to finance the War by printing money. One author writes, "The single-minded condemnation of the Yankees probably kept President Davis and the Confederate Congress from becoming targets of widespread discontent among white Virginians .... The frequently acerbic Kean thought the Confederate government deserved at least some of the blame, however. In January 1865, he chastised [the Confederate] Congress for lacking the courage to face the full extent of the Confederacy's fiscal crisis. 'As the real condition of the treasury comes to be known, he wrote, 'the hopeless bankruptcy in which it is plunged , the arrears of $320 million, and the proposition to tax 16% ad valorem as a means of meeting it--the Congress can get more and more weak in the knees.'" 【Robertson】
Both the North and South were affected by the War, but especially the South. The economy of the Confederacy was built around one crop -- cotton. Acrop that was mostly prioduced on plntations using slave labor. It was not the only ctop, but it as by far the most important. And the South made very little use of the cotton. It was mostly exported to European makets, primarilly Britain and France, with mills using the cotton to produce textiles. There was alson shiopments to northern states with mills. This created a great weakness, close off the exports and and the cotton had no val=ue. Meaning the Southern economy would collapse. Gen. Winfielkd Scott, the senior officer of the U.S. Army was from Vurginia, bur remained loyal nto the United States. He ciceived of the Abacinda Plan to blockade the Confederacy. Lincoln adopted his plan as the the Unuted States strategic plan. Many Southern plnters felt that this dependance would force Britain an France tointervene to break the v=blockade abd even reciognize the Confederacy. Conderate leaders did not recognize hiow out of step they were with Western thought. The south had bsically out-lawed any real discussion of slavery. Wihout cotton the Confederacy had great difficuklty funncing the War. There was anotyher huge problem. Given the Confedercy's smller population, it had to mobilize men an horses to a far greater extent. This significantly impacted food production as so mabny sotherners had go leae theur farms and tje their hiorses which were bneeded to produce food. The North had auch more diverse economy with a substantial and growing industrial base. There was akso a mjor agricultural sector that not inly supplied norther cities, but exported. The Northern economy was able to finance the War, introducing Federal currency for the furst time--the Greenback. There was substantial agricultural and industrial output creating both taxable income and a strong economy and a solid econiomy base that enabled the Federal Government to borrow money. The mobikization of men and horses also impacted Northern agriculture although not to the degree of the South. First, the Northhad a margin of safety because it was exporting so much food. Second, the War spurred more Northern investment in labor-saving equipment. 【Nelson】 This was an option that the North was more culturally and materially capable of doing this and the South. Inflation was a major problen . It affected te North, by theConfederacy was driven into hyper-inflationbecauuse therewas no way to tax. .
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Hannah-Jones, Nikole. The 1619 Project (2020).
Hormats, Robert. The Price of Liberty
Nelson, Scott Reynolds. A People's War.
Robertson, James. The Untold Civil War: Exploring the Human Side of War (2012).
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