during the war, they increased in importance as financial intermediaries in later decades.
In the final analysis, however, the rare instances of the war's positive contributions must be weighed against the destruction of human and physical capital. In "The Economic Cost of the American Civil War: Estimates and Implications" Claudia D. Goldin and Frank D. Lewis estimate that direct costs of the war were $3.4 billion in the Northern states and $3.3 billion in the South. In other words, the war cost about $200 per capita in 1860 dollars. To put these figures into perspective, consider that in "The Economics of Emancipation" ( 1973) Goldin estimates that the cost of purchasing the freedom of the entire slave stock in 1860 would have been $2.7 billion, or about 40 percent of the war's actual cost. Financed by the issue of thirty-year bonds at 6 percent interest, this option would have cost the Northern population $9.66 in taxes per person per year. Of course, such mean calculations distort the fact that the fundamental economic condition of war is not its average cost or benefit but rather its distributional effect. The economic benefits of the Civil War were bestowed upon those who were able to take advantage of the changes it generated, while its costs were most heavily borne by those who suffered and died on its fields of glory.
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