Tariffs, Blockades, and Inflation: The Economics of the Civil War
Majewski, John, Freeman
Tariffs, Blockades, and Inflation: The Economics of the Civil War by Mark Thornton and Robert B. Ekelund, Jr. Scholarly Resources, Inc. * 2004 * 124 pages * $65.00 hardcover; $19.95 paperback
In concise and clear prose Professors Mark Thornton and Robert Ekelund use basic economics to explain the causes, outcome, and consequences of the Civil War. Employing Public Choice theory-a subdiscipline of economics that focuses on how public officials and government bureaucracies make decisions-Thornton and Ekelund attempt to revise many standard accounts of the war. Although their economic analysis sometimes comes across as simplistic, they nevertheless add an important and overlooked perspective on the causes and consequences of the bloodiest war in U.S. history.
Perhaps the most controversial claim in Tariffs, Blockades, and Inflation is that the tariff (as opposed to slavery itself) may have been far more important in causing the Civil War than many historians assume. The protective tariff hurt the long-run economic performance of the nation as a whole, and it was undoubtedly a major regional divide between North and South. Northern manufacturers benefited most from a protective tariff, while Southern planters and farmers, who paid higher prices for the manufactured goods they purchased from either Britain or the North, suffered most. Given that Lincoln wanted to raise tariffs, Thornton and Ekelund argue, his election signaled the possibility of a protectionist regime that might have reduced the value of Southern plantations and slaves by some $700 million. Southerners could probably have blocked Lincoln's attempt to raise tariffs if they had stayed in the Union, but Thornton and Ekelund argue that "tariff uncertainty" made secession an appealing option. Rather than risk higher tariffs, why not simply leave the Union?
Thornton and Ekelund also highlight the impact of the Union blockade, which ironically led Southern blockade runners to import highly valued luxury items rather than wartime necessities. Thornton and Ekelund argue that the blockade changed relative prices within the Confederacy so that it became more profitable to import easily transportable luxuries (such as silk textiles) and less profitable to import bulky necessities (such as iron and machinery). Profit-oriented blockade runners thus focused on luxuries even as Confederate civilians and soldiers suffered grievous shortages of basic necessities. The "Rhett Butler" effect, as Thornton and Ekelund call it, had a host of unintended consequences. It lowered Confederate morale and led to widespread condemnation of "unpatriotic" blockade runners and speculators. …