Download EEAH Slavery and Civil War

Economics of Slavery and the Civil
War
Overview
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The lost chance
Economics of slavery
Why fight?
How did the Civil War
change the economy?
The Lost Chance to Eliminate
Slavery
• In the early days of the
new nation, there were
hopes that slavery
would fade away.
• Many Americans
regarded slavery as
morally repugnant.
• Others defended it.
The Lost Chance to Eliminate
Slavery
• Many thought that its
inefficiencies and
immoral nature would
cause it to eventually
collapse.
The Constitution: The Lost
Opportunity
• The best opportunity to
abolish slavery almost
certainly occurred at the
Constitutional
Convention of 1787
when the delegates
debated the issue.
George Mason on Slavery
“Every master of slaves is
born a petty tyrant. [These
masters] bring the judgment
of heaven on a country. As
nations cannot be rewarded
or punished in the next world,
they must be in this. By an
inevitable chain of causes
and effects, providence
punishes national sins by
national calamities”
Debates in the Federal
Convention of 1787
Three Fifths Compromise
• Delegates who
supported slavery
wished to count all
people, free and
enslaved, for the
purposes of
representation.
Three Fifths Compromise
• They hoped that this
approach to allocating
representatives would
strengthen the power of
the slave states in
Congress and thus make
emancipation less likely.
Three Fifths Compromise
• Delegates who opposed
slavery wished to count
only free citizens.
• They hoped that this
approach would weaken
the power of the slave
states in Congress and
thus make emancipation
more likely.
Three Fifths Compromise
• The Founders decided
that enslaved individual
would be counted as
three fifths of a person.
• The delegates also voted
to eliminate the external
slave by 1808.
• But, they lost the
chance to eliminate
slavery itself.
Gradual Emancipation
• The Constitution of
Vermont prohibited
slavery in 1777.
• In 1780, the
Massachusetts
Constitution stated that
all men are free and
equal by birth.
• 1780, Pennsylvania
adopted a plan for
gradual emancipation.
• Other states took similar
actions:
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Rhode Island in 1784,
Connecticut in 1784,
New York in 1799
New Jersey in 1804
Gradual Emancipation
• Gradual emancipation
meant that newborn
African Americans
would be declared free
when they reached
adulthood.
Gradual Emancipation
• Why would gradual
emancipation work in
the North and not in the
South?
Economics of Slavery
• The economy of the
South was growing from
1840-1860.
• Slavery was profitable.
• Enslaved workers were
more productive than
wage and salary
workers.
• Agricultural production
was more efficient with
slaves than without
slaves.
• Owners had an
incentive to provide
enslaved individuals
with basic necessities
for survival such as food,
shelter, and medical
care.
• Before 1861, the market
for enslaved individuals
had increased.
Fogel, Robert, and Stanley Engerman.
Time on the Cross: The Economics of
American Negro Slavery. Boston: Little
Brown and Company, 1974
Characteristics of a Market
Economy
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Private property
Self interest
Competition
Profit motive
Voluntary exchange
Limited role of
government
Slavery and Markets
• Was slavery a market
institution?
Productivity and Cotton
• Eli Whitney’s invention
of the cotton gin in 1793
changed the economy
of the South.
• Until that time, it
required a great deal of
time to pick the seeds
out of cotton.
Cotton Gin
• Whitney was staying on
the plantation of
Catherine Greene where
he worked as a tutor.
• After listening to the
complaints of local
farmers about how
difficult it was to
remove cotton seeds
from the cotton itself,
he designed a machine
similar to the one
pictured here.
Cotton Gin
• A person fed raw cotton
into the machine by
turning the crank. The
cotton was moved
through a cylinder with
wire teeth.
• The cotton fiber was
pulled along by the
teeth, but the cotton
seeds were left behind.
Cotton Gin
• Before the invention of
the cotton gin, a person
could clean about one
pound of cotton per day.
• With his invention,
Whitney made it
possible to clean fifty
pounds per day -- a
huge increase in
productivity.
Power Cotton Gin
• With the application of
power to the gin, the
amount of fiber that
could be produced
appeared almost
limitless.
King Cotton
• Just before the Civil War,
there could be no doubt
that cotton was king.
• Douglass North
remarked that it is
difficult to exaggerate
the role of cotton in
American economic
growth between 1800
to 1850.
Economics of the Civil War
Why Fight a War When…
Why Fight a War When…
• Economists say that
individuals act irrationally
if they deliberately act
against their own interests.
• Using this definition, was
the Confederacy’s decision
to secede irrational?
• Or, did it represent a
miscalculation of the costs
and the benefits?
Alterative 1: Continue to Compromise
• Resolving the slavery
question had been
postponed for almost 100
years.
• Was further compromise
possible?
• The Missouri Compromise
of 1820 admitted Missouri
and Maine to the Union.
Missouri was a slave state
and Maine was a free state.
• This dual admission - - one
slave and one free state - allowed the nation to
preserve the existing
balance between slave
states and free states.
Alterative 1: Continue to Compromise
• The Kansas-Nebraska Act of
1854 overrode the Missouri
Compromise.
– It authorized voters in
portions of the Louisiana
Purchase to decide
whether or not to permit
slavery.
• In the case of Dred Scott v.
Sanford (1857), the U.S.
Supreme Court ruled that
Congress could not prohibit
slavery in any U.S.
territories.
Alternative 2: Free the Slaves
• Free the slaves, but provide
taxpayer financed
compensation to slave
owners.
• By 1860, there were 4
million slaves.
• They were worth close to $3
billion.
• Would this work?
Alternative 3: Fight
• The Union was right to
assume that it had
enormous economic
advantages.
• President Lincoln hoped for
a quick capture of the
Confederate capital on
Richmond.
• Optimism was high.
Alternative 3: Fight
• The CSA was right to believe
it had advantages.
• The South had strong
military tradition of
providing strong leaders - General Robert E. Lee.
• The South was only fighting
a defensive war.
• Only a few victories would
demonstrate to the North
that it was futile to fight.
Did Both Sides Miscalculate the Costs
and Benefits?
• The leaders of the CSA
thought the benefits of
preserving slavery and
states rights were worth the
costs.
• They expected a short and
decisive war.
• That didn’t happen.
Did Both Sides Miscalculate the Costs
and Benefits
• The leaders of the Union
thought the only feasible
way to end slavery and
preserve the Union was to
fight.
• They expected a short and
decisive war.
• That didn’t happen.
Economic Analysis of the Civil War
A High Price
• Preserving the Union and
ending slavery came at a
high price.
• About 620,000 deaths.
• The South bore most of the
destruction.
• Loss of human capital.
• Loss of physical capital.
African Americans After the War
• The emancipation of African
Americans destroyed the
plantation system.
• Something else needed to
be worked out.
• By 1880, about 20% of
African Americans owned
farms.
• About 26% rented farm
land.
• A few became
homesteaders.
• What would happen to
everyone else?
Economics of Share Cropping
Advantages to African
Americans
• Sharecropping provided
basic necessities African
Americans needed - - land,
equipment, housing.
• It provided a steady source
of employment.
• About 54% of freed African
Americans participated.
Disadvantages to African
Americans
• It prolonged dependence on
cash crops such as tobacco
and cotton.
• Sharecroppers became
dependent on landlords and
merchants.
• Many were pushed into
heavy debt.
• The cashless transactions
made it hard to seek other
opportunities.
Economics of Share Cropping
Advantages to Landlords
• Landlords had a steady and
dependable source of labor.
• Risks for crop failures were
shared by both sides.
Disadvantages to landlors
• Landlords were locked into
cash crops as much as the
sharecroppers were.
• The whole system
discouraged innovation and
diversification.
• The cashless transactions
made it hard to seek other
opportunities.
Did the Civil War Change the Direction
of the Economy?
• The Beard-Hacker Thesis
states that the Civil War was
“Second American
Revolution.”
• By this they meant that the
Civil War shifted the
balance of power from
Southern planters in favor
or Northern manufacturers.
• The Civil War propelled the
economy toward
industrialization.
The Civil War Slowed Economic
Growth
• The war caused tremendous
loss of human and physical
capital.
• Without the war, most
people would have been
employed in the private
sector where they would
have produced more goods
and services.
• Without the Civil War,
investment would have
gone into the private sector.
• The Civil War came at a high
opportunity cost.
Direct Costs of the Civil War
Questions