08 December 2012

Good Government and the Civil War



Foseti on what makes for good government:

For whatever reason, economists will apply lots of concepts to individuals and companies but not to states. 

For example, the invisible hand is the theory that: “individuals’ efforts to maximize their own gains in a free market benefits society.” 

Applied to states instead of individuals, the invisible hand argues for citizenism.

Libertarians, instead, tend to be global utilitarians. Frustratingly, they refuse to explain why they believe it’s positively good for individuals and companies to pursue their own interests but bad for states to do so.

One intriguing aspect of the event leading up to the civil war was the economic considerations of both sides.  Recall from the constitution that the federal government was extremely limited in how it could levy taxes.  It could either tax the states or levy tariffs on imports.  So, the federal government decided to levy tariffs, among other taxes.  Tariffs were a big deal to the south because it made the price of imports increase and the south was heavily oriented towards an agrarian economy.  In fact, the south exported a lot of crops (cotton being one of the major ones, if my memory serves me correctly) to the north and even to Europe.  The north, on the other hand, was far less agrarian and far more industrialized.  The north, then, being higher up the production chain was in a rather profitable position while the south, being lower on the production chain, was in a less profitable (possibly unprofitable) position.  Thus, one of the major conflicts between the north and the south prior to the civil war was a matter of taxation and its ill effects.  The south hated tariffs because it jacked up their prices and made their exports less valuable because they weren’t able to get as much in foreign trade.  The north, however, had not developed enough in industry to be able to compete with foreign producers for southern business, and so it was very much in favor of tariffs.*

Anyway, what makes the situation so interesting is how the north favored an extremely intelligent long-term economic strategy while the south’s economic strategy was, to put it politely, literally retarded.  The south favoring free trade would have ensured that it stayed grounded in an agrarian society for a long time, and that it would be one of the last to develop industrial technologies.**  The south’s favoring of slavery as an institution was also retarding as well.  Basically, southern economic policy was to make a quick by farming then stay mired in the mud, as it were, of an agrarian society for quite some time.

The north, on the other hand, had the foresight to protect its developing industries.  This protection would pay off in the long run, by the close of the 19th century, American industry was gearing up to dominate the world in terms of technology and production, and this would come to nearly full fruition by the 1950’s.  Anyhow, the north took a long-term, intelligent view of economic growth, which is why the north had supported tariffs and mostly abolished slavery.

Thus, the war between the states can be viewed as a war over economic policy.  What policy was to take precendence:  the short-term reliance on free trade and slavery of the south or the long-term development enabled by tariffs and abolition of the north?

Ironically, war was not necessary to settle this question.  The north could have let the south secede, and thus wallow in their retarded economic policies.***  Eventually, the south either would have wised up and sought to rejoin the union or they would have devolved into another shitty third world country.  I suspect they would have eventually wanted to rejoin the union, in a manner not dissimilar from how a lot of third world Western and even Eastern Europe countries sought to join the EU back when it was economically beneficial to do so.  Instead, though, the North went to war in order to preserve the union.  This might have possibly been done to preempt a possible trade embargo that the south might have levied as revenge after seceding, but I’m not well-versed enough in history to know if this is plausible.

Anyhow, getting back to Foseti’s point, the civil war, and the events leading up to it, can serve as proof of his point.  The north acted in the nation’s self-interest, at least in terms of economic policy leading up to the war.  Both abolition and tariffs were policies that alternatively forced and enabled the north to industrialize.  Had the south been wise, it would have at least banned slavery on a per state basis to jump start their own industrial revolution.  (There were hints of an industrial revolution in the south, what with the cotton gin**** and the mechanical reaper.)  Unfortunately, the south was not wise, and instead chose to pursue short-term benefits instead of long-term growth and development.

It would have been interesting to see, though, the effects of their policies in contrast to the north’s had they been free to pursue their stunted policies instead of being forced to modernize by the north.  I wonder what the advocates of free trade and free immigration would say about the south had it been allowed to pursue a tax policy that favored a basic agrarian economy and a labor policy that encouraged expansive, cheap labor.  My guess is that their theories would ground to a sputtering halt.

* Some background on the working of tariffs and their impact on the economy can be found in Free Trade Doesn’t Work by Ian Fletcher.

** See the above book on how trade impacts industrial development.

*** See Black Rednecks and White Liberals for a brief history of why southern culture was so retarded.  In short, the people who moved from Europe (and specifically from the Scottish highlands) were the ancestors of the modern rednecks, from whom most African-Americans take their cultural cues.  The short time horizons and economic impatience generally exhibited among blacks and lower-class (read: redneck) whites can generally be traced to southern culture, which can be traced to certain parts of Scottish culture.  Some of this general cultural history is hinted at in the book Gone With The Wind, particularly when Margaret Mitchell gives a brief history of Scarlett O’Hara’s family, which was from Scotland.  Scarlett’s father acts basically like a redneck.

**** Ironically, the cotton gin was invented by a northerner, but it mostly profited the south.  They had begun to use it because it was more efficient than using slaves.  One can’t help but wonder, though, how the south’s reliance on cheap labor (sound familiar?) delayed the development of this invention.

7 comments:

  1. "The north could have let the south secede, and thus wallow in their retarded economic policies.*** Eventually, the south either would have wised up and sought to rejoin the union or they would have devolved into another shitty third world country. I suspect they would have eventually wanted to rejoin the union, in a manner not dissimilar from how a lot of third world Western and even Eastern Europe countries sought to join the EU back when it was economically beneficial to do so."

    If the South had seceded and gone on with its policies it would have basically become Northern Mexico, in spirit and possibly even in fact, sending its unassimilable blacks northwards as surely as Mexico sends its unassimilable Indios to El Norte.

    Cheap labor always carries a dire price in the end-if you're dumb enough to work for subsistence wages and never organize then you're probably too dumb to breed wisely or to not get blind drunk and go driving.

    Further, you're going to be likely to have little or no moral compunctions against taking out home loans you can't afford and whining to the government for help once they fall through. Abstract moral development requires concrete functional societies and cultures and free time, not to mention the intellectual capacity to build on those things.

    Further, the South had a fairly quick post-Reconstruction resurgence because their main population was white, and thus possessed the intelligence to use their time wisely in rebuilding. For a great many, the 'redneck' thing is a big front. (Watch Duck Dynasty sometime.)

    As for their slaves...not so much. They had the redneck culture, but none of the sense or future time orientation to tone it down in dangerous situations.

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  2. "Further, the South had a fairly quick post-Reconstruction resurgence because their main population was white, and thus possessed the intelligence to use their time wisely in rebuilding."

    That may be part of it, but I'd bet the larger cause was being occupied by intelligent and efficient northerners who passed their culture, and even genes (through intermarriage), on to the south.

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  3. Meh, I think the south was fine(beyond slavery). For any large empire it's a good idea to keep a rural, farming, rough and tumble around to produce excellent military leaders and troops. Great empires allow zones of specialize. The south should have been one of those zones.

    The north fundamentally wanted to turn southerner into good little puritans to work as slaves in factories. They would have been far better off honor the south's place in the union and helping them industrialize and become more productive without loosing their rough edge that made them such excellent soilders

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  4. @Red- good points. However, my concern was more with the consequences of the south's economic policy, and not so much with whether that policy is preferable.

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  5. @Simon Grey
    The south pursued such policies because it fit their own populous' disposition and because it would have been counterproductive to try to compete with the north in terms of industrial goods(It just too damn hot in the south to have really productive factories before AC). The south didn't view the north as a hostile power and thus didn't prepare for war. The Constitution was freely entered into so it was thought the south would go freely.

    There's evidence that the north was prepping for the civil war for a very long time. They imported huge immigrate populations to work in the factories. They kept the tariffs very high to ensure that northern industrialists made a killing off cheep southern materials. From those profits they ran a 30 year propaganda campaign to stir the north up at the south and to keep England out of the war.

    The north had such huge advantages and long term planing to win such a conflict, but they still only won because Sherman tossed away the civilized war rule book and fought a total war on the southern populous. One of the greatest war criminals in history and he is the only reason the north won the war.

    So what if between 1 and 6 million people starved to death to achieve that victory. It was all in the cause of righteousness and purity.

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  6. @Red- Again, I don't disagree with your assertions that the south acted in its own best self-perceived interest. I'm not saying that doing was necessarily a bad thing, only that it would have certain consequences.

    If you have read much of this blog at all, you would know that I'm hardly a fan of Lincoln (I believe him to be one of the worst presidents ever). My general view of the civil war is that it was unconstitutional and, as evidenced above, basically unnecessary, and incredibly evil to boot. Also, for the record, I'm not a fan of Sherman. I also think that Lee was one of the most gentlemanly generals to ever fight a war.

    Nonetheless, tariffs are proscribed in the constitution, and are, in my opinion, one of the best forms of taxation, insofar as taxes can be described as good. I do think that the south had legitimate complaints about the tariff rates, and think they were justified in leaving the union for that reason alone. Still, I don't think that the south would be nearly as wealthy as it is today had it not shared in the northern policy of protectionism during the industrial revolution. this is not a moral justification for the civil war, it is an economic opinion. Do not confuse the latter for the former.

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  7. "There's evidence that the north was prepping for the civil war for a very long time. They imported huge immigrate populations to work in the factories. They kept the tariffs very high to ensure that northern industrialists made a killing off cheep southern materials. From those profits they ran a 30 year propaganda campaign to stir the north up at the south and to keep England out of the war."

    And the South ran a full spectrum pro-slavery campaign as soon as the cotton gin was invented, obliterating most local anti-slavery societies and increasing the number of slaves to unsustainable levels.

    Look, unless the government specifically funded these campaigns with public money, you'll be hard-pressed to blame the prep on anything other than the natural consequences of their respective cultures. Both abused the immigration system for cheap labor because they could. Both lied to themselves about human nature and their ability to regulate it because it was profitable in the short term to do so. Both united post-Reconstruction under the realization that the white men of both regions had a common enemy in the black man (hence Pennsylvania having a far stronger Klan presence than, say, South Carolina.)

    And for all his faults, Lincoln had exactly the right solution to the slavery issue-removal and repatriation of the slave population.

    Because we have ignored it for so long, genocide is sadly now the easier option.

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