There was a sea change in money and banking in the U.S. as a result of the Civil War. Government became the primary regulator. Metal coins gave way to paper. Mistakes of one bank infected others – it was contagion.
Inflation is a giant rip off, a stealth tax stealing purchasing power. Money is not neutral. The first receivers of new money benefit. Savers and those on fixed incomes struggle. From 1857 until the war was a period of “free banking” where the fed had nothing to do with the banks and the states had little control over them. High economic growth and prosperity prevailed.
Recorded at the Austrian Economics and Financial Markets conference at The Venetian Hotel Resort Casino, Las Vegas, 02-18-2005
The Confederate government blockaded the Southern economy by bad policies like impressment and trying to run the blockade themselves. The government declared that fifty percent of all cargo space had to be for the Confederate government.
How does any political movement that begins by being opposed to the state avoid being absorbed by the state? The most crucial step, writes Lew Rockwell, is to decide what you are for and what you are against from the very outset.
Thanks to a little-noticed item in Bush's budget, writes Joseph Potts, it won't just be Islamist suicide bombers whose families are limned and paid off for the death of their fighters.
Blockade boat owners turned to engines for speed instead of sails. Blockade running became more expensive as the blockade became stricter. Certain prices increased much faster and higher. Most goods desired in the South had to be imported.
Tariffs were generally favorable for the North and unfavorable for the South. They were a key political battle for forty years. The Union General Scott developed the anaconda plan to squeeze the breath out of the South. The Union Blockade was the first part of that plan. This battle at sea won the war for the Union. The land battle was a stalemate.
Serious thinkers have known for centuries that society is a complex, spontaneous order, which cannot be centrally directed at gunpoint.
Opportunity cost is the proper economic basis for specialization and trade in resources. Opportunity cost is the highest value you give up when you make a choice. It was Confederate government policy that caused misallocations on the part of the South, making it inefficient and wasteful. A few of those bad policies were: drafting soldiers, confiscating resources, and monetary inflation.
