War and Foreign Policy

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.

The Economics of the Civil War should instruct us in ways that the history of the Civil War might not. Cotton had much to do with what the war was about. Slavery as a cause of the Civil War is a modern development. How did the Union win the war? How did the aftermath of the war affect our own lives? What lessons can benefit us?

Delivered to the Hillsdale Liberals, Hillsdale College, on 31 August 2004.