The US Civil War

The American Civil War raged between the northern and southern states from 1861 to 1865. The total number of dead on both sides—620,000—marks the conflict as the bloodiest in American history. However, the aspect of the war that is of particular concern to libertarians is its impact on liberty. The Civil War ironically represents the simultaneous culmination and repudiation of the principles of the American Revolution.

Before the war, the United States, already one of the world’s most prosperous countries, possessed one of the most limited governments. There were only two sources of national revenue: a low tariff and the sale of public lands. These income sources had been more than adequate to cover the minuscule peacetime budgets, which peaked at $74.2 million in 1858. That amount translates into less than 2% of the economy’s total output. The national debt stood at a modest $65 million, an amount less than annual outlays. Thus, most Americans paid no taxes whatsoever to federal officials directly, and their only regular contact with any representative of the central authority was the U.S. Post Office.

The one great blight on the American landscape was black chattel slavery. Although it was finally abolished during the Civil War—a triumph for free institutions that cannot be overrated—in other respects the American polity reversed direction. The war did not merely crush the aspirations of white Southerners for self-​determination; it, like all wars, also brought in its train a massive increase in government power. Furthermore, postwar retrenchment failed to return the government’s size and scope to prewar levels. Indeed, some argue that the Civil War, rather than the New Deal or some other watershed, marks the decisive turning point in American history with respect to the growth of government.

The war involved two central governments, Union and Confederate, whose policies were in many respects mirror images of each other. Both imposed internal taxes to cover the war’s astronomical costs—the first such taxes Americans had paid to any central authority in nearly 40 years. By 1865, the Union budget had risen to more than 20% of the economy’s total output. A vast array of national excise, sales, license, stamp, and inheritance taxes required an extensive Internal Revenue bureaucracy. More portentous was the first national income tax. Yet all the Union taxes combined were sufficient to cover no more than about one-​fifth of the war’s monetary cost.

The national debt consequently climbed to $2.8 billion, and the Treasury resorted to $431 million of fiat paper money, popularly known as Greenbacks, the first issued since the Constitution’s adoption. The North’s money stock approximately doubled, as did the price level. The Confederacy, having to depend still more heavily on paper money to finance the war, suffered a hyperinflation, with prices rising 2,676%.

To harness northern banking to war finance, Congress created a system of nationally chartered banks that is still in existence today. This system was just one part of a comprehensive wartime program of government subsidies and regulation that also included high protective tariffs, land grants and loans for transcontinental railroads, the first federal aid to higher education, and a new Department of Agriculture. In the North, the Civil War generally saw the triumph of a neomercantilist alliance between private businesses and governments at all levels, whereas in the much less industrialized South, it saw the emergence of full-​blown war socialism, with governments directly owning factories and a variety of other enterprises.

The Civil War also brought with it the first centrally administered conscription in American history, initiated by the Confederacy in 1862, with the Union quickly following. Because of widespread resistance to the draft and other war measures, President Abraham Lincoln suspended habeas corpus and throughout the course of he conflict imprisoned at least 14,000 civilians without charges or trial. In addition, his administration monitored and censored both the mails and telegraphs, and it suppressed publication of more than 300 newspapers for varying periods.

After the Confederacy’s defeat, national spending fell back to between 3% and 4% of total output, but this amount was still nearly twice the prewar level. Protectionism continued to dominate trade policy, the internal taxes were never fully abolished, and pork-​barrel subsidies became scandalously common. Interest on the war debt commanded about 40% of federal outlays into the mid-​1870s. To their credit, the postwar administrations ran surpluses for 28 straight years. Interest on the war debt, which had been the largest single budget item, was finally dethroned from its position in 1884 by yet another war-​related expenditure: veterans’ pensions. These pensions were so lavish that, in essence, they constituted a system of old-​age and disability insurance that stands as a precursor to modern social security.

A contemporaneous surge in nationalism complemented the surge in actual government power. Northerners now viewed the United States as a single nation, rather than a union of states. Moreover, the war generated a proliferation of government activism at the state and local levels. The war accustomed the public to government solutions to a wide range of social problems, from public health measures to business regulations, from professional licensing restrictions to antiliquor and antivice controls.

This question inevitably arises: Could slavery have been abolished without these concomitant costs? The liberation of 4 million American slaves dwarfs all other emancipations in scale and magnitude, and the fact that it was an unintended consequence of the Civil War in no way gainsays the accomplishment. Although the fundamental reason for secession was without a doubt the protection of what Southerners called their “peculiar institution,” slavery had little to do with the northern refusal to let the South go. Federal authorities at the outset were quite explicit that the war was being fought solely to preserve the Union. Even Lincoln’s final Emancipation Proclamation of 1863 was limited in its application, and only with the adoption of the Thirteenth Amendment in 1865 was chattel slavery totally eradicated within the United States.

No abolition of slavery throughout the world was totally peaceful, but the southern United States and Haiti were just 2 among 20-​odd societies in the Western hemisphere where violence predominated during emancipation. The radical abolitionists, among them William Lloyd Garrison, had advocated northern secession from the South. They felt that this secession would best hasten slavery’s destruction by allowing the free states to get out from under the U.S. Constitution, with its fugitive slave clause and other proslavery guarantees. At the time of Lincoln’s inauguration in March 1861, the Union still retained more slave states than had seceded. Hence, letting the lower South go in peace in 1861 might have been a viable antislavery option. If Northerners had been sincerely interested in ending slavery, rather than maintaining the federal government’s territorial integrity, alternate policies suggested by some abolitionists may have achieved this goal almost as rapidly and with far less loss of life and of other liberties.

Further Readings

Bensel, Richard. Yankee Leviathan: The Origins of Central State Authority in America, 1859–1877. Cambridge: Cambridge University Press, 1990.

Fredrickson, George M. The Inner Civil War: Northern Intellectuals and the Crisis of Union. New York: Harper & Row, 1965.

Hummel, Jeffrey Rogers. Emancipating Slaves, Enslaving Free Men: A History of the American Civil War. Chicago: Open Court, 1996.

Rawley, James A. The Politics of Union: Northern Politics during the Civil War. Lincoln: University of Nebraska Press, 1974.

Stromberg, Joseph R. “The War for Southern Independence: A Radical Libertarian Perspective.” Journal of Libertarian Studies 3 (Spring 1979): 31–53.