How would the economy of the United States would have been if the outcome of the Civil War had been different?:dubious:
The rump Union would quickly recover and just devote the funds that would otherwise have been expended on reconstruction to developing the West.
As for the victorious CSA, I can’t imagine slavery remaining a tenable basis for any economy approaching the 20th Century. Even if the rest of the world didn’t eventually embargo an independent CSA, larger and larger slave revolts with moral, financial, legal, and asylum support from abroad would eventually lead to economic collapse in the South.
It would heavily depend on why the outcome was different. Because in a straight-up cage-match, the South was always going to lose. They didn’t have the industry or the manpower to take on the North and win by sheer military might.
If the North had agreed to a division of the country by political means, all it would do is postpone the war by a few decades. Eventually the two countries would come into conflict over the West, and the South would lose (again), because as noted above, a slave economy just can’t compete with industrialization. Britain would never have recognized the South over the long-term, which would limit their access to industry and weaponry. They would be doomed to whither and die, probably at the hands of their slaves. Then the North would step in and we’d have a reformed USA.
What I think is interesting is trying to figure out race relations in a defeated North. Blacks, in the short term, would probably be blamed for the war, but after a few years I think you’ll see greater racial integration, as there were fewer in the North to begin with and there would not have been the great migrations.
Hmm… Should WWI still occurred, what would the US have used for cheap labor when the European spigot went dry?
That’s where people are going to make the error: in no way would the North be “defeated.” Not victorious, but there is zero chance the South could ever “defeat” them in any meaningful way.
Another question that has to be addressed is “When?” When does the war stop? Because that’s going to have a great effect on the economic and military positions of both sides. If Vicksburg has fallen, the the South is screwed from the get-go. They have lost control of the Misssissippi, and the Union blockade of their ports means they will slowly starve, economically. So any settlement after mid-1863 means the South dies quickly.
If the war ends before Grant can capture the rivers in the West, then the South can expand after the armistice. Which would just run them up against Mexico, either French-controlled or not. They would lose. The Union walks in and takes over.
I’ve seen the argument in the past that if the South had successfully seceded, it would have just ended up under the economic domination of the North. It was a resource producer, not an industrialized (would-be) nation, and they are typically dominated by the industrialists. They would have been that century’s version of a Third World nation; dominated by a tiny elite that hogs all the wealth in a sea of impoverishment & oppression, subsisting on unskilled labor growing & extracting basic resources and selling it cheap to the much richer and more powerful people who use those resources.
A huge question is whether the Confederacy/Louisiana controlled the outlet of the Mississippi. If the south had control over the Ohio/upper Mississippi rivers’ access to the Gulf of Mexico, it would strongly affect the economy of the Midwest, and give the South a potentially devastating weapon against the North.
In the short run the loss of tax revenue from the export of cotton would hurt the Federal government’s finances.
At least as applied to the seceded states, the Fugitive Slave Law would be a dead letter, unless the South were somehow able to demand extradition as part of the peace treaty. Even so one suspects that the North would honor it in the breech, largely winking at escaped slaves.
Given its decentralization and state autonomy, it’s likely that the South would have continued for some time to have multiple incompatible railroad track gauges, making cross-country shipping slower and more expensive.
The South would have turned a blind eye to slave smugglers, probably until the British navy got on their case big time.
Another big question is whether the Confederacy would have become the hegemon of the Caribbean and Latin America in place of the United States.
The what now?
The American government collected tariffs on imports. There was no tax on cotton or other goods being exported out of America.
I doubt they would have had the political stability or wealth to do anything like that. I doubt that they’d even have stayed intact for too long; I wouldn’t be at all surprised to see further secessions from the Confederacy, or attempted ones.
o ignorance fought. Although perhaps exported cotton was still important in a balance-of-trade sense.
The CSA would have been really screwed. In addition to all the pre-war flaws in their economy, they gave themselves a self-inflicted wound.
The Confederates wanted to emphasize to the British how dependent they were on Confederate cotton supplies. So in the first year of the war, they refused to export any cotton to Britain. The embargo was pointless - British manufacturers had seen there were going to be problems in America and had been buying and storing excess cotton in previous years. The British had warehouses full of cotton and the Confederate embargo didn’t hurt them.
It did however hurt the Confederates. They had somehow not noticed that they were at least as dependent on sales to Britain as the British were. So they tried to restore their cotton sales with Britain to bring money into the country. But the embargo had given the United States enough time to set up its blockade and cut down on Confederate trade.
And this is when the real death blow landed. The British decided they couldn’t rely on American cotton. While they were working their way through the cotton in their warehouses, they were also planting cotton fields in Egypt and India. British cloth makers had switched over from American cotton to British Imperial cotton within a couple of years. Even if the CSA had won the war, they would have found their pre-war export market had disappeared.
Indeed, the self-assurance of the South as voiced in James Henry Hammond’s “Cotton is King” speech in hindsight looks almost delusional:
And if nothing else, by the turn of the century the boll weevil blight would have destroyed the South’s cotton economy.
It has been my experience that when one finds followers of a delusion (like slavery was good for blacks) that they are also prone of following other delusions, (in this case, the delusion that economics was on their side too).
Now that I think of it, this makes a fascinating contra-factual: what if the boll weevil had come to the South in the 1830’s instead of the 1890’s?
Well, the North and South mini-series would be shorter. That’s a plus.