Sunday, April 12, 2015

The Civil War In Dollars and Cents

The American Civil War was without a doubt America's bloodiest armed conflict bar none. That war claimed more than 750,000 lives.

The campaigning armies left destruction in their wake, particularly in the Southern states that bore the brunt of the fighting. 

Best estimates place the total number of war-time clashes in excess of 10,000, many of them large scale encounters that resulted in staggering losses for both sides. 

Engagements such as Gettysburg, Shiloh, the Wilderness and Chickamauga are ranked among the great battles of history. 

They bear witness to the courage and tenacity with which the Federal and Confederate soldiers fought for their beliefs.

The Civil War was one of the most devastating events in the history of the United States. It lasted from 1861 to 1865.

It has been estimated to have direct cost of about $6.7 billion valued in 1860 dollars. 

If this number is true and were evaluated in dollars of today using the GDP deflator it would be $140 billion, less than one-fourth of the current Department of Defense budget. 

The only measure that makes sense for an expenditure of this size is to use the share of GDP, as the war impacted the output of the entire country. 

That means, the relative value of $6.7 billion of 1860 would be $24.8 trillion today -- or over 150% of our current GDP.

The $6.7 billion does not take into account that the war disrupted the economy and had an impact of lower production into the future.

Some economic historians have estimated this additional, or indirect cost, to be another $7.3 billion measured on 1860 dollars. 

This means the cost of the war, as a share of the output of the entire economy, was nearly $52 Trillion as measured in current dollars.

This is according to experts. And frankly, that is a tremendous amount of money.

As for the 1.6% of Americans who owned slaves in 1860s, they controlled an empire of wealth.

It should be noted that while historically the status of slave has become primarily associated with Africans, slavery in America's, North and South has had a contentious history for all sorts of people -- Native American, whites, blacks, and even Asians.

We know that in South America, the Aztecs, the Inca, and even the Tupinamba had slaves taken during battle as spoils of war. 

We know that in North America, the Crow, the Blackfoot, the Creek, the Comanche, and many other tribes even up into Canada owned slaves -- again mostly spoils of war. 

Many slaves were captured during wars between rival Native American Indian nations. Some tribes, like Cherokees walked the trail of tears and took their slaves with them. 

Chattel slavery, also called "traditional slavery", is so named because people are treated as the "chattel" (personal property) of an owner and are bought and sold as if they were commodities. 

For those who might not realize it, the legal institution of chattel slavery that existed in the United States of America in the 18th and 19th centuries was left to us after we gained independence and before the end of the American Civil War. 

Slavery had been practiced by the British, the French, and the Spanish, in North America from early colonial days, and was later recognized in the Thirteen Colonies at the time of the Declaration of Independence in 1776.

Though Muslims had been buying and selling black slaves from Africa for a thousand years with the onset of that religion, in America blacks were not the first slaves.

In America, before blacks slaves were brought here as slaves from Africa, Irish and convicts from Europe were hauled to the America's in slave ships.

Sure whites owned slaves, but it has to be remembered that some free black people in this country bought and sold other black people.

And yes, they did so at least since 1654 and continued to do so right through the Civil War.

But frankly, it is no wonder, because by the 1860s the economic impact of slavery, especially in the South, was tremendous.

Whether it was whites or blacks, slavery in the United States was an institution that had a large impact on the economic and political fabric of the country.

While white slaves went for far less, in many cases seen as a bargain for under $100 in some cases, the average price of a black slave from Africa in 1860 was about $800.

One historian placed the cost of purchasing an African slave at $360 in 1850 and at around $500 in 1860. 

Another historian states the sale price of slaves from Africa in the United States South peaked in 1860 just prior to the Civil War with a male adult in "prime" condition for field work being sold for $1,000 in Virgina and as high as $1,500 in New Orleans. 

If we go with the average $800 figure of one report, ever wonder how much would that $800 be in today's money? 

In today’s dollars, that would be the equivalent of about $19,000 which is the equivalent of a mid-sized car today.

Friends, for the year 1860, depending on the index used, there were an estimated four million slaves living in the South and it is estimated that their aggregate market value was over $3 Billion then. 

That, my friends, corresponds to $10 Trillion today as a share of GDP.

Yes, the cost of the war, as a share of the output of the entire economy, was nearly $52 Trillion as measured in current dollars, and the slave industry would be a $10 Trillion share of the Gross Domestic Product.

Friends, it is no wonder the 1.6% of Americans who owned slaves in the 1860s are said to have controlled an empire of wealth. They certainly did.

And yes, that's just the way I see it.

Tom Correa

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