VMI Conference Part II

The second lecture was DiLorenzo’s “Lincoln’s Tariff War”. The main tax pointed out in this lecture is the Morrill Tariff of 1861. Please see the link for a good description of the tariff, its historical significance, and some common misconceptions. We should remember, however, that the origins of the conflict lay not just in the election year of 1860 but in its preceding years as well. It is important to note (from that link) the following information:
“The Morrill Bill had been put over to the next session in the Senate, and became an issue supported by the Republicans in the election of 1860. In the new session, after several southern senators had already vacated their seats, the Morrill Tariff was passed 1861 February 28, and was among the last bills signed by President James Buchanan. Historians are not unanimous as to the relative importance which Southern fear and hatred of a high tariff had in causing the secession of the slave states, but there has been a growing tendency to lay more emphasis on it than formerly. Of the declarations of secession, only Georgia's mentions economic issues. South Carolina's address to the other slave-holding states discusses taxes, but expounds at greater length on the South's new minority position, and on slavery.”

What did the Morrill Tariff protect? It protected Northern Manufacturing concerns. Northern industry was not very competitive compared to its European counterparts. In other words, northern businessmen and (more importantly) northern labor earned higher profits and wages than they would have in the absence of a protective tariff. The north did not develop manufacturing because they were better educated, more talented, or had any distinguishing characteristics from their southern brothers. The north had no slaves and thus was labor poor. To compensate for this “disadvantage” they became “capital rich” which led to the development of manufacturing concerns. The south, with its free labor pool, devoted its resources to the development of labor-intensive (capital poor) industries such as agriculture and was dependent on the export of cotton and tobacco. The export-dependent south was disproportionately hurt by the protectionist tariffs. Why was the south hurt disproportionately? The north was able to charge higher than market prices for their products hurting southern consumers and leaving the rest of the world was less able to afford southern goods (not to mention any retaliatory trade practices resulting from US policy). To say that the tariff was the cause of the “War to prevent Southern Secession” is to ignore the reason why the south was disproportionately affected by the tariff, why the south was economically different from the north, and the words of the Southerners themselves. (Georgia, Mississippi, South Carolina, and Texas’ declaration of secession all mention the issue of slavery first!). My notes here are timely as I see that another of the speakers at the conference has a lecture about the economics of the Civil War on the events page of the Mises Institute. Perhaps the Mises Institute is losing its focus.

The rest of the lecture covered the Nullification Crisis. It would have been more interesting if the actual Constitutionality of nullification had been discussed. At least the nullification crisis was a tax revolt and fit within the framework of the conference. Mr. DiLorenzo quoted Jefferson Davis (with some admiration) as calling the North an "exploitive economic system". How he somehow did not manage to mention the hypocrisy of this is something I still puzzle over. After all, how can the Institute claim to promote the "economics of freedom" while giving slavery a free pass? He claims to support the morality of free trade, but I did not once hear him condemn the morality of slavery. Instead he went on an elongated attack on President Lincoln. Lincoln, you see, was not actually the man our public schools texts present. Lincoln played the game of politics. He was attempting to become President of the United States and he was a professional politician. This means he pats people on the back with one hand while stabbing them with a knife held by the other. Lincoln played the game just as Bush, Clinton, and any other professional politician does. So, Lincoln pretended to be for slavery on one hand (demonstrating support for a Constitutional Amendment to keep the federal government out of slave issues and keeping it a state decision) and moving against it at the same time by attempting to keep slavery out of the Western Territories soon to become states.

I think the problem with this lecture was that Mr. DiLorenzo attempted to define the Civil War entirely in terms of a tax revolt led by honest, hard-working southerners against an evil northern regime headed by a statist president. After all, he claimed, the southerners just wanted to trade freely with the rest of the world and the tariffs prevented them from reaping all of the rewards they could earn from free international trade. The fact that the source of their product was slave labor did not seem to concern him at all.

I have one more issue with the conference. The speakers demonstrated a sense of, for lack of better words, “intellectual superiority”. I heard repeated (and perhaps some deserved) slurs against public schools and public education. The speakers attempted to separate themselves (and their enlightened audience) from "average Americans". Perhaps they should examine their audience? Mr. Rockwell also mentioned the "political class" and the "privileged elite" quite often. I can sniff the vitriol of class warfare even without the use of the terms "bourgeois" or "proletariat". I wonder what message he is attempting to convey using those terms or if he thinks any good can come of it. And was he not part of the "political class" during his lifetime? From the looks of his website, he seems to have become the "privileged elite" he denounces.

Part III to come soon!

J. Thyme Matz