The French classical economist Frédéric Bastiat once remarked, “when goods do not cross borders, armies will.” Democratic Senator James Hammond of South Carolina infamously agreed with those sentiments on March 4, 1858, nearly eight years after Bastiat’s death. In a speech before the Senate, Hammond offered the following on sectional tensions and the cotton trade:
“But we have nothing to do but to take off restrictions on foreign merchandise and open our ports, and the whole world will come to us to trade…and we [the South] never shall dream of a war… You dare not make war on cotton. No power on earth dares to make war upon it. Cotton is king.”
Some people today turn to Bastiat’s dictum about free trade when discussing the Civil War. Their argument goes this way. The path to peacefully resolving sectional tensions lay in ending protectionism. Tariffs, by transferring southern wealth northward, incentivized southern secession. And, the North’s refusal to let the South leave the Union cost 600,000 lives and set dangerous precedents for centralized government power.
This narrative, with its focus on classical liberalism and economics, is quaint and incorrect. It glosses over the political dimensions of economic policy, and ignores the pervasive influence of slavery on the body politic. The case for free trade as the antidote to the sectional crisis that exploded into war skirts the peculiarities that mock southerners’ claims to classical liberalism. Defending slavery, and not fidelity to liberal principles, defined how southerners approached economic policy and government power.
The rhetorical appropriation of dogmatisms, economic or otherwise, need not match actions. The early 1830s climax of the tariff debates is a prime example. It demonstrates the capacity of politicians to use one idea as a stand-in for another issue. Southern politicians’ demagoguery on free trade belied their defense of slavery, which later emerged openly through political bargains with Northern Democrats. Indeed, conflicts over government power regarding the economy eventually led to political crises over slavery in the form of infringing on civil liberties and waging war.
The Founding Fathers undoubtedly granted Congress the power to levy duties in Article I Section 8 of the Constitution. But tariffs were relics of a mercantilist age that Adam Smith had savaged in his 1776 The Wealth of Nations. Tariffs produce inefficient outcomes by taxing imports to sustain higher prices on certain goods for domestic producers. This artificial wealth accumulation for protected industries was an early form of government picking winners and losers.
Many southern politicians came to this view as the post War of 1812 boom, fueled by low interest rates and cheap credit, ended with the Panic of 1819. A currency contraction rendered overextended and indebted southern planters insolvent. Protection of northern manufacturers, begun in 1816, aggravated matters. Southern agricultural staples earned less on the world market while manufactured goods cost more.
This pinch on southern incomes led Congressmen George McDuffie of South Carolina to pontificate against the tariff in economically explicit terms in February 1830. He denounced the 1828 “Tariff of Abominations” for costing planters forty bales of cotton out of every hundred they exported. By raising the price of European textiles, the tariff lowered foreign demand for American cotton and undercut the resale proceeds in America that planters would enjoy.
This was bad economics. McDuffie incorrectly assumed an almost straight one-to-one barter of cotton for textiles. Merchants did exchange cotton for un-protected products or cash. Nor were planters, with their enslaved labor, running a perpetual 40% loss as the speech implied. That would have bankrupted every plantation in the South.
Moreover, McDuffie did not mention the role that southern politicians played in creating the “Tariff of Abominations.” The hated law, which increased import duties to 50%, was conceived by southern Congressmen to kill a tariff bill for the session. By raising rates on western raw materials and blocking any amendments to the bill, free traders would force manufacturers into an up or down vote. Northern, primarily New England, representatives could swallow the poison pill or join the South and vote down the tariff.
The plan backfired. A large enough minority of New Englanders, 16 of 39 (41%), coupled with overwhelming support from mid-Atlantic and western states passed the bill 105 to 94. Southern economic agony over the succeeding years birthed another politicized attack on protectionism. This one neared explicating the real issues at stake, government power and bondage.
Two decades before he called slavery a “positive good” in 1837, Senator John Calhoun of South Carolina supported activist government. He insisted that Congress should fund infrastructure development to “conquer space.” Economic nationalists agreed, and turned to tariffs to raise revenue. Unfortunately, the end of prosperity in 1819 and ensuing depression did not reduce protectionism. Realizing the harmful economic effects of tariffs on cotton planters, and the unwillingness of protectionists to adjust rates, Calhoun disavowed his economic nationalism. He found hope in a strict constructionist reading of the Constitution.
He focused on the nature of enumerated powers or legislative intent. Congress had the power to pass tariffs, but protectionists had affirmed the constitutionality of passing a policy for the explicit benefit of one section. To Calhoun, and his southern brethren, Congress had used an enumerated power to promote an extra-constitutional end. The Constitution said nothing about permitting protection of certain industries. To southern consternation, protectionists responded with the General Welfare Clause. As Calhoun commented in the early 1830s, such a reading could empower Congress to legislate for “any purpose the majority may think to be for the general welfare.”
This equation of a broad interpretation of the General Welfare Clause with tyranny by majority struck a nerve. The constitutionality of protectionism appeared affirmed after an 1833 compromise lowered rates, and Southern Democrats spent the next quarter-century decrying federal power. Antebellum Democratic Party platforms routinely declared, “the Federal Government is one of limited powers” before listing the party’s liberal principles. There were no enumerated powers to build infrastructure, “foster one branch of industry to the detriment of another”, charter a national bank, or “to interfere with or control the domestic institutions of the several States[emphasis added].”
From a coalition building standpoint this made sense. Negative government principles, whether about tariffs or slavery, could satisfy most party members and ensure some unity. Indeed, many Northern Democrats, especially President Martin Van Buren, argued strongly for shutting slavery out of national politics. Do this and the liberal alliance of “plain republicans of the North” and “planters of the South” could politically outflank the economic nationalist Whig Party.
But, Southern Democrats were their own worst enemies. Any threat to slavery, whether perceived or real, wrought repressive efforts to ensure non-interference with bondage. Even words were considered dangerous. In 1835, Congress allowed southern postmasters to remove abolitionist literature from the mails. Next, the House of Representatives trampled on the First Amendment right of citizens to petition their government. The Gag Rule controversy from 1836-1844 evolved from tabling abolitionist petitions upon reception to rejecting their entry. Censorship was the face of non-interference with slavery.
This contradiction between professed principles and real actions forced southern politicians into legal contortions. It was perfectly acceptable for states to censor the mail inside their borders, but the feds had no such power. Why? According to Calhoun in 1836, Congressional willingness to censor abolitionists implied “the right to determine what [tracts] are not incendiary, and to enforce their circulation.” Enforcing mail delivery could well “clothe Congress with the power to abolish slavery.”
But, Calhoun and his ideological brethren did not appreciate the failings of strict constructionism before practicality. In a bit of perverse irony, efforts to keep Congress away from slavery became entangled with political deals that kept bondage a federal issue. The efforts of southern Congressmen to legislate measures securing Africans’ enslavement required votes from northern, primarily Democratic, colleagues. And principles could, and did, disappear during political bargaining.
Indeed, the territorial expansion of the 1840s was a fitting coda to the tariff debates. It heightened sectional angst through the most explicit and consequential government power, war. Two southern presidents, Whig in name only John Tyler and Democrat James Polk, backed by Congress, threatened and waged war to accrue territory. First, the Republic of Texas was annexed in February 1845 on dubious Constitutional grounds (by joint-resolution of Congress rather than treaty) with unanimous Democratic support in the Senate. Next, Congress overwhelmingly endorsed a war of conquest against Mexico. The declaration of war in May 1845 passed 114-17 in the House and 40-2 in the Senate. Nearly all of the thirty-five and three abstentions in the House and Senate were Whigs.
But, nationalist endeavors had national consequences. The federal government became the custodian of the army’s fruits of conquest after the war. And since federal power won the territories, Congress had a say in the composition and administration of those future states. Thus the question of federal power regarding slavery came permanently into the open. Either free or slave labor could prevail in the territories, but not both. And, Congress was empowered to choose.
However, its role as arbiter of the new lands was arguably hopeless. Northerners wanted slavery restricted to its areas of existence thus leaving the territories to develop a free labor economy. Southerners denounced attempts to usurp their right to the national bounty of land. Georgia Congressman, and future Confederate Secretary of State, Robert Toombs earnestly addressed the House in early 1850: “if by your legislation you seek to drive us from the territories of California and New Mexico…I am for disunion.”
Economics complicated matters further. As Alexis de Tocqueville noted inDemocracy in America, “those provinces which had virtually no slaves increased in numbers, wealth, and prosperity more rapidly than those which did have them.” But Tocqueville, writing in the 1830s, could not see a cotton boom from the mid-1840s to 1860 that arrested the possible economic decline of slavery. Rising cotton prices, coupled with soil exhaustion, drove an insatiable southern desire for virgin land in the west. A growing economy in the 1840s and 1850s, coupled with tariff reduction in 1845, made the cotton trade highly profitable.
Senator Hammond put it bluntly in his King Cotton oration against the backdrop of the Panic of 1857:
“When thousands of the strongest commercial houses in the world were coming down… What brought you up? That cotton, but for the bursting of your speculative bubbles in the North, which produced the whole of this convulsion, would have brought us $100,000,000. We have sold it for $65,000,000 and saved you. Thirty-five million dollars we, the slaveholders of the South, have put into the charity box for your magnificent financiers.”
Hammond could hardly have been clearer. Real wealth in the form of slave cultivated cotton saved the industrializing North and the nation from an economic calamity. And the lucrative cotton crops in the last years before the Civil War validated the power of trade to create wealth. Whether or not it was had by extortion was immaterial.
The South’s struggle to own slaves and abide by liberal principles ended fittingly in contradiction. Arguing about free trade and limited government provided some consistency for southerners if one overlooked the part about owning people. The Confederate Constitution banned paying for internal improvements out of the Confederate treasury or instituting tariffs “to promote or foster any branch of industry.”
Confederate Vice-President Alexander Stephens hailed these, and other, “great improvements upon the old constitution” in a speech on March 21, 1861. But, he went further than most on the slavery question. According to Stephens, the Founding Fathers (Thomas Jefferson namely) regarded slavery as “in violation of the laws of nature; that it was wrong in principle, socially, morally, and politically.” Such beliefs were erroneous.
“Those ideas, however, were fundamentally wrong. They rested upon the assumption of the equality of races. This was an error…Our new Government is founded upon exactly the opposite ideas; its foundations are laid, its cornerstone rests, upon the great truth that the negro is not equal to the white man; that slavery, subordination to the superior race, is his natural and normal condition.”
At bottom, this was the issue that plagued antebellum politics and not the constitutionality of protectionism or infringements on economic freedom. Slave owners coopted liberal principles for their wealth enhancing power or usage as ideological window dressing. Free trade merely meant higher earnings off the fruits of others’ toil. Wielding the lash just made chasing every last dollar easier.
Tim Reuter is a Forbes contributor, and a frequent writer for RealClearSports.