The “Free Trade” South versus The Mercantilist-Keynesian North during the Civil War

Emir Phillips

Journal of Economic Issues, 2023, vol. 57, issue 3, 924-947

Abstract: Since acquiring money is not, and is not intended to be, directly in the social interest, the economic principles suitable for capitalism must, in the long run, resolve the possible institutional conflicts between acquiring money for the business enterprise and producing real output for the benefit of society-at-large. Mainstream economic theory since Adam Smith has suppressed this structural quarrel by presuming the capitalist monetary economy operates as if it were a barter economy. Ironically, money as an institution of capitalism is presumed neutral with respect to both employment and output, but President Lincoln never believed this, and in the Mercantilist tradition of Hamilton-Adams-Clay-Carey (“The American System”), his Greenbacks institutionally effectuated the National Capitalism of the(se) United States.At issue had been whether to concentrate capital (North) or disperse it westward (South), whether to create a national bank to finance internal growth (North) or whether to oppose the system of finance-capital and paper credit (South). Throughout the Civil War, the North’s non-neutral view of money versus the South’s (orthodox commodity-exchange) neutral view of money proved critical to this embattled national decision of societal production (North) versus State’s rights. Ultimately, the North’s instituting the monetary-economic insights of the National Capitalist via Abraham Lincoln proved decisive

Date: 2023
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DOI: 10.1080/00213624.2023.2238504

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