DID THE WAR HELP OR IMPEDE THE ECONOMIC GROWTH OF THE UNITED STATES?
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Transcript of DID THE WAR HELP OR IMPEDE THE ECONOMIC GROWTH OF THE UNITED STATES?
DOES WAR HELP OR HURT AN ECONOMY?When considering the economic effects of
the Civil War or any other war, there is one key question to consider:
HOW WOULD THE ECONOMY HAVE DIFFERED IF THE WAR HADN’T BEEN
FOUGHT?Could the Civil War have prevented the United States economy from pursuing a
superior path of economic growth?
Many individuals believe that the Civil War brought unprecedented economic growth to industry.
Stimulated by increased demand for wartime goods, many industrialists charged ahead to produce the goods and services. Production of iron and steel are examples.
Taking the Civil War as one example, how does war seem to affect a nation’s economy? Does war foster economic growth or stunt it?
New war factories Labor saving machines were
inventedSewing machine
Agriculture production increasedReaper
Railroads expanded
Benefits of the U.S. Civil War End of slavery Protection of the Constitutional
structure of U.S. Increased industrial production of
war-related goods Higher military employment
Costs of the U.S. Civil War Human death and dismemberment Destruction of capital (tools, factories) Loss of livestock Reconstruction Economic decline of the South Uncompensated loss of capital investment in slaves Inflation Production inefficiencies Decreased production of civilian goods and services Loss of rights of states to secede or claim
independence from the Union when in disagreement with the President or the Congress.
600,000 lives would not have been lost. Hundreds of thousands of workers would
have been released into the economy. One in four persons in the North went
into military service. They might otherwise have been employed in the private sector.
Without the war, investment would not have been diverted from civilian into military production.
The Costs of the Civil War(Millions of 1860 Dollars)
South North Total
Direct Costs:
Government Expenditures 1,032 2,302 3,334
Physical Destruction 1,487 1,487
Loss of Human Capital 767 1,064 1,831
Total Direct Costs of the War 3,286 3,366 6,652
Per capita 376 148 212
Indirect Costs: Total Decline in Consumption 6,190 1,149 7,339
Less:
Effect of Emancipation 1,960
Effect of Cotton Prices 1,670
Total Indirect Costs of The War 2,560 1,149 3,709
Per capita 293 51 118
Total Costs of the War 5,846 4,515 10,361
Per capita 670 199 330
Population in 1860 (Million) 8.73 27.71 31.43