Mr. Lincoln’s Economics Primer
From the Dec. 20, 2010, issue of NR.


Did this amount to “big government”? Not if we measure bigness by the size of the federal budget. In 1860, federal spending amounted to a minuscule $63.2 million. Factored for a century and a half of inflation, the modern equivalent would be a federal budget of about $1.5 billion. During Lincoln’s presidency, federal spending leapt from $66.6 million in 1861 to $1.29 billion in 1865. But even with the swollen costs of war to absorb, the 1865 federal budget would translate into only about $18 billion in today’s money, using consumer-price inflation as the measure.

The bulk of that spending was war-related, and disappeared as soon as the wartime emergency was over. By 1871, the federal budget had shrunk to $293 million — only 22.7 percent of the size it had been in 1865 — and it would have shrunk even more drastically if not for the cost of servicing the wartime debt (which accounted for 44 percent of the budget) and paying pensions to wounded and injured soldiers (another 11 percent). Lincoln was dead by then, of course, but his successors and the Congress had generally followed his intentions. If Lincoln’s goal was to use the Civil War as the cloak for a permanent transformation of the federal government into an all-powerful megastate, the budget numbers certainly do not show much evidence of it.

The Italian historian Raimondo Luraghi once remarked that, unlike the Lincoln administration, the “Confederate rulers did not want a private capitalist industry” and “did not want to see a powerful industrial bourgeoisie rising in the Confederacy.” So while the Union government contracted out its wartime needs to the private sector, the Confederate government set up government-owned supply facilities “investing millions of dollars, arming and supplying one of the largest armies in the world — and all this as national property or under national control, in a kind of quasi-socialist management.” Predictably, the Confederacy’s nationalized industries did a bad job of supplying and feeding the rebel armies, so among the reasons Luraghi listed for the Confederacy’s downfall was its choice of “the way of ‘state socialism,’ a solution that is as far from capitalism as the earth is from the moon.”

But the fundamental convictions that animated the “Slave Power” — that stability is preferable to mobility, and that top-down management in the name of efficiency and fairness is the default position of human society — were not among the things surrendered at Appomattox. Half a century after Lincoln’s death, another American president would contradict every principle in political economy that Lincoln held dear by announcing that society must stop modeling itself on metaphors like “the race of life” and instead become a “family . . . where men can live as a single community, co-operative as in a perfected, coordinated beehive, not afraid of any storm of nature,” and do so “with an eye single to the standards of justice and fair play.” What a century of Woodrow Wilson’s “family” metaphor has produced, however, is the dreary reality of a government that regards citizens as miscreant children requiring constant correction of their appetites, salaries, attitudes, vocabulary, and even light bulbs.

Hurling Lincoln’s economic principles back against this present-day reality may seem like the height of futility. How many battalions, we may ask, do the economic ideas of a man dead for a century and a half command? But those inclined to dismiss these ideas should beware of Lincoln’s ditch. A generation from now, the question might seem more serious.

Allen C. Guelzo is the Henry R. Luce Professor of the Civil War Era at Gettysburg College. This article first appeared in the Dec. 20, 2010, issue of National Review.


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