Men from lower-income groups primarily waged fighting in the Civil War. Once the need for mass mobilization was evident, both sides turned to the draft to acquire men, and both sides allowed conscripts to buy out their service by paying another to go in their place. From this time on, the war was widely and correctly viewed as a “rich man’s war and a poor man’s fight.” While this policy shifted the burden of fighting to the poor, it arguably had efficiency advantages. The exchanges were voluntary, and if those with higher labor opportunity costs were replaced by those with lower opportunity costs, the overall costs of the war effort were reduced. The inequities, however, remained.
In the North, the cities witnessed the most heated discontent, especially New York, where large numbers of immigrants lived. The Irish, especially, felt that the burden of the draft was falling on them. In July 1863, mobs stormed through the streets of New York for four days; 20,000 federal troops were needed to quell the riots, which resulted in 105 deaths.
The recruitment and drafting of large numbers of men might have been expected to raise the real wages of those working on the home front by reducing the available supply of labor, but this did not happen.
As shown in Figure 14.3, prices rose more rapidly than wages in the North. Thus, real wages (wages/prices), the amount of goods and services that could be bought with an hour’s work, fell. Wesley C. Mitchell, who first studied this problem, thought that workers bargained ineffectively because they (and their employers) were influenced by customary notions about wages. The wage lag, he believed, had produced a surge in profits that could be invested after the war, another reason for thinking that the war accelerated industrialization (Mitchell 1903, 347). Reuben Kessel and Armen Alchian (1971), however, pointed out that the fall in real wages could also be explained by rising taxes, rising
FIGURE 14.3
The Wage Lag in the North during the Civil War
Index (1860 = 100)
Source: Kessel and Alchian 1971, 460.
Prices of imported goods, and other real factors (Fogel and Engerman 1971). Subsequently, Stephen DeCanio and Joel Mokyr (1977) showed that failure to anticipate inflation explains about two-thirds of the fall in real wages and real factors about one-third. Northern labor, in other words, would have experienced a substantial decline in its income in any case, but the inability of labor markets to adapt rapidly to the inflation made things a lot worse than they otherwise would have been.
Inequality was even more glaring in the South. In October 1862, the southern draft law was altered to allow an exemption for anyone owning 20 or more slaves. Although this exemption benefited small numbers, it created great resentment. Small farmers were infuriated to see their farms, dependent on their own labor, deteriorate while rich plantations were maintained. R. M. Bradford of Virginia wrote the Confederate Secretary of War in October 1864:
The people will not always submit to this unequal, unjust, and partial distribution of favor and wholesale conscription of the poor while able-bodied and healthy men of property are all occupying soft places. (Escott 1978, 119)70
The South did not use slaves for fighting because both masters and slaves knew the enemy provided a route to freedom.71 Ironically, the efforts of slaves to grow cotton, spurred by the exceptionally high prices in the early 1860s, was negated by the South’s trade policies to England. Most of this vital labor was simply wasted as high stockpiles of cotton rotted in the countryside and on the docks.
World History
