Direct Costs and Economic Causes of the Civil War

Abstract

Before turning to studies concerned with the impact of war on long-run development, it will be useful to consider first the published estimates of the direct costs of the war for American society. Relevant figures have been extracted from budgets which recorded governmental expenditures in wartime and during the transition to peace. These estimates exclude civil expenditures unconnected with war and the costs of maintaining a military establishment in peacetime. Here the normal assumption made is that in the absence of war the costs of the armed services would have remained constant. Incremental costs, expressed in dollars, are then deemed to measure the immediate burden imposed on American society, contingent upon the reallocation of resources from civilian to military purposes and back again. Thus the figures in Table 1 represent the ‘price’ paid to transform ‘butter into guns’.