A number of years ago, in his book Yankee Leviathan, the political scientist Richard Franklin Bensel insisted that the relationship between the federal government and finance capital that was forged during the Civil War “mortgaged a radical Reconstruction” before the conflict had even ended. It is an arresting argument, and a relevant one. The idea that wars make states—because governments have to create the capacity to wage and pay for them—certainly holds true for the Civil War. The claim that the conflict saw the birth of the modern American state is also now widely accepted. But what kind of state, and what kind of economy, did the war produce? Did it create a state dedicated to emancipation, or to big business?
Roger Lowenstein’s new book, Ways and Means, provides one answer. Offering a highly readable account of how Abraham Lincoln’s government financed the Union’s efforts during the Civil War, it tells the story of two parallel conflicts, one between armies, the other within the economy. Out of each, Lowenstein shows, came a process of political centralization through which the modern American state was created. It is in many ways a fairly conventional account, albeit one well told, particularly in its emphasis on the challenges and unpredictability of the commodity markets during the war. But it is also a strangely optimistic, even boosterish account of finance for a post-2008 history of American capitalism, and one quite removed from the anti-triumphalist turn in recent scholarship on the Civil War and what it accomplished. For Lowenstein, the American fiscal and military state was an instrument of moral purpose, most notably emancipation. Taken on its own, this is a defensible argument. But Lowenstein’s liberal, economistic view of historical change separates forces that might be better understood in terms of political economy, which means that he misses the way big moneyed interests—finance capital—set the terms for free labor and stacked the political deck even at the moment of greatest democratic promise. Whatever the cause, the effect is to leave him unprepared to tackle the era that followed the war, which he covers in an 18-page epilogue that turns unexpectedly dark.