The American Genius for Self-Government
[Part 3 of "The Secession Tradition in America," a paper presented at the 1995 Mises Institute conference, "Secession, State, and Economy." Click here for Part 2, "A Voluntary Federation".]
On the eve of the War Between the States, the majority of northerners appeared to have believed either that a state could legally secede or that one should acquiesce in peaceful de facto secession. How northern opinion quickly changed sufficiently to support invasion is a complicated story that cannot be told here, but it would contain the following themes.
First and most crucial was Lincoln’s early decision to make war against the southern states should they secede. In 1856, he had told southerners who asserted their right to secede:
We won’t let you. With the purse and sword, the army and navy and treasury in our hands and at our command, you couldn’t do it. 
President James Buchanan, who preceded Lincoln, had declared that the central government had no authority to coerce a seceding state, but Lincoln stated privately that he would retake the forts Buchanan had allowed to pass back to state control. In the first draft of his first inaugural address, Lincoln was prepared to make this intention public: “All the power at my disposal will be used to reclaim the public property and places that have fallen.”  Lincoln refused to negotiate with Confederate commissioners to pay for federal property and to establish a trade treaty, and he, thus, encouraged the public impression that the Confederates were lawless aggressors who had stolen federal property and threatened invasion of the North.
Second, the ineptitude of southern leaders, and their bellicose speech and policies (such as allowing themselves to be lured into firing on Ft. Sumter), played into Lincoln’s hands by inflaming northern nationalism.
Third was the venality of northern commercial classes, who were happy to have the South to fund some three-quarters of the federal revenue, but were unwilling to allow a low-tariff zone on their southern border. The economic differences between North and South were stark. By 1860, agriculture still accounted for some seventy-five percent of American exports and most all of it came from the South. Trading on an unprotected world market, the South required a policy of free trade. The North, having just industrialized, was guided by a vision of a vast continental market for manufacturing, which required a policy of prohibitive tariffs. For three decades, southerners had complained about the injustice of tariffs protecting northern manufactures, because the tariffs resulted not only in a drain of wealth from the South to the North but also because southern trading partners, whose manufactures became prohibitively high for exchange for southern staples, were forced to find staples elsewhere. Once the northern industrial section got control of Congress, the average rate on goods subject to duties rose from the 1860 rate of 18.84 percent to a spectacular high of 46.56 percent in 1865. The tariff did not drop below 40 percent until World War I, except for two years when it was 38 percent. After the war, it rose again under Harding, Coolidge, and Hoover. This brutal and unjust policy dealt a crippling blow to the southern agricultural export trade, which was vastly greater than what northern markets could absorb.
Interstate commerce regulations passed late in the nineteenth century discriminated against southern manufacturing by, among other things, fixing rail rates and steel prices so that goods manufactured in the South would not be able to undercut northern manufactures.  These were not abolished until the 1940s when the Supreme Court declared them unconstitutional. The National Banking Acts of 1863, 1864, and 1865 created a new national currency, secured by the public debt, and drove state bank notes out of circulation. Once the central government and its national banks had the authority to control the money supply, the financial destruction of American federalism was complete. This revolution in finance discouraged the formation of banks in farming communities and worked to transfer bank funds from agriculture to industry. As historian Robert Sharkey wrote,
Human ingenuity would have had difficulty in contriving a more perfect engine for class and sectional exploitation: creditors finally obtaining the upper hand as opposed to debtors, and the developed East holding the whip over the undeveloped West and South. 
All of this turned out to be much worse than what John C. Calhoun predicted would happen if the American federation of republics was transmuted into a consolidated nationalism dominated by a northern industrial class.
The brief constitutional history I have sketched that views secession as part of the checks and balances system of American federalism is unknown to most Americans. The reason is that we have come to believe the absurd nationalist theory of the Constitution propounded by Story and Webster and used by Lincoln to legitimate invasion of the South. Lincoln said he had taken an oath to preserve the Union, but he was mistaken. He had taken not an oath to preserve the Union, but rather an oath to preserve the Constitution, and the Constitution did not in 1861, and does not now, prohibit the secession of an American state.
The consolidated nationalism that Story, Webster, and Lincoln put forth as the Constitution was not the Constitution they had inherited. That instrument was a compact between sovereign states creating a central government having only enumerated powers. The instrument they put forth was an imagined and constitution at the service of an emerging industrial class. In this view, the states were reduced to little more than counties in a nationalist regime, and the central government emerged as unlimited in power if supported by a majority. Such a government could not only interfere with slavery by taxing it out of existence, it could do much else besides. Tariffs to protect northern industry had drained the South of wealth for over than thirty years. Further, the South was the source of most of the federal revenue, and this was exploited by a northern majority for improving its infrastructure. The South had generally been opposed to internal improvements, claiming that such powers had never been granted to the central government, and it was thought that if such powers were assumed, a scene of endless patronage and corruption would ensue without parallel in history.
Southern colonies had seceded from Britain because they refused to be a source of revenue for a consolidated British empire centered in London. That act was still vivid in the historical memory of southerners (for example, “Lighthorse” Harry Lee, the father of Robert E. Lee, was a Revolutionary War hero and a friend of George Washington). As such, southerners in 1861 were not prepared to be a source of revenue for a northern industrial version of a consolidated empire centered in Washington. Indeed, the very idea of Washington as the “capital” came after the failure of the war for southern independence. In the antebellum period, Washington was generally thought of as the “seat” of the central government, as when one speaks of a town being the seat of the county government, or of Strasbourg and New York as the seats, respectively, of the European Union, and the United Nations. Washington was the seat of a central government having only enumerated powers; it was not the capital of anything.
Likewise it is wrong to describe the conflict of 1861–1865 as the “Civil War.” The exemplar of a civil war is the English Civil War. That war was a struggle, within a modern state, by two factions (Crown and Parliament) for control of the same government. But the federation of American states was not itself a modern state any more than the European Union is a modern state. Its central government had only enumerated powers delegated to it by the sovereign states. But Virginia, New York, etc., were modern states, each of which contained the presumption against the secession of its parts. And the struggle that occurred was not between two factions seeking control of the same government. Rather, it was between one group of states exercising their federative power to withdraw from the federation and govern themselves, and another group of states seeking to conquer and govern them. The Great Seal of the Confederacy bears an equestrian statue of George Washington, the symbol of secession from the British empire. Just as the break with Britain was not a revolution but an act of secession, so the break with the North was not an act of treason issuing in civil war, but an act of secession issuing in conquest by the North. That both conflicts are frequently misdescribed points again to the under-theorized character of secession.
But there is another difference between the conflicts. During the American Revolution, the American colonies could appeal only to a moral argument to legitimate secession. Having more or less governed themselves for more than a century, and having acquired the character of a people, they claimed that they had acquired a title to full self-government. But the colonies were not and never had been recognized as sovereign states, either by others or even by themselves. At the time of the Civil War, however, the southern states had been and still were sovereign states, and so they could mount not only a moral argument but a legal one as well. And it was the legal argument they primarily insisted upon. Each state used the same legal form to secede from the Union that it had used to enter, namely, ratification in a convention of the people. In some cases, the decisions of these conventions were put to referenda. Of those southerners who were opposed to secession, including Robert E. Lee, the great majority of them recognized the legitimacy of the conventions and supported their states, to which, under the compact theory of the Constitution, they owed their primary allegiance.
With the orderly, legal secession of the southern states, the American genius for self-government reached its highest moral expression. Here was something unprecedented in history; a vast continental empire of republics torn by sectional, economic, and moral conflicts seeking to settle its differences not by war, but by peaceful secession of eleven contiguous republics, legitimated by the consent of the people. This was the very thing that, in 1840, John Quincy Adams said might be necessary in the future, and which the American commitment to self-government of peoples would legitimate, rather than a Union held together by bayonets. It was this also that President Buchanan had in mind when, although opposed to secession, he declared that the central government had no authority to coerce a seceding state. The same doctrine was asserted by Madison and Hamilton in the Federalist. Lincoln, however, like George III, was determined on coercion, but unlike the latter, he was also prepared to launch total war against the civilian population of the South to achieve the goal of a consolidated nationalism.
With Lincoln, then, a radical break occurs between the older Americanism that was grounded in the natural rights of substantial moral communities to govern themselves and a new Americanism grounded in the centralization and consolidation of power, and like the French Revolution, dedicated to an egalitarian doctrine of individualism. This doctrine, wherever it has been applied in the world, has required the destruction of independent social authorities and moral communities and the massive consolidation of power needed to achieve such destruction. Lincoln was a man of his age, and it was an age of unashamed empire building and of the coercion of independent political societies into consolidated unions. What Bismarck was accomplishing in Germany with a policy of “blood and iron,” and what Lenin would accomplish in Russia, Lincoln had accomplished in America. Lincoln did not preserve an organic indivisible union from destruction because he did not inherit one; rather, like Bismarck, he created one.
Why did the southern states secede? This is a question best answered by examining closely the Constitution of the Confederacy, which bears not only the imprint of the southern conception of self-government but also their grievances against the North. Though there is no space to do that here, a few points are worth making. Southerners were loyal to the Constitution of the Founders. What they objected to was the northern interpretation of it which sought, by an act of philosophical alchemy, to transmute it from a compact between sovereign states creating a central government with enumerated powers to a consolidated nationalism with a central government having unlimited powers.
The Confederate Preamble makes clear that the parties to the compact are the people of the states and not the people of the confederacy in the aggregate. And each state is said to retain “its sovereign and independent character.” In the Federal Constitution, the initiative to amend can come from either Congress or the states. The Confederate Constitution vests this power only in the states. Southerners considered secession a legal right available to a state under the Federal Constitution conceived as a compact between sovereign states. But they purposely did not put a right to secession in their own constitution because to do so would imply a change and would play into the hands of those northerners who held that secession was treason. However, the right of a confederate state to secede was thought to be self-evidently contained in the declaration that the states retain their sovereignty and independence.
A central government in a federative system cannot be unduly oppressive if its revenue is carefully restricted by consensus of the states, or by something approaching consensus. One of the main grievances against the northern conception of the consolidated Union was that the central government would become an uncontrollable center of patronage and corruption that would subvert the independent moral and political life of the states. The hated protective tariffs on imports were prohibited. Export tariffs, however, were allowed if passed by a two-thirds majority. Funding for internal improvements was severely restricted. With few exceptions, Congress could appropriate money only by a two-thirds majority or by a majority upon a request by the President.
As in the Federal Constitution, slavery was recognized. The Confederate Constitution outlawed the slave trade, but, unlike the Federal policy, required Congress to pass legislation that would enforce the law. Current American policy refused to cooperate with the British and French in allowing American ships to be boarded, and so the slave trade continued into South America under American flags up to the conflict of 1861–65. Jefferson Davis’s first veto was over a bill that would allow the sale of slaves captured by the Confederate Navy. The Confederate Constitution allowed non-slaveholding states to join the Confederation, and left it up to the individual states whether they would abolish slavery. Many nations in the Indian Territory had treaties with the Confederates, and fought for it on the promise of creating a sovereign Indian state.
The central reforms enacted by the Confederate Constitution, which Lord Acton greatly admired, were designed to protect and strengthen the substantial moral and political communities of the states, and to limit the power of the central government by reducing its revenue, restricting its power to spend, and making it difficult to pass legislation for special interest groups.
Just as their ancestors two generations earlier, acting as citizens of sovereign states, had seceded from the Articles of Confederation (even though the Articles were styled as “a perpetual union” and could not be legally changed without unanimous consent) in order to form a “more perfect union” (a union requiring only nine states), so eleven contiguous southern states sought to form a more perfect union, one grounded in the preservation of independent moral and political communities, their union by consent, and the right of secession.
From a philosophical point of view, the Confederate Constitution may be viewed as the highest expression of the adventure in self-government begun by the American colonists in 1776. That adventure began with an assertion of the right of substantial moral and political societies to self-government, and this right was secured by an act of secession. The Americans, in their most speculative moments, imagined a legal world, a rule of law, in which this right would be recognized.
Quoted in Ludwell Johnson, Division and Reunion: America 1848–1877 (New York: John Wiley and Sons, 1978), pp. 76–77, emphasis added.
Ibid., p. 77.
Ibid., pp. 109–10.
C. Vann Woodward, Origins of the New South 1877–1913 (Baton Rouge: Louisiana State University Press, 1971), chap. 11, “The Colonial Economy.”
Johnson, Division and Reunion, pp. 113–15, and quotation from p. 115.
Ibid., pp. 72–73; see also Selected Writings of Lord Acton, J. Rufus Fears, ed. (Indianapolis, Ind.: Liberty Classics, 1985), pp. 216–79 and 361–67.