The impact of the Civil War and Reconstruction on subsequent American development was incalculable, and historical scholarship as a result never ceases to consider the events from new perspectives. Richard Franklin Bensel undertakes an important such analysis in Yankee Leviathan: The Origins of Central State Authority in America, 1859-1877 (1990). As the title suggests, he argues that the Civil War caused an “explosive expansion” in central state authority—not only in the Union but even more so in the Confederacy (a point overlooked in much of the literature). Reconstruction presented an opportunity for even greater state expansion as the North occupied the South in an attempt to rebuild its political economy, but by the early 1870s the attempt had effectively failed, and further growth of the state was halted until the turn of the century. The failure, Bensel argues, was due primarily to “internal contradictions within the [Republican] alliance,” especially the existence of a Northern financial class that had an interest in ending Reconstruction (p. 2). Its failure had major implications for national politics in the subsequent century, and Bensel discusses these in the final chapter of his book. It is a rich and wide-ranging work; in the following I will summarize and critique its main conclusions and consider its place in the relevant historiography.
Bensel characterizes the antebellum state as “self-effacing”: until the war, “the American state [was] little more than an arena in which contending forces and coalitions in the national political economy competed over decisions related to continental settlement and foreign policy” (p. 2). Indeed, the antebellum state was supposedly so minimal that Bensel treats the Civil War and Reconstruction periods as a case-study in state-formation. In this instance, it was revolutionary state-formation: the Republican party, which represented a “cohesive political-economic alliance,” captured the state apparatus, which caused its major opponent, the Southern plantation elite, to withdraw from the state and found its own country. Thus, the government of the North was a party-state, as was that of the South. Both states became ‘leviathans’ during the war, but the Southern especially so—ironically because of the South’s underdeveloped, premodern economy. While the Union “relied on an unregulated capitalist market to supply resources and manpower,” in the Confederacy “the central state regulated almost all forms of production and manpower, often assuming direct control of private factories, impressing their production, and even constructing state-owned plants where private capacity was insufficient for the needs of the war effort” (p. 233). In these respects the Confederacy was more modern than the Union. The latter was premodern also in a particular consequence of the virtual identity between its state and a single party: the government used political patronage to fill its bureaucracy, which compromised the quality of its operations. This fact actually contributed to the failure of Reconstruction, as described below.
Nevertheless, the Union was quite modern in many respects, including its emancipation of slaves, its sponsorship of economic development through such measures as high tariffs, and its reorganization of the nation’s financial system. The latter is a central focus of Bensel’s analysis. He argues that the Union government financed the war mobilization in three ways: it abandoned the gold standard and issued paper currency (greenbacks); it created a national banking system that “abolished locally chartered banks of issue and effectively nationalized the currency”; and it placed, through the national banking system, a large part of the national debt with finance capitalists (p. 14). These measures effectively created a new and powerful class of financiers whose interests aligned with the state’s. They wanted it to win the war, and they wanted its fiscal policies to succeed. This alignment of interests, however, fell apart after the war had been won, for several reasons.
First, the financial class favored an early return to the gold standard, which had anti-statist implications. Its support for the gold standard rested on a number of considerations: (1) the resulting program of deflation would benefit many creditors; (2) the systemic stability fostered by the gold standard would benefit those financiers who operated in fast-paced, high-risk markets; (3) “the greenback system compelled the Treasury to conduct open-market operations” for which it was ill-equipped (as financiers knew), being staffed by incompetent “party hacks”; (4) the financial community probably sought power and influence through resumption of the gold standard, knowing that the Treasury would thereby lose influence over the money market (pp. 294–296). On the other hand, the gold standard was anti-statist for precisely that reason: the state would no longer control the amount of money in circulation, and it would lose economic autonomy within the world system. Moreover, resumption of the gold standard would make impossible the statist project of radical Reconstruction, since such Reconstruction would entail high government expenditures, therefore a huge national debt, and therefore a maintenance of the greenback system. The financial class wanted budget surpluses, not budget deficits.
Financiers opposed Reconstruction for other reasons as well. The massive redistribution of wealth from planters to blacks and poor whites that would have been necessary to ensure a large Republican presence in the South and to set the region on a new economic and social path entailed a great expansion in government, to which the financial class was opposed in part because of its experience with administrative incompetence and in part because it would lead to higher taxes. Also, a class-centered policy of wealth redistribution might well have extended to the North, as labor and the lower classes demanded a similar policy on a national scale. Thus, the financial elite used its influence in Congress to subvert the ambitious proposals of radical Republicans.
In fact, according to Bensel, the only faction of the Republican party that was strongly committed to radical Reconstruction was the Southern Republicans. “Iron districts,” for example, “were more interested in the tariff, capital-rich districts in the operation of the financial system, and settlement districts in internal improvements” (p. 363). In short, “as the interests of the different factions diverged, the party lost the revolutionary zeal that had attended its role as the agent of Union survival and increasingly became a broker organization within which political allies narrowly construed their interests” (p. 303). Bensel concludes that the Civil War and Reconstruction era provides an example of how a particular pattern of state development can be self-limiting. In this case, the Union created a financial class (by floating a huge national debt) to help it win the war, but this class then turned against further state expansion in the form primarily of Reconstruction. The (semi-)laissez-faire state of the Gilded Age was the result—though it also resulted from the demise of the revolutionary party-state due to factional strife in the Republican party and the return of former Confederates to the government.
With the failure of Reconstruction came the retardation not only of modernization of the state but also of Southern political and economic development. A more interesting insight of Bensel’s, however, is that the party-system of Republicans and Democrats that emerged militated against social democracy and the national rise of a coherent labor party. This is because a “cross-sectional inversion of class alignments” occurred: Republicans represented Northern industrial and financial capital and Southern blacks, while Democrats represented Southern plantation-owners and Northern immigrant-workers and subsistence farmers. That is, each party—the ‘Northern’ Republican and the ‘Southern’ Democratic—included in its constituency the economically discontented of the other section of the country. The lower classes therefore could not use the two-party system to assert coherent class claims across the entire nation: “an attack on economic privilege could only be made by sacrificing the elite interests of one of the two major parties” (p. 421). This is one of the reasons why Bensel thinks that the major problem facing late-nineteenth-century American state-builders was not the social dislocation of industrialization but the fact of Southern “separatism.”
Having summarized the book, let us consider its place in the scholarship. Bensel sees himself as arguing against the relevance of modernization theory to America in the Civil War era. Louis S. Gerteis expresses it well in his review of Yankee Leviathan: “Union victory and the triumph of the northern state did not integrate a premodern South into a single modern national political economy. In the wake of the Civil War, Bensel argues, the South was not modernized but marginalized” (Reviews in American History, Vol. 20, No. 2, p. 190). Modernization of the state and the South would have proceeded had Reconstruction succeeded, but the hostility of the North’s financial class prevented that from happening. More generally, however, Yankee Leviathan shows that modernization theorists are wrong to think that broad political participation at an early stage of state development necessarily hinders political modernization (by “abort[ing] the development of the specialized and politically insulated bureaucracies necessary to a strong central government” (Bensel, p. 5)). The American state was strong enough to attempt Reconstruction, even as “that strong state was synonymous with a robust political party (the Republicans) and rested on wide electoral participation (by southern freedmen and poor whites).” Far from being weaknesses, these were strengths (pp. 414, 415). –On the other hand, the modernization theorists are partly right: as Bensel’s own evidence shows, the political patronage and corruption that resulted in part from the robustness of democracy did weaken the state and signify that it was not yet modernized.
Brooks D. Simpson points out in his review of the book that while “the impact of the Civil War upon American institutions has long interested historians, [until Yankee Leviathan there had been] no systematic exploration of this topic employing the concepts of state building and political economy” (Journal of American History, Vol. 79, No. 1, p. 276). Bensel goes further than previous historians in treating the Civil War as an example of state-formation, rather than merely -expansion. Indeed, he probably goes too far. As Gerteis notes, Yankee Leviathan has no discussion of the statist implications of the creation of the Interior Department in 1849. Moreover, a state that could administer the massive, continental postal system is certainly not “self-effacing”—or at least it is simplistic to label it so. Similarly, it is surely an exaggeration to claim that “the Civil War, even more than the end of British colonial rule, represents the true foundational moment in American political development” (Bensel, 10). Do the decades of state-development from the 1790s to the 1850s not count at all? Are they nothing but a ‘prelude’ to the 1860s? That seems a misleading way of interpreting the history.
Yankee Leviathan is a fusion of political science and history; it belongs to the ‘new institutionalist’ school, which Richard John characterizes as follows:
[It] focuses not only on discrete governmental institutions, such as courts, legislatures, or administrative agencies, but also on the configuration of institutions that gave the polity its distinctive character. For [new institutionalists], governmental institutions are best conceived of as agents with wide-ranging social and cultural effects. Often they focus not only on the goal-oriented activities of policymakers, but also on the unintended and often unforeseen consequences of the organizational network in which specific institutions are found (Richard John, “Governmental Institutions as Agents of Change: Rethinking American Political Development in the Early Republic, 1787-1835,” p. 367).
Bensel is thus concerned with institutions and their effects on society, not with social history or social movements or ideologies. This is perfectly legitimate, of course, but arguably it leads him to give an oversimplified interpretation of the failure of Reconstruction. He attributes its failure primarily to the opposition of the Northern financial class to an overweening statism; other factors, such as the resistance of Southerners, he downplays or ignores. No doubt he is right that factionalism in the Republican party was of major importance in causing the downfall of the Reconstruction regime, but by trying to interpret all the disparate phenomena he discusses through the lens of institutionalism, and more particularly through his focus on modernization and state-formation, he is forced to ignore features of reality that do not fit such a framework. For instance, he almost totally ignores the ‘concrete reality’ of Reconstruction, the ways in which Republican policies were carried out in the South and how that in turn influenced the policies. Yankee Leviathan exists on a very ‘abstract’ plane of analysis. The author has the right to choose what features of society he wants to discuss or ignore in his book, but it is well to keep in mind the limitations of this study.
On the other hand, Clyde W. Barrow is right that “Bensel’s work breaks new ground by documenting the concept of a ‘weak state’ with an empirical analysis of the distribution of federal officials, troop deployments, arsenals, custom houses, lighthouses, etc.” (Journal of Politics, Vol. 54, No. 2, p. 602). The book’s empirical data can even be overwhelming at times, and tedious to read. Yet somehow, at the same time, Yankee Leviathan seems very ‘theoretical’ and ‘divorced from society’—perhaps because the data amassed relate mostly to the behavior of political parties, interest-groups, Congress, and other institutions.
Yankee Leviathan is an extremely rich book, but through all the data-analysis, theoretical discussions, and attempts at resolutions of secondary questions (such as why the South seceded in the first place and why the North did not simply let it secede) runs the thesis that during the 1860s and 1870s a modern American state was in the process of being created. While its continued creation was halted with the end of Reconstruction, the foundations had been laid for further modernization in the next century. The framework of a ‘politically neutral’ state apparatus and bureaucracy had finally been established—a “sovereign central authority…which could at least initiate (if not administer) substantive social and economic policies” (Barrow, op. cit., p. 602). This is an important and interesting conclusion, and in itself it makes the book well worth reading.