http://www.youtube.com/watch?v=Joo90ZWrUkU How long do you think it would take the CSA to get enough out of debt so that less than 3/4 of the budget is going to things other than the military and debt service?
Who do they owe all that debt to? There are ways to reduce debt other than by paying, if you are allowed to screw with currencies and not need to worry about angry bondholders sending gunboats.
The Union on the otherhand would be absolutely stuffed with almost no exports (grain excepted) and baring a nice juicy European war (like OTL WWII) to offset its debts against it could still be in debt 50 or 100 years later!
Grain is a very big exception. In fact, it's a major reason Britain never helped the CSA IOTL — there were crop failures in the early 1860s, and they needed Northern food more than they needed cotton.
The Union on the otherhand would be absolutely stuffed with almost no exports (grain excepted) and baring a nice juicy European war (like OTL WWII) to offset its debts against it could still be in debt 50 or 100 years later!
The Confederate economy will be in poor shape by 1900 if they fail to industrialize. The European countries will eventually start acquiring agricultural goods from their colonies, so in the long run commodities is a losing game for them
Additionally, about 40% of their population will unable to purchase goods because they are slaves, so the CSA can't rely on internal markets to industrialize.
The irony of this is that the Confederate government itself will likely be awash in cash, but it really has nothing to spend it on except the military and debt repayments. It is collecting nearly 7.5% of the GDP of the CSA, which means the military may become the most dominant institution in the Confederacy and it may be at parity with the US military.
I think you're forgetting about burgeoning US industrial exports around this time...
This does not follow at all. Firstly, the only European country that counts in this context is Britain, nobody else has a textiles trade, tobacco trade or sugar trade large enough to worry about. Second, in the long term (but not necessarily the short term) British demand for cotton, tobacco, molassess and other agricultural products was huge and was supported by world demand for textiles, finished tobacco products and refined sugar. The British colonies could not meet this level of demand and the Confederacy can become a very profitable provider of these goods.
The Confederacy does not need to industrialise to become a powerful economy. It will do well primarily as an agricultural and primary products exporter. However, it will industrialise to some extent, it had the best foundary in North America for example.
Well first, if they can find money the slaves can and did historically purchase goods. Secondly, ad much more importantly slaves are still consumers, they eat, need to be clothed, and treated when sick. The difference is the owner purchases the goods for the slave.
This does rather assume they continue wartime measures into peace time which is questionable.
There were no burgeoning industrial exports from the USA at this time OTL. There was whale oil and bone but the USA's whaling fleet, the largest in the world was in decline and there was the export of small machines which the USA managed to make an impression in because the British were obsessed with heavy industry, this industry did not really hit its stride until about the 1880s. In the scenario we are considering where the USA has little to export and the Confederates do and are independent this industry may not arise at all because it will be very hard to use tariffs to protect its domestic market from European competion.
If I have forgotten an industry let me know.
US industrialization was mostly domestically driven and would be in TTL as well. There is no reason to assume that soaring industrial exports will be held up more than 5 years or so.
I challenge your assertion that the USA was mostly driven mostly domesticly, if by that you mean most of the investment came from domestic sources. I would be interested to see any material you have that supports such an assertion.
There are at least three, possibly four good reasons for beliving that industrial exports will be held up for prolonged periods and may not even happen at all:
1) The USA funded the war by bond issues, most of which were taken up by the local capitalists. The USA needs to pay these back or default on them. If they pay them back then the USA has a major debt to service which will be far greater than that of the Confederacy. If they default on them then the local capitalists will have far less money to invest and international investors will be frightened off by such extreme action.
2) The USA also generated a lot of income during the war from import tariffs, it also protected home industries. However, if there Confederacy is independent then all of the funds from exports which paid for the imports end up in Confederate hands and imports to the USA slump as does tariff income.
3) Immigration will still continue but there will be a shortage of jobs due to the the lack of investment in industry. This will lead to unrest which will need to be policed.
4) In the event of the CSA getting the Arizona territory and a possibly free California then the USA loses a significant proportion of its specie income too. I consider that most of the realistic ways in which the CSA could gain its independence involve European intervention of some sort and in those cases the loss of Arizona and California, unlikely as they are in the grand scheme of things are rather likely here.
Domestically driven as in most of its customers were American. The two big things that drove industrialization in the US was a large and rich (for the time) population and plentiful resources neither of which change with a sucessful CSA. There is little reason to invest any less in it then before.
1) US debt was much smaller in percentage of its income than the CSAs. The US had a booming economy while the CSA's was a train wreck. Unlike the CSA it had little difficulty paying its debts.
2) Why? During the whole ACW the North didn't have slumping imports nor decling duty revenue and it wasn't collecting much in duties from the South.
3) Again why? There is no reason to expect much less industrialization without the South.
4) The chances of the CSA getting AZ or CA going independent are zero. AZ has too small a population to hold itself and the CSA has no men to spare. There was no major support for an independence movement in CA. The CSA would be damn lucky to keep TN not talking gaining AZ or any other state.
The Confederate Constitution will also require major amendment to enable industrialization and defensive measures. For example, Article I, Section 9 says that funds raised in one state cannot be used for internal improvements in another state that facilitate commerce. Article I, Section 10 also prohibits states from having armies or navies in peacetime, which is troublesome because the state forces formed the backbone of the Confederate military (the Confederate Navy and Confederate Marines were almost entirely from Virginia).
To the CSA, Tennessee is non-negotiable, they will not even settle for splitting the state (if Lincoln is in charge, he would agree that splitting up individual states is bad.), they will be getting TN at least if they get independence. If we are talking 1862 it is concievable for them to have Kentucky, Oklahoma and Arizona.
Domestically driven as in most of its customers were American. The two big things that drove industrialization in the US was a large and rich (for the time) population and plentiful resources neither of which change with a sucessful CSA. There is little reason to invest any less in it then before.
1) US debt was much smaller in percentage of its income than the CSAs. The US had a booming economy while the CSA's was a train wreck. Unlike the CSA it had little difficulty paying its debts.
2) Why? During the whole ACW the North didn't have slumping imports nor decling duty revenue and it wasn't collecting much in duties from the South.
What will the merchants used to pay for the imports? Who can afford to buy them? The revenue producing south has gone.
3) Again why? There is no reason to expect much less industrialization without the South.
See above.
4) The chances of the CSA getting AZ or CA going independent are zero. AZ has too small a population to hold itself and the CSA has no men to spare. There was no major support for an independence movement in CA. The CSA would be damn lucky to keep TN not talking gaining AZ or any other state.
That is a very interesting explanation of your view point without much in the way of a justification. I think you are wrong. There are almost no credible scenarios for CSA independence in which the CSA manages to achieve independence by its own merits. I can think of only two:
1)The CSA wins its independence by continued feats of arms on the battlefield early in the war and gains European recognition. In which case sin some scenarios they end up with Arizona and in some they don’t. In which case all I have said above is valid.
2)The CSA wins its independence after a long and gruelling defensive war of attrition peace in the Union election year of 1864 or God forbid 1868. By this stage both USA and to an even greater extent the CSA are economic basket cases and nothing I have said above is valid.
The other way the CSA can gain its independence is via a European intervention primarily a war with Britain arising out of the blockade or with the French over Mexico in 1864. In which case the CSA gets Arizona in most scenarios, California becomes independent, splits or ends up as part of French Mexico in many scenarios and in some BNA starts grabbing choice bits of the borderlands. In which case everything I have said above is valid but things are even worse that I have described for the Union.
To put this into context however, if we performed a thousand historical simulations, in around 750 of them the USA holds on to the CSA, in 160 of them a contemporaneous Union war with Britain (sometimes France as well) gives rise to an independent CSA, in 30 a war similar war with France gives the CSA independence, in 50 the CSA wins by a sustained feat of arms early in the war and in just 10 scenarios does the CSA win independence through a war of attrition.
The CSA will take what it can get. If the Union Army is sitting in TN there is no way that the CSA can get it. They had no capacity, NONE of retaking any meaningful amount of territory anywhere. The Union won't give up as long as Lincoln is president and Hamlin would be just as stubborn about it so we are talking 1864. The CSA has a slim chance at getting KY, a moderate chance at getting OK and NONE of getting AZ. AZ had the population of Madison, WI so had no meaningful military power or ability to provide the CSA with any meaningful support, intelligence or otherwise. That means whoever sends the larger army wins and that is a fight the Union will win EVERY time.
What will the merchants used to pay for the imports?