Book SummaryWays and Means, by Roger Lowenstein

1-Page Summary1-Page Book Summary of Ways and Means

Union's Economic Challenges and Lincoln's Solutions at Civil War's Start

This section focuses on the economic crisis Lincoln faced upon his election and the initial steps taken, particularly by Salmon Chase, to address the impending insolvency of the government. The author skillfully details the contrast between the philosophies and personalities of Abraham Lincoln and Salmon Chase, two figures who personified the competing strains of the newly empowered Republican Party.

Lincoln's Whig Vision: An Activist Federal Government Promoting Opportunity

Lowenstein emphasizes that Lincoln's upbringing in the frontier region and his experience as a lawyer and state politician deeply influenced his political economics—he fully embodied Whig ideology. While firmly advocating capitalist ideals such as self-reliance and the importance of capital formation, Lincoln was equally devoted to the idea that government should work to extend those ideals to everyone, particularly to people with the lowest income. This meant promoting public education, infrastructure improvements, a central banking system, and other government-supported modernizations that Lincoln had fought for during his early legislative career in Illinois. What distinguished Lincoln from many of his Republican confreres was that he embraced a more egalitarian America, in which, as he told voters in 1860, a Black man deserved it—a fair opportunity to improve his lot.

Lincoln's Efforts to Promote Economic Development Within the State

Lincoln believed in using the government to foster opportunity, even redistribution. His experience as a state legislator had schooled him in many of the same issues that he was to grapple with at the national level. In his youth, he tirelessly promoted infrastructure investments in canals and railroads, arguing that good transportation was vital to trade and economic growth. He always remembered his family's arduous trek to Illinois, which gave him a firsthand understanding of the difficulties faced by farmers and other pioneers in moving their goods to market. His time as a store clerk and his later years working as a lawyer for the railroad sensitized him to the need to develop a modern financial system -- including banks and a stable currency. During his time as a lawmaker, he also supported public education and, unlike many other white politicians, contended that Black people had an equal claim to an "equal opportunity in life's journey."

Context

• Infrastructure projects often required political negotiation and compromise, as they involved significant public funding and could impact various regions differently, leading to debates over resource allocation.
• Before the widespread use of railroads, transportation relied heavily on waterways and rudimentary roads, which were often impassable during certain seasons due to weather conditions.
• The banking system in the early 19th century was fragmented, with state-chartered banks issuing their own currencies. This lack of a unified banking system led to instability and inefficiencies in trade and commerce.
• Lincoln's own limited formal education may have influenced his support for public education, as he understood the barriers faced by those without access to learning.
• The country was on the brink of the Civil War, with tensions high between abolitionist movements in the North and pro-slavery sentiments in the South. Lincoln's views on equality were part of a broader debate about the future of slavery and civil rights.

Lincoln's Emphasis on Work and Investment

The author takes pains to distinguish Lincoln's understanding of the role of labor from that of the economy that was based on slavery, which was grounded in the idea that white people were entitled to "the output of others' labor." For Lincoln, labor was noble, the origin of all capital. He did not, then, see an essential opposition between labor and capital—indeed, he argued in a particularly interesting speech to Congress that those who labored should be encouraged to save, to purchase tools and property, and ultimately become capitalists themselves. Thus, Lincoln advocated government policies such as the legislation that gave people free land that he believed would help working people achieve social mobility. As Lowenstein puts it, the President favored an economic system based on freedom that was the opposite of the slave economy of the South.

Practical Tips

• Support businesses that are known for ethical labor practices by researching companies before making purchases. This can involve looking at certifications, reading up on company policies, or even reaching out to businesses directly to inquire about their labor standards.

Other Perspectives

• The nobility of labor is a subjective value judgment and can be perceived differently across cultures and historical periods.
• The idea that labor and capital are not fundamentally opposed might overlook the inherent power imbalance that can exist between workers and those who control the capital, potentially leading to exploitation or unfair labor practices.
• While Lincoln encouraged laborers to save and invest, not all laborers may have had the means to do so due to low wages and the high cost of living at the time.
• The effectiveness of land grants as a tool for social mobility might be limited by broader economic conditions; during periods of economic downturn, even landowners could face poverty and lack of social mobility.

Lincoln's Efforts to Unite Republicans and Form an Advisory Team

Lowenstein shows Lincoln as a shrewd politician who recognized that the Republican consensus was based on a fragile coalition of Whig modernizers and Radical abolitionists. Lincoln took care to select a cabinet comprised of strong figures chosen, at least in part, for representing these factions. This was particularly true of his appointments naming Chase for Treasury and Seward for...

Ways and Means Summary Federal Power Expansion and Economy Centralization During the War, Including National Banking and Currency Creation

The author argues that, due to the imperative to wage the war, Lincoln's government, and specifically its Republican-led Congress, fashioned a fundamentally new role for the federal government in American life. Prior to the conflict, the U.S. was more a loose coalition of sovereign states than a federal entity. During the conflict, the national purpose took center stage, pushing the states aside. This was especially true in finance, where the government took on the role of regulating the currency and issuing bonds directly to the nation's investors.

The Thirty-Seventh Congress Altered the Direction of American Governance

Lowenstein explains that the Thirty-Seventh Congress, which convened in the summer of 1861 and finished its labors at the beginning of the following summer, had the greatest impact in American history. The legislature not only raised the unprecedented funds necessary for the war effort (around tenfold the prewar budget) it also passed numerous other measures broadening the federal government's role. The Republicans still invoked states' rights, but only as a means of curtailing the influence of the seceded Southern states. They held no comparable...

Ways and Means Summary Union Strategies to Weaken Confederacy: Trade Restrictions and Bond Drives

The author skillfully describes two competing strategies for funding the war. The North, under Lincoln's direction, sought to exploit its superior industrial might and broader access to capital (both human and financial) to squeeze the South economically. The North's main weapon, aside from its ever-stronger military forces, was its control of the seas. The blockade disrupted the Confederacy's supply lines, preventing a steady influx of arms, ammunition, and other essential goods from Europe. This constituted the military side. Lincoln also attempted to leverage the Union blockade, as well as strict regulations on commerce within the Southern states themselves, to depress the value of cotton, the Confederacy's chief export. The other main economic weapon was government-issued securities and the greenback itself. These enabled the Union government to wage an economic battle against the Confederacy—ultimately leading to its defeat.

Lincoln’s Attempts to Curtail Trade With the Confederates

Lincoln aimed to squeeze the South by imposing a trade embargo and, as Union troops came in increasing control of communities, to permit trading only with southerners who pledged allegiance....

Ways and Means Summary Economic Divergence: Union vs. Confederate Collapse, Republican-Led Transformations in Wartime

The author powerfully shows how differences in economic systems influenced not only how the war unfolded, but, more importantly, the respective futures of both societies. By the time the war ended, the Union economy was vastly more diversified and more dynamic, and Northern states emerged in a markedly stronger international position, while the South's finances and economy were in ruin. This divergence in war outcomes is often attributed to imbalances in military leadership or the relative tenacity of the soldiers in each army. Lowenstein argues persuasively that their contrasting underlying economic systems determined what happened to them.

Superior Economic Capabilities and Flexibility in the Northern States

Lowenstein argues that the North's superior economic power, most visible in its military might, was manifest in the home front as well, and enabled the Union not only to withstand the war but, remarkably, to experience a boom. The author describes the thriving factories in the region around the Great Lakes, the swelling trade in agriculture, the record-setting immigration figures, and the surging stock market. By comparison, the South faced shortages and a financial...