What If the Union Had Bought Out the Confederacy Instead of Fighting the Civil War?
Brian Gongol

Was There a Better Way to End Slavery Than Civil War?
Slavery was one of the most vile institutions ever to mar the soul of the American republic. This exercise assumes three things: Evaluating the Costs of the Civil War
Total cost (North and South) of the Civil War (in current dollars from the era): $5,200,000,000
Total number of slaves living in the South at the start of the Civil War: 3,500,000
Average cost of war per slave:
$5,200,000,000 / 3,500,000
Average market price per slave in 1860 (current dollars from the era): $1,658.00
Total estimated cost to have bought out all living slaves at market price:
$1,658.00 * 3,500,000
Approximate premium cost of buyout in excess of direct costs of war: $603,000,000
Total combatant deaths due to war: 558,052
Value of combatant lives lost if priced at the market value of a slave:
558,052 * $1,658.00

The Premium Paid for War
If slaves were selling for more than $1,600 each, then it would be consistent with the principle that "all men are created equal" to value the life of a free soldier at the same amount. A very conservative estimate of the value of lives lost in combat, then, would be the market value of a slave times the number of soldiers' lives lost, or more than $900,000,000. The difference between the actual cost of the war ($5,200,000,000) and the hypothetical buyout option ($5,803,000,000) would have been only $603,000,000, or three hundred million dollars less than the very conservative estimate of the value of lives lost in combat.

Prevailing wages for labor in the South at the time were around 50 cents per day, or perhaps $150 for a 300-day working year (slaves could certainly be assumed to have worked six days a week). Even assuming that the slaves delivered a 10% to even 20% annual return on the slaveowner's investment, a buyout option, even for a premium price, would have been a vastly less costly method of resolving the dispute over slavery than outright war. The value used as the "cost of war" is strictly the direct out-of-pocket expenses incurred by both sides.

Naturally, there may be some objection to the concept of ending slavery by buying it out, since that would seem to legitimize the evil of slavery by acknowledging it with one final exchange. However, the practice of buying a slave's freedom had already been established by the time of the Civil War (Frederick Douglass, for instance, had bought his own freedom two decades before), so this exercise only seeks to illustrate whether there was a more economical alternative to combat.

It may also be reasonably pointed out that the average price paid for a slave could have been expected to rise during the course of a progressive buyout, since demand would have remained relatively high and supply would have declined. What is presented here is only a rudimentary analysis, and it assumes a rather liberal application of eminent domain under the Takings Clause of the Constitution (within the Fifth Amendment): "[N]or shall private property be taken for public use, without just compensation." This analysis assumes that the government had the legal authority to set a value moderately above the market price for which it could have asserted eminent domain in order to free the slaves. While certainly an imperfect solution, it brings the mathematics of the situation within our grasp.

Costs Not Accounted For
While war offers very little in terms of indirect benefit, it incurs significant indirect costs. Among those costs not accounted for in the above: Considering the nearly one million combat casualties during the war, a more economical solution to the problem of slavery would have been a progressive buyout of slaveowners with a simultaneous prohibition on the purchase of new slaves.

Conclusion: Thinking Strategically Beyond Direct Action
Questions of this nature persist today: A reasonable conclusion to draw is that rational policymakers should consider economic solutions to their goals and evaluate them against reasonable estimates of the costs of military or other strategic action, since the same objectives may be achieved through economic action as through other methods, at much lower cost.

This being purely a speculative alternative history, little attention is granted to the many other factors that would surely have complicated what is presented here as a tidy arithmetic analysis. Would even a compensated emancipation had to have been enforced at gunpoint? Could either the North or South have reasonably estimated the costs of war? Was the Civil War really about Constitutional principles, with the emancipation just a pleasant byproduct? The bottom line is that like all economic models, this is a gross simplification intended to teach something valuable about human behavior. In this case, though it's much too late to apply the economic lesson to the Civil War, it is extremely worthwhile to keep economic alternatives in mind for future instances of human conflict.

Further Reading
Abraham Lincoln actually perceived the possibility of a slave buyout by the North to the tune of $400 million at the Hampton Roads conference in 1865. Confederate Vice President Alexander Stephens, a participant in the talks, quoted Lincoln as saying, "Slavery is doomed. It cannot last long in any event, and the best course, it seems to me, for your public men to pursue, would be to adopt such a policy as will avoid, as far as possible, the evils of immediate emancipation." Secretary of State William Seward balked at the proposal and suggested that the Union had no obligation to the Confederacy, but Lincoln viewed slavery as the joint failure of both North and South. Lincoln also apparently perceived that compensation would ease Southern hostility. Unfortunately, this course was never followed.