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Economy and War
To cover fully the economics of war would require an encyclopedia unto itself. This entry will provide brief introductions to four questions: (1) To what extent did economic forces cause America's wars? (2) After going to war, how has the United States managed the reallocation of resources? (3) How has the United States financed the reallocation of resources? and (4) What have been the economic legacies of war or of a given war?
The Economic Causes of America's Wars
Although economic forces are not the only causes of wars, perhaps not even the primary causes, all of the wars that the United States has fought have had important economic causes. Although the Revolutionary War had its origins in a wide range of political and cultural causes, the colonists were outraged above all by taxes—especially those imposed upon them by the Crown without their consent. American colonials were also irritated by mercantilist policies that limited their right to trade freely with the rest of the world, although research by economic historians has tended to minimize the actual costs to the colonists as a result of these policies. The most important economic cause of the Revolution, however, may have been British restrictions on western settlement. The Declaration of Independence alludes to these restrictions in its bill of particulars:
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
The War of 1812 stemmed in part from the belief of the young United States of America that it could, as a neutral party, trade equally with both France and England during the Napoleonic Wars between those two countries. With both nations trying to enforce blockades (and both capturing American ships to do so), relations became strained. An equally if not more important factor that led to the conflict was the war fever in the West fueled by the prospect of expansion and economic growth. A successful war with Britain, Westerners thought, would lead to the annexation of Canada and to a fatal weakening of Native American resistance, thus opening vast new lands for settlement. In the end, after considerable diplomatic maneuvering, the United States decided to go to war with England, not France.
Land hunger, in particular the desire of Pres. James K. Polk for California, was also a factor behind the Mexican War. From the beginning of his administration, Polk had made the acquisition of California and the territory of New Mexico a high priority—in large part to prevent Mexico from ceding California to Great Britain (to which Mexico was in great financial debt) and thereby prevent U.S. expansion all the way to the Pacific Ocean. When Mexico refused a U.S. offer to purchase California, Polk pressured Mexico diplomatically and militarily. The Mexican government did not acquiesce to Polk's demands, however, and two years of war ensued. Mexico lost, and California and New Mexico were annexed by the United States. In 1850, its population bolstered by the gold rush, California became the 31st state.
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