Cowards and Heroes: Group Loyalty in the U.S Civil War

1. Cowards and Heroes: Group Loyalty in the U.S Civil War Dora L. Costa MIT and NBER Matthew E. Kahn Tufts

2. Introduction • The U.S Civil War was horrific • Soldiers knew that: • Probability of death from disease and battle was high (20%) • Pay was low and irregular • Punishment mechanisms were weak • Why didn’t everyone desert?

3. What motivates soldiers to be loyal to this organization? • Narrow self-interest cannot explain why the desertion rate was only 9% • Alternative Explanations: • Altruism for your fellow men • Desire for their honor and esteem • Ideology • Morale

4. Empirical Contribution • Use a unique data set of 31,850 Civil War Union soldiers to model the propensity to be a “coward” and a “hero” as a function of: • demographics • community characteristics • ideology • morale

5. Cowardly and heroic deeds • Non-market interaction • An important aspect of human behavior that ECONLIT suggests is under-researched

6. The Paper Contributes to Three Growing Literatures • Group Loyalty • Levitt and Venkatash 2000, • Berman 2000, • Luttmer 2001, • Poterba 1997, • Iannaccone 1992

7. Production of Social Capital • Social Capital is the “Glue” that keeps the army united • Growing research on the micro and macro determinants of producing social capital • Alesina and La Ferrara 2000, • Glaeser, Laibson and Sacerdote 2000, • Costa and Kahn 2001

8. Empirical Organizational Design • What types of organizations “function well”? • Outcome measures such as turnover levels are higher in more heterogenous divisions based on observables such as age, education, tenure, race and sex (see Pfeffer)

9. Demand and Supply of Military Loyalty • The military faces a tough “agency problem”. • It produces team output – winning battles • The military cannot observe its workers’ effort in the smoke of the battlefield. • The “usual” solutions for agency problems cannot be utilized

10. For the Military: Social Capital can substitute for monetary incentives • If loyalty could be built within the company this would mitigate the agency problems • Such loyalty cannot be “purchased” it must be produced “in-house”

11. How Does Social Capital help this Organization Function? • Self-enforcing peer-pressure, fighting is done in public and your actions are common knowledge among your peers; • Don’t lose face, self-esteem tied to how your peer group views you • More social capital => more group loyalty => less shirking => better chance for victory

12. Will the Men Supply Loyalty? • Survival Instincts says “no” • BUT: If they feel altruism for their fellow men • If they desire the respect of their company • If they believe in the cause • If their side has been winning recently

13. Production Function Framework • Loyalty = f(social capital, individual attributes, morale) • Social capital = g(individual attributes, community attributes)

14. Empirical Design • Hazard model of competing risks (Weibull), why choose this? • Our Decision Tree • Focus on coefficients on individual attributes, company attributes, and ideology to measure “cowardice” and “heroism” • Desertion measures “cowardice” • Promotion measures “heroism”

15. Robert Fogel’s Union Army Sample • Sample includes 31850 white men who fought for the Union • 303 infantry companies out of 331 randomly sampled and within these companies a 100% sample • their wealth representative of northern population • % all northern men serving ranged from 53 to 81% in 1839-1845 birth cohorts

16. Advantages of our Empirical Design • Stakes are high • easy for the researcher to measure “shirking” relative to the modern firm • team members also observe “shirking” • 303 companies provide “cross-variation” • Small Companies but not randomly assigned

17. Demographic and socio-economic Determinants Individual Characteristics; • occupation • country of birth • age and height • total personal property wealth in 1860 • Literacy • Marital status

18. Community Determinants • company characteristics -- • birthplace fragmentation • occupation fragmentation • age heterogeneity of the company • Do you have a brother in your company? • Population of city enlisted in

19. Ideological Determinants • Volunteer • percent of your county of enlistment who voted for Lincoln • Year mustered

20. Morale Determinants • Momentum variables – share of battles won in the last year • Share of company who died

21. The Geography of Cowardice and Heroism • Table One • Each column’s entries sum to 100% • Wide variation • Wisconsin and Iowa are special in terms of promotion

22. Summary Statistics • Table Two reports the means of the explanatory variables for; • The whole sample • For “Cowards” • For “Heroes” • Means differ depending on ultimate category

23. We Estimate Separate Hazard Models for Desertion, Arrests, AWOL, and Promotion • We organize our findings by major hypothesis

24. Individual Attributes • The Deserters are: • Older • Literate • Wealthier • Irish and British • Not German • Married

25. Community Level Variables • Desertion probabilities are higher in companies where: • heterogeneity is higher as measured by: • birth place, • occupational • age • if you are from a large city • duration dependence parameter in the desertion hazard • Fragmentation Measures • Big City Effects • “Dark Side” of Social Capital? Do more homogenous companies collude to avoid combat and to survive? “Special treatment and favoritism” --- • Reflection Effects

26. Community Continued • Unlike the desertion results, the community variables do not intuitively predict promotion to officer (i.e heroism) • Having a brother in your company raises desertion propensity but lowers AWOL propensity • Evidence of Contagion Effect identified due to functional form

27. The “Dark Side” of Social Capital Hypothesis • We find no evidence that in more homogenous communities that the men “collude” to straggle in back • Some evidence of favortism if the officer and the soldier have similar attributes

28. Ideology • Desertion is Lower for: • Men who enlist early (1861) • Volunteers • Men from Pro-Lincoln counties

29. Morale • Desertion falls when the company death rate is lower • When the Union is winning battles

30. Optimal Organizational Design • Table 8 allows us to show the magnitude of our hazard estimates • If the army wanted to minimize cowardice, Table 8 shows what we predict it could achieve

31. Conclusion • A self-interested soldier would have deserted, yet a small fraction did. Why didn’t more soldiers desert? • Social capital and fear of loss of honor substituted for incentive pay • The same variables that predict participation in the “modern” social capital literature predict participation in this historical setting