In an Origfamous protest song, Edwin Starr (Gordy Records 1970) thundered, “War, ugh, good god. What is it good for? Absolutely nothing, …” Lindsey Schakenbach Regele disagrees. She argues that wars, and government policies related to wars and the broader objective of national security, lie behind the transition to industrial capitalism in the United States in the first half of the nineteenth century. The broader perspective of national security means it was not just hot wars in which the United States participated, but also, insurrections, the continual threat of domestic conflicts, as well as wars elsewhere. In her view, other scholars have overstated the existence of peace in the first half of the nineteenth century. In addition to the War of 1812 and the Mexican War, there were continual skirmishes with Native Americans and rebellious citizens, and a contentious ongoing presence of British businesses in the northwest, all of which required military capability and thus increased arms production. But Regele argues further that it also called forth government assistance for textile producers. While guns were a military imperative; textiles mattered “as visible manifestations of independence” (p. 10).

As obvious as the need for national security might have been, it was not the new nation’s top priority in its first two decades. Nor was industrialization a high priority. Although there was much rhetoric about the value of industrialization and the merits of government intervention in the economy to foster manufacturing, very little was actually done, except perhaps to buy guns from American armories. And even that was not much. Textiles struggled even more, and the United States continued to import military clothing and guns until the eve of the War of 1812.

The Embargo and War of 1812 provided some incentive for both arms and textile manufacturing to expand production. Neither industry expanded much during the Embargo, and dwindled or stagnated once the embargo was lifted. The war had a more noticeable impact, especially on arms manufacturing, but again both industries experienced difficulties after the war. Nevertheless, Regele’s view of this period is that despite the lackluster performance, the government, by having engaged in national security capitalism—providing contracts, picking winners, setting appropriate policies—spawned industrial development.

Subsequently, the two industries benefited from government assistance in perhaps unexpected ways. In the first instance, aid came from the acquisition of Florida from Spain in 1821 and the related wars with the Seminoles. While ostensibly of benefit to those with commercial interests in the Gulf of Mexico, these events were more important to New England manufacturing. Arms production was driven by the need to fight the wars with the Seminoles. The benefits to the textile industry were less obvious, but more consequential. In the author’s view the Boston Associates’ political connections influenced the negotiations with Spain, so that the terms of the Transcontinental treaty included $5 million to pay off claims against the Spanish government. Much of this went to the Boston Associates at a propitious time. The Panic of 1819 had resulted in many business failures in New England, and these windfall payments allowed the Associates to engage in vulture capitalism.

The growth of arms and textile manufacturing was fostered in the following decades by revolutions in Latin America and the implementation of Manifest Destiny. By supplying arms to Latin American countries during the revolutions, a commercial diplomacy was established that benefited U.S. textile sales. U.S. Consuls played a key role in opening markets in Latin America to textile producers, especially those firms that were part of the Boston Associates. Some of these consuls appear to have been acting as private agents for the Boston Associates, a behavior Regele sees as emblematic of early nation state-promoted capitalism that may have stimulated economic growth generally, but privileged certain individuals. This episode leads Regele to conclude that the growth of foreign markets for U.S. manufactures “cannot be explained by free trade, economic rationality, or comparative advantage, but by US diplomatic policy in Latin America” (p. 112) Government assistance continued in the era of Manifest Destiny helping to expand arms and textile manufacturing in two ways. Westward expansion involved negotiations and treaties with Great Britain and China that benefited the textile industry, while military action against Mexico and Native Americans benefited both the firearms and textile industries.

Regele has done a masterful job of integrating a huge secondary literature with numerous pieces of evidence from primary sources to lend support to her theses. In summary there are 80 pages of notes compared to 167 pages of text. While this is an impressive amount of documentation, I would like to have seen more quantitative evidence that put some of her claims into perspective.

For example, she argues that the close interaction between the government and the arms industry in the early nineteenth century was the genesis of the military-industrial complex of the twentieth century, and offers data showing that the military absorbed one-third of peacetime outlays in the early nineteenth century, not much less than the share in 1950 when Eisenhower first warned about the military-industrial complex. But she fails to mention that federal expenditures in total were much smaller in the early nineteenth century. Compared to GDP, defense spending in the early nineteenth century was typically less than 1 percent; in the 1950s, its share was more than 8 percent.

A key point in her story is the large payout to the Boston Associates, perhaps $1 million dollars, which was part of the Transcontinental Treaty. Scholars may have neglected this source of investment capital that financed the textile industry, but how important was that to the Associates? How large was it compared to the Associate’s own capital reserves and other sources of capital? In a similar vein, how does one assess her claim that scholars have overstated the existence of peace in the first half of the nineteenth century? Are we to believe that every encounter between the military and Native Americans, no matter how small, was a notable breach of the peace that gave rise to increased production of arms and uniforms? The numbers of military personnel on active duty suggest that only the War of 1812 and the war with Mexico stand out; in other years the personnel appear to have been peace-time military.

These shortcomings aside, there is much to appreciate in this book. Economic historians might not be too keen about a story that gives greater explanatory power to diplomacy than to profit maximization and comparative advantage, but there is plenty to think about. On the other hand, her work will be valued highly by those who adhere to the idea that businesses did not achieve success on their own.