2018 Articles

State-Building After War’s End: A Government Financier Adjusts His Portfolio for Peace

Farber, Hannah

As the War of 1812 and the broader Napoleonic conflict drew to a close ... a new question emerged: How would the financial infrastructure forged in war be transformed by peace? Within a few years of the war’s end, the political economy of the United States was undergoing a set of dramatic, interrelated transformations. The power of the Federalists collapsed. The federal debt began to diminish. Political momentum shifted toward the states, which began to charter the hundreds and then thousands of joint-stock corporations that would come to organize domestic economic development. In the eyes of many scholars, these shifts marked the beginning of a new age of American capitalism, during which direct engagement with markets increasingly shaped American life.

We can understand this profound change even better, however, by identifying certain underlying continuities between the ages of war and peace. Among these continuities, as this article will demonstrate, were the state’s war financiers, who continued to shape the state after the wars
ended. Financiers supported the wartime state with their capital, and also with their expertise. As transatlantic warfare drew to a close, they shifted their efforts in new directions, but they did not wholly disengage from the American state. In a sense, they were incapable of doing so. They remained, I argue, part of the state’s broader apparatus, even as they sought out new avenues for personal gain. The career of government financier Jacob Barker is a case in point. A survey of Barker’s activities before, during, and after the War of 1812 reveals that postwar capitalism remained bound up with the state in no small part because the state was made up of the strategies, reputation, and expertise of the capitalists themselves. Men like Barker did not so much destroy the apparatus of the war state as disassemble it, using its parts to build themselves new fortunes.