Abstract: Managing New Markets: A Reinterpretation of the Rise of American Industrial Capitalism
This paper reinterprets early industrial capitalism in the United States as a product of commercial diplomacy in Latin America in the 1810s and 1820s. Domestic protectionism, individual ingenuity, and improvements in technology engendered industrial development in the United States, but so too did new markets for manufactured goods. This paper draws on consular despatches, merchants’ papers, and manufacturing records to argue that US diplomats throughout the 1810s pursued a strategy of relationship-building and commercial information gathering, which laid the groundwork for diplomats in the 1820s to negotiate with newly independent governments for commercial policies favorable for US exports, particularly manufactured goods.
Rivaled only by Great Britain, the United States achieved a commercial and diplomatic dominance in Latin America first in relation to arms. During the Latin American Independence Wars, South American patriots turned to the United States, which by 1810 manufactured the vast majority of its own arms and produced a surplus of gun parts every year. Latin American demand for guns shifted the policies of Latin American governments in favor of U.S. trade, paving the way for commercial diplomacy that benefitted American textile importation, for which no obvious demand existed. The power dynamics that emerged as a result of military provisioning subsequently enabled U.S. agents to aggressively push for favorable textile regulations in the mid-1820s.
These dynamics can be understood as the beginning of the United States’ exertion of soft power in the region, whereby the United States used its growing economic power to pursue ever more favorable trade policies that benefitted American industry, generally, and specific businessmen, in particular. Access to South American markets became increasingly important for United States manufacturers, whose exports almost exclusively went to the Caribbean islands, Mexico and South America. During the nation’s first few decades, the deployment of consuls to posts throughout the world offered a solution for how best to utilize minimal federal resources in the service of growing the US economy.