The 1797 Quasi-War That Built the US Navy

In this episode of The Economic History Podcast, Lucas and Luna explore the Quasi-War of 1797-1800—an undeclared naval conflict with France that forced the young American republic to build a standing navy from scratch. They trace how this military build-up catalyzed the rise of domestic shipbuilding, iron forging, and insurance industries, turning a security crisis into an economic launchpad. Specific numbers: the US Navy budget jumped from zero to $10 million in three years (roughly $300 million in today's dollars), and the private shipyards of Boston, Philadelphia, and Baltimore doubled their workforce. Lucas connects this to modern defense-industrial policy, asking whether security threats can sometimes spark long-term economic development. Luna challenges the framing, pointing out that military Keynesianism has a mixed track record. A focused deep dive into how a forgotten war shaped American industry. #QuasiWar #USNavy #EconomicHistory #DefenseSpending #1797 #Shipbuilding #IndustrialPolicy #MilitaryKeynesianism #FexingoBusiness #BusinessPodcast #Economics #JohnAdams #XYZAffair #BostonShipyards #IronForging #MarineInsurance #AmericanIndustry #NationalSecurity Keep every episode free: buymeacoffee.com/fexingo