I think it's lost on most Americans how strange American conservatism is. Maybe "strange" isn't the best word, but the views that constitute American conservatism don't usually go together. Before World War II, Europe's upper-classes and nobility were quite skeptical of capitalism, and believed it threatened the "natural order" of the nation, so to speak. I think a lot of this had to do with the nobility obtaining its status by birth or by inheriting land, and an entrepreneur or businessman could threaten that status by finding success in industry or banking. In any case, Benjamin Disraeli emphasized one-nation conservatism, which supported government programs for the working class. Otto von Bismarck, the 19th century's archetypal conservative, instituted Europe's first social safety net. Fascism, which grew as a right-wing response to communism, emphasized social cohesion, hence the "socialism" in National Socialism. And after World War II, Christian democracy took over Western Europe. Christian democracy emphasized conservative social values from the mid-40s through the mid-60s, but also supported a strong safety net and workers' rights. After Christian democracy, I believe Europe's right became more "libertarian," and focused on free-market capitalism, but without the religious values and war mongering. Today, right-wing populists like Marine Le Pen, are very secular, and, if anything, oppose unfettered capitalism. So why did the American right take a completely different course? How did it come to be defined by support for the military, taxation and spending cuts, and Christian social values?
The short answer: the conservative coalition that surged to power in the late 1970s and 1980s that combined together faith in Christian rejuvenation of the nation, muscular rearmament of the nation in a Cold War era, and a resurgent corporate class that set forth economic ideas in a period when Keynesian belief in government economic intervention was discredited.
I am not a historian of the early American Republic, but I'd argue that the American economy has never really functioned as anything other than capitalism. "Manifest destiny", the banner of westward expansion for the entirety of the 19th century, was very much an expression of the search for markets, resources, and productive land.
Franklin Roosevelt and the New Deal was not the first step away from unfettered capitalism (the Progressives were already aware of the problems in Gilded Age America two generations earlier), but it was the major moment where leftist America had found broad national success. From the end of WWII to the 1970s, even when Republican presidents were in power, there was broad popular and Congressional consensus around using the government to intervene heavily in the economy and shoot for full employment. Was this a moment where militarism and Christian values were in decline? Far from it! If you were a businessman in Southern California or a developer in Arizona or an engineer in Seattle, "government intervention" meant contracts with the US military, supported by the need to maintain the nation's strength in the Cold War. Phrases like "in God we trust" and "under God" were added in to the national fabric during the Eisenhower administration, weaving together faith with the nation's new goal of protecting the free world.
But I see the 1970s as the key moment when you see the disparate, contradicting elements of the extraordinarily successful conservative resurgence come together. The key idea here? NATIONAL REJUVENATION.
Firstly, the Vietnam War (which also sank Johnson's Great Society efforts to end poverty) demolished government credibility to use big solutions to solve big problems. Combined with the stagflation economic crisis, the Keynesian consensus around government economic intervention collapsed (even though we now know that government intervention wasn't really the cause or perpetrator of stagflation, the door was open for a new school of economic thought to waltz in). Economic rejuvenation could come through Milton Friedman and trickle down economics, God Bless!
So we have one piece of the puzzle: growing belief that limited government intervention and lower taxes would be the way to manage the economy. But what about the other two, militarism and Christian values?
The Vietnam War did lead to a brief waning in support for American militarism. But by the end of the 1970s, increasing awareness of human rights abuses around the world and America's relative decline in power promoted support for a more muscular reimagination of the nation. President Carter's (in my opinion, prudent) limited response to the dramatic hostage taking in the US embassy in Iran was NOT popular. Conservative politicians like Ronald Reagan began to garner larger audiences by offering a vision that could dismiss the lingering phantom of the Vietnam experience, rather than trying to really rethink the nature of US global power.
Christianity was a crucial plank in the conservative coalition surging to power at the local and then national level. Business leaders had long touted ties to Christian values, exemplified by the Walton family (founder of Walmart) which promoted Christian family values alongside business-first economic thinking. Christian values offered the ideological blanket that could provide MORAL rejuvenation to a country that had seen the legitimacy of traditional authorities tarnished in the 1960s. This was not limited to conservatives--Jimmy Carter was a Georgia-based born again Christian, emblematic of the broad resurgence of attendance in evangelical churches. But the right wing was far more effective at claiming Christian values for right wing economic and national security ideas.
Figures like Reagan (and before him, Barry Goldwater) offered messaging that hit at these crucial areas, forging a coalition of voters that included business leaders, suburbanites, disaffected workers, and Christians. That central crucible has remained at the core of the Republican Party since his election in 1980.