America is known as a land of entrepreneurship and a country that continually reinvents itself while retaining a commitment to its Founding ideals. Are the two things distinct, or are they intrinsically related? Arthur Herman argues they’re interrelated in his new book, Founder’s Fire, which makes it a fascinating read on our current political moment.
Herman’s book is ambitious. He simultaneously presents a history of American business entrepreneurship from Eli Whitney’s invention of the cotton gin to the quest for AI and a political history of the country from the Founders to Trump. Herman shows the entrepreneurial virtues that create new, transformative companies—such as willingness to take risk and putting customer needs first—are the same that have animated great leaders like George Washington, James Madison, and Abraham Lincoln.
People like Cornelius Vanderbilt and Henry Ford, two titans Herman lauds, did not know their ventures would be successful when they started. They were blazing new paths in creating affordable steamboat shipping, railroad travel and transport, and inexpensive, mass-produced automobiles. They frequently failed in their initial attempts to create what had never existed before. Their ultimate successes stemmed from uncommonly strong belief in themselves and their visions and a willingness to learn and adapt from prior missteps.
Political leaders often demonstrate similar qualities in their pursuit of high office. Washington won the Revolutionary War despite losing battle after battle because of that strength of vision as well as an ability to adapt to misfortune. Lincoln famously lost almost every race he entered from 1848 until he was finally elected president in 1860.
Herman brings this argument to roost in the present day by arguing that Donald Trump and the tech giants of our age are remaking the world as we watch by employing identical qualities. The tech bros, having remade the world by creating the internet and social media, are now transforming it with their AI research. Trump’s political revolution is uprooting decades of a stale consensus that had throttled U.S. manufacturing, stifled millions of Americans’ ability to reach the American Dream, and hampered our capacity to wage and win a war with our strongest foe yet, techno-fascist Communist China.
Herman’s work could have been a relatively dry description of these trends. Instead, he argues that America works best when political entrepreneurship energetically supports economic entrepreneurship. That’s not a restatement of the old nostrum that “the business of America is business.” Herman criticizes what he calls the managerial mindset that can often dominate mature corporations after the founder departs.
The perceptive reader will note that I haven’t mentioned any political leader between Lincoln and Trump. That’s because Herman rarely mentions them either. This poses a very significant challenge to his thesis, as both Franklin Delano Roosevelt and Ronald Reagan—the two most entrepreneurial and transformative 20th-century presidents—pursued policies that run counter to Herman’s model.
FDR’s 13 years in power created the modern American welfare state and powerful central government. Look at any aspect of the federal government—high taxes on the well-off and transfer payments to the poor, working class, and retired; extensive regulation of business activities in pursuit of the public interest; civil rights legislation that constricts civil society to advance historically disadvantaged population segments—and he either directly instituted those programs or provided the political framework to allow his successors to do so.
His popular appeal was directly the result of his stated ambition to curb the private power that loosely constrained business leaders—usually of the entrepreneurial sort—exercise. It’s no longer politically relevant to debate whether FDR’s charge that their allegedly greedy and irresponsible exercise of that power caused the Great Depression.
Herman argues that true entrepreneurs thrived under the tariff system and cut costs while raising real wages. The trouble with his condemnation of the so-called managers is that they were responding to the incentives that Reagan’s policies established. Reagan started his 1980 presidential campaign by calling for a North American free trade pact, an intellectual forerunner of what became first NAFTA and then the USMCA.
No contemporary political entrepreneur can run roughshod over the worlds that FDR and Reagan built, at least not so long as we have a functioning democracy. Successful political entrepreneurship always involves meeting the public opinion where it is and moving it in a new direction.