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, as is commonly believed, 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. It’s an audacious thesis, one that rings true if one takes a minute to think about it.
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. They triumphed for the same reasons their business analogs did—vision, adaptability, willpower, and skill all married in one person.
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. It’s specifically the entrepreneur, the person who seeks to create something new and transform his surroundings, that Herman contends is uniquely American and uniquely deserving of support.
That argument, applied to the present day, leads to an audacious conclusion: America should enthusiastically back Trump’s political revolution and Trump should enthusiastically support the AI revolution.
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. Love him or hate him, he is one of the most consequential American political leaders in our 250-year history.
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. Americans of almost all political persuasions—and certainly all politically relevant ones—believe that private power must be tamed when it conflicts with the public interest.
That sentiment is precisely what is at issue in public debates over the speedy adoption of new AI technologies. AI fans, of which Herman is clearly one, talk about the necessity of beating China to mastery of this technology on national defense grounds. Opponents worry about massive job displacement or, at the dystopian end of criticisms, the possibility that AI entities will gain some form of consciousness and hence selfishness and willpower. That debate is worth having, and a functional democratic system will encourage it rather than suppress it.
Herman’s near total exclusion of Reagan might appear baffling until one grasps how Reagan’s presidency intersects with his argument about the decline of American industry. Herman contends that American firms in the period between 1950 and the rise of Silicon Valley became captured by managers who lost the risk-taking ethos that makes American business thrive. He cites the burdens these managers faced when confronted with environmental regulations, but more tellingly, he criticizes their decisions to cut costs by shipping production overseas, thereby trimming costs while also devastating American families and communities.
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. He also proselytized in favor of extending the free trade ethos worldwide, a belief that was institutionalized after the end of the Cold War in the World Trade Organization’s pursuit of globalization and low trade barriers.
If managers of existing industry hollowed out America by putting paper profits over national interest, it was because of the system that Reagan created. Low taxes on capital gains meant executives and financiers could capture the gains of lowering costs for themselves, and free trade enabled them to build more for less—the classic formula for building wealth. Americans enthusiastically backed this drive, and tens of millions of Americans who have benefited from globalization remain deeply committed to it.
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. Trump or any successor would be foolhardy to ignore decades of settled opinions and interests to pursue something as uncertain as untrammeled AI expansion or turn a blind eye to the potentially mindboggling economic dislocation it could cause.
None of these concerns, however, detract from the importance of Herman’s core insight: Economies do grow most expeditiously when the entrepreneurial instinct thrives, and American politics regularly needs political entrepreneurs to refresh its democracy and find a way to connect modern challenges to our ancient faith. Herman does us all a service by reminding us of these twin truths.
Founder’s Fire: From 1776 to the Age of Trump
by Arthur Herman
Center Street, 352 pp., $32
Henry Olsen is a senior fellow at the Ethics and Public Policy Center and author of the weekly newsletter Margin of Victory.
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