The following is most of the Foreword, written by Forrest McDonald, in The Myth of the Robber Barons: A New Look at the Rise of Big Business in America, by Burton W. Folsom, Jr. (Young America’s Foundation, 1991). While neither the Foreword nor the book is explicitly Biblical, it 1) corrects an historiography that is false, 2) shows the power of capitalism to benefit everyone in a free society (not just the “big businessman), and 3) illustrates Biblical principles of limited government and free enterprise. (For a longer discussion of this issue, see internet reference at the bottom of the page.
Folsom shows that the “Robber Baron” school of historians of American business enterprise was partly right and partly wrong…. There are two kinds of business developers… “political entrepreneurs” and “market entrepreneurs.” The former were … comparable to medieval robber barons, for they sought and obtained wealth through the coercive power of the state, which is to say that they were subsidized by government and were sometimes granted monopoly status by government. Invariably, their products and services were inferior to and more expensive than the goods and services provided by market entrepreneurs, who sought and obtained wealth by producing more and better for less cost to the consumer. The market entrepreneurs, however, have been repeatedly — one is tempted to say systematically — ignored by historians….
Folsom’s study has profound implications for American historiography beyond the immediate subject to which it is addressed. It is commonly held that the Whig Party of Clay and Webster and its successor Republican Party of Abraham Lincoln and William McKinley were the “pro-business” parties, and that the Jacksonian Democrats were anti-business…. (Actually) the Whigs and Republicans engaged in a great deal of pro-business rhetoric and in talk of economic development, but the policies they advocated, such as subsidies, grants, of special privileges, protective tariffs, and the like, actually worked to retard development and to stifle innovation. The Jacksonian Democrats engaged in a great deal of anti business rhetoric, but the results of their policies were to remove or reduce governmental interference into private economic activity, and thus to free market entrepreneurs to go about their creative work. The entire nation grew wealthy as a consequence.
Folsom’s work… has a powerful relevance to current political discourse…. In the last decade or two, many corporate businessmen have joined with leftist ideologues to clamor for a “partnership” between government and business that would involve central planning, protective, tariffs, and a host of restrictions upon foreign competitors…. Political promotion of economic development is inherently futile, for it invariably rewards incompetence; if competence is rewarded, incompetence will therefore be the product; and when incompetence is the product, politicians will insist that increased planning and increased regulation if the appropriate remedy.
Adam Smith warned us more than two centuries ago. “The statesman, who should attempt to direct people in what manner they ought to employ their capital, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”
For further reading on this same issue, see http://www.mises.org/story/2317.