The Economic Lessons of Bethlehem

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the heart of the Christmas story rests some important lessons concerning
free enterprise, government, and the role of wealth in society.

begin with one of the most famous phrases: "There’s no room
at the inn." This phrase is often invoked as if it were a cruel
and heartless dismissal of the tired travelers Joseph and Mary.
Many renditions of the story conjure up images of the couple going
from inn to inn only to have the owner barking at them to go away
and slamming the door.

fact, the inns were full to overflowing in the entire Holy Land
because of the Roman emperor’s decree that everyone be counted and
taxed. Inns are private businesses, and customers are their lifeblood.
There would have been no reason to turn away this man of aristocratic
lineage and his beautiful, expecting bride.

any case, the second chapter of St. Luke doesn’t say that they were
continually rejected at place after place. It tells of the charity
of a single inn owner, perhaps the first person they encountered,
who, after all, was a businessman. His inn was full, but he offered
them what he had: the stable. There is no mention that the innkeeper
charged the couple even one copper coin, though given his rights
as a property owner, he certainly could have.

remarkable, then, to think that when the Word was made flesh with
the birth of Jesus, it was through the intercessory work of a private
businessman. Without his assistance, the story would have been very
different indeed. People complain about the "commercialization"
of Christmas, but clearly commerce was there from the beginning,
playing an essential and laudable role.

yet we don’t even know the innkeeper’s name. In two thousand years
of celebrating Christmas, tributes today to the owner of the inn
are absent. Such is the fate of the merchant throughout all history:
doing well, doing good, and forgotten for his service to humanity.

if there was a room shortage, it was an unusual event and brought
about through some sort of market distortion. After all, if there
had been frequent shortages of rooms in Bethlehem, entrepreneurs
would have noticed that there were profits to be made by addressing
this systematic problem, and built more inns.

was because of a government decree that Mary and Joseph, and so
many others like them, were traveling in the first place. They had
to be uprooted for fear of the emperor’s census workers and tax
collectors. And consider the costs of slogging all the way "from
Galilee, out of the city of Nazareth, into Judea, unto the city
of David," not to speak of the opportunity costs Joseph endured
having to leave his own business. Thus we have another lesson: government’s
use of coercive dictates distort the market.

on in the story, we come to Three Kings, also called Wise Men. Talk
about a historical anomaly for both to go together! Most Kings behaved
like the Roman Emperor’s local enforcer, Herod. Not only did he
order people to leave their homes and foot the bill for travel so
that they could be taxed. Herod was also a liar: he told the Wise
Men that he wanted to find Jesus so that he could "come and
adore Him." In fact, Herod wanted to kill Him. Hence, another
lesson: you can’t trust a political hack to tell the truth.

having found the Holy Family, what gifts did the Wise Men bring?
Not soup and sandwiches, but "gold, frankincense, and myrrh."
These were the most rare items obtainable in that world in those
times, and they must have commanded a very high market price.

from rejecting them as extravagant, the Holy Family accepted them
as gifts worthy of the Divine Messiah. Neither is there a record
that suggests that the Holy Family paid any capital gains tax on
them, though such gifts vastly increased their net wealth. Hence,
another lesson: there is nothing immoral about wealth; wealth is
something to be valued, owned privately, given and exchanged.

the Wise Men and the Holy Family got word of Herod’s plans to kill
the newborn Son of God, did they submit? Not at all. The Wise Men,
being wise, snubbed Herod and "went back another way"
– taking their lives in their hands (Herod conducted a furious
search for them later). As for Mary and Joseph, an angel advised
Joseph to "take the child and his mother, and fly into Egypt."
In short, they resisted. Lesson number four: the angels are on the
side of those who resist government.

the Gospel narratives, the role of private enterprise, and the evil
of government power, only begin there. Jesus used commercial examples
in his parables (e.g., laborers in the vineyard, the parable of
the talents) and made it clear that he had come to save even such
reviled sinners as tax collectors.

just as His birth was facilitated by the owner of an "inn,"
the same Greek word "kataluma" is employed to describe
the location of the Last Supper before Jesus was crucified by the
government. Thus, private enterprise was there from birth, through
life, and to death, providing a refuge of safety and productivity,
just as it has in ours.

3, 2000

H. Rockwell, Jr. [send him
], former publications editor to Ludwig von Mises and congressional
chief of staff to Ron Paul, is founder and chairman of the Mises
, executor for the estate of Murray N. Rothbard, and
editor of
See his

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