Ayn Rand Was Right
I'm not one of the slavering Ayn Rand worshippers. I think the lady was a little unhinged, and certainly, a hypocrite. But, on some things -- like her definition of love, and the currect economic situation, she was dead-on. And yes, I meant that: the current economic situation -- which she wrote about 52 years ago in Atlas Shrugged
The current economic strategy is right out of "Atlas Shrugged": The more incompetent you are in business, the more handouts the politicians will bestow on you. That's the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies -- while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to "calm the markets," another trillion of national wealth is subsequently lost. Yet, as "Atlas" grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate "windfalls."When Rand was writing in the 1950s, one of the pillars of American industrial might was the railroads. In her novel the railroad owner, Dagny Taggart, an enterprising industrialist, has a FedEx-like vision for expansion and first-rate service by rail. But she is continuously badgered, cajoled, taxed, ruled and regulated -- always in the public interest -- into bankruptcy. Sound far-fetched? On the day I sat down to write this ode to "Atlas," a Wall Street Journal headline blared: "Rail Shippers Ask Congress to Regulate Freight Prices."
In one chapter of the book, an entrepreneur invents a new miracle metal -- stronger but lighter than steel. The government immediately appropriates the invention in "the public good." The politicians demand that the metal inventor come to Washington and sign over ownership of his invention or lose everything.
The scene is eerily similar to an event late last year when six bank presidents were summoned by Treasury Secretary Hank Paulson to Washington, and then shuttled into a conference room and told, in effect, that they could not leave until they collectively signed a document handing over percentages of their future profits to the government. The Treasury folks insisted that this shakedown, too, was all in "the public interest."
Ultimately, "Atlas Shrugged" is a celebration of the entrepreneur, the risk taker and the cultivator of wealth through human intellect. Critics dismissed the novel as simple-minded, and even some of Rand's political admirers complained that she lacked compassion. Yet one pertinent warning resounds throughout the book: When profits and wealth and creativity are denigrated in society, they start to disappear -- leaving everyone the poorer.
One memorable moment in "Atlas" occurs near the very end, when the economy has been rendered comatose by all the great economic minds in Washington. Finally, and out of desperation, the politicians come to the heroic businessman John Galt (who has resisted their assault on capitalism) and beg him to help them get the economy back on track. The discussion sounds much like what would happen today:
Galt: "You want me to be Economic Dictator?"
Mr. Thompson: "Yes!"
"And you'll obey any order I give?"
"Implicitly!"
"Then start by abolishing all income taxes."
"Oh no!" screamed Mr. Thompson, leaping to his feet. "We couldn't do that . . . How would we pay government employees?"
"Fire your government employees."
"Oh, no!"
Abolishing the income tax. Now that really would be a genuine economic stimulus. But Mr. Obama and the Democrats in Washington want to do the opposite: to raise the income tax "for purposes of fairness" as Barack Obama puts it.
David Kelley, the president of the Atlas Society, which is dedicated to promoting Rand's ideas, explains that "the older the book gets, the more timely its message." He tells me that there are plans to make "Atlas Shrugged" into a major motion picture -- it is the only classic novel of recent decades that was never made into a movie. "We don't need to make a movie out of the book," Mr. Kelley jokes. "We are living it right now."
Pournelle's Iron Law of Bureaucracy:
"In any bureaucracy, the people devoted to the benefit of the bureaucracy itself always get in control and those dedicated to the goals the bureaucracy is supposed to accomplish have less and less influence, and sometimes are eliminated entirely."
bradley13 at January 12, 2009 6:16 AM
It is amazing how Mr. Kelly is right on this; Atlas Shrugged is now prophetic. I wonder how long it will take before the "Atlas" of this world start to fold and leave.
Toubrouk at January 12, 2009 6:16 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/01/12/ayn_rand_was_ri.html#comment-1620031">comment from ToubroukAyn Rand also echoed in my head during the tech boom, when people were producing nothing but selling stock for millions.
Amy Alkon
at January 12, 2009 6:18 AM
Hilariously, today's quote on the Murphy's Law calendar is:
"It is difficult to get a man to understand something when his salary depends on his not understanding it." -- Upton Sinclair, The Jungle (1906)
How very true.
Jim P, at January 12, 2009 7:03 AM
I think I will re-read D'Anconia's speech The Meaning of Money today just for comfort. It is always good to remember where money came from.
Toubrouk at January 12, 2009 7:08 AM
Amy Alkon
http://www.advicegoddess.com/archives/2009/01/12/ayn_rand_was_ri.html#comment-1620041">comment from ToubroukI think I will re-read D'Anconia's speech The Meaning of Money today just for comfort. It is always good to remember where money came from.
A link to that speech: http://rahmisari.com/2008/02/29/francisco-danconias-speech-the-meaning-of-money/
Amy Alkon
at January 12, 2009 7:29 AM
I agree with you Amy bu only a major catastrophy will lead to change. But no need to fret, when these public works projects actually increase unemployment and deficits skyrocket, Obama will be left with 2 choices. Raise taxes or print money. It's either going to be 1932 or the 70's all over again ...
Charles at January 12, 2009 9:35 AM
$100,000 on 1932
lujlp at January 12, 2009 11:06 AM
I've got fifteen bucks. Which, adjusted for inflation, will be about a hundred grand in three years.
Or, enough to buy a burger.
brian at January 12, 2009 1:16 PM
Reason magazine's latest shocker is the one on pension funds. Yikes. I hadn't even thought of that, although I am already expecting credit card debt, auto loans, and student loans to go the way of mortgage loans.
I predict the government will bail all of them out, incur more debt and print more money to cover it, and we'll grind through years and years of economic stagnation and decline. It makes me glad I don't have kids and don't have to worry about taking care of anyone but myself.
Pirate Jo at January 12, 2009 2:08 PM
Actually, if the government prints enough money, it'll trigger a world-wide default.
If we lower the value of the dollar sufficiently, holders of dollar-denominated debt will sell that debt, flooding the market with dollars which will trigger massive defaults as we are unable to produce sufficient assets to cover those dollars issued "with the full faith and credit of the United States of America".
Which means hyperinflation followed by deflation.
Which means that China owns your house, as there's no other collateral to be offered at this point.
brian at January 12, 2009 2:36 PM
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