08
Nov
09

Rand and the Recession

I have been reading two truly hilarious novels lately. One of these, PG Wodehouse’s Thank You, Jeeves, deserves credit for being intentionally funny. The other, Ayn Rand’s Atlas Shrugged, not so much.

I bring this up because it’s been well reported that sales of Atlas Shrugged have jumped considerably in light of the recession. So much so that there’s a recent rash of books coming out discussing Rand’s books and the philosophy she professed. Last week’s Economist magazine had an article on her, and there have apparently been rumours in Hollywood that an adaptation is being fast-tracked. Her new popularity is being credited to the recession as the book prophesises an economy grinding to a halt, and a government scramble to fix it which instead makes the whole thing far worse. It is this view that leads me to believe the rest of the world has read a different Atlas Shrugged from the one I have, as the philosophy espoused in my version has been rendered provably wrong by the recession.

I want to point out that the recession is not the reason I read this novel. I picked it up because I recently played and fell in love with a videogame called Bioshock, which deliberately establishes itself as a counterpoint to Atlas Shrugged. If you find it audacious that a mere computer game should challenge such a celebrated book, I ask you to consider what a stunningly brilliant piece of fiction Bioshock actually is, and what a tawdry sci-fi Atlas Shrugged descends to. I don’t take any pleasure in attacking the book like this. There’s no denying that Rand was a writer of exceptional talent. Her prose simply flows from the page. The problem is that this book is far too self-indulgent and lost in its message to be enjoyed as fiction, and too shallow to be regarded as philosophy.

I don’t want to get bogged down with discussing the plot, except to say it tells the story of Dagny Taggart and her battle to run a railroad company in the face of government interference and her inept brother, president of the company. I found it useful to imagine Dagny as a young Margaret Thatcher, as it helped me to understand her motivation (thought it did also make the sex scenes pretty disturbing). The reason to read this book is to try to appreciate fully Rand’s philosophy of objectivism. Objectivism states that pursuing one’s own happiness in a moral imperative, and that the free market and laissez-faire capitalism are required to regulate society. Its opposite is altruism, and Rand certain isn’t shy about expressing her contempt for “the need of the many”.

I suppose her work is enjoying renewed popularity as the bail-out of banks and motor companies in the States, not to mention our very own Nama, smacks of the collectivism to which Rand was so opposed. The trouble is that our recession wasn’t caused by altruists or collectivism. Alan Greenspan, who can largely be credited as the architect of the recession (and who was himself a disciple of Rand) has admitted to the flaws in free market ideology exposed by the recession.

Of course supporters of objectivism are not without ammunition. In one scene in Atlas Shrugged Dagny is interviewing the manager of a failed bank. He tells her: “If people needed money, that was enough for me. Need was my standard… I did not sit on piles of money and demand collateral from poor people who needed money. Their heart was my collateral.” This should remind us of the 100% mortgages that fuelled unsustainable housing bubbles here and elsewhere. In the US this was largely begot by a government policy to ensure every American family were homeowners, a policy envisioned by the Clinton administration and encouraged with gusto by Bush. All of which is in line with Rand’s opposition to state-interference with business. But it doesn’t hold, not from my reading of the novel. At the end of the interview the manager tells Dagny: “You haven’t any right to despise me,” continuing, “My motives were pure. I wanted nothing for myself. Miss Taggart, I can proudly say that in all my life have never made a profit.” To this Dagny responds: “I think that I should let you know that of all the statements a man can make, that is the one I find most despicable.” There are many, many reason to despise our real-life, modern day bankers, but the charge that they were uninterested in profit is not among them.

Even without the perspective of the recession, there’s something clearly wrong with the way Rand presents her philosophy. All of her characters motivated by profits are depicted as brilliant visionaries incapable of making a mistake. Whereas anyone who ever express concern for the common good is immediately caricatured through varying combinations of stupid, myopic, scheming, power-hungry, weak-willed, cowardly, unfocused and physically unattractive. Rand is dealing in black and white, tabloidy absolutes. In addition, in the second part of the novel we are told that the “looters” are planning the mysterious “Project X”, which they demand be kept secret at all costs. But I ask you, how secret can this project be if those involved frequently boast about it, as if it offers some kind of threat or social currency? This is the kind of presentation one expects of cheap thrillers. In a philosophical novel it smacks of lazy, straw man propaganda, the same category of propaganda Rand damns in the book.

As much as all this bothered me, however, none of it came close to my biggest complaint with the book: its smugness. I never before encountered a novel I’d describe as smug. I never even entertained the notion that a novel could be smug. Yet this is a book that takes an extraordinary level of comfort in the absolute believe in its own hypothesis. For instance, there’s one scene during a wedding reception when one of the heroes overhears someone remark: “Money is to root of all evil,” and immediately launches into a speech on why money is the root of all good. This speech goes on for five pages – FIVE FECKIN’ PAGES of ranting that money is great – and when he finally finishes he smarmily states: “If you can refute a single sentence I shall hear it gratefully.” Of course nobody can refute it. In Rand’s world those who don’t love money are the enemy of reason. However, in reality there is very little to refute. Despite the length of the rant, it contains precious little that can be called evidence or arguments. It’s just a series of idealisations and insults. Nowhere, however, is the novel so smug – or for that matter sleazy – as when a train pulled by a coal-burning engine is force to through a tunnel, smothering to death all its passengers. During the events that lead up to this Rand take every opportunity possible to state this would never have happened under a free-market, capitalist model (i.e., General Motors would never knowingly allow cars with a dangerous fuel-tank design on the market, because they reasoned that the costs they’d incur being sued by anyone hurt would be cheaper than a recall). What really makes this scene perverse is that as the train enters the tunnel Rand take the time to make a list of those killed and point out – in a language more damming and incensed than anywhere else in the book – how they all contributed to the altruistic society that ended them. She kills off a train full of people just for the opportunity to mock and whisper, “I told you so,” with thigh-rubbing glee. It should be a tragic scene but ends up just sickening, and not for the reason Rand intended.

I don’t know why I’m posting this, except to get it off my chest. I don’t expect anyone who has an opinion on Rand either way to be challenged by what I write here. I guess I’m asking why anyone still believes Rand’s theories make sense. What is it that I’m missing? One of the repeated messages in the book is that when confronted with two scenarios that seem to contradict each other, by checking your premise you will find one scenario to be false. Well, here we have renewed interest in a brand of economic theory, at a time when implementation of that theory has proven disastrous. If Rand is right, one of these is false. I’m going to email a link to this post to all the Randian theorists I can find, because I genuinely want the answer to this.

I want to close by highlighting another example that disproves Rand’s philosophy. Now, I read somewhere (though I don’t remember where) that she herself was once asked about the plight of native Americans and how this contradicts her belief, to which she simply dismissed the question as leftist propaganda. I don’t know if this is true, but there is another issue we can look at: blood donation. Here in Europe we take a very altruistic approach to blood donation; we do it because socially responsible. Our only reward is a few biscuits and the knowledge you may have saved someone’s live. In America they tried a different approach; paying people to give blood. As a result is was a service taken up by homeless people and drug addicts, or those similarly desperate for money. The blood products derived from these people were sold on to other health services across the world, including ours. This is why so many people were infected with HIV and hepatitis through receiving blood products. Many more people died from this scandal than were smothered on Rand’s train.

If sound like I’m damning the book, that’s not my intent. What I’m trying to say is that, personally, I would place Atlas Shrugged in the same category as The Communist Manifesto or even Mein Kamph; that is to say, important works that should never be forgotten or ignored, yet read only with an understanding of how deluded the author was.

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7 Responses to “Rand and the Recession”


  1. November 8, 2009 at 9:01 pm

    Seeing that Bioshock 1 (as its going to be called by everybody soon) was based on a society using Rand’s theories you might be interested in the plot of Bioshock 2 (due in February).

    I won’t spoil things but following the events of the first game where Ryan is defeated (point of the game, hardly a spoiler) things change in the city of Rapture. Sophia Lamb ends up in control of the city (at the start of game 2, set 10 years after game 1, no word on how she ends up in charge and when) and she tries to run the city on an altruistic approach (of sorts at least).

    This put the city in a very careful balance, and the players arrival end ups upsetting that balance, in her mind at least.

    Given that things are not going all that well in Rapture, it might be interesting to see how altruism can go bad.

    • 2 The Unemployed Blog
      November 9, 2009 at 4:56 pm

      Will, I’m very much looking forward to Bioshock 2. However, when I heard that it will be examing altruism this time I was less than enthused. And it’s not because I’m sensitive about altruism being criticised. For you average game it might be ok to substitute your plot-hook for another in the sequel and assume you’ll get the same level of storytelling, but Biohshock is not your average game.

      But who knows? Maybe it’ll work and the game will be as good as the original. Time will tell.

      • November 9, 2009 at 5:04 pm

        I think the catch was a way to stay in the city. I saw very early ideas for Bioshock 2… basically Jack and the little sisters creating splicers and industry on dry land.

        When the designers decided they had to go back to the city and the Big Sister idea (now Big Sisters, plural) hit they needed something to work off. The way I’ve heard it is.. caring for lots for people means slowly that people become numbers on a spreadsheet and not lives anymore.

        Looking forward to it myself, but I won’t be in the queue on the first day (I’ve lost too many hours in Rapture already). Besides, that multilayer might tip me in to going gold.

  2. 4 casey831
    November 11, 2009 at 9:18 pm

    Unfortunately, I disagree with nearly everything you say about the book. First and foremost, your assessment of America’s economic crisis is surface deep. You suggest that it’s the market that magically created the recession. That is, you suggest that the market worked for two centuries of America’s history and mysteriously stopped working overnight last September. This is a common mistake leftists make. It is not the market that causes disaster, but rather government intervention that does so. In America’s case, it is undoubtedly the Federal Reserve’s manipulation of the market that causes the roller coaster ride America is going through. It is a fallacy to compare Rand’s capitalism to modern America’s “capitalism” when we have a central bank. Central banking is completely opposed to the idea of sound money that Rand promotes; for example, in the book the residents of Galt’s Gulch use gold as their tender because the American dollar is simply paper money.

    I do agree, however, that the book is rather smug.

    • 5 The Unemployed Blog
      November 13, 2009 at 7:12 pm

      Casey, I’d rather not get into a debate over the Fed’s roll in the American crash, largely because I’m not an economist and I wouldn’t know what I’m talking about, but in the Irish case it’s not true to say government interviention caused our market crash. Here government regulators and our Central Bank took a hands-off approach to managing the markets and the banks. It proved disasterous, even when compared to the global recession. And now, when other countries are beginning to come out of recession (largely due to market interference), Ireland is still facing a real risk of national bankrupcty. A little intervention would have served us well.

      I’d also like to avoid talking about Galt’s Gulch, because it was exactly when this was revealed that the novel fell apart and became a laughable sci-fi for me. However, I have to take up your claim that it’s a fallacy to compair America’s capitalism to that of Rand due to her belief in the sound-money principle that Central banking is opposed to. I’m not saying this is untrue, but for the same reason isn’t in also a fallacy to declare the novel prophetic?

  3. 6 Budapestkick
    January 29, 2010 at 6:05 pm

    ‘You suggest that it’s the market that magically created the recession. That is, you suggest that the market worked for two centuries of America’s history and mysteriously stopped working overnight last September’

    Eh? What about the great depression? The depression of 1839-43? What about the dozens of recessions and crashes that have occurred in the American and world economy throughout history? (whether or not that nasty dead hand of the state intervened)

    You seem to be suggesting that the market worked fine all this time. Blatantly it hasn’t and serious dips and recessions are clearly endemic in the system.

    Also, nobody’s suggesting that there was anything mysterious about the collapse of the banking system. The over-extension of credit and stupidity on the part of the greediest and wealthiest in society were the cause of it. Even a neoliberal moron like Greenspan would be forced to concede that.

    Also, I would recommend reading some of better histories of the Irish famine. An example of how laissez-faire economics in the whig government’s response to the blight led to an unnecessary level of suffering and death. Ayn Rand would have made Trevalyan look like a pussy cat.


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