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Two powerful ideas

Why Include Rand?

Ayn Rand (second from right) with President Gerald Ford, her disciple Alan Greenspan, his mother and her husband in the White House 4 September 1974. Photo: Photo: David Hume Kennerly/The Gerald R. Ford Library.

It is Ayn Rand’s birthday, 2 February, and I am therefore sharing my justification for including her in a forthcoming book....

A few months ago, I was talking to one of my old Oxford chums, now a distinguished political philosopher. I told him about the book I was writing for the think tank New Direction in Brussels on ‘Twenty-Four Conservative-Liberal Thinkers’. He asked me who the thinkers were.

Twenty-Four Remarkable Political Thinkers

I told him that in the first part they were Snorri Sturluson, the Icelandic chronicler who described the ancient Germanic principle that government should be by consent; St. Thomas Aquinas who taught that princes are under the same law as the people; John Locke who argued that resources could be appropriated from the commons without making anyone worse off; David Hume who presented a traditionalist defence of free trade and private property; Adam Smith who explained how competition turned self-interest into the service of other people; Edmund Burke who eloquently stated the case for evolution instead of revolution; Anders Chydenius, a little-known Swede who described the principles of free trade before Smith; Benjamin Constant who made a famous distinction between ancient and modern liberty and between conquest and trade; Frédéric Bastiat who demonstrated in clever parables the long-term gains from trade; Alexis de Tocqueville who found in America a society combining equality and freedom; Herbert Spencer whose Principle of Equal Freedom was better grounded and easier to apply than the suggestions of some of his contemporaries; and Lord Acton who emphasised the moral responsibility of historians.

In the second part the thinkers were Carl Menger who refuted both Georgism and Marxism with his theory of value, based on marginal analysis; William Graham Sumner who reminded us of the forgotten people who pay the bills; Ludwig von Mises who pointed out the practical difficulties of rational central economic planning; Friedrich von Hayek who derived the immense achievements of Western civilisation despite individual ignorance from the acquisition, transmission, and utilisation of knowledge; Wilhelm Röpke who inspired the successful revival of the German economy after the Second World War; Michael Oakeshott who skilfully combined conservative dispositions and free market principles: Sir Karl R. Popper who defended the open society against enemies such as Plato and Marx; Bertrand de Jouvenel who wrote tellingly about the growth of Power; Ayn Rand, on whom more below; Milton Friedman who was the most influential spokesman for economic freedom in the latter half of the twentieth century; James M. Buchanan who exposed the myth of the benevolent despot; and Robert Nozick who restated, in a clear and refreshing way, the liberal theory of justice (liberal in the old European sense of course).

The Heroes of Commercial Society

My friend said: I can understand your choices of all but one of those thinkers. Why Ayn Rand? Is she included just to make the others look better? Perhaps I should use Rand’s birthday today, 2 February, to respond properly. In my opinion, Rand presented two powerful ideas which have been much less noted in political theory than they deserve. First, she responded to the worries expressed by Adam Smith, Edmund Burke, Alexis de Tocqueville and many other liberal theorists that in the commercial society they saw coming there would not be any heroes, only calculators. People might become better off, but there would be less to inspire them. In her two major novels, The Fountainhead and Atlas Shrugged, Rand describes the real heroes of capitalism, inventors, innovators, artists, scientists, venture capitalists, entrepreneurs, and industrialists, who do not take orders from others and are instead motivated by their own urge to explore, create and produce, while they insist on getting paid properly for services they render to other people.

In The Fountainhead, for example, the talented architect Howard Roark is not in thrall to money or to the masses. He is brought to trial where he gives a long speech: ‘Throughout the centuries there were men who took first steps down new roads armed with nothing but their own vision. Their goals differed, but they all had this in common: that the step was first, the road new, the vision unborrowed, and the response they received—hatred. The great creators—the thinkers, the artists, the scientists, the inventors—stood alone against the men of their time. Every great new thought was opposed. Every great new invention was denounced. The first motor was considered foolish. The first airplane was considered impossible. The power loom was considered vicious. Anaesthesia was considered sinful. But the men of unborrowed vision went ahead. They fought, they suffered and they paid. But they won.’ Roark points out that man comes unarmed into this world. He can survive in only one of two ways, by the independent work of his own mind or as a parasite fed by the minds of others. ‘The creator’s concern is the conquest of nature. The parasite’s concern is the conquest of men.’ Roark says that the creator disagrees, goes against the current, stands alone. ‘Civilization is the process of setting man free from men.’

I think that Roark and also some of the heroes in Atlas Shrugged such as John Galt are examples of what Aristotle called the ‘magnanimous man’. This is a man (or a woman) who deserves respect and who does not shy from accepting it. Instead the magnanimous man takes for granted honours bestowed on him. He is neither vain nor meek. He is conscious of being superior without suffering from a superiority complex. Perhaps the best word to describe him is ‘outstanding’. For Aristotle, magnanimity, megalopsychia in Greek, is a virtue, indeed the adornment of the virtues. The magnanimous man does not concern himself with trifles but is willing to take great risks if needed. He gladly does favours but is reluctant to receive them. He is frank and honest and leads a life of his own. He does not bear grudges and avoids gossip and complaints.

When the Most Productive People Leave

The second powerful idea presented by Ayn Rand was really a thought experiment, played out in Atlas Shrugged: What would happen if all, or most of, the productive people in a society would grow tired of having to contribute to the unproductive? In Rand’s novel which takes place in the United States at some uncertain time the answer is clear: economic stagnation and political chaos. John Galt and other creators have disappeared, and it turns out that they have gone on strike. They have built their own community and used their technical skills to hide its whereabouts. Atlas Shrugged is a skilfully constructed combination of science fiction, a mystery, a dystopia, and a love story. Close to the end Galt gives a long address on the wireless where he emphasises that people are entitled to what they have created themselves and that others should not appropriate it without consent. The individual owns himself or herself and is not a slave or a serf to the community. ‘Only a ghost can exist without material property; only a slave can work with no right to the product of his effort. The doctrine that “human rights” are superior to “property rights” simply means that some human beings have the right to make property out of others; since the competent have nothing to gain from the incompetent, it means the right of the incompetent to own their betters and to use them as productive cattle.’

Rand’s thought experiment is however more than a fantasy. Her main point can be illustrated by observing the proportion different income groups in various countries bear of the tax burden. For example, in the United States the top 50 per cent of all taxpayers paid 97 per cent of all personal income tax in 2016. The bottom 50 per cent paid the remaining 3 per cent. The top 1 per cent paid a greater share of personal income taxes, 37.3 per cent, than the ‘bottom’ 90 per cent combined, who paid 30.5 per cent. The Randian challenge could be put this way: What would happen if the top 10 per cent would get tired of its vilification and leave? Could the state make up its loss of tax revenue from this group—almost 70 per cent of personal income taxes—by raising taxes on the remaining 90 per cent? Perhaps, but it would be difficult.

Some historical examples may also illustrate this point. It had a negative impact on the economy of Spain when Isabel and Ferdinand expelled the Jews in 1492, and similarly the economy of France was badly affected when King Lewis XIV drove out the Huguenots in 1685. Again, it was disastrous for the economy of Algeria when the French-speaking minority was forced to leave after independence in 1962, or when almost the whole white minority in Zimbabwe emigrated after 1980 in response to intimidation. I emphasise that I do not think this had anything to do with religion, colour or race, but rather with the fact that some groups, usually because of their traditions and culture, are more productive than others, and if they leave, for whatever reason, the economy will be worse off. There is an even more striking and recent example of such a Randian process: In Cuba, practically the whole middle class, 10 per cent of the population, fled after the communists took power in 1959 and tried to appropriate their resources as well as their labour. Cuba went from being relatively wealthy to being one of the poorest countries in the Caribbean. One way of expressing Rand’s message is that under capitalism there certainly are geese that lay golden eggs, but it should never be forgotten that geese have wings.  

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