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A VIEW FROM THE PROGRESSIVE SIDE: Ayn Rand's Despised "Altruism" Is Essential to Building a NATION of "Producers."

By       Message Robert Anschuetz     Permalink
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Bringing back an America based wholly on the principles of reason and individualism, and the rights of property, will also ensure the happiness of its citizens.   In a society based on trade among individuals pursuing their own rational self-interest, there can be no conflicts of interest between those of greater and lesser productive talents.   Those at the top will contribute the most; those at the bottom will benefit the most.   In this ideal economic system, moreover, each person will live by his own rational judgment, and no one will obtain material or moral assets by force.   All people will live without fear and enjoy the company of others who are responsible and reliable.   It will be a just world, where virtues will be rewarded and people will relate to one another on the basis of mutual respect.  

The Response of a Political Progressive:

In the "progressive response" made earlier to Rand's objections to government "altruism," I made the point that, regardless of Rand's misgivings, the national government must collect a significant level of tax dollars from both individuals and businesses, since they are needed to address real societal needs that simply can't be met by other means.   The past twelve years, especially, punctuated by the last four following the Wall Street crash, suggest strongly that substantial reductions in such investments have led to staggering, and probably unsustainable, inequalities in income and wealth.   As of 2007, the top one percent of Americans enjoyed 21 percent of the income.   Even more tellingly, latest statistics indicate that 400 American individuals have the same combined wealth as the poorest half of Americans, which includes over 150 million people.   And to put the case in its starkest, and perhaps most meaningful, terms, Mother Jones reports that, in the years 2007-2009, Wall Street profits went up 720 percent, while unemployment rates increased by 102 percent and Americans' home equity fell by 35 percent. For progressives, these statistics sound a clarion call to more "altruism," not less.  

Government spending to stimulate the economy for America's "99 percent" will of course require tax increases that to some extent reduce business profits -- an effect Rand describes as government "interference" in the competitive free-market system.   There is little or no evidence, however, that historical tax rates -- say the restoration of Clinton-era marginal rates on the incomes of high-earning individuals -- will cause business owners or managers to stop hiring or simply close shop.   According to most mainstream economists, the major impediment to business growth is a stagnant customer base -- which can in fact be revitalized by government investments in job creation and worker training.

As noted earlier, Rand's notions of government "interference" with business go further than taxation.   They also include regulatory constraints that government analysts believe necessary to prevent various forms of harm to workers and the natural environment resulting from the production process; and to customers, and, in some cases, the general public, from use of the end product.   Based on the Galt speech in Atlas Shrugged, we can imagine the gist of Rand's views on business regulations.   She would point out that they impose burdensome costs and impede productivity.   Most damagingly, she would claim, they undermine the independence and morale of the company leadership, distracting it from the rational planning and freedom of action needed to fully realize the creative and economic potential of their enterprise.  

This projection of Rand's views is of course grounded in her foundational belief that regulations are unnecessary in the first place, because businesses under capitalism are already naturally regulated by the free-market system.   Since the system picks winners and losers impartially, it forces firms, out of competitive necessity, to maintain a healthy workforce and accommodate consumer interests.   (Competitive imperatives would seem to have little bearing on the protection of environmental interests, however, since, without regulation, these are advanced only by unpredictable manifestations of public concern and pressures.)  

What is absent from Rand's analysis, however, is any factoring in of the very human and distorting influence in business -- especially in large corporations -- of predatory practices and cronyism in Washington.   Rand places great importance on maintaining the full freedom of the nation's producers to pursue their "rational self-interest."   But one must ask: How much rationality can we actually find in the practices of Wall Street bankers leading up to the crash of 2008?   How much planning was there to fulfill the purpose of the lending system by adding value to the nation's economy?   Wasn't the entire operation run, in fact, as nothing more than a giant Casino, in which every player was simply out to "get his"?  

Against this background, a contrary argument in favor of expanded government regulation of business was recently made by Rocky Anderson, a former successful mayor of Salt Lake City and now the impressively able, but rarely seen or heard, progressive presidential candidate of the newly formed Justice Party.   In an August 26, 2012 interview with Ron Bayer of the Internet news blog Truthout, Anderson argued that, in the case of Wall Street in particular, neither the American nor the global economy has been well served by weakened regulation.   Today, when predatory practices have become a normal part of business, it is precisely the imposition of regulation, not its removal, which is needed most.

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Anderson stated: "We know that government policy can help produce a healthy, thriving middle class where there's greater opportunity for everyone. And yet our government leaders have been doing the bidding of those who help buy their way into Congress and the White House through such means as deregulation of financial institutions and turning a blind eye to the massive financial fraud on Wall Street, all of which led to the financial meltdown from which so many of us are still reeling, not only in this country, but around the world."   [See the entire article at http://truth-out.org/news/item/10766-a-road-less-traveled-presidential-candidate-rocky-anderson-speaks-candidly-on-the-crumbling-state-of-the-union.]

I got my own sense of the symbiosis of Congress and Finance a year or so ago, when I happened to watch on C-SPAN a hearing in which Elizabeth Warren appeared before the Senate Banking Committee.   Before her current run for the Senate from Massachusetts, Warren was a special advisor to the Secretary of the Treasury for the new Consumer Financial Protection Bureau, and it was in that capacity that she had been invited to offer her testimony.   At the time, I viewed Warren as a kind of modern-day Joan of Arc, leading an inspired, but often bumpy and lonely, crusade for economic fairness in behalf of American consumers.  

I recall being astonished, as I viewed the hearing, at the repeated rudeness of the adversarial questioning by the committee's Republican members.   This was so out of place, so much sheer bullying rather than vigorous policy debate, that it seemed to me motivated not by "rational self-interest," but by an unthinking, libidinous defense of power.   Whenever Warren brought up a proposed reform that seemed to make too much sense, the Senators simply subjected her to filibuster, rather than to anything resembling reasoned debate.   The entire proceeding struck me as a kind of inquisition, in which the purpose was nothing more than to shield the banking industry from any regulation in the interest of consumers that might detract from its accustomed freedom to maximize personal gain.    

Another challenge to Ayn Rand's uncritical faith in the benign self-regulation of the free-market system is offered by Huffington Post columnist Stephen Herrington.   In an article dated March 15, 2010, Herrington points out that, while Rand castigates socialism for its stifling of creativity and the seizure of work product, she overlooks the same tendencies in capitalism.   "It happens every day in capitalism," Herrington writes.   "Corporate monopolies act to break the will of the competition.   Corporations stifle creativity with things like planned obsolescence and the withholding of known solutions from markets in all fields.   Corporations buy legislation, passing the cost on to consumers, and stack the legal deck against the public interest with impunity.   Corrupt bureaucracy can be found at WalMart as easily as at the Politburo."  

To turn a last time to a concept already explored in this critique but brought up again in the concluding segment of John Galt's speech, one of the most dubious ideas in Rand's economic thought is the perniciousness of business "altruism."   To recapitulate, Rand argues that, because the rational pursuit of self-interest demands a constantly fixed focus and an exercise of judgment that inflexibly serves its ends, mixing that pursuit with concern for the needs of others must always be self-defeating.   When the people, the state, or religion demand "altruism" from the "producers" in the form of economic support they have not earned, they distract the producers from their steady focus on fulfilling both their own ambitions and the company's promise.   The demoralized leaders consequently draw back from their efforts.   This distorts the rational outcomes of free-market competition and leads, in Rand's apocalyptic vision, to a corrupt society in which competing groups struggle for powers by which they can simply extort wealth they've done nothing to earn.

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Here again, Rand's vision may square logically with the theoretical premises on which she bases it, but one must ask once more, Does it truly reflect the world?   Have higher taxes and regulations on American "producers" ever actually caused them to lose all incentive to develop their business, or even to close their doors?   And is it likely that America will ever suffer such a total business deflation that the society will be reduced to a dog-eat-dog arena where competing groups fight for power over the scraps that are left?

Overall, it seems to me, the major weakness of Rand's thought is its narrowness.   Human beings, society, and the world, in all their multi-dimensional reality, are simply far more complex than she represents them in her abstract and black-and-white terms.  

By contrast, the strength of progressive thought is that it recognizes that complexity, and seeks in its vision of society a balance between the free pursuit of self-interest, whether personal or commercial, and the necessary restraints and obligations that must be accepted in the common interest.   It is only this rational balance that can produce in reality the peaceful, prosperous, and just society that Ayn Rand seeks in the pursuit of material self-interest and the untaxed and unregulated operations of free markets.

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Bob Anschuetz is a retired college English teacher and industrial writer who remains actively committed to the progressive political values of economic fairness, social justice, and global community. In retirement, Bob has continued his work as a (more...)
 

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