A truly "rational" system of economics, does not concern itself merely with money and the decisions that are made, but also with the human cost of making such decisions. Even if it were true that Mr. Jones and millions of his fellow producers were able to "automatically" make better decisions about buying and selling, the questions would still arise: Is it really more efficient for so many Mr. Joneses, rather than so few committee members, to spend their time deciding such matters? And, are all the headaches acquired by Mr. Jones and his fellow businesspersons in the course of the decision making process really worth it?
Of course, Mr. Jones may have nothing better to do in life than to stay up night after night worrying about the price of his nuts and bolts. Or he may actually enjoy this kind of activity and consider it a creative endeavor. Or he may feel that, if he lets a central planning committee make his economic decisions, planners will start regulating the rest of his life as well--will tell him what kind of tie he should wear, when he should eat his meals, and how often he should copulate with his wife.
So there are compensations that Mr. Jones may have if he acts as a capitalist and takes on his shoulders all the responsibilities for "automatically" abiding by the rules of the free market. But there are also enormous drawbacks. And it is these drawbacks that Ayn Rand, with her one-sided deification of pure capitalism, pig-headedly refuses to acknowledge. Not that there aren't serious drawbacks to allowing a nation's economy to be run by civil servants, who can easily become bureaucratic, self-seeking, corrupt, unresponsive to consumer desires, and otherwise inefficient; for there certainly are such disadvantages of collectivism. Let us, unlike Rand, recognize the evils of all economic systems and not pretend that ideal capitalism would be perfect or feasible. Let us admit that a combination of socialism and capitalism may possibly produce the best we truly want to achieve.
16. Since Rand is opposed to any form of collectivism, she also is opposed to collective bargaining on the part of labor. Whereas the Marxist philosophy insists that all productivity and economic value stems from labor power, and that profit is merely the surplus value that the employer extracts from his laborers through the process of exploiting them, Rand takes the opposing view: that labor itself is worth relatively little but gains most of its value through the creative ingenuity of individual capitalists, who help it achieve its best ends. States Nathaniel Branden in this connection: A country's standard of living, including the wages its workers receive, depends on the productivity of labor. But high productivity, in turn, depends on machines, inventions, and capital investment; and these depend on the creative ingenuity of individual men. Only a capitalist system that protects the individual's rights and freedom provides these essentials, (1966g). Here are some objections to this position:
a. Both the Marxist view and the objectivist view are myopically one-sided. Yes, workers would not produce very much without machines, inventions, and capital investment; but capitalists would not produce at all without various kinds of employees, as well as those workers who had a notable part in producing the machines, the inventions themselves, and the capital investment that they employ in their plants. The capitalist and the worker are interdependent; and under the capitalist system, one would not get very far without the other. Moreover, the worker is the customer in the big picture. If the capitalists continue their consolidation and automation of production, there will be almost no workers -- and no customers. Productivity increases will either have to be limited or most people will have to give up their work ethic.
b. The capitalists themselves are workers. They are not merely people with ideas, creative inventiveness, and an intransigent belief in rampant individualism--as Ayn Rand nobly depicts them in her novels--but are also, and perhaps more importantly, people, who work steadily at building their enterprise, who deprive themselves of all kinds of goods and pleasures in the process, and who keep plodding away to earn and to save money, and still more money. Very often, they have a minimal of creative imagination and clear-cut ideation. Often, they are imitators, buyers and stealers of others' ideas, grubby traders who make excellent use of others' inventions but who rarely think up any of their own. To be sure, they organize, direct, and take financial risks. But most of all, if they are successful, they probably work and work and work.
It should be recognized that very frequently the inventor, the innovator, and the capitalist are three different people. The inventor creates a new commodity or technique or improves on existing goods and services. The innovator finds a way to produce and market a commodity so that there is demand for it. The capitalist mainly provides the financial backing for the entire set of transactions that includes invention, innovation, production, and distribution. In the old day the capitalist may have been an inventor and innovator as well as entrepreneur; but today is likely to be a capitalist in the literal sense of the term--an accumulator of capital who finances the business for which investors, innovators, and other individuals work. Rand's continual use of the term "capitalist" as if it were synonymous with creator, inventor, or innovator is therefore not legitimate. She refuses to acknowledge the highly uncreative, work-day activities capitalists perform most of the time.
c. There is no evidence that the creative ingenuity of individuals requires, for its exercise, a politico-economic system that protects the individual's rights and freedom. People of outstanding creative ingenuity--including composers, artists, inventors, statesmen, generals, writers, and professionals--have done marvelous work under the worst kind of despotic monarchies and dictatorial governments. People of genius, like Mozart and de Vinci, for example, worked for royal patrons. Modern rocketry was developed to outstanding heights (no pun intended!) under, first, the Nazi and then the Soviet dictatorships. It is quite probable that creative ingenuity, in the long run, tends to develop better under conditions of politico-economic freedom than under authoritarian regimes. But it certainly can flourish quite well under politico-economic systems that Ayn Rand in no way tolerated (and which I, too, would deplore).
Moreover, while the economic growth of a nation is partly dependent upon the nature of its politico-economic system, it seems clear that a government can aid the growth process by doing more than merely protecting the individual's rights and freedom. For one thing, it can spend money on research development that may pay off handsomely. In our own country, for example, many billions of dollars a year are spent on research development; and the government puts much of this up through subsidies and tax incentives, thus encouraging research money spent by private industry. Much of the research development funds available are used by private industry; and a large part of America's recent economic growth seems to be both directly and indirectly attributable to this kind of government spending.
There is another confusion in Rand's philosophy. The real essence of capitalism is the direct rewarding of effort. The essence of what Rand is saying is that people only perform well when their rewards are closely tied to their efforts and not taken from them after the fact. She expands that concept to mean that there must be no control or involuntary tax on such efforts or they will cease. Yet B.F. Skinner and others proved long ago that it is the schedule of reinforcement or punishment that really matters, so that one can train an animal and some humans to work for very unprofitable, undesirable things in the long run. However, the reverse is also true--you do not have to give them huge rewards, as capitalists would have you think. Rather, you just need to make the reward sure and fair.
Furthermore, there is no reason that rewards cannot be built into a collectivist system just as they are in the more successful corporations. If done properly, the collectivist managers would be rewarded for efficiency in their operation as well as foresight for the whole economy. For example, the manager of a buggy whip and carriage factory would be rewarded for shutting down his enterprise so that an automobile company could form in a collectivist society. In a capitalist society there will be all sorts of skullduggery, wailing, pleas to the government, and gnashing of teeth in the transition, if it takes place at all.
17. Rand takes the unrealistic attitude that humans can only be coerced by the threat of physical violence and that economic coercion itself never leads to such violence.
Typically, Branden notes that in a free, unregulated economy, from which coercion is barred, no economic group can acquire the power to victimize the rest of the population. (1966b). This is simply not true, because:
a. A free, unregulated economy does not bar coercion; it sanctions it. For coercion does not mean only physical force, compulsion, restraint, or constraint. It also means the use of any kind of power or control to force, compel, restrain, or constrain people to do something that they do not want to do. Thus, a child is coerced into being mannerly or going to school not, mainly, because his parents whale the hell out of him if he refuses, but because they level various other sanctions--including loss of his allowance--against him if he does not comply.
In a free economy, I have the perfect right to purchase the local water reservoir, and then to force you and everyone else in town to pay almost any price I ask for drinking water. I also have the right to accumulate money, by working hard and spending little on myself; to use it to monopolize the town's real estate, grocery stores, bars, or anything else, and to force you to obey virtually any rules I set up in regard to living quarters, food purchases, or drinking liquor. Large corporations impose arbitrary rules and burdens on their employees and customers. The recent documentary "Outfoxed" shows how a single man, Rupert Murdock, has ruthlessly tried to monopolize and pervert the news to suit his own philosophy - which is based on whose work? Ayn Rand!
In a true unregulated economy I have the right to set up huge factories in town, to poison the air with polluted byproducts, to maim you and your family members with this kind of pollution, and to deceive and confuse you with my advertising or editorials. And if you or others should try to stop me by passing town laws against my polluting the air, I can scream to the heavens that you are abrogating my inalienable right to be an individual, to use the free market, to use freedom of speech and press to push my agenda, and that you are unfairly coercing me with your nasty governmental rules!
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