Following up on Ilya’s post, I though I’d mention a couple of other contributions Rand made.
First, and as is most evident in Atlas Shrugged, Rand turns Marxism on its head. While Marxists argue that “capitalists” make their profits on the backs of the working class, Rand illustrates that the working class, as such, makes almost no contribution to wealth, but relies on the efforts, risks, sacrifices, and most of all the genius of the entrepreneurial class. Consider, as a thought experiment, what living standards would be like if every person in the world had an IQ around the median of 103, and otherwise had average talents and ambition. Does anyone seriously doubt that “workers,” and everyone else, would be a lot poorer than they are today, and indeed would likely be living as poorly as our hunting and gathering ancestors?
I should add that Rand’s view on this was not original; very similar views are expressed by William Graham Sumner in What Social Classes Owe to One Another. But Rand has obviously had a much greater long-term impact than did Sumner (unless a researcher discovers that Rand actually came upon her idea via Sumner).
There is, of course, the danger of taking this insight too far. The fact that “ideas people” are largely responsible for our wealth doesn’t mean that they necessarily have a moral claim on any given fraction of that wealth. We all, after all, stand on the shoulders of others, and no matter how brilliant and entrepreneurial someone was living in 1st century North America, he was going to be a lot poorer than the average person in 21st century North America. Not to mention that without a proper legal system, property rights, etc., supported by the public at large, no amount of genius and talent is going to result in societal wealth.
Also, believers in the welfare state could reasonably claim that at least some social programs, including government-financed schooling, are necessarily to help budding geniuses fulfill their potential. Surely, many brilliant illiterate immigrants to the U.S. who could have been great entrepreneurs wound up as “workers” only because they lacked educational and other opportunities.
All that said, the radicalism of Rand’s view on this, and its stark contrast to the popularity of crude Marxist ideology based on the view that wealth is somehow just “there” to be exploiting by “capitalists” is quite noteworthy. Rather than the capitalists living off the workers, the workers, in a sense, are living off the capitalists.
Second, Rand, with her celebration of man’s potential and achievement, has inspired many people to strive to fulfill their potential, including me. Rand didn’t influence my political views very much; I was already a libertarian when I read her work, and had already read Friedman, Hayek, Nozick, Rothbard, Sowell, and many others. But she did help change my outlook on life.
I was always a very successful student, but always a very lazy one. When I arrived in college, my basic career goal was to find an easy but reasonably well-paying job, and do the minimum necessary to maintain it. I indeed wound up finding a job, in academia, that allows many people to do this. But in the meantime, reading Rand, along I’m sure with less obvious influences that I can’t identify easily, led me to want to be an achiever, not just a time-server. The glow of Rand’s writing eventually wore off, but I found that I really enjoyed being a scholar, working hard at it, and being good at it. As a result, I’ve worked much harder in my career than I ever did in high school or college. And the feeling of satisfaction I get when I work hard and publish something I think worthwhile is far greater than I ever got from my effortless A average in college.
I’ve read over the years about many Rand fans who are not libertarians, who are not interested in “Objectivism” as such, but who feel that her writings–especially The Fountainhead–helped inspire them to be their best. In some cases, they decided to pursue their dreams, instead of what their parents wanted or expected them to do. In others, they got out of toxic, abusive relationships with spouses or family and demanded respect as individuals. In yet others, they simply resolved to do their best in whatever endeavor they chose to pursue, whether a career or parenting or even charitable work. Despite Rand’s not-too-subtle dislike of homosexuality, I’ve even heard of gays and lesbians who were inspired to embrace their sexual identity by Rand’s celebration of the individual, and rejection of irrational traditional mores.
Of course, Rand has had a destructive influence on many individuals, too. As her own chaotic personal life, depicted in Anne Heller’s new biography, illustrates, trying to manage one’s personal relationships through a slavish devotion to pure reason, combined with an excessive faith in one’s own ability to reason (and to be objective about oneself and one’s loved ones), is a recipe for disaster. But I suspect that Rand’s overall influence on how people live their lives is strongly positive.
UPDATE: I should add that I’m likely very unusual in that I found Rand’s life story to be at least as inspirational as her writings–I’ve never been a big fan of The Fountainhead. To come this country at age 26, knowing little English, and become one of the most influential writers of the twentieth century while holding strikingly unpopular political and social views is just amazing, more so than anything Howard Roark ever did.
Redman says:
I think the current sorry state of the US economy should stand as an answer to the old question of which is more important, capital or labor?
While both are needed to sustain an economy, capital, if it exists, will attract labor. But labor cannot create capital.
Our economic woes are not a result of no labor, but of no capital.
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October 22, 2009, 1:05 pmmischief says:
ah, but that argument for the welfare state turns on the existence of children. Chambers hit the nail head on there: children are a weak point in Rand’s philosophy.
One can raise a child out of selfish motives, but the child thus raised is particularly likely not to fit the Objectivist ideal, since having your well-being dependent on how well you appease someone else’s desires does not inculcate independence and strength of mind.
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October 22, 2009, 1:10 pmDavid Bernstein says:
Children, are undoubtedly, an especially weak point in Rand’s ideas. She dealt with this in her personal life by not having any; indeed, according to Heller, having at least one abortion.
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October 22, 2009, 1:13 pmd-berg says:
Interesting. Now waiting for confessions/testimony of people who Atlas Shrugged inspired to quit trying and become simple workers — ref John Galt in waiting.
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October 22, 2009, 1:14 pmzuch says:
Prof. Bernstein:
May I point out that it makes just as little sense upside-down?
Cheers,
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October 22, 2009, 1:15 pmzuch says:
Prof. Bernstein:
I call “red herring”. What does this have to do with the relative merits of various economic strategies in the real world as we find it?
Cheers,
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October 22, 2009, 1:17 pmJosh Blackman says:
David, thanks for your post. Rand influenced me in similar ways. Check out this post on how Rand influenced me, and why I work so hard.
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October 22, 2009, 1:21 pmDuffy Pratt says:
This reminds me of an old joke: The difference between capitalism and Marxism is that capitalism is a brutal, oppressive system that is founded on man’s inhumanity to man. While in Marxism, it’s the other way around.
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October 22, 2009, 1:30 pmAndrew J. Lazarus says:
I’ve never read Ayn Rand, so maybe someone who has can tell me: Who cleaned the toilets in Galt’s Gulch? The answer might suggest a problem with sycophants’ adulation of entrepreneurs.
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October 22, 2009, 1:33 pmCommodore says:
“First, and as is most evident in Atlas Shrugged, Rand turns Marxism on her head.”
Does this mean she also turned Hegel rightside-up again? ;-)
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October 22, 2009, 1:33 pmB.D. says:
And the feeling of satisfaction I get when I work hard and publish something I think worthwhile is far greater than I ever got from my effortless A average in college.
This comment made me throw up a little in my mouth, effortlessly.
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October 22, 2009, 1:44 pmmattski says:
If you wanted to be very precise about it, IMO, you’d be constrained to say that they are living off each other. In a word, we are interdependent.
There is a tangible benefit to avoiding language which tends to trigger prejudicial responses, for example, feelings of disrespect.
Another point: Most of us real-life liberals living in America today concern ourselves with the problems of managing a market economy to a) prevent its self-destruction and b) maximize human development and the common good.
There is an extremely good argument to be made that it is liberals, not conservatives, who as a rule have a better understanding of what it takes to keep a market economy functioning smoothly.
And the folks who insist on bringing up Marxism, frankly, often just seem to be out-of-it.
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October 22, 2009, 1:54 pmsk says:
I’m confused, in a non-snarky way, about your following statement.
“The fact that “ideas people” are largely responsible for our wealth doesn’t mean that they necessarily have a moral claim on any given fraction of that wealth.”
Really? I would think the opposite (ideas people have a direct moral claim to the fruits of their labor) is in fact the first principle of libertarianism. Maybe we understand the sentence differently (‘moral claim,’ ‘ideas people,’ and ‘wealth’ may not mean to you want I am assuming), but I really can’t even fathom how you could believe this, unless you are a redistributivist. Owning the fruits of one’s labor really seems to be the first principle in any philosophy that values freedom.
Sk
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October 22, 2009, 1:55 pmSteve Horwitz says:
Very well said David. I think your paragraph on non-libertarians who found themselves through Rand is a particularly nice tribute to the power of her work, whatever its and her flaws.
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October 22, 2009, 1:56 pmPaul Horwitz says:
I have no quarrels with your post, which to my mind is generally fair-minded about the strengths and weaknesses of Randian thought. I do think the problems posed by the personal in both her life and her work, ie. the “children” problem and the question of the emotions, love, loyalty, and so on, pose fundamental problems to her work, which in theory is supposed to be seamless on these issues. But it may still offer a net benefit in people’s lives — although one has to discount the number of more hard-working people against the obnoxiousness of teenagers who discover The Fountainhead for the first time and go around sneering at all and sundry. (Was I one of them? Yes. Happily, discovering Jack Kerouac next mellowed me out a bit.)
But I do want to question whether Rand “illustrates” that the working class as such makes no contribution to wealth. I understand the argument and am sympathetic to her effort to point out the obvious virtues of idea-creation and entrepreneurialism. But I am not sure a work of fiction can “illustrate” any such thesis in a robust manner, except in the way that fictional “illustrations” of this kind do, which is to say cartoonishly, without a serious empirical effort, and by assuming away many difficulties, children among them. The Fountainhead and Atlas Shrugged are fine novels, except for the prose, characterization, plotting, style, etc. But they’re just novels.
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October 22, 2009, 1:59 pmPaul Horwitz says:
P.S.: Yes, generally it is a good idea to avoid talking about one’s own effortless A average, however well-meaning it may be. You don’t hear me talking about how I managed to find real loving commitments in life despite my overwhelming good looks and sex appeal, do you?
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October 22, 2009, 2:01 pmDavid Bernstein says:
sk: my libertarainism is utilitarian, not philosophical/moral. And a morality-centered libertarian may argue that the question of redistribution isn’t a function of moral dessert, but of the morality of voluntarily, peaceful transactions. For example, to take Nozick’s famous example, the fact that Wilt Chamberlain was born with great basketball skills (and height) doesn’t establish that he has a moral right to keep the money of those who pay him to play basketball. Rather, the fact that people are voluntarily willing to pay him establishes the moral right. Again, it’s not my argument, but I don’t think even morality-based libertarainism relies on the claim that everyone “deserves,” from a moral perspective, the wealth they get, as opposed to the idea that free market transactions area moral rule, and thus the outcomes are just (see Hayek).
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October 22, 2009, 2:05 pmDavid Bernstein says:
Paul, I purposely chose the word “illustrates” over “shows” or “demonstrates” precisely to avoid the concern you raise. Sorry I failed.
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October 22, 2009, 2:07 pmloki13 says:
“Not to mention that without a proper legal system, property rights, etc., supported by the public at large, no amount of genius and talent is going to result in societal wealth.”
I think this small passage is the part that doesn’t get enough attention. The current way our society is ordered is what allows the “idea people” to enjoy any fruits of their labors. In the past, it wasn’t them, necessarily; for example, the “club people” were more likely to enjoy the fruits, or the “divine birthright people” or the “god’s will people.”
Were society to break down completely tomorrow (and once the ammo runs out), the person who will do best is the person with the club and the willingness to use it, not the person with great ideas for repackaging home mortgages into collateralized debt oligations. That libertarians continuously ignore society in their elevation of the individual is as pernicious of a flaw as Marxism’s elevation of society over the individual.
Good? Bad? I’m the man with the boomstick.
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October 22, 2009, 2:07 pmba2 says:
The problem of not recognizing the existence of children is not just with Ayn Rand, but with libertarianism in general and its embrace of legalized drugs, gambling, pornography and other destructive addictive things that can lead the young down bad paths. Many children, especially poor children, believe if the law says something is okay then you should do it.
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October 22, 2009, 2:10 pmSG says:
what living standards would be like if every person in the world had an IQ around the median of 103, and otherwise had average talents and ambition.
This unfortunately blurs together two things that should not be — talent and ambition are orthogonal. A society of highly ambitious 103 IQ people will be far more wealthy than a society of low ambition 140 IQ people. Sure all things being equal, more talent is better, but IMO ambition counts for far more than talent, at least across a broad swath of the bell curve (at least 4 to 5 sigma).
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October 22, 2009, 2:12 pmKevin P. says:
Rand had a great influence on me as a teenager and while I didn’t subscribe to all her ideas, they helped me arrive at a clear understanding of my rights as an individual and my responsibilities to others. I am an immigrant who grew up in a socialist country with a society that was smothering, tribalist and collectivist. Rand helped me break out of that smothering mindset and achieve my best potential as an individual and a free citizen, husband and family man, manager and employee.
I still re-read Rand every few years. Atlas Shrugged, in particular, seems eerily prescient.
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October 22, 2009, 2:26 pmPaul Horwitz says:
David, I appreciate the clarification. Point taken.
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October 22, 2009, 2:28 pmJMA says:
So, loki:
You don’t fear a smart man with a club more than a moron with a club?
:)
Not that I’m old enough to say this with authority (being younger than, say, 750 years of age), but I’m pretty sure that the reason feudal societies last as long as they do is that the guys in charge were smart enough to stay that way.
Before you ask, “What about their dumb children?” consider that it only takes one monkey to learn to put salt on the potato, and all the other monkeys can learn by example.
As I’m not sure I can make this link show up right, do a google search for “chimpanzee salt potato” (no quotes) and examine the first result. >.>
Actually, that would’ve been way easier if I hadn’t used the “link” button.
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October 22, 2009, 2:29 pmTony says:
There are two novels that can change a bookish fourteen-year old’s life: “The Lord of the Rings” and “Atlas Shrugged.” One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.
Purely in jest, and completely plagiarized, but I can’t remember the source.
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October 22, 2009, 2:29 pmKevin P. says:
This may have been the case in the Soviet Union, but in the US, the law generally does not permit anything, it only prohibits certain conduct.
Libertarians also don’t embrace “legalized drugs, gambling, pornography and other destructive addictive things” as a good thing. They just feel that the “cure” of banning these things becomes worse than the disease. Also, few if any libertarians endorse unrestricted access by minors to these behaviors.
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October 22, 2009, 2:30 pmsol vason says:
AMERICA IS A MISTAKE. The economic growth, the inventions, the waves of immigrants, the westward expansion, nothing would have happened If our current laws and federal government existed in 1620 with all the same power they have today.
Instead, the United States would be like Alaska, a vast national park stretching from sea to shining sea with a few settlements on each coast and nothing but wilderness in between. Plus a few dachas owned by the well-connected.
Instead the US was blessed with a virtually powerless Federal government that could not prevent poor people from getting rich; inventors from inventing; financiers from financing. Did you know that almost every city in the US had its own stock exchange?
Immigrants came to America (and still do) because their inventions were unacceptable at home. Cyrus McCormick’s harvester was banned because it would have put 1000s out of work in Scotland. But it allowed 1 farmer in America to harvest a section of land by himself and grow rich.
Andrew Carnegie was driven out of Ireland but he found a home in Pittsburgh as a major air polluter. Today he would be put in jail before he built a single steel mill.
Today there is no growth in regulated industries. These industries are grinding to a halt as equipment built a century ago stops running and cannot be replaced. Growth and invention only comes in industries so new that the regulators haven’t found them yet.
But the current anti-business climate is not new. We are merely returning to the normal antibusiness state of affairs that existed from the birth of the first city in 3000 b.c. to 1620 ad. We invent more inventions in a single month than were invented during the entire period from 3000 bc to 1620 ad. The period from 1620–1992 was the anomaly. It will never happen again.
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October 22, 2009, 2:32 pmmischief says:
On the fruits of their labor, sure — but not on the consequences of their labor. A farmer can charge for his food, but he can’t charge for what people are able to do with his food.
Indeed, unless you produce not only the idea but the product and the marketing and everything — the result is not solely the fruit of your labor and therefore you have to wrestle with “how to slice up the pie.”
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October 22, 2009, 3:10 pmmischief says:
It isn’t the legalization, which we could handle. It’s that libertarianism is not capable of generating a social stigma necessary to keep people behaving in ways that will maintain libertarianism.
“destructive addictive things” are in fact only a small portion of it. Children would have to be raised to work hard and study hard. This is hard work for the parents, and libertarianism as such has no argument when one or both parents decide it’s too much and they will develop themselves to stuff they prefer and let their children run wild.
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October 22, 2009, 3:14 pmMike says:
If you had read the book, you would know the answer to that question.
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October 22, 2009, 3:15 pmyankee says:
This is a pretty odd way of putting it. For one thing, Rand’s protagonists are hardly uniformly members of the “entrepreneurial class.” Rearden started his own business, but Dagny Taggart and Francisco D’Anconia are both heirs to well-established business enterprises. John Galt is an inventor who at no point runs his own business. Several characters who started their own businesses are portrayed as value-sucking “moochers.”
It’s also a pretty enormous elision on your part between “smart people who generate new ideas” and “the entrepreneurial class.” Scientists, inventors, engineers, etc. are typically not members of management. Either they are paid employees of a business enterprise (and if the value of their ideas exceeds their salary, that value goes to the company) or they work in a nonprofit enterprise such as NIH. The idea that the real value is being added by management is far from self-evident.
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October 22, 2009, 3:43 pmPubliusFL says:
IMHO the strengths of libertarianism as a political philosophy do not necessarily carry over into all aspects of life. A libertarian political system can be complemented by other social networks organized on principles other than the maximization of individual liberty.
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October 22, 2009, 3:57 pmA. Zarkov says:
“Consider, as a thought experiment, what living standards would be like if every person in the world had an IQ around the median of 103, and otherwise had average talents and ambition. Does anyone seriously doubt that “workers,” and everyone else, would be a lot poorer than they are today, and indeed would likely be living as poorly as our hunting and gathering ancestors?”
This is another way of stating the Pareto Principle or the law of the vital few. It seems to operate at all levels on an 80–20 basis. That is 20% of a population generates 80 of some product– usually intellectual. While a country with a high IQ can be poor, I know of no examples of a low IQ country that’s rich. It other words, some minimal IQ is necessary but not sufficient.
BTW I don’t think the median world IQ is 103, it’s surely less than 100. Korea has about 105, while urban China is about 103 and Japan the same.
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October 22, 2009, 4:05 pmmischief says:
Libertarianism really can’t cope with children and is going to have to call in support from other philosophies to succeed.
Many libertarians have real problems coping with that.
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October 22, 2009, 4:05 pmMatt from Albany says:
David:
I thought this was an excellent post substantively, and very well written. I found it quite inspiring to read.
Matt
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October 22, 2009, 4:05 pmbyomtov says:
Rand illustrates that the working class, as such, makes almost no contribution to wealth, but relies on the efforts, risks, sacrifices, and most of all the genius of the entrepreneurial class.
What hogwash. Did she believe that? Do you? If so, get off campus for a while.
How far do entrepreneurs get without people to do the work? And let’s be clear — lots of those people contribute a great deal. Do you really think Microsoft is solely the product of Bill Gates’ genius? Do you think successful companies in any area don’t rely on the work and talent and intelligence of their workers?
Another point. “Ideas people” who are supposedly responsible for our wealth are a dime a dozen. The people who matter are those who can figure out which ideas are worthwhile, and can convert them into reality. That takes work, and it takes the contribution of others. Entrepreneurs who look down their egomaniacal noses at their workers don’t get very far.
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October 22, 2009, 4:07 pmMahan Atma says:
How about considering a society that did not have any “workers.” Who in the world would build the house you live in, pick the fruit you eat, carry away the abundant quantities of garbage you produce, dig the ditches that carry away the many gallons of sewage you produce, etc. etc. etc.?
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October 22, 2009, 4:12 pmArkady says:
You know, that piece of craptacular nonsense puts me in mind of what I’ve come to understand about battles–that they’re won by privates and pfcs and lost by generals.
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October 22, 2009, 4:14 pmd-berg says:
Since this comment section is into reminiscences today, here’s my story. I too came to US from a then-Soviet bloc country. I first read Rand well into adulthood, already a professional and a family man. She certainly did not change my life. But her arguments were interesting and thought-provoking. Some of her thoughts aligned with my opinion. I’ve seen Marxism first hand and it makes my blood boil to hear apologists for this ideology or Soviet Union. People in the West with red envy have no clue. Not only was Soviet regime oppressive internally and aggressive externally, driven own population into poverty, but it destroyed society and relationships.
Anyway, back to Rand. I have to admire her for the power of her thoughts and her poor leadership skills. The former was mentioned here already. As for the latter: I’m just glad a person of her strength of convictions did not have people and organizational skills of Lenin/Stalin/Hitler. That, or she picked a wrong country.
Literary, her writing is lacking. I personally found that in Atlas, one of the weakest parts is description of Galt’s Gulch and one of the strongest — the distopian “to all according to their needs” factory community. Seems she had a good idea what to avoid. “Positive example” society description was unconvincing, IMHO, not because she could not visualize it, but because her image was unrealistic. Galt’s Gulch society can not be built.
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October 22, 2009, 4:17 pmzuch says:
mattski:
Oh, it’s a common rhetorical tactic, the “fallacy of bifurcation”; you’re either a laissez faire capitalist or a socialist Marxist commie (and prolly fascist or even Islamofascist to boot) ... far too common, I’d say, in some quarters (particularly those of an ideological bent who tend to see the world in “black and white” and don’t look to see if there’s any other alternatives).
Cheers,
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October 22, 2009, 4:19 pmBrett says:
I will give her that. Even as a highly progressive liberal, reading Atlas Shrugged really made you want to go out there and be everything you could be to the best of your abilities. Fountainhead didn’t really do that to me, since Roark struck me more as a fool than a genius (it’s just that his enemies are needlessly simplistic in the book), who forgot that the Customer Is Always Right when you are designing a building for them.
I think of them also as a type of side-payment to ensure social stability. Whether or not it’s “fair”, if you were to have, say, millions of workers thrown out of work in a depression with no means of supporting themselves or avoiding starvation, you’re basically asking for riots, crime, etc.
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October 22, 2009, 4:22 pmDavid Bernstein says:
Yom, thanks for illustrating my point by quoting Brecht the Communist (not an epithet, he was in fact a Communist).
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October 22, 2009, 4:22 pmjtanner says:
GB Shaw observed that “The notion that the colonel need be a better man than the private is as confused as the notion that the keystone need be stronger than the coping stone.” Neither is fully effective without the other and, indeed, there is no actual boundary between the two: line workers are key to develoing improvements in systems. At bottom, “idea people” can and often do increase exponentially the value of products created by workers. Without workers, however, the ideas of the entrepreneurs remain inert in terms of standard of living until workers actually produce something that effectuates the idea.
And AJ Lazarus is right — someone has to clean the toilets.
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October 22, 2009, 4:23 pmWidmerpool says:
Does this mean Wimpy must now pay today for a hamburger he will eat Tuesday?
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October 22, 2009, 4:26 pmzuch says:
A. Zarkov:
Well, considering that half the Republicans here in some parts think that Obama wasn’t a “natural born citizen” and a considerable fraction think the Earth (and universe) is 6000 years old, one might quibble with that ... until one realizes that the U.S. is not all that rich any more.
Snark aside, though, what countries are “low IQ countr[ies]”?
Cheers,
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October 22, 2009, 4:26 pmDavid Bernstein says:
Doing manual labor (which, by the way, is a perfectly fine thing to do), is not the same as creating wealth. I didn’t say that I want a world without workers. I said that workers’ well-being depends to a large-extent on the genius, ambition, and risk-taking of the entrepreneurial class. Why are workers in most of the world so much wealthier now that one thousand years ago? It’s not because they are working harder, or because God is being nicer to them, or because rulers have become more selfless. The rule of law, the market system, and people with the capacity to take advantage of that system to build wealth.
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October 22, 2009, 4:32 pmA. Zarkov says:
The sub-Saharan countries ( average= 67) and most of South and Central America. Mexico for example has an average IQ of 90.
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October 22, 2009, 4:37 pmbyomtov says:
Yom, thanks for illustrating my point by quoting Brecht the Communist (not an epithet, he was in fact a Communist).
Yes, I knew that, thank you very much, but so what?
Does that mean the point he makes here is wrong? Do the workers really contribute nothing? This is not a question of how the economy ought to be organized; it’s a question of what it takes to build wealth. The view, which you seem to endorse, that it’s all done by a few great men of vision, seems to me to be nonsense, which is what I was trying to say.
I’m not a law professor. My career has been almost entirely in small business. I know what it takes to make things go, and it’s not the “great ideas man,” who is usually just a BS artist anyway. It’s having a lot of people working hard and intelligently. The “one genius, many drones” model is stupid.
Now maybe tha’s why you chose the word “illustrate” rather than “demonstrate,” but that’s pretty weak. One does not typicaly say “In book X Writer Y illustrates principle Z,” unless one believes principle Z. If you think Z is false, why talk about Y’s “contribution” at all?
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October 22, 2009, 4:37 pmDavid Bernstein says:
I don’t know about better, but the idea that it doesn’t matter who is the colonel and who is the private is ludicrous on its face. Is it Shaw’s (or your) position that military leaders should just be randomly chosen from among the enlisted ranks? Or that we are likely to get more innovative tactics and better leadership from the bright, industrious, ambitious, preferably with natural leadership abilities?
These quotes from Brecht and Shaw suggest precisely what Rand was against, the notion that no person should be deemed more capable than any other.
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October 22, 2009, 4:38 pmMike says:
I like this post very much.
It makes evident the balance that underlies the difference in *opinion* between liberals like me and libertarians like you. This balance is, on the one hand, to what extent do the leaders of our society deserve the fruits of our society, bearing in mind that they contribute disproportionately to its advances, but also remembering that the vast majority of our wealth comes from advances made by people who are long dead. And, on the other hand, balancing to what extent it is necessary to give people private incentives to develop their potential to the fullest, verses acknowledging that the accomplishments of any individual are critically dependent on huge segments of society providing various means of support.
I think if there is a “correct” answer to these questions, no one knows it, which is why I say “opinion” above. In the end we both enter with our biases, based on our experiences, which guide us to view how the world is, how it should be, and what courses of action move us in the appropriate direction.
But what I would like to see more of from the right is, a recognition that there is indeed a *balance* here, which means one cannot automatically dismiss proposals as “too socialist” or “too much regulation” etc. — one must argue proposals based on their specific merits and flaws, in the context of the unideal, complicated society in which we live.
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October 22, 2009, 4:41 pmDavid Bernstein says:
Byom, you’re misconstruing both my point and Rand’s. I don’t have the time and energy to go into detail, but the point is certainly NOT that every business owner is brighter or more capable than every employee, and I should think that this idea is absurd on its face.
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October 22, 2009, 4:43 pmTwirlip says:
Rejecting one dumb idea does not require us to rush off in search of an opposite but equally dumb idea. Standing Marxism on its head was no doubt very emotionally satisying for her, but it’s a poor guide to thought for the rest of us.
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October 22, 2009, 5:00 pmArkady says:
No, you did not say that. You specifically said:
And that is utterly fatuous.
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October 22, 2009, 5:02 pmAeon J. Skoble says:
Excellent post, David, very well put.
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October 22, 2009, 5:02 pmMark Jones says:
Eddie Willers (I think that was his name–it’s been a while). Dagny Taggart’s right hand man. Eddie was by no stretch of the imagination in the same class as Dagny, Rearden, Galt, and the others when it came being an idea man. But he was just as heroic as they were, just as devoted to their principles, just as determined to be all that he could be, to earn his keep by working hard and doing his best.
Nor was Eddie alone in that. Rand wrote about how all the faceless people in businesses all over the land who began to disappear after hearing Galt’s speech. They weren’t giants of industry, but everyone who knew them knew they were vital nonetheless, and knew they’d vanish sooner or later–and why.
But while Eddie and those others were valuable people, they could not replace Dagny, Rearden, or Galt. Dagny, Rearden and Galt could do their jobs, but the opposite wasn’t true. Which was the point of Eddie’s last scene–the technical society he was trying so hard to maintain was impossible without “idea men”.
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October 22, 2009, 5:05 pmbyomtov says:
Doing manual labor (which, by the way, is a perfectly fine thing to do), is not the same as creating wealth.
Is a house wealth? Does the guy who puts up the drywall help to create the house, or is it all the doing of the architect?
Human society begins to create wealth when it has a food surplus — when it can produce enough food to feed itself without using all available labor. So weren’t the food producers — not genius entrepreneurs — the original wealth creators?
I didn’t say that I want a world without workers. I said that workers’ well-being depends to a large-extent on the genius, ambition, and risk-taking of the entrepreneurial class.
And success as an entrepreneur depends on reliable and intelligent workers. The success of a business is simply not attributable to one great genius. The risk-taking, the ideas, the technical, marketing, and administrative skills, are not the province of one person. Even if you want to boil it down and say the essence is creative ideas (it’s not, by the way) then you have to recognize that these come from lots of sources. (Perhaps oddly, you might consider what I think are Hayekian notions of the guy close to the action being cucial to making the system go).
Why are workers in most of the world so much wealthier now that one thousand years ago? It’s not because they are working harder, or because God is being nicer to them, or because rulers have become more selfless.
I think modern democratic governments, the ones where workers have made the greatest advances, can fairly be characterized as “more selfless” than feudal monarchs, nobles, and high church officials.
The rule of law, the market system, and people with the capacity to take advantage of that system to build wealth.
But there are many, many more people today who can create wealth. This is due in part, by the way, to widespread public education, not to mention other statist curses like public health measures, electrification projects, and so on.
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October 22, 2009, 5:06 pmMahan Atma says:
And I didn’t say I wanted a world without an entrepreneurial class. That was your “thought experiment.”
And the well-being of the entrepreneurial/intelligentsia class depends to a large extent on the labor of the workers. Neither could survive without the other.
So what’s your point, exactly?
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October 22, 2009, 5:07 pmTwirlip says:
Rand may try to make that argument but it’s rather unlikely that she “illustrates” it. The entrepreneurial class need workers as much as the workers need an entrepreneurial class.
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October 22, 2009, 5:07 pmTwirlip says:
Any interesting question which has long puzzled me — why are lawyers of all people so attached to libertarianism? It’s a bit of an odd match, isn’t it? But from all I’ve seen they are markedly more libertarian than most other professions, with the exception of engineers.
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October 22, 2009, 5:11 pmCato The Elder says:
Sure. But leftists always say this. The question I want answered is: Why are they always reviving the same hoary ideas that, kindly, do not seem to have such a great success rate, if they actually believe the rhetoric? For example, why have we returned to 1930s style Keynesian “pump priming” in 2009, when macroeconomic thought supposedly progressed beyond that after the ‘70s? Why are we talking about reinstituting Glass-Steagal when I see it written all the time in finance textbooks that the Eurodollar market and international trade flows made that sort of legislation all but impossible to enforce? Liberals are always talking about new, sexy ideas with new, sexy economic paradigms to prop them up but somehow we end up with programs like Cash For Clunkers and trying to pay off doctors to then cut health-care costs. Explain why you aren’t vociferously calling out programs that clearly FAIL on their merits.
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October 22, 2009, 5:13 pmbyomtov says:
David,
I think your point, or Rand’s, is that the worker does not create wealth but depends on the genius of the entrepeneur. If that’s not it then I don’t know what it is.
My point is that this is just wrong. Wealth is created by the combination of lots of things and people, capital, labor, etc. Certainly organizing a firm and coordinating its activities is an important thing. But to attribute the creation of wealth solely to those who do that is to take a cartoon view of economic activity.
You may glorify the founder of a pharmaceutical firm and believe that the scientists who actually discover the medicines contribue no wealth. That’s plainly silly.
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October 22, 2009, 5:17 pmArt Eclectic says:
“Rand illustrates that the working class, as such, makes almost no contribution to wealth, but relies on the efforts, risks, sacrifices, and most of all the genius of the entrepreneurial class.”
I continue to disagree every time this tripe comes up. I don’t know where people keep finding this idea in her books. Rand never has anything but praise for the common worker who performs his/her job impeccably. From the short order cook to the train brakeman. All play their parts for the machine to function properly. Where you find her disdain is for the lazy, the incompetent and the sloppy who expect to ride the coattails of others without contributing.
Rand wasn’t a classist — she just couldn’t stand incompetence.
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October 22, 2009, 5:17 pmloki13 says:
Lawyers as a whole (practicing), not so much with the libertarianism.
Professors that teach law, quite a bit more. I leave the analysis of that to you.
(However, I will leave you with an anecdote– some time ago, in my first year of law school, a rather sweet but naive 1L was trying to make conversation with the professor in a class. She ased, “So, did you ever actually practice law?” Went over like a lead balloon.)
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October 22, 2009, 5:17 pmDerHahn says:
The entrepreneurial class need workers as much as the workers need an entrepreneurial class.
Who is more likely to provide for himself and his family, the man who finds a plot of ground and plants a garden, or the guy who waits around for someone to tell him to grab shovel?
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October 22, 2009, 5:20 pmTwirlip says:
Well, let me expand my point. Where do lawyers (or law professors) fit into this scheme of an “entrepreneurial class” on the one hand and “workers” on the other.
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October 22, 2009, 5:21 pmTwirlip says:
Non sequitur. Has nothing to do with the comment it was responding to.
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October 22, 2009, 5:23 pmJerome says:
I think it’s important to be careful about saying that a novelist introduced big ideas into the world. I know there are people who promote her as a philosopher, but do you really believe that people like George Gilder, who now write based on the idea that energetic geniuses drive progress, would not have done so without Ayn Rand? Maybe she was the first to popularize this idea, or memorialize it in fiction, but I am skeptical about her status as Great Philosopher.
Second, if we really want social progress (based on her core idea as you’ve articulated it) then shouldn’t we have a pretty extensive welfare state, doing everything possible to insure that poverty, ill-health, racism, etc. don’t discourage geniuses from emerging? Instead in Rand’s work there seems to be an utter contempt for poor people, as if they were to blame for their condition by not transforming themselves miraculously into hard-driving super-achievers.
I do agree with you, though, that reading Rand can have a very energizing effect. This happened to me long ago. But it can also turn one into a complete a**hole. This happens all the time — it seems like most Rand devotees I’ve known end up with this super-intense, aggressive, not very nice, demeanor, which involves not smiling very much. I think this naturally results from the tenor of Rand’s work (even though it’s quite possible to be an intense achiever while being friendly and agreeable to all). There is a certain Rand personality, just as there is a certain National Review personality (wry, charming, eloquent, arrogant).
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October 22, 2009, 5:30 pmJerome says:
By way of contrast, there was another Russian Jewish emigrant to the U.S. who made it big and changed the world — the Lubavitcher Rebbe, who spread thousands of Jewish centers around the world and continues to re-connect secular Jews with their heritage (and introduce them to Chabad’s mix of religious rationalism and mysticism). Because it is all rooted in basic religious values of compassion, humility, kindness, and so on (which Rand sought to turn upside down, as did the totalitarians), there is a not a problem with a certain negative personality being picked up by many of those influenced by him. His achievements may not be creating wealth and innovation, as did Rand’s heroes, but at least they help ensure the Jewish people does not cease to exist (which it eventualy would, at least in the diaspora, if all become atheists), and creates positive emotional and spiritual experiences that can create a good quality of life regardless if you’re rich or poor. And of course it’s not imcompatible with high secular achievement — think of Lev Leviev.
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October 22, 2009, 5:55 pmSG says:
So weren’t the food producers – not genius entrepreneurs – the original wealth creators?
Absolutely. But I think the development of agriculture was an act of sheer genius and profound risk taking. I’m don’t understand why you dismiss it so.
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October 22, 2009, 6:22 pmloki13 says:
Most lawyers do not fall into the entrepeneurial class. They fall into the “smart, but risk-adverse” class. As with any generalization, this is an overly-broad (there are some risk-takin’ plaintiff’s attorneys, for example), but on the whole, I think it is accurate.
The job of a businessman is to imagine everything that can go right. The job of a lawyer is to imagine everything that can go wrong.
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October 22, 2009, 6:23 pmzuch says:
A. Zarkov:
The sub-Saharan countries ( average= 67) and most of South and Central America. Mexico for example has an average IQ of 90.
Cites for these “facts”? Thanks in advance.
Cheers,
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October 22, 2009, 6:30 pmmattski says:
Yikes. What a rant. And you say you saw it “written in a finance textbook”, eh?
Let me ask you this: Why do you think the global financial system melted down in 2008? Was it all those hoary leftist policies?
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October 22, 2009, 6:39 pmDavid Bernstein says:
And, like Ayn Rand, the Lubavitcher Rebbe’s followers invented a lot of details about his life to make him look more impressive.
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October 22, 2009, 6:51 pmBlue Neponset says:
General DeGaulle said it best, “The graveyards are full of indispensable men.”
Rand & Co,. should look up the law of large numbers. In a nation of hundreds of millions of people there are plenty of talented individuals. The very idea that a couple of hundred people could go on strike and send us back into the dark ages is laughable.
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October 22, 2009, 7:17 pmNever Yet Melted » The Influence of Ayn Rand says:
[...] Fellow Volokhian David Bernstein, responding to Ilya, adds his own personal tribute to [...]
SuperSkeptic says:
(emphasis added)
I appreciate both of these points in their respective contexts. Helps explain the mistrust/disdain of the state. Could it all just be a historical disagreement, with my crowd saying the state helps less, and yours saying the state is savior? Or is there a third option — a la bill mahr and religion — the state helped but now it hurts more? Or are the individual and the state symbiotic in your eyes?
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October 22, 2009, 7:33 pmMike says:
I don’t mean to imply that liberal policy proposals are always good. I think it’s a fair guess that most ideas are bad, and while critical analysis can be good for sorting the good from the bad, the market is a much better tool. But you have to know how to play with the market. It doesn’t solve problems until you give it incentives to do so. Sometimes public policy is the only way to go.
It seems to me conservatives/libertarians are apt to presume economics supports their views. I don’t think things are so clear. First of all, from everything I’ve seen, all these advances in macroeconomic theory people talk about, while interesting from an academic perspective, don’t apply to the world we live in.
The current US health “insurance” “market” is not like the markets of economic theory. In fact no modern markets are, though some are a much better approximation than others. One of the important assumptions of market efficiency, from what I understand, is no externalities. Isn’t this often what we’re trying to solve with govt regulation?
I also hear people say economics says lower taxes are better. I’d like to see the economic theory that tells us what the ideal tax rate is! Or that tells us the capital gains tax should be lower than the income tax. Or that poor and wealthy people should be taxed at the same rate.
I do understand frustration with “liberal” policies that centralize decision-making power in govt. As I said I think the market is a better tool. But it would help if people who believed in markets offered up their market solutions to our problems, instead of pretending there are no problems, or that markets can solve problems without changing incentives, or the only problems come from govt (which is like saying there were no problems in the past).
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October 22, 2009, 7:33 pmbyomtov says:
But I think the development of agriculture was an act of sheer genius and profound risk taking. I’m don’t understand why you dismiss it so.
I don’t dismiss it. I point out that it wasn’t the product of a Randian entrepreneurial genius. It was, rather, the work and discovery of lots and lots of people, who were universally manual laborers. Techniques were discovered, improved, and communicated slowly, by trial and error and hard work, not by some magnificent visionary.
No wealth would have been created without all that work and all those workers.
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October 22, 2009, 7:41 pmSuperSkeptic says:
Unfortunately, because all too often the “externalities” are contrived to justify the “govt regulation”
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October 22, 2009, 7:45 pmSuperSkeptic says:
Did not a Mr. Mackey of Whole Foods do precisely that? People do, just not Congresspeople.
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October 22, 2009, 7:47 pmloki13 says:
Superskeptic,
I don’t have a single, consistent position. It’s like choosing a football coach– is a relaxed player’s coach better, or is a hard-nosed disciplinarian better? Depends on the team and the time.
So it is with the government and the market. I think that, as a general rule, the lower the taxes and the freer the markets, the better. But I also think that there are things that the market doesn’t do well for various reasons and that there are things that we, as a society, have made a normative choice about even though it might be economically inefficient in the long run.*
I think that the tension between the two is a good thing, and that when it gets out of whack (too much emphasis on the society, or too much emphasis on the individual) things go poorly. In my perfect world, the government (both Federal and State) would do less of what it does currently in some areas, more in a few others, lower the overall number of regulations while enforcing the regulations that remain more consistently. Vague enough?
YMMV.
*Because in the long run, of course, we’re all dead.
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October 22, 2009, 7:56 pmDavid Nieporent says:
Because lawyers are more familiar with government, and so we know to trust it less?
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October 22, 2009, 7:59 pmHarryEagar says:
This has been the most enjoyable thread I’ve seen at VC. It kinda leaves libertarianism quivering and expiring on the floor, not the least enjoyable but most surprising part of it.
David asks: ‘Why are workers in most of the world so much wealthier now than one thousand years ago?’
Technique, technique, technique. Once someone devises a technique — a thing that correlates very poorly with residence in a Randian society, by the way — then everyone who comes after benefits. That’s why Jefferson said that the greatest benefactor of mankind was he who introduces a new food crop.
It doesn’t take genius, talent, experience and only the tiniest amount of entrepreneurialism to do that.
As for Rand’s influence on me, I found ‘The Fountainhead’ on my grandma’s bookshelf when I was 11 or 12. She tried to take it away from me because of the sex scenes but I finished it anyway.
If it influenced me at all, I hope it was to deter me from being as much of a jerk as Roark.
Later, in college I hung out with the architecture students. Every year they would have a party and show ‘Fountainhead’ and roar and jeer and sneer at it, the way later kids behaved at ‘Rocky Horror Picture Show.’
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October 22, 2009, 8:07 pmBlue Neponset says:
Trust it less that what? The free market?
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October 22, 2009, 8:07 pmyankee says:
And does not entrepreneurs’ well-being depend to a large extent on the hard work, ambition, and risk-taking* of manual laborers? How does an entrepreneur accomplish anything without someone collecting the trash they produce, maintaining the pipes that deliver the water they drink, maintaining the power grid that provides their electricity, picking the crops they eat, constructing the buildings they live and work in, and so forth?
I’m also still baffled as to why you attribute ideas that improve human well-being to the “entrepreneurial class” rather than to the people who come up with them. Scientists who develop life-saving medications are rarely members of management of any business large or small.
*I mean this literally. Jobs involving manual labor are often physically dangerous. An entrepreneur risks their investment, but someone doing manual labor on a farm risks life and limb.
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October 22, 2009, 8:14 pmleofromlansing says:
The greatest contribution that Rand made was to provide a quick and effective way to determine whether or not someone was an arrogant bed-wetter. Just ask someone if they liked reading Rand, then you’ll know.
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October 22, 2009, 8:18 pmloki13 says:
I’m also going to comment briefly on Bernstein’s disdain of the working class (“it’s a perfectly fine thing to do” after saying they never create wealth is evocative of “not that there’s anything wrong with that”). There’s different kinds of skills, and I think the good Professor would do well to realize that.
I cannot speak for him, but while I certainly have my own skill set for which I feel I am generously compensated (although I question how much value I add), I am definitely lacking in other areas. For example, despite my book-learnin’ I am hopeless when it comes to fixing cars. Not from lack of trying– I just can’t. Same with home repair. Or carpentry. Or gardening (I have the black thumb). While, in an abstract way, there is certainly value added by an “idea man” like DB pontificating that Lochner was wrongly decided for the 300th time (or, to be fair, his next article on Daubert), I find it odd that he finds this to be valuable while the person who repairs his car, fixes his toilet, builds his house, and grows his food creates no wealth.
Puzzling.
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October 22, 2009, 8:25 pmRPT says:
Sounds like Genesis 1. This thread does demonstrate that libertarianism is incompatible with Christianity (following the teachings of Jesus, i.e., Matthew 5–7).
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October 22, 2009, 8:27 pmArthurKirkland says:
Putting aside the merits of selfishness and altruism, I wonder how likely America is to embrace a worldview that regards military heroes and Gold Star mothers as sneer-worthy saps.
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October 22, 2009, 8:34 pmBruce Hayden says:
I have been waiting a long time to hear this compelling argument. I would also, I think ask how you reconcile this belief of yours with the performance of the Obama Administration and the large majorities his party has in Congress right now in overcoming the current recession. My view is of a lot of people getting rich off of the various programs that have been passed and are proposed, with red ink extending at obscene levels as far as we can see. All with unemployment being several points higher now than was promised if the almost trillion dollar “stimulus” plan was passed.
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October 22, 2009, 8:36 pmDavid Bernstein says:
I mean “idea man” in the sense of someone who comes up with an idea that benefits mankind, say Thomas Edison. Law professors, including me, are very rarely “idea men”, and I’d be the last to argue that we create wealth (more like consume it).
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October 22, 2009, 8:40 pmSuperSkeptic says:
Vague, yes, a bit, but reasonable — dare I say quite sensible.
I don’t have a single, consistent position. It’s like choosing a football coach– is a relaxed player’s coach better, or is a hard-nosed disciplinarian better? Depends on the team and the time.
Good federalist argument.
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October 22, 2009, 8:41 pmA. Zarkov says:
Labor is a factor of production. Obviously we need workers of all kinds in a large enterprise. Management is just another kind of labor so is engineering. We can argue about ratios of salaries for the different kinds of labor, but they are all still labor nonetheless. Capital is another matter. The owners of capital demand a return for supplying capital and taking a risk. For people who believe in the labor theory of value, the whole of the value we assign to the enterprise should be based on labor. In other words, the owners of capital are not entitled to a return. As I see it, this is the basic argument.
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October 22, 2009, 8:54 pmOwen H. says:
You know, it should hardly be surprising that the tale shows the teller to be correct, in a work of fiction.
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October 22, 2009, 9:01 pmA. Zarkov says:
Cites for these “facts”?Thanks in advance.Cheers,
R. Lynn and T. Vanhanen, IQ and the Wealth of Nations has tables that summarize various studies. It’s important to adjust for the Flynn effect. You can also use google to find data for specific countries.
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October 22, 2009, 9:03 pmBruce Hayden says:
My last post was a bit snarky, but behind that was my belief that the left really doesn’t understand where wealth comes from, and rather, assumes that they are smart enough to manage its creation through government intervention and planning.
And, I would suggest that that approach is invariably destined for failure, and is dependent upon a Utopian view of mankind. Rather, decisions on the allocation of wealth are ultimately made based on political maneuvering, lobbying, etc. Man is basically greedy and self-centered, and so, no matter how noble the goal, we will have people gaming the system to make themselves rich. We have Al Gore becoming a centamillionaire by flogging Global Warming, and a “stimulus” and appropriations bills so full of pork that there is little left to have much effect. And we have money that should be going to equip our troops in combat going to build a memorial to Ted Kennedy. That sort of thing. It is the natural result of a government making decisions about the allocation of wealth and resources in this country. Much of the money is guaranteed to be spent wrongly, since the determination of where to spend it is political, and therefore the path to wealth is through manipulation of the political process.
But none of this creates wealth. And that is the problem. Sure, Henry Ford needed his assembly line workers, but they were, and are, almost as interchangeable as the parts that went into his cars. His vision and his willing to take risks, along with others of his ilk, are what created that industry. (And, it is government intervention by well meaning liberals that is what has wrought so much damage to it).
The problem is that the government can either create an environment that facilitates wealth creation, or it can create an environment that hinders it. An environment that facilitates it has a stable legal system (which doesn’t include giving union pension plans priority over secured creditors in a bankruptcy), stable, reasonably low, fairly flat, tax system, and minimizes government intervention into the market. The tax system is key here, because wealth is made when people take large risks to implement their great ideas or visions. Taxing those who do take the big risks, work the long hours, and do the other things needed to create the wealth, so that others can live off of their efforts through redistribution by the government just doesn’t work. Rather, they should just get government or academic jobs, with pretty much guaranteed and reasonably generous benefits and retirement. But that isn’t where you want your best and brightest, because that is not where wealth is created.
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October 22, 2009, 9:06 pmHarryEagar says:
‘The owners of capital demand a return for supplying capital and taking a risk’
Not necessarily. See Wittfogel, ‘Oriental Despotism.’
Most of the technical advances we rely on today came from such regimes.
It might be argued (incorrectly, in my view) that Randian organization mobilizes innovations more rapidly and/or thoroughly than other forms of organization, but it cannot possibly be argued that there are more ideas in a Randian system.
One problem with free-market idolatry is the career of Mr. Perkin’s great discovery. It came at the height of and at the center of the most devoted attempt in history to make libertarianism work, yet it was exploited not then or there but in an antidemocratic despotism under government sponsorship.
Results count, in my book.
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October 22, 2009, 9:12 pmSuperSkeptic says:
And let us not forget the role of the judiciary, Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668. (Mich. 1919)
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October 22, 2009, 9:29 pmMahan Atma says:
I remember having this debate with you a few years ago. If I recall correctly, many (most?) of the studies cited in that reference were ridiculously out-of-date (e.g. in some cases dating back to the 30s), had ridiculously small sample sizes, or else had no information whatsoever about how the “sample” was drawn (meaning they were most likely based on samples of convenience, not statistically-representative samples).
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October 22, 2009, 9:43 pmMahan Atma says:
Some pertinent criticism of the datasets in the Vanhanen book can be found here, for example:
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October 22, 2009, 9:55 pmDYSPEPSIA GENERATION » Blog Archive » Ayn Rand’s Contributions says:
[...] Read it. First, and as is most evident in Atlas Shrugged, Rand turns Marxism on its head. While Marxists argue that “capitalists” make their profits on the backs of the working class, Rand illustrates that the working class, as such, makes almost no contribution to wealth, but relies on the efforts, risks, sacrifices, and most of all the genius of the entrepreneurial class. Consider, as a thought experiment, what living standards would be like if every person in the world had an IQ around the median of 103, and otherwise had average talents and ambition. Does anyone seriously doubt that “workers,” and everyone else, would be a lot poorer than they are today, and indeed would likely be living as poorly as our hunting and gathering ancestors? [...]
rpt says:
Is anyone contending that Rand’s ideas were original to her? They do not seem so.
Bruce Hayden or anyone else: Does the finance component of the economy (i.e., Goldman Sachs) create wealth for anyone other than itself? Are they “idea men”? Risking their own capital? So skillful that they merit billion dollar compensation? For what?
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October 22, 2009, 10:20 pmPeterM says:
David–
Why do you say that children are an especially weak spot in Rand’s ideas?
The fact that there are only a few children in Atlas Shrugged (one of the most beautiful passages in the novel involves two young boys) raises this question: So what? It’s not a novel about children or family life? Did we criticize Aristotle, Hume, Friedman, or Nozick for having no meaningful discussion of children in their books?
Ayn Rand’s essay on “The Comprachicos” is, of course, one of the greatest essays ever written in defense of a proper view of child rearing.
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October 22, 2009, 10:53 pmmattski says:
Bruce Hayden:
I don’t mind a little snark–I’m guilty of it myself. Look, I hear many folks here say things similar to yours above, eg, the “left” doesn’t understand where wealth comes from. I find that frankly laughable.
Wealth comes from the labor and innovation of people. Some wealth is directly attributable to the intervention of government. For example, roads and bridges. For example, the space program, the capacity to deploy satellites, the internet itself. Government has a proud and productive history of funding basic research which has been handed off to private industry for the benefit of all. Even the monetary system, the greenbacks in your wallet as well as the financial data which constitutes your bank balance is an artifact of government action.
I say this not to claim that “government creates wealth”–kindly make no mistake about that. I say it to remind you that government is made up of people who are just as capable of assisting in the creation of wealth as any other people. The idea that government is some special evil, an idea which Ronald Reagan helped to propagate, is simply childish.
Now, why do I say there is an argument that liberals make better stewards of the free market than conservatives? Here is why: Because liberals are not generally under the thrall of a free-market ideology, or what amounts to blind worship of an idea. Consequently, liberals are more inclined to take practical measures to prevent market failures. Failures which ideologues like Alan Greenspan would tell us that we can’t do anything about. I think it is ludicrous to argue against the regulation of complex financial instruments. Alan Greenspan held a different view... at least until his ideology came crashing down around his feet.
Thanks for listening, more later.
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October 22, 2009, 11:06 pmnguyentruong says:
“First, and as is most evident in Atlas Shrugged, Rand turns Marxism on her head.”
Does this mean she also turned Hegel rightside-up again?
————————————–
nuoc hoa | nuoc hoa nam | nuoc hoa nu
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October 22, 2009, 11:11 pmmattski says:
I want to go back to what loki wrote near the top of the thread:
In the examples I cited above I pointed to active gov’t contributions to the creation of wealth. But loki’s point is critical as well. Government is what makes civil society possible. A civil, stable society with a competent system of justice is a necessary condition for the creation of significant wealth. So the indirect contributions of government to wealth creation are as significant if not more so than the direct contributions government makes.
Now returning to liberal free-market stewardship. Did you know that Alan Greenspan did not believe that the government should try to prevent fraud in the financial markets? He thought the market would take care of fraud by itself. I recommend this Frontline program, you can watch it on your computer. The Frontline website allows you to access extended interviews of some of the participants. I particularly enjoyed reading the text of the interview with Joseph Stiglitz. Maybe you would too.
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October 22, 2009, 11:38 pmseerak says:
trying to manage one’s personal relationships through a slavish devotion to pure reason, combined with an excessive faith in one’s own ability to reason (and to be objective about oneself and one’s loved ones), is a recipe for disaster.
So what are you saying here — that sometimes it’s not rational to use reason?
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October 22, 2009, 11:46 pmseerak says:
Putting aside the merits of selfishness and altruism, I wonder how likely America is to embrace a worldview that regards military heroes and Gold Star mothers as sneer-worthy saps.
What worldview is that? It’s not Ayn Rand’s.
I suggest that you shouldn’t be “putting side” the issue of selfishness vs. altruism, as it’s leading you to absurd caricaturizations.
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October 22, 2009, 11:53 pmmattski says:
A final note regarding the culpability of some powerful Democrats in the financial meltdown. It is undeniably true that Robert Rubin, Larry Summers, Tim Geithner & Bill Clinton bear some responsibility for helping stymie regulation of derivatives as well as rolling back pre-existing financial controls. That is clearly a strike against them, but it has to be said that they were acting in the age of Reaganism when free-market ideology was at its zenith.
They were Democrats who fell under the spell, but the spell was Randian. And people like Summers & Geithner have shown a willingness to admit error and modify their views. (Indeed, Greenspan deserves credit in that regard also.)
Finally, I hate the Yankees. That is all.
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October 22, 2009, 11:57 pmCurt Fischer says:
This is an interesting line of thought. I am not convinced that it is true *in general*, but I think we have certainly all encountered dogmatic ideologues on the side of free markets.
Here you jump to far too many conclusions to bolster anything you said above. First of all, what is a market failure? Is it a *market* failure anytime market prices go down? A correction in the market for housing (and derived products) led to a collapse in the banking sector. Is that a fault of the banking market? Or of the banking *industry*? Some have argued that too much regulation and/or misplaced regualation of the banking sector has prolonged our economic malaise. How do you tell if a failure is a market failure or a regulation failure?
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October 23, 2009, 12:16 amSenatorX says:
Most of us real-life liberals living in America today concern ourselves with the problems of managing a market economy to a) prevent its self-destruction and b) maximize human development and the common good.
Key word being MANAGED. The difference between the left and many on the right is that word. There is a gulf of difference between the state literally trying to manage everything to perfection and the state maintaining(managing) an environment for free citizens. In the second scenario the focus of the state is much smaller.
Aso for maximizing human devlopment and the common good the problem, as always, is who decides what these mean and if you disagree what punishment is the state going to dole out on your ass.
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October 23, 2009, 12:22 amSenatorX says:
Greenspan, the Central Banker, failed free market ideology. Irony set me free!
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October 23, 2009, 12:26 amHarry Eagar says:
Bruce, your post wasn’t up for me to see when I posted my last, but the example there — Perkin — proves that your general statement is incorrect as a generality.
The usual explanation for the failure of free market England to exploit Englishman Perkin’s great discovery is its backward and class-ridden school system, compared against Germany’s more comprehensive and broader and technically-oriented education system.
Germany’s system was a deliberate creation of a government, while England’s was pretty much a free market organ.
People who argue that markets are always superior to government direction are wrong. No two ways about that.
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October 23, 2009, 12:49 amArthurKirkland says:
I believe these words distill Ayn Rand’s positions:
What does a military hero do if not “live for the sake of another man” and “sacrifice himself [herself] to others?”
Where does a person who sacrifices for others and rigorously follows orders at the low end of a heirarchy — a soldier — rank in the world according to Rand?
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October 23, 2009, 1:00 amPaul R says:
David Bernstein’s superficial understanding of Rand leads him to state that “... Rand illustrates that the working class, as such, makes almost no contribution to wealth, but relies on the efforts, risks, sacrifices, and most of all the genius of the entrepreneurial class.” Rand does not deal in classes of people, she writes about individuals. Worthy and worthless people are found among strewn throughout society. Then he calls Rand a lying fantasist who made up details about her life by comparing her to Lubavitcher Rebbe, who lied about his academic degrees. Where, even in Prof. Burns new book, is it shown that Rand lied about her life? Bernstein is not a reliable source to understand Rand’s philosophy or literature.
And in Galt’s Gulch, everyone cleans their own goddamn toilet.
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October 23, 2009, 1:09 amPaul R says:
As an enlisted veteran of the United States Navy and the worst kind of committed Objectivist and Randian you could ever meet, I can tell you with authority exactly why I did it. I did it to defend the United States Constitution against foreign enemies, particularly communists. I did it for the chance to learn electronics and work with multi-million dollar equipment at an incredibly young age. I did it for the education benefits. I did it to get out of my small home town. I did it for the regular paycheck.
It is simply not true that the armed forces of a civilized society are composed of suicide bombers eager to throw their lives away in sacrifice. The trick is to make the enemy sacrifice his life. I accepted the risk I took as a professional hazard.
Ayn Rand was invited to give a speech at West Point on March 17, 1974. She delivered her address “Philosophy: Who Needs It?” Here is the post-script to that speech where she answers your question directly.
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October 23, 2009, 1:38 amSarcastro says:
My totally non-strawman impression of a liberal:
“wealth not created by the government is bad wealth, so we should only produce wealth with the government, cause the market is never good.
Also I do not tolerate dissent of any kind and am a fascist who hates America and is working to undermine it’s market-based evilness from the inside.”
[it’s the rare “double-strawman!]
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October 23, 2009, 2:04 amA. Zarkov says:
There are many data sets from sub-Saharan Africa that are not small. For example: Ghana N=1,693, Tanzania N= 2,959, Uganda, N =2,019. Remember that the standard error of the mean scales with the square root of sample size. We don’t need a very large sample size to detect a difference of 2 standard deviations, which is typical of the difference between Europe and sub-Saharan Africa. In fact a sample size of N=10 would be sufficient. So sample size is a red herring in this context. Whether the sample is representative is another story. But let’s say the African IQ were 100. It would be hard to find a sample that would average 70 because only about 2% of the population would be below 70.
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October 23, 2009, 2:59 amOperationCounterstrike says:
In any case She (Ayn Rand) is a BAD writer. If I were teaching writing, I’d use her as a negative model.
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October 23, 2009, 3:59 amricky says:
To say Rand’s point is that workers create no wealth sounds like a Leftist strawman. The point of the novel is that independent, hard-working people of any class create wealth, while whiny collectivists and redistributionists of any class destroy wealth. Many of the “good guys” in the novel are just track-laying schmoes who show up and do their jobs to the best of their ability. The bad guys were the “businessmen” who kept running to the government to bail out their failing businesses, and “workers” who thought that merely having a pulse entitled them to a paycheck.
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October 23, 2009, 4:06 amDavid Bernstein says:
Yeah, we wouldn’t want your students selling 40 million copies of their books or anything. I’m not a huge fan of Rand’s (fiction) writing style, but the idea that the books are actually objectively “bad writing” despite their ability to inspire millions of people is ridiculous.
Quite a few commenters, the above included, mistakenly think that one has to “create wealth” to be a worthy person. I don’t think that, and I don’t think Rand thought this. But you can be the most worthy clerk, or bank teller, or professor in the world, honest, moral, hardworking, magnanimous, productive member of society, etc.; doesn’t mean you’ve created any wealth.
I’m not a Randian, but it’s quite clear that Rand that that the “Fountainhead” of human progress was the extraordinary individual. She didn’t have contempt for the vast majority of people who are “ordinary”, but she also would have hardly agreed with the “well the average factory worker is just as important to society as a Thomas Edison” line; indeed, this is explicitly contrary to her thought. Quite obviously, her heroes are the extraordinary, indeed sometimes cartoonishly extraordinary, not the “common man.”
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October 23, 2009, 4:31 amLargo says:
Paul R:
Thank you for your inspiring personal testimony.
I can add only that an audio recording of Rand’s West Point speech is available online.
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October 23, 2009, 5:19 amPliny the Elder says:
One can change nothing in human beings . . .
All one can do is bleed and obliterate oneself for them
(I think from Gornac Lines of Life;the full paragraph is really good, I just do not have it.)
I think to be in the military requires some type of religious commitment (broadly defined)
Being in Iraq again has convinced me
N.B. if one has no such commitments, military service borders on the inexplicable
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October 23, 2009, 5:52 amPaul R says:
Pliny the Elder, I agree. As an Objectivist I am an atheist who despises most other atheists and agnostics. Having a philosophy to understand the world is invaluable, and even religion is better than the post modern snark and nihilism of modernity.
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October 23, 2009, 6:48 amPeterM says:
It’s amazing to me how virtually every single article on Ayn Rand says the same thing. They all repeat the same, standard, bogus arguments against Ayn Rand. It’s as though there were a playbook that they’re all operating from. For example:
1. Rand’s characters are all one-dimensional, cardboard-like, cartoonish.
2. Rand can’t write.
3. Rand is what you read when you’re in high school but then you grow out of it.
4. Rand’s philosophy has no room for children.
5. Rand is a materialist.
6. Rand’s philosophy is superficial fluff that no serious philosopher would take seriously.
One hears these arguments all the time, particularly from the little boys at National Review. They are all fundamentally dishonest and reveal the true motive of those who repeat them: fear. Such people fear Ayn Rand’s philosophy and its influence on the culture at large. Such people would rather have college students read Nozick than Rand because they know that Nozick’s philosophy is sterile and will influence maybe 5% of the students while Rand’s philosophy will influence positively upwards of 80% of the students.
Such people also don’t like Rand because they read The Fountainhead and Atlas Shrugged and see themselves presented in the persons of Peter Keating, Ellsworth Toohey, James Taggart etc.
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October 23, 2009, 8:34 amEx parte McCardle says:
I suppose you’d apply exactly the same logic to Danielle Steele, Jodi Picoult and Dan Brown, wouldn’t you?
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October 23, 2009, 9:49 amTwirlip says:
PeterM, I’d be interested to hear from you which literary characters you do consider to be one-dimensional, cardboard-like, and cartoonish.
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October 23, 2009, 9:51 amTwirlip says:
David Nieporent
Uh huh. Except that lawyerly (especially law professor) libertarianism tends to be of the “big goverment libertarianism” sort, long on social liberalism (which tends toward the growth of the state) and short on abolishing government agencies. Which, after all, employ lots of lawyers ...
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October 23, 2009, 9:58 amDavid Bernstein says:
Danielle Steele has “inspired millions of people?”
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October 23, 2009, 10:01 amTwirlip says:
I guess Bernstein is a huge fan of the Christian Bible then, it having outsold Rand by several orders of magnitude.
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October 23, 2009, 10:02 amDavid Penner says:
Danielle Steele has “inspired millions of people?”
How about the Rev. Moon? He has.
Come on, yours is a dumb argument, and you should give it up.
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October 23, 2009, 10:04 amTwirlip says:
How do you think wealth is created, Mr Bernstein?
One of Rands most unfortunate influences has been the spreading of the belief that wealth creation is the work of a tiny handful of people.
Some of her defenders argue that this is a misreading of her work, but there’s no denying that many of her most devoted fans took just that away from reading her.
On a separate issue, there’s something disturbing about the development of a cult of personality among libertarians, of all people. It’s hard to imagine a similar attitude toward Hayek or Rothbard, for instance.
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October 23, 2009, 10:10 amPaul Horwitz says:
David, I’m not sure this is right:
Yeah, we wouldn’t want your students selling 40 million copies of their books or anything. I’m not a huge fan of Rand’s (fiction) writing style, but the idea that the books are actually objectively “bad writing” despite their ability to inspire millions of people is ridiculous.
You’ve said you’re not a Randian. But I don’t think it takes being a Randian to say that there can be such a thing as good or bad writing and that the fact that writing is popular doesn’t make it good. Certainly Rand believed that — recall the best-selling and absurd collectivist literature in The Fountainhead. Inspirational writing is not necessarily the same as good writing, just as it is not by no means inconsistent with good writing. I agree with you that she would not for me be the prime model of bad writing; there are certainly worse, and there are things she does well — the narrative flow is compelling, sometimes very much so, when she does not interrupt it for 90-page speeches. But I would also be pretty confident, notwithstanding differences of taste, in saying that she is a deeply and obviously flawed writer. As for PeterM’s retort, it strikes me as very Randian, and not in a good way. The propositions he advances all seem to me to have genuine merit as criticisms of Rand’s work (which, as I have said, I nonetheless enjoy), so calling them “bogus” or purporting to psychoanalyze everyone who has ever held these views as acting only from fear strikes me as a mere assertion, not an argument, and an incorrect one at that.
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October 23, 2009, 10:17 amMark Field says:
And here I thought that the division of labor was one of Adam Smith’s more signficant insights.
I thought Rand herself insisted on objective standards for art. If she fails her own standard....
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October 23, 2009, 10:26 ammattski says:
There is something a little weird about asking what a market failure is at this particular time. Let’s put it this way: anytime a business fails, people lose their jobs and large amounts of dollar value evaporate then you have a market failure. When there is a threat of cascading failures (systemic risk) then you’re talking about a market failure that NO ONE wishes to contemplate.
Any mention of regulatory failure is, I think, quite ambiguous, possibly obfuscatory. Are you suggesting that regulations might have been to blame? Or lack of regulations? What are you talking about?
BTW, I clicked your link. What a strange article. Like it was written by someone with ADD. Toxic assets? Let’s just change the subject and talk about pleasant things like “new banks”. ???
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October 23, 2009, 10:34 ammischief says:
Yes, and it contradicts this
Because everything in it in orientated toward the good of the child. Neither the parents nor the teachers are treating as independent entities with their own rights — not even with the convoluted argument that raising such children will be good in the long run. No, raising children right is a moral obligation regardless of what benefits you do not derive from it, and what efforts it takes on your part.
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October 23, 2009, 10:41 ammischief says:
It couldn’t possibly have had anything to do with the Community Reinvestment Act actively punishing banks that didn’t make bad loans?
Obviously not. Then you wouldn’t be able to blame it on the market and have the Leviathan seize even more control.
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October 23, 2009, 10:43 ammattski says:
It’s called “democracy” and it’s not a bad idea, IMO. Civilization has a cost. Maybe us liberals think it’s worth 40 cents on the dollar, maybe you conservatives think it’s only worth 25 cents. If that 15-cent spread has you dreaming of violence then I think maybe you’re not civilized.
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October 23, 2009, 10:43 amZip says:
Even a lot of people who have read Rand miss this point, (though one does wonder at your willingness to attack her having not even bothered to go as far as reading her), aside from that this might help.
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October 23, 2009, 11:28 amRPT says:
I see Gov. Mark Sanford has an article praising Rand in the forthcoming Newsweek, now available online. Where do you put someone like Sanford in the mix? Married into wealth? Flies around the world on the South Carolina dime? Accepts stimulus funds after rejecting them? Another “it’s all about me” guy. In the entirety of human history is there any successful society based on Randian principles rather than accepting the necessity of collective and altruistic behavior?
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October 23, 2009, 11:40 amCurt Fischer says:
Your definition of “market failure” would include the collapse of the USSR, the bankruptcy and liquidation of Pan American Airlines, and the fade into obsolescence of the telegraph industry. Those three things all involved a business failing, people losing their jobs, and the “evaporation” of dollar value (or ruble value in the case of the USSR). Do you really think those things were market failures? If so, what regulatory reforms might have prevented these market failures?
Yes. In a free market, barriers to market entry (and exit) are low. So when banks began to freeze up and stop lending to their customers, in a free market, anyone with sufficient funds would be able to start a new bank, and begin lending. But as the article I linked to mentioned, regulators were in no mood to approve the creation of new banks during the banking collapse. Even if they had been, clearing all of the regulatory hurdles that a new bank needs to clear would still take a prohibitive amount of time.
That’s just one example. One other commonly cited regulatory mechanism that many blame, in part, for the economic crisis is the “Greenspan Put”.
You seem convinced that the market mechanism is solely responsible for our present economic situation. I am unconvinced, and I thought you might explain the basis for your convictions. Sorry if you think my questions are a “little weird” or “obfuscatory”.
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October 23, 2009, 11:40 amzuch says:
A. Zarkov:
[zuch]: Cites for these “facts”?
R. Lynn and T. Vanhanen, IQ and the Wealth of Nations has tables that summarize various studies. It’s important to adjust for the Flynn effect. You can also use google to find data for specific countries.
I’m quite sure your brilliance is quite the compensation for your two inch pecker, but not being brilliant, and furthermore not being a gullible fool for hack science trotted out to say “We’re number one! We’re number one!”, I don’t suffer the same insecurity.
Anyone pretending to compare country scores in such a thing as “IQ” has a formidable task in front of them (first of which is defining WTF “IQ” is in the first place).
Did these alleged “studies” use the same test all over? If so, was it in English? Did it, to take one example of a widely respected “IQ” test, the Wechsler Adult Intelligence Scale — Revised [WAIS-R], have such questions which establish “IQ” as the following (spoiler alert, don’t read if you don’t want to know the questions in advance): “What colour is the American flag?”
Trot out all the pseudoscience you want to tell yourself yours is bigger, but it’s a load’o’crapola. But your pecker is still small, and that’s an objective fact.
As to the wonderful Mr. R. Lynn, he’s a buddy of your J. Phillipe Rushton who keeps reminding you that you’ve got a widdle winkie.
And here’s some nice statistical legerdemain by Messrs. Lynn and Vanhanen [from the Wikipedia article]:
So by manufacturing data in a way that fits their model, they get a higher correlation coefficient. Neat, eh? Didn’t spot that one, didja? See, brilliance isn’t all it’s cracked up to be, when you haven’t a lick of common sense....
Cheers,
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October 23, 2009, 11:51 amjames wilson says:
Garrett, Hayek, Mallock, Bastiat
Capitalism was not designed. It came not from thinking but from doing. In the beginning and for a long time it had no more theory about itself than a tree; like a tree it grew, and its only laws were remembered experience. When the writers of political economy began to provide it with a theory they had first of all to study it to find out how it worked. Many capitalist were innocent of its existence. What could theorist tell them about what they were doing every day?
The extended order, capitalism, is transcendent–that which far surpasses the reach of our understanding, wishes and purposes, and sense of perception. It incorporates and generates knowledge which no individual brain and no single organization could posses or invent.
To extend human cooperation beyond the limits of human awareness requires being governed not by shared purposes but abstract rules of conduct. Powerful instinctual and rationalistic impulses rebel against the learned rules and institutions that capitalism requires.
Labor (Marx notwithstanding) is not the cause of most of our wealth: unaided, labor produces merely a bare subsistence. Man is not a laboring animal naturally; without especial incentive, he works as little as will enable him to sustain life.
If self-preservation and self-development are common aspirations among all people,there is also another tendency common among people. When they can, they wish to live and prosper at the expense of others. This fatal desire has its origin in the very nature of man–in that instance that impels him to satisfy his desires with the least possible pain.
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October 23, 2009, 11:57 amPeterM says:
Twirlip: I don’t consider any of the characters to be one-dimensional, card-board characters unless of course Ayn Rand intentionally tried to create such characters. If you disagree, please feel free to make an argument about some character(s) in Atlas Shrugged.
Paul Horowitz: Ok, make an argument. Those who make these assertions do so without arguments; they just assert them. They are not true, but I won’t answer an assertion. I’ll respond to an argument. The burden of proof is on he who asserts the positive. I’m also happy to defend my claim that many people who make these assertions against Ayn Rand do so out of fear–the fear that her ideas will actually influence the culture.
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October 23, 2009, 11:59 amDavid Bernstein says:
Paul,
I think one can subjectively say “I don’t like Ayn Rand’s writing,” but I don’t think one can objectively say its “bad.” In part, that’s because a lot of the criticism of her writing is really a criticism of the genre, not the writing. But beyond that, if you’re teaching writing, it would be foolish to use any hugely popular author as an example of “bad” writing. Better to figure out what it is about the writing that makes it hugely popular, at least if you want your students to be successful (in the career sense) writers.
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October 23, 2009, 12:09 pmMahan Atma says:
Remember that the whole concept of a “standard error” only makes sense in the context of a random sample. Please show me evidence that the datasets in your reference were constructed by means of random samples.
But don’t waste your time. I’ve already given you one extremely egregious example of how those datasets were deficient (the Ethiopian example). The fact that the authors were willing to use that data so disingenuously calls into question their integrity and/or competence. Pretty much everything else they say is deeply questionable at that point.
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October 23, 2009, 12:10 pmzuch says:
Mahan Atma:
Remember that the whole concept of a “standard error” only makes sense in the context of a random sample. Please show me evidence that the datasets in your reference were constructed by means of random samples.
Not to mention Mr. Zarkov’s statement is only necessarily true under a host of other conditions, such as independence of samples, normal distribution, interval metrics, etc.
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October 23, 2009, 12:46 pmPJ says:
Ah, the old “I’m a pragmatist but everyone who disagrees with me is an ideologue who is blinded by his ideology” argument. Makes sense. After all, it’s not like liberalism is an ideology.
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October 23, 2009, 12:47 pmmattski says:
I don’t understand what you’re trying to say. For one thing, calling the USSR a “market” is puzzling. But if you insist on doing so, what do you feel that you have just illustrated?
In the case of Pan Am I’m not familiar with the circumstances of their demise, but certainly, when a business goes under that is an example of a market failure. Why wouldn’t it be? Same for the telegraph industry.
Isn’t it obvious from the discussion that when I mentioned “preventing market failures” I was talking about financial market failures?
Well, the global financial crisis is an extremely complicated situation with many causes. If one had to attempt to summarize the main causes then, yes, I believe greater transparency and regulation would have greatly limited the damage. So, simply put there is an essential role for the government to play.
If I am unable to persuade you, maybe Joe Stiglitz can?
*Your remarks about “creating new banks” seem pointless to me. If you have the capital to start a new bank you could just as easily put that capital to work in various other investment vehicles–money markets say–which would both earn you a return (hopefully) and increase the liquidity of the economy. So where are all these nice proto-bankers just dying to grease the system???
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October 23, 2009, 12:56 pmA. Zarkov says:
I cited that reference not for the correlation between wealth and national IQ, but as a source for IQ data. You can completely ignore the text and look at the studies referenced therein for our purposes here. Recall this started off by my saying that I don’t know any low IQ country that is wealthy– that comment still stands. There are other sources of IQ data, the Lynn book is one that provides pointers to the literature. Actually Lynn’s subsequent book provides much more data. You seem to think that all the international IQ data over the last 50 years is bogus. What an amazing conspiracy that would be. If all the countries in sub-Saharan Africa really had an average IQ of 100, how would you explain the large body of data indicating otherwise?
I don’t know what to make of all that scurrilous text in your post, so I will ignore it. If you keep it up I will ignore you.
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October 23, 2009, 12:58 pmA. Zarkov says:
If you don’t like Ethiopian data set then ignore it. Remember the data in the reference came from many sources over a period of more than 50 years. Remember also that I’m not concerned with a correlation between national IQ and wealth. I’m only concerned with finding a counter example to the assertion that no low IQ country is wealthy. That’s it. If you have a counter example then share it. Can you come up with even one study that finds even one sub-Saharan country with an average IQ of 100, or even 90?
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October 23, 2009, 1:13 pmmattski says:
Yes, actually. I am a pragmatist. If you think I’m hiding some blind devotion to an idea (a materialistic idea!) maybe you could be more specific.
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October 23, 2009, 1:14 pmCato The Elder says:
Zarkov you’ve seen this thorough survey by Wicherts et. al, with none of the possible methodological flaws of Lynn, that finds an average African IQ of 82, right? It’s a better cite.
I wouldn’t argue with zuch BTW. He doesn’t know what he’s talking about and he’s rude — impossible to have a civil and productive discussion under those premises. It would take ages to wade through his dissembling; after all, they’ve been doing it in the soft areas of academia for many years. What’s the point? Besides its too far off-topic in this thread. Let anyone interested in the truth of the matter investigate for themselves.
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October 23, 2009, 1:21 pmAndrew J. Lazarus says:
Mark Field got my point exactly. I suppose it’s possible that every Galt’s Gulch entrepreneur cleans his own toilet, but that isn’t economically efficient, and even more so when it’s time to take the garbage to the landfill. (Libertarians are often, although not always, a little amnesiac on issues like pollution.) Nor will it be feasible for every garbage-hauler to be an independent entrepreneur without inefficient duplication. There are going to have to be employees doing dirty, unpleasant work, and somehow I don’t see Ayn Rand’s heroes [to correct myself, I read some of her essays, none of her fiction] hauling out the trash. Even cleaning their own toilets might make them wish for their good old days when they had Untermenschen servants. The idea that menial labor will become ennobled in Galt’s Gulch is a mirror image, equally inaccurate, of the idea menial labor will be ennobled when carried out for the Good of the Communist State. Unless Galt remembered to bring some illegal immigrants with him, their little paradise will soon reek of rotting garbage.
On the other hand, there have been a number of general strikes by labor, and they’ve often been effective in bringing the entrepreneur’s economy to a screeching halt in a matter of days.
Rand’s analysis of wealth creation is pure sycophancy. I’m sure courtiers lined up to tell Louis XIV that the wealth of France depended on his every move. Rand is no more insightful than they.
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October 23, 2009, 1:43 pmMichael Smith says:
mischief wrote:
There is no contradiction here. Raising a child properly does not require one to “live for the sake of another man”.
It is true that the task of parenting is very demanding. But so is the task of becoming a brain surgeon. That doesn’t mean that if one undertakes to become a brain surgeon, one is necessarily “living for the sake of another man (future brain surgery patients)”.
The rational reason to undertake either of these demanding tasks is because one values the outcome sufficiently to justify the effort — in which case, one is not “living for the sake of another”, one is pursuing one’s own freely chosen values and interests, i.e. one is pursuing one’s own happiness.
Rand held that parenting could indeed be a rational value, if it is approached properly and seriously. See the passage in Atlas Shrugged involving the mother and her two children in Galt’s Gulch.
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October 23, 2009, 1:43 pmzuch says:
A. Zarkov:
A bad source. But you did indeed put forth not only this suspect “IQ” data but an implicit claim for the supposed correlation:
That’s hard to deny. Not to mention the cum hoc ergo propter hoc fallacy in your implications in using this data.
You can completely ignore the strong methodological criticisms of the data as well as the criticism of the very concept of “IQ”, too. But to do so is not being very honest.
I don’t know of any country that is basically illiterate that is wealthy (except for the exceptions that were pointed out in the Wiki article, such as Qatar, which Lynn conveniently ignored). Think that might have some significance to your “meritocratic” thrust here?
Yes, for the reasons I’ve pointed out (and more that I haven’t), any such comparisons are hopelessly flawed ... and because they measure something that is ill-defined, and thus pretty much unmeasurable, meaningless. For instance, I suspect that the WAIS-R would show you have a somewhat above-average “IQ” ... but you seem to lack a lick of common sense.
I really don’t care what “IQ” they might have (were it even possible to actually measure such, and not just make data up, as I showed Lynn did), because it’s not a very meaningful or useful concept.
The point is that if you believe crap like Mr. Lynn puts out, you should also believe the stuff the Rushton puts out. And console yourself with your own brilliance.
I should also point out that any systemic bias in either measuring or sampling becomes even more significant, the larger the sample size. You can get highly significant results ... that basically tell you that it’s almost utterly impossible that you didn’t make these errors in your study and that your findings are indeed just due to chance.
Cheers,
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October 23, 2009, 1:45 pmMichael Smith says:
Andrew J. Lazarus wrote:
Rand’s analysis of wealth creation is pure sycophancy.
If you can refute the idea that man’s mind is the source of all wealth, then proceed to do so. Proceed to show us how wealth can be created mindlessly, i.e. without any use of one’s rational faculty at all.
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October 23, 2009, 1:49 pmA. Zarkov says:
Thanks for the article. Too bad they levy a charge to download it.
Even if we take 82 as the average African IQ, that still supports the notion that low IQ countries don’t become rich. They also have a brain drain problem. As an undergraduate I knew a Nigerian student who is fabulously brilliant. But he didn’t go back. He stayed in the US and became a professor and author. And he didn’t need any affirmative action either.
South Korea is an interesting example. It has one of the highest average national IQs and yet it was poor for a long time. Once it started down the development path, everything changed and it’s now prosperous.
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October 23, 2009, 1:53 pmzuch says:
A. Zarkov:
You should have read the Wiki link provided:
Why don’t you do yourself a favour, and read what others provide you, in the future. Enlightenment might be attained ... but only if you pay attention.
Cheers,
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October 23, 2009, 1:53 pmmischief says:
Would there be any law in a libertarian state requiring a brain surgeon to keep on in that occupation for any longer than he wished to? Unless, perhaps, he was actually contractually bound to perform certain tasks?
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October 23, 2009, 1:56 pmzuch says:
“IQ” test question 327:
Consider these statement:
What’s wrong with these statements? Extra credit if you didn’t bother to pay attention to the bolding....
Cheers,
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October 23, 2009, 1:58 pmzuch says:
Cato The Elder says:
Now that’s rude. But run, Sir Robin, bravely run away....
Cheers,
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October 23, 2009, 2:00 pmzuch says:
Cato the Elder:
Question for you, Cato:
From the abstract:
Did the WAIS test ask “What colour is the American flag?”, as did the WAIS-R that I took?
“[N]one of the possible methodological flaws”, eh?
Cheers,
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October 23, 2009, 2:08 pmMichael Smith says:
mischief asked:
I don’t know about a “libertarian state”, but under laissez-faire capitalism (which is what Objectivism advocates), the answer would be no, there would be no law dictating that a brain surgeon must remain a brain surgeon — unless, of course, he’s contractually agreed otherwise.
But this is a political/legal question. What I was addressing was the moral issue — the implication that proper parenting requires that one “live for another man”. So I don’t understand the relevance of what you ask.
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October 23, 2009, 2:12 pmCurt Fischer says:
I think we are reaching the crux of our disagreement about market failures: From my point of view, you may be conflating business and markets. I view a market failure as a failure of the market mechanism. That is, I think a market failure happens when a freely acting, disaggregated body of independent participants fails to produce an efficient distribution of society’s resources.
I would not count the USSR as a market: it did not have freely acting disaggregated participants. So in my view, the USSR’s failure was not a market failure. (But the reason I brought it up is that it certainly ran businesses, and in some sense was a business itself. So it’s collapse would meet the definition of market failure you offered a few posts up.)
Similarly, I would not count the collapse of Pan Am as a market failure. Since the goal of markets is to distribute society’s resources efficiently (not to make everyone’s investments go up, or to provide permanent jobs to everyone), the collapse of Pan Am might’ve simply been a sign that too many resources were allocated to air travel companies, and too few to other areas. And so too with the telegraph industry. Capitalizing telephony and internet services instead of the telegraph industry led to a more efficient distribution of society’s resources. So I’d count that as a market victory.
So what about the financial markets and our current economic collapse? Is there a market failure? That housing prices went down is not a market failure: if assets were overvalued, decreased housing prices is a sign of market success. Perhaps that housing prices went up in the first place is a sign of market failure: distributing so many of society’s resources to finance and construction was not efficient. That some banks collapsed is also not a sign of market failure. Perhaps the “freezing up” of credit markets for a huge swath of consumers and companies is a sign of market failure.
But in both cases, since the markets were not perfect, it is unclear if the market mechanism itself led to the inefficient outcome. Maybe it did, but as you say, it was an “extremely complicated situation with many causes”. Federal Reserve regulatory policies may have contributed to the build up of housing prices. Regulatory delays may have impeded new banks from being formed or capitalized (by e.g. hedge funds).
Does the fact that poor regulations may have been involved in the crisis mean the answer is way less regulations of any and all types? No, it doesn’t. But neither does it mean that markets failed. I think all we can say at our present level of abstractness is that the complex interactions between the housing and financial markets we had and the housing and financial regulations we had did led to failure. It’s hard to argue that because the interactions between markets and regulations didn’t work like we’d hoped, now we need “greater” regulation. Maybe we just need different regulations. Maybe we need fewer regulations. Maybe we do need more. It’s hard to reach conclusions when we’re speaking so abstractly.
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October 23, 2009, 2:15 pmyankee says:
And you may proceed to show us how wealth can be created without any use of physical labor by anyone.
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October 23, 2009, 2:39 pmmattski says:
Curt, I guess I think you’re hung up on a semantic point. But I appreciate the polite way you express yourself.
To me it sounds like you’re saying that a perfect market cannot fail. Which then becomes a sort of theoretical exercise. What if I say that a) the market wasn’t perfect and b) it failed. What else is new? There aren’t any perfect markets.
Do you agree that there is a financial crisis? I’m certainly not thinking of “the market mechanism” as the culprit. I’m thinking of human imperfections like greed and ignorance and fear. Markets can fail because they’re run by people. How’s that?
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October 23, 2009, 2:50 pmmattski says:
Breaking rocks with a pick-axe doesn’t require much intellect. YMMV.
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October 23, 2009, 2:53 pmHarry Eagar says:
Curt:
Airline Deregulation Act: 1978. Collapse of Pan-Am: 1991
Total airline industry profits since Airline Deregulation Act: < $0.00.
Discuss
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October 23, 2009, 2:54 pmSG says:
Breaking rocks with a pick-axe doesn’t require much intellect.
It also doesn’t create wealth.
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October 23, 2009, 3:08 pmyankee says:
I think David B’s “effortless A average” says more about grade inflation at Dartmouth than it does about him.
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October 23, 2009, 3:17 pmMahan Atma says:
You dodged my question. Were any of the datasets from the sub-Saharan region drawn using a random sample? If so, which ones? If not, why raise an argument based on standard errors, or other statistical inference concepts for that matter?
I can ignore the Ethiopian dataset for sure (that’s clearly not a random sample, right?). But doesn’t it bring into question the integrity and/or competence of the authors? It’s an obviously defective dataset for several reasons, right? So what kind of “scientist” would try to make use of that data in the way these authors did?
And the Ethiopian dataset is hardly the only problematic data presented in the book, right?
Seriously — it’s plainly junk science, is it not?? I can’t believe anyone would argue with this...
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October 23, 2009, 3:21 pmmischief says:
No, it’s the moral issue.
And if you don’t know about a libertarian society, why are you trying to defend libertarian principles?
ROFLOL. I, too, was addressing the moral issue. YOU brought in brain surgery as analogous. Therefore, you must defend it as analogous or admit that it’s not the same.
You think that a parent can, at any time, freely chose to stop raising a child as soon he decides that it is no longer “pursuing one’s own freely chosen values and interests, i.e. one is pursuing one’s own happiness”?
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October 23, 2009, 3:23 pmTwirlip says:
Peter M
You misunderstood my question. It was to tell me which characters in all of literature you would describe as being one dimensional and cartoonish, not in Rands writing.
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October 23, 2009, 3:33 pmTwirlip says:
That’s a remarkably “liberal” argument for you to make, DB. No such thing as objective judgements? Can any writing be described as bad then?
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October 23, 2009, 3:36 pmChrisTS says:
DB:
someone who comes up with an idea that benefits mankind, say Thomas Edison ....
the “Fountainhead” of human progress ....
I’ve gone from being stunned by the initial claim that labor creates no wealth to wondering what ‘wealth’ means, here, to, now, wondering how we got from creating wealth to benefitting humanity.
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October 23, 2009, 3:37 pmChrisTS says:
Jerome:
As are most philosophers. The NYT ran an article about women philosophers and pasted a pic of Rand on it. The response from philosophers was...not good.
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October 23, 2009, 3:40 pmTwirlip says:
There’s the problem, isn’t it? Everybody likes to talk about wealth but nobody can define what it is or how it is created.
Is digging gold or diamonds “wealth creation”? SG thinks not.
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October 23, 2009, 3:49 pmMarco says:
Guess who benefits? Easy, unless you were traveling on an expense account, enjoying meals on real china served by a white-gloved stewardess.
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October 23, 2009, 4:10 pmCurt Fischer says:
mattski — Yes, I agree that there was a financial crisis. (I think the crisis part has largely passed, although we are still in a recession.) I think that human fallibility is to blame for the crisis. But if I were in charge of distributing blame (even though I am no expert) I would likely dish out a fair bit to market regulators as well as market players.
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October 23, 2009, 4:27 pmSG says:
I’ve gone from being stunned by the initial claim that labor creates no wealth
Labor is necessary, but not sufficient to create wealth. Go dig a big hole in your back yard; you’ve done labor but have created no wealth. You more likely to have destroyed wealth if you had landscaping.
Is digging gold or diamonds “wealth creation”? SG thinks not.
No, it’s absolutely not wealth creation. Oil doesn’t make Saudi Arabia rich — it’s the productive things that modern economies do with that oil that makes them rich. 200 years ago that oil was worthless. If alternative energy technologies ever becomes more economical, that oil will becomes worthless again.
I’ll talk about how wealth is created. Wealth is created when people willing exchange goods/services and both feel they’ve gained by the exchange.
But go out and start digging randomly. Tell me how much gold and diamonds you find. Compare your output to someone who’s done geological surveys. And used modern mining equipment. You’ll labor a hell of a lot more while creating nothing but holes.
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October 23, 2009, 5:07 pmmattski says:
I beg to differ. A gravel pit is a enviable asset.
I’m not sure I can think of a human artifact which would not properly be described as a form of wealth.
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October 23, 2009, 6:08 pmChrisTS says:
Curt Fischer:
Including TSO for not effectively regulating AIG?
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October 23, 2009, 6:26 pmTwirlip says:
So, if I give you my gold, and you give me your diamonds, wealth has been created?
But you and I have to actually do the work of digging the gold and diamonds first, don’t we? And does not that take a lot more effort than the mere exchange?
Suppose we each dig both gold and diamonds. Now each of us has the exact same amount of gold and diamonds as in the previous scenario, but no exchange has taken place. Are we “poorer” than otherwise? In what sense?
I don’t see how “digging randomly” enters into it, and your need to throw out silly strawmen like this does not suggest a great deal of self-confidence in your ablity to argue the actual point.
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October 23, 2009, 6:28 pmDonald Kilmer says:
Capitalism, as a system, is hard to defend precisely because it is not a “system” of economics. (like self-defined systems based on Marxism, Socialism, Utilitarianism, etc...)
Capitalism is a consequence of political freedom (i.e., freedom from physical agression by another person or persons) and objective law that protects private property.
Rand’s genius was her ability to make that case in popular literature. Others may have had the idea first. Others may have written in ways that appeal to the academic mind more forcefully that her chosen vehicles. Fiction is certainaly a novel way of explaining a philosophy. But story-telling transcends art when it has intrinsic and utilitarian value. She was a good story-teller. Her stories were good yarns by any standard. That they are still relevant today (artistically, politically and socially) is a testiment to a good mind.
I predict that she will maintain her status as a catalyst for good, thoughtful discussions, such as these postings on this blog, for at least another century.
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October 23, 2009, 6:44 pmTwirlip says:
Oh, come on!
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October 23, 2009, 6:51 pmHarry Eagar says:
‘Guess who benefits?’
The guys who had put in 30 years at Eastern Airlines?
The people in Sioux Falls who used to have scheduled air service?
Some people here are struggling to define ‘wealth’ and/or ‘capitalism’ and using holes as a point of reference. I don’t think pouring wealth into a bottomless hole is it, though.
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October 23, 2009, 6:55 pmSG says:
Suppose we each dig both gold and diamonds. Now each of us has the exact same amount of gold and diamonds as in the previous scenario, but no exchange has taken place. Are we “poorer” than otherwise? In what sense?
If there were no other parties who wanted gold or diamonds, then yes we would be poorer in the very real sense that we spent great effort digging up shiny rocks and minerals instead of getting food, water and shelter. The gold and diamonds only have value because they can be easily exchanged for other things we want and need.
If you were alone on a desert island with a huge gold mine and beaches strewn with diamonds, but no food or water, you’re poor. Unlike water and salt, gold and diamonds have no intrinsic value but only have value through exchange.
I don’t see how “digging randomly” enters into it, and your need to throw out silly strawmen like this does not suggest a great deal of self-confidence in your ablity to argue the actual point.
It’s not a strawman — you simply missed the point. Raw labor has no value. Labor is moving the shovel. The value is in knowing where to dig and how to identify and process what you dig in order to extract things that others will value.
Again, labor is necessary, but not sufficient for wealth creation. Undirected labor doesn’t create wealth; it needs to be purposefully applied in order to produce wealth.
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October 23, 2009, 7:47 pmAndrew J. Lazarus says:
Fine. Randian Entrepreneurial Heroes aren’t sufficient to create wealth either, indeed, they are probably not sufficient to haul their own garbage away.
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October 23, 2009, 8:04 pmmischief says:
Only if you think of using it properly.
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October 23, 2009, 8:53 pmMahan Atma says:
And as we all know, laborers are so stupid that if there weren’t intelligent, entrepreneurial types to guide them, they’d go around digging holes at random.
Look dude, I don’t know if you’ve ever had to dig ditches for a living, but I have, and I can tell you that there is more to labor than “moving a shovel”. Believe it or not, the laborer usually has some degree of intelligence, and often knows more about how and where to dig ditches than the guy who owns the company (unless they’re in sub-Saharan Africa, where the average person is retarded, apparently.)
Ever tried to run a backhoe? I’m guessing not...
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October 23, 2009, 8:54 pmPeterM says:
Twirlip,
Your question was easy to misunderstand given the context of the thread which is Ayn Rand and her novels. I’m sure there are unintentionally shallow and one-dimensional characters in literature, but I don’t read such literature, so I can’t think of any.
Back to Ayn Rand. Any character in her novel that is shallow and one-dimensional was intentionally written that way.
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October 23, 2009, 10:05 pmyankee says:
I don’t think this is in dispute. The dispute is about whether (to quote the OP) “the working class, as such, makes almost no contribution to wealth.” By contrast, I contend that both the working class and people who generate useful ideas* contribute to wealth. Scientists may develop a new fertilizer, but it’s worthless unless somebody goes out into the fields and applies it.; nor could scientists even develop them unless the working class was out there working on farms, collecting the trash, installing and repairing water pipes, etc.
*Note that these categories are neither mutually exclusive nor mutually exhaustive.
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October 23, 2009, 10:46 pmtraveler496 says:
Genius of the entrepreneurial class, eh?
If I were given a gun, 100 bullets, a spacetime machine w/ finite fuel, and perverse orders to shoot genius types with a goal of minimizing the world 2009 GDP else the universe would be destroyed, I’d reluctantly target more physicists and mathematicians than entrepreneurs (I’d include at least one lawyer btw — Leibnitz:-)
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October 24, 2009, 3:12 amLargo says:
Twirlip says:
SG says:
Contrary to SG, I suggest that that gold and diamonds may be of some intrinsic (non-trading) value to a rational person whose central purpose in life is creating jewelry, which I suspect SG would grant. In any case, consider the parallel with one who farms wheat with another who farms apples. Apples and wheat together are more valuable than apples and wheat separately: apple pie! More ingredients are needed of course, but are not relevant to the point. Labor is needed to turn the wheat and apples into apple pie, but assume for now that such labor is insignificant compared to the labor of farming.
I will recast Twirlip’s hypothetical as follows:
[I trust that twirlip will advise me if my recasting of his hypothetical makes for any material change to his question.]
The hypothetical is insufficient to yield a definitive answer. One needs information about the cost of the farming (or of the digging) to both parties. If you are a more skilled than me in farming apples (or mining gold) and I am more skilled than you in farming wheat (or mining diamonds), then the total cost of our baking our apple pies (or making the diamond rings) will be less in the case of trade than in the case of no trade. Which is to say, the non-trading scenario will leave us poorer, in a sense that should be clear from the analysis.
Now if I am more skilled than you in all respects (a better farmer of both apples and wheat; a better miner of gold and diamonds), we may still both be poorer in the non-trading scenario. This is counter-intuitive, but so it is with a great deal of economics–along with probability theory, physics, and a bunch of other fields. (No snark intended, I find myself continually surprised by the stuff that gets turns up.)
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October 24, 2009, 6:39 amLargo says:
@twirlip:
I suspect SG meant something that might be put more precisely as “go out and start digging with a greater labor/thought ratio compared to another with a lesser labor/thought ratio (eg as someone with no training in geological surveys compared to someone who’s done geological surveys). By ‘thought’ I mean rational thought aimed at being a productive minor (which could include training in geological surveys, which might include gut sensitivity that comes from years of experience, but which in any case is to be distinguished from physical labor). Who would have the greater output?”
SG can point out if I am mis-characterizing her intent here. In any case, I would say it is a matter of degree of competence, and once decision to develop and apply that competence, which Rand presents to us–not the question of ‘labor class’ vs ‘managerial class’. In any productive role, whether or not it carried the label of a ‘labor’ role (whatever that means), one’s productivity correlates positively with one’s commitment to rational thought in the role — even if it is cleaning toilets.
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October 24, 2009, 8:17 amLargo says:
[sorry, this was meant to be included in the last comment]
I would like to follow that up, elaborate as follows, which may or may not match SG’s intent. Suppose two mining teams set out to mine. One was lead by a geological surveyor, the rest being experienced pick and shovel men who knew how to swing a pick with the best force, and at the best angle, given a particular aspect of rock-face. The other was led by someone less thoughtful, the rest being men of considerable brawn, much of it developed my excessive (because inefficient) pick swinging: inefficient, not because the men had any less native powers of intellect, but because they did not choose to cultivate and focus that intellect in their work. Compare the teams’ outputs.
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October 24, 2009, 8:19 amLargo says:
This is a long comment. Unreasonably long, but I digressed into a little essay, which most may wish to skip. I post it because it may be of interest to a few. (These posts are consecutive, which makes it appear worse, but that is because I am in a remote time zone.)
***
Now further to my last comment:
First, Rand would admire be people in the first team, from the ‘highest planner’ to the ‘lowliest laborer’ — and the former would not be micromanaging (planning) the swing-work of the latter. The competence of the latter’s work in the latter’s sphere would be respected and valued.
Second, if lightning had to strike any particular individual on the first team, the effect on the outcome of the project would probably be greater in the case of the surveyor being struck than by any particular pick swinger. As a corollary to this: the surveyor, while perhaps not be the entrepreneur of the project, would certainly receive a greater portion of the wealth created by the joint work of the team, than would any particular pick-swinger on the team. In any case, the entrepreneur is the person on the team who selects the surveyor, and the pick-swing crew (or delegates such decisions as his thought directs). Thoughtfulness in this aspect of the project might matter more than the thought of any other of the team. (Notwithstanding this, if the non-entrepreneurial geological surveyor is highly critical to the project’s success, this person may will receive a greater portion of the wealth than the entrepreneur.)
Third, if you read The Fountainhead, you will find Roark (the geological surveyor, so to speak) teaching some of the tradesmen (the pick-swingers, shovellers, etc) how to do their job. But he certainly did not conduct classes, and he certainly did not micromanage them. In most real life situations he would likely have less competence than the tradesmen in the latter’s particular skill. For the sake of the novel, Rand was positing the ideal man, one which might never be found, but which one could strive to emulate. His showing a welder how to weld (the situation in the novel) was an incident of the occasion, serving the character purpose of presenting an ideal to the reader, as well as a plot purpose in bringing together Roark with his competent and devoted crew, who follow him to work on his buildings (Roark being an architect) whenever possible.
Finally, a comment on ‘dirty work’. Cleaning toilets has been raised as work that no one in Galt’s Gultch would do. The hero of The Fountainhead, did break-breaking quarry work with a jackhammer. You might consider him to have been a pick-swinger at that time. He did it out of choice, preferring such labor to even a foreman’s supervisory position. I submit to you that he would have no problem cleaning toilets. I doubt of Reardon or Galt would have a problem with cleaning toilets either. If everyone in the Gultch had the same productive capacity as Reardon or Galt, they might have cleaned their own... they might have had a roster... who knows? But there were people of varying levels of productive capacity. Galt was not a supervisor in his profession. Circumstances forced him to lead a strike, but he would end up working for Tagny (an entrepreneur) as an engineer, which was his previous work. Others would surely do ‘dirty’ work, happily, if their competence at such work was respected.
‘Cleaning toilets’ is a phrase that carried a social stigma. It is a stigma I am sure Rand would have despised. Perhaps the better objection to the success of the Gultch is not in the need for ‘dirty work’, but for ‘mindless work’. I suspect Rand would object to the very idea that there could be ‘mindless work’ (productivity without thought), but lets say that certain factory line work than cannot yet be automated could (and would) be done without rational reflection. If the product of such work was needed , for some reason, by Galt, then if he were unable to obtain it by trade, he would do it himself. If one really does needs to do a certain amount of ‘mindless labor’ to achieve one’s rational purpose, then one will do so.
If one can be a productive factory worker (labor requiring no thought, even if it required thought at the beginning to learn the productive skill), and there was a need somewhere for the product, then while such work could not (in Rand’s view) be one’s rational purpose in life, it could still serve one’s rational purpose in life. This is disputed by some, but to me it seems clear that although Rand insisting that one is obligated (to oneself) to produce value through the application of rational thought, she did not insist that the value be tradeable, i.e. that it be of value to any other person. Tradeable value is norm, for one’s productivity in anything will depend on some things that are impractical to produce on one’s own. But with a rationally (reasonably) safe retirement plan, one could devote oneself to the study of bridge, or chess, or music, even if the value produced is not likely to be ‘bankable’ (eg, a career in music is unlikely). It may still be of value to oneself, in one’s own hierarchy of values.
Rand would not then not despise the factory worker who worked mindlessly (by assumption) five days a week, but who saved, and invested their savings, and who spent their weekends thinking (or their time on the job thinking, if the job allowed) about chess, who pursued this avocation rationally, and who retired to a life of chess. This person may even delight in teaching chess without pay to brilliant students, or in running a local chess club. This person would not be living for another, but living for what one values most highly to oneself.
My conclusion here is that even in the Gultch, mindless work (if such a thing really exists, and if the product is required by any in the Gultch), there would be persons whose rational self interest would be served by doing this work. But this would, indeed, be work of the lowest kind, perhaps even despised. But this would not translate to despising those who do such work.
My real last conclusion is this: that there is honor in scrubbing toilets, if you do it honestly and well. ‘Dirty work’ and ‘mindless work’ are very different things. Those who despise ‘dirty work’ (and who, by implication, would assume that such work would be despised in the Gultch) are those who Rand would despise — and rightly so (even apart from the correctness of objectivism.)
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October 24, 2009, 8:24 amMarco says:
Gains to trade (hat-tip to the Apple pie example). Adam simply discovers cool places to dig but lacks the strength to dig vigorously. Bob simply digs randomly. Either alone finds no buried treasure. But, if they trade, there exists a possibility for greater joint production, hence a parato-superior end-point. Now, Economics generally does not make a value judgement to the appropriate way to split the greater wealth resulting from trade.
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October 24, 2009, 9:05 amSG says:
Mahan Atma:
You’re reading a lot of things into my comments that just aren’t there. First of all, I’m speaking of labor as verb, not labor as a noun. Secondly, I’ve all I’ve said is that while labor (working) is necessary to create wealth, it is not sufficient. Working very hard in poor manner will not create wealth — it is more likely to destroy it.
BTW, it’s been my experience that the people who create the most wealth are those that work the hardest, and decidedly not those who were the smartest. You can’t be dumb, but you don’t need to be brilliant either (although it certainly doesn’t hurt).
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October 24, 2009, 9:39 amSG says:
Adam simply discovers cool places to dig but lacks the strength to dig vigorously. Bob simply digs randomly. Either alone finds no buried treasure. But, if they trade, there exists a possibility for greater joint production, hence a parato-superior end-point. Now, Economics generally does not make a value judgement to the appropriate way to split the greater wealth resulting from trade.
Actually, economics does. If Carl, Doug, Edward and Frank were all capable of performing Bob’s contribution to the effort but not Adam’s, then Adam’s contribution was more valuable and warrants a greater share of the resulting wealth.
None of which is to denigrate Bob’s absolutely necessary contribution to the endeavor. I’m not arguing against the importance of laboring, which is absolutely necessary for wealth creation.
BTW, suppose George knew how to run a excavator. His effort (labor) would be much less that Bob’s in an absolute sense, yet he would make the company orders of magnitude more productive. It’s not the effort that matters, it’s the productivity and productivity can be greatly enhanced through intelligence.
Now, suppose George was the only one who knew how to run the excavator. Adam would be obliged to cut George a greater share than he would Bob, but even though Adam’s relative cut is reduced, he is still wealthier that he would be partnering with Bob. If George was a good negotiator, he should ask for (and should rationally receive) more than half the proceeds because this split would still leave Adam wealthier than the alternative. This is because even though his contribution (extraction) is replacable (5 other people know how to dig), but his productivity is so great that it effectively is.
Mostly, I’m arguing against what I perceive to be a poorly articulated labor theory of value. All other things being equal, working harder is better than being lazy, but all other things are rarely equal.
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October 24, 2009, 10:03 amMahan Atma says:
I’m talking about laborers and entrepreneurs in the real world.
You’re speaking at a level of abstraction that is divorced from reality.
That’s true of a lot of people in this thread. My guess is that it’s a by-product of not having done a great deal of hard labor.
So what? In the real world entrepreneurs need laborers just as much as laborers need entrepreneurs. Furthermore, laborers don’t go around digging holes at random. They usually have a pretty good idea where to dig them without being told. (When I I was digging sewer and water lines, you’d just find the point of on the side of the house, and dig towards the street for the most part.)
And furthermore, when they do need to be told where to dig, there’s a really good chance the guy telling them where to dig is also a wage slave, like my boss was.
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October 24, 2009, 11:35 amTwirlip says:
You are evading the question, SG. The question was, how do we create wealth? And what is wealth anyway?
According to you it is created by the process of exchange. It may even BE the process of exchange. This begs the question of where the stuff to be exchanged comes from. You seem to take it for granted as existing already.
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October 24, 2009, 4:04 pmTwirlip says:
Thanks for taking a stab at it, but that’s not what I’m askng. I’m already very familiar with comparative advantage. I’m asking how wealth is created in the first place.
And implicit in that question, I’m asking for a definition of “wealth”.
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October 24, 2009, 4:10 pmTwirlip says:
The classic Rand cultist.
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October 24, 2009, 4:11 pmTwirlip says:
Great, I agree with this. It still does not answer my question however.
Then it is very mysterious that people pay money for it.
You just said it had no value? But this is a waste of time, you’re intent on saying the things you want to say regardless of whether they have any bearing on my point. I’m not asking for some silly lecture on the utility of capital. I’m asking how wealth (capital if you like) is created.
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October 24, 2009, 4:20 pmPeterM says:
Twirp: Now you’re just being embarrassingly stupid.
The only cult here is the anti-Ayn Rand cult that refuses to make an argument or take ideas seriously and who can only repeat what they read in their anti-Rand seminar book.
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October 24, 2009, 11:32 pmLargo says:
PeterM said:
Cheap shot, Peter, (if not a typo), notwithstanding the value of what I elided.
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October 25, 2009, 6:24 amPeterM says:
Just so that there is no misunderstanding, Largo, this is precisely what I think of Twirlip. He asked a series of baiting questions (which I knew to be baiting), I answered them straight, and he then proceeded to insult me and Ayn Rand (as I suspected he would).
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October 25, 2009, 8:14 amTwirlip says:
Your paranoia aside, my question was not in any way “baiting”. I was curious to know what sort of literary characters you considered to be cartoonish.
And I responded “straight” to your inane Rand worshipping answer.
This is the comment of a dishonest buffoon.
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October 25, 2009, 11:44 amLargo says:
Twirlip said:
@Twirlip (and perhaps @SG?):
Your welcome, and I am sorry I missed the mark. I am willing to take a stab at a definition of “wealth” in another comment, if you wish. I won’t do that here for two reasons. First, it is a very difficult question, and I will touch on it again at the end. Second, I believe that “how is wealth created?” can be answered, to an extent, independently from, and more easily than, the question “what is wealth”. I propose a method of doing so, and will use this method to provide a very partial answer which I hope, nonetheless, will serve a first step.
I assume that we each already have an idea of wealth , and that these ideas coincide to a significant degree, even if we lack a common definition (or even any definition) of the term “wealth”. (If not, we would not be even able to reach this point of discussion.) I assume that there are scenarios involving wealth in which we would agree that the amount of wealth in some particular scenario is the same as (or is greater/less than) the wealth in some other particular scenario. Assume we are in scenario A. If we agree that doing X would lead to scenario B, and that doing Y would lead to scenario C, and that the wealth in scenario B is less than the wealth in scenario C, then we might learn something about the creation of wealth by comparing X and Y, even if we lack a definition of “wealth”.
Now lets specify the variables. Let A be the scenario of you and me, a wheat field, and an apple orchard, with me being an experienced apple farmer, and you being an experienced wheat farmer. Let X be you and I each farming one half of the apple orchard and one half of the wheat field, and our each making apple pies following our harvest. Let Y be you farming the entire wheat field, and me farming the entire apple orchard, and you and I swapping with each other half of our produce after harvest, followed by our each making apple pies from what we have following the trade. X and Y lead, respectively, to scenarios B and C.
Since I am more skilled than you in farming apples, we can expect to each have more apples in scenario C than in scenario B. Simmilarly, we can each expect to have more wheat than in scenario A. Hence we can expect each to have a greater number of apple pies in scenario C than in scenario B. All other things being equal, I assume we would agree that scenario C is the scenario with the greater wealth.
But not all things are equal. The labor involved was different. Perhaps farming apples is more laborious than farming wheat. But lets assume for the moment (1) that given our different skills, it is easier for me (you) to farm a full orchard (full wheat field) than half of each. The only obvious difference between scenarios B and C, other than the greater number of pies, is a lessening of the costs of production. I.e., factoring in labor leads us to conclude even greater wealth disparity across scenarios. Furthermore, even if assumption (1) is false, the law of comparative advantage will point to some trading scenario C’ which results in greater net wealth than scenario B.
Now we have to get into what we are all arguing about. Would the wealth of apple pies in scenarios B and C be possible without labor? No. Crops must be harvested, flour must be milled, pies must be baked. But if we compare the difference in wealth between scenarios B and C, is the difference a result of labor? No. It is the result of trade. It is reasonable to speak here of wealth being created by trade, though perhaps not of wealth being created ex nihilo by trade. But that is obvious–to do any trade requires some wealth prior to the trade, i.e. the substance being traded. A different question is whether any wealth can exist absent of labor. I don’t think that SG would deny that farming results in a degree of wealth, even in the absence of trade. I suspect that to think otherwise would be to misread her. But it is so easy to misread one another–especially of fine distinctions are missed (creation, vs creation ex nihilo). I don’t mind others quibbling with my terms (and SG might reserve the term ‘wealth’ for something involving trade alone, as in ‘trade value’ vs ‘intrinsic value’, but the labels matter less than the distinctions that are made.)
So we come back to your last comment to me, Twirlip, where you say “I’m asking how wealth is created in the first place”, and I confess that my very partial answer may still miss the mark, for it address only the simpler question: “how is wealth created?” When you say “in the first place”, your question is ambiguous to me. Perhaps you mean the creation of wealth, as I say, “ex nihilo”; perhaps by your question you meant “how is wealth created at all?” I think I gave some answer to the second, but not to the first. In any case it comes back to “what is it we are trying to arguing about?” — or explore, or discuss, or persuade, or polemicise, or whatever? All great stuff. Me, I like to explore. But I am often not sure what other folk are trying to do...
If you are interested, Twirlip, (or anyone else), in trying to define wealth itself, (or are interested in why I treat the two questions so differently), I am game. It seems to me that ‘what is wealth’ is a question of philosophy of economics, rather than economics itself. I suspect the idea of wealth in economics is much like the idea of number in mathematics. (Many texts on math contain definitions of ‘integer’, ‘real number’, ‘complex number’, etc., but only texts on the philosophy grapple with the idea of number as such. The parallel with economics is not exact, but I suspect a deep correlation. And if this interests you — or anyone — do let me know!)
In any case Twirlip, I hope what I’ve offered her is in some sense a step forward. I’d like to hear what you think.
[BTW, ignore my 8:40 post if it is still there. I submitted it by mistake when trying to edit it. Also, please do not read anything personal into my remarks on comparative advantage, and its being ‘counter-intuitive’. These remarks are for the benefit of any who may be following our conversation, and who might be unaware of these topics and their pertinence. Thanks.]
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October 25, 2009, 12:17 pmLargo says:
Kids, settle down!
:-p
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October 25, 2009, 12:18 pmLargo says:
Wealth without labor!
I put this to you all as an intuition pump. (I admit it is an extreme boundary case and not in any way typical of wealth increase.)
Stranded on a desert, hungry and thirsty, a marooned sailor sits beneath a coconut tree and things, I will climb that tree for coconuts, but first a little nap. The sailor is awakened by a coconut from the coconut tree falling on his head. (No injuries, ok?). The sailor is pleased to see this coconut, which was in the tree, now at hand.
Claim: The sailor’s wealth has increased during the nap!
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October 25, 2009, 12:27 pmLargo says:
@PeterM:
I do not dispute the substance of what you say. However:
(1) Ipse dixits are of very limited polemic value, regardless of how true the may be, or of how objectively they may be established. (And the two of you have been trading them for a while).
(2) Trading insults along with ipse dixits is the mark of a troll, which I believe you are not.
But do read the most important third point:
(3) If I thought you were a troll, indeed if I did not value your presence, I would not have written (1) and (2). :-)
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October 25, 2009, 12:36 pmTito says:
Actually, our current mess is a function of listening to the Randians of the world. Credit Default Swaps are a Randian dream, a fool’s numbers game by highly intelligent financing people,
and our nightmare. Rand never had a good understanding of humans or human nature, hence her horrible personal relationships, her fictional characters being wooden cardboard cutouts and the total and ultimate failure of her philosophical system.
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December 31, 2009, 12:44 pmLargo says:
Tito,
The “total and ultimate failure of her philosophic system” a consequence of her poor understanding of humans and human nature? Do you really mean to attribute a failure of, not just her ethics, but her ontology, to her failure in understanding people?
I do not know whether you are an idiot or a troll.
Cordially,
Largo.
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January 2, 2010, 3:30 am