Ayn Rand’s 1957 novel “Atlas Shrugged” has been seeing a big resurgence in popularity in the last 18 months, surpassing even Barack Obama’s “The Audacity of Hope” on Amazon.com’s sales rank.
Initial increases in sales coincided with central banks slashing interest rates, and the Bank of England’s bailout of Northern Rock in September of 2007. The following month, the book sold even more copies on the heels of the Bush administration’s announcement of a plan to encourage more lending to subprime borrowers.
More recently, the previous administration’s plan to purchase significant stakes in nine large banks as a part of the TARP program, and Obama’s stimulus package both seemed to provoke yet even more copies of the fictional story of John Galt to fly off the shelves.
So why the sudden interest? I can understand – I read and enjoyed several of Rand’s books when I was in high school, and I even wrote an essay on “The Fountainhead” seeking money for college from the Ayn Rand Institute, a program they’re still running to this day. It’s really kind of funny when you think about it; an institute that despises handouts and public education, and believes that “income inequality is good,” is handing out thousands of dollars to help students suffering from the effects of income inequality to afford a higher education through a university that is either public, or most likely receives government funding.
Now, to be fair, I agree with a lot of what Alex Epstein has to say in that article about income inequality. I completely understand that wealth is created, and that there isn’t a finite “pie” which is sliced up amongst the citizens of a nation. I do not believe we should be striving for “income equality” – no one is saying that a janitor deserves the same wages as a brain surgeon – but I don’t think we can overlook the very real problems of a shrinking middle class and nearly stagnant wages for working people in the face of more and more money being concentrated in the hands of a smaller and smaller group of wealthy elites. The problem isn’t the existence of income inequality, it’s the fact that the disparity has been increasing.
The old meme is that “a rising tide lifts all boats,” and Epstein reinforces this basic idea behind trickle-down economics; “Further, the wealth creation of the richest Americans makes us far more productive and well-off.” This idea has been now refuted twice in the history of our country in shocking form.
This chart shows percentage of total wealth held by the top 10% of income earners in the United States, 1913 – 2008.
The three different colored lines represent the top 1%, top 1-5% and top 5-10% of income earners holding pieces of the admittedly non-finite pie.
At the peak of income disparity in 1928, the top 10% of income earners held nearly 50% of the wealth of the nation, with almost 25% of that in the hands of the top 1%. Cue the Great Depression.
Looking at 2008, the numbers are almost identical. Cue the global financial crisis.
Epstein and his ilk rely too heavily on a mythical worldview, dreamt up in response to the extremes brought on by the Bolshevik revolution in Russia and projected upon the landscape of the American system. Rand’s philosophy of Objectivism is interesting and not without merit, but we should be careful not to give too much credit the lessons of fictional stories – especially ones that demand total dedication to extreme ideas.
In Rand’s magnum opus “Atlas Shrugged,” the ultimate point of the story is played out in the last 90 pages in a 3+ hour speech in which hero John Galt calls for a union-style strike – but not one of those terrible collectivist workers’ strikes – this is a rich man’s strike.
The idea is that the real producers of wealth simply get tired of paying taxes on the fruits of their labor, so they just stop earning money in protest. This “precipitates the ultimate collapse of American society,” as John-Galt-movement blog GoingJohnGalt.org describes it. The tagline of that blog is “Loving this country enough to leave it / Loving this country enough to save it,” and apparently loving this country enough to precipitate its ultimate collapse by embracing the value of selfishness.
I could discuss the absurdity of claiming that, for example, someone making $150,000 a year won’t want to make $200,000 next year because – gasp! – $28.5k of that additional $50,000 in income will be taxed at an additional 5% above the previous $83k – $171k bracket, a take-home difference of about $1,400 less than if the higher tax bracket didn’t apply. But we can all do math.
I’ll simply say this, in conclusion:
To all those John Galt wannabes out there, I officially call your bluff. Quit your job, stop investing, and get the hell out of my way – because I’m moving onward and upward, regardless of the situation and without whining. If you wish for a world where the “real producers of wealth” like the folks at AIG, Bear Stearns and Lehman Brothers decide to just take their toys and go home, leaving the field open to the rest of us, by all means please show us you have the courage of your convictions. Let me know how that works out for you.
3 Responses
I’m a month late to the party on this one, but I agree. Galters, bring it on. I only see two possibilities.
(1) The “extra work” being done by the Galters is necessary to the economy, in which case others will step up and do it. If the work is high-paid this will help to mediate the income disparity across the country. That’s a good thing.
(2) The “extra work” actually returns no value to the economy. In this case, if the work is not done the money that would otherwise be going down a hole will be freed up for more worthwhile economic activity. That’s also a good thing.
Either way, we all win and the Galters lose.
Posted on April 16th, 2009 at 1:26 pm
Ananael. You mean there are people cowering in the shadows afraid to “step up and do” the work at this time? And these are the type of people you want in important positions? Sounds interesting.
Posted on April 21st, 2009 at 8:29 am
Edward,
You’re the only one here who said anything about people “cowering in the shadows” or about anyone being “afraid” of anything. This is what we call projection.
If you would take the time to think this through, instead of jumping to so drastically mischaracterize someone else’s position that it makes your own seem a little less insane, you might see what Ananael was likely getting at;
Most CEOs, most of the powered elite who dominate the American marketplace, come from wealthy families who are able to afford educations at places like Harvard and Yale, and they nearly always start near the top of the corporate ladder. There are, however, many people who have spent decades working in the trenches for these CEOs, who in reality can only pull themselves up by their own bootstraps so far before hitting the ceiling.
I guarantee you there are literally dozens of hard-working and intelligent men and women who would make a much better CEO than Rick Wagoner who are currently fighting to keep their tiny benefits packages, while Wagoner walks away with $20mln after tanking the company. These people have real-world experience, not just book-smarts and a wealthy family, but they aren’t given the opportunity to take up these kinds of important positions.
How about instead of trying to paint other people as being as afraid of the world as you are, you go out and find the names of all the Fortune 500 CEOs who worked their way up from the bottom in the “free” market?
Then ask yourself, “Edward, why are you still just another loser and not a great successful man like John Galt? Is it because you’re just not trying hard enough? Or is it because the same people who have controlled the majority of the money and the power in the country for generations have managed to convince everyone else that they are the real producers, they are more important than the working class (too big to fail), and if we ever stop supporting them for a moment the whole thing will fall apart?”
Posted on April 21st, 2009 at 11:25 am
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