David Matthew Press, Wichita State University, Wichita, KS
Capitalism: The Only Moral Economy
Capitalism, according to John Galt, is “mutual trade to mutual advantage,” (Rand Atlas Shrugged, 989) or as Adam Smith put it: “[trade] by mutual consent and to mutual advantage.” In true capitalism, the economy is strictly separated from the state, just as there is a separation between church and state in the USA. This basic tenet of capitalism describes the only economic system that can be morally justifiable. Communism, fascism, socialism, dictatorships and “regulated capitalism” are all systems that breach upon an individual’s basic rights, while capitalism respects and recognizes a man’s right to control the product of his mind. In her philosophical treatise Atlas Shrugged, Ayn Rand uses fictional characters and events to dramatize the only economy that is consistent with man’s rights and virtues.
Before Ayn Rand, no one had ever seriously attempted to justify capitalism on moral grounds. It was a given that capitalism was immoral; the proponents of capitalism merely tried to exhibit the efficiency of the system (i.e., it is a “necessary evil"). Economists did this because they focused only on the people who would be helped by an anti-capitalist society: the “needy.” What Ayn Rand presents so masterfully through Atlas Shrugged is the objective perspective of what is occurring in societies where people may take from others for the “public good"; in the novel, she repeatedly begs the question: “At whose expense?” When the People’s State of Mexico nationalizes the San Sebastián mines, Ayn Rand clearly presents what is really happening: a gang of looters is robbing an honest business for their own benefit. In any other case, this would be deemed highly immoral, but when it is done in the name of the “public good,” the action suddenly becomes noble. By utilizing hard-working and honest heroes and heroines such as Hank Rearden and Dagny Taggart, Ayn Rand presents what really happens to the victims of the “needy.”
In essence, capitalism is the only economic system that is compatible with individual freedom. In every other form of economy, a person is, in one way or another, a slave to the non-entity known as the “public good.” In the anti-capitalist society of Atlas Shrugged, the Hank Reardens and the Dagny Taggarts of the world are constantly at the mercy of the government’s whims and fancies because, whenever it deems that the “public good” is threatened, the government can justify any action towards them. Points one and two of Directive 10-289—where workers must stay where they work and businesses must stay in operation—clearly illustrate how an anti-capitalist economy can literally enslave its people “In the name of general welfare” (Rand Atlas Shrugged 505).
The right to life is the most important freedom an individual can have, and capitalism is the only system that is consistent with this right. “Since man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life” (Rand “Man’s Rights” 288). This necessarily leads to the notion of the absolute right to private property, the bedrock upon which the moral and practical foundations of the capitalist system rest. By definition, any anti-capitalist system abrogates this right in one way or another. For example, in Communism the “public” owns all property, in a dictatorship the dictator owns everything, and in “regulated capitalism” the government can do whatever it pleases (according to the whims of its legislators) with an individual’s “private property.”
In Atlas Shrugged, the fifth and seventh points of Directive 10-289 are the most obvious examples of the violation of private property in a non-capitalistic economy. Through this regulation, the government dictates to people what they can and cannot do with their own property: the property that they earned through effort, ingenuity and intelligence. Under the fifth point, a business may no longer produce as much (or as little) as it chooses to; the seventh point prohibits a business to set its own prices. It is clear that these restrictions mean eventual disaster for any company (one can merely look at the roots of the current California power crisis to see this); the government, because it has a monopoly on the licit use of force, compels businesses to destroy themselves or be destroyed. This is tantamount to putting a gun up to a man’s head and telling him that he must either kill himself or be killed by the criminal. However, the aforementioned self-immolation is just what the anti-capitalists would advocate; in the society of Atlas Shrugged, sacrifice, not merit, is morality.
Moreover, capitalism is the only economic system that adheres to an objective (i.e., in accordance with reality) set of standards. In this system, people, in general, receive in proportion to their productivity; it is as simple as that. In contrast, the society of Atlas Shrugged applies completely subjective standards because of its mixed economy. Bureaucrats such as Wesley Mouch attempt to give to everyone according to their “need.” But how does one define what is needed by men? Does that mean the right to a job, an education, a house, food, two cars, et cetera? How far does the government go until it reaches the state of the Soviet Union? In reality, this need is defined by whatever special interest group carries more weight within the government: Tinky Holloway’s unions, the National Alliance of Railroads, the State Science Institute, or any other organization with enough money and lobbyists.
Because it is the only objective system, capitalism is the only economy that can literally be called just. By definition, justice is merely giving a man that which he deserves. When a man deserves something, he acquires it as a result of his behavior or effort. Thus, it is not justice when a man obtains something undeserved, especially if it is at the expense of the merited. By its very nature, capitalism is completely consistent with the previous statement and, consequently, is just. However, the anti-capitalist society in Atlas Shrugged advocates that a man is entitled to what he needs, even if he is a worthless leech who has never lifted a finger in his life. Through methods such as the income tax, this society steals from producers like Dagny Taggart and gives her money to those who did not earn it. Is that justice? It is this society that believes it is moral to steal Hank Rearden’s chemical formula so that the corrupt, unproductive and certainly undeserving Orren Boyle can use it without compensation. Is that justice? It is clear that capitalism is the only economic system that gives people what they deserve; capitalism is economic justice.
Capitalism has been proven time and time again to be the most “effective” (in terms of production) economic system in existence, but this is only secondary to the primary fact that it is the only moral economy. In Atlas Shrugged, Ayn Rand shows that, by its very nature, capitalism is freedom: the freedom for a man to do what he wants to do with the product of his own mind and effort and, the corollary to that, the freedom to live.
Rand, Ayn. Atlas Shrugged. New York: Random House, Inc., 1957.
---. “Man’s Rights.” Capitalism: The Unknown Ideal. New York: The New American Library, 1967. 286–94.