Ayn Rand: Radical for Something Other Than Capitalism?


Libertarian philosopher Roderick Long has a very interesting (and very long and detailed) essay about Ayn Rand up at Cato Unbound. After doing a good defense of the quality and originality of her philosophical thinking, combined with some jabs at those who think she was the philosopher who solved every intellectual problem most thoroughly and most rationally, he gets to an interesting discussion about whether what Rand stood for is best called "capitalism" in modern reality.

His thoughts on the question of whether Rand's account of capitalism is true to the reality that people encounter in what they think of as capitalist modernity:

 no, not at all. But how much of a problem that is for Rand depends in part on which meaning of "capitalism" one goes by, and thus on the extent to which our work-a-day reality is to be identified with capitalism in the first place……

Rand…sharply condemns "men with political pull" who seek "special advantages by government action in their own countries" and "special markets by government action abroad," and so "acquire fortunes by government favor … which they could not have acquired on a free market." [8] Likewise, while readers often come away from Atlas Shrugged with the vague memory that Dagny Taggart was fighting against villainous bureaucrats who wanted to impose unfair regulations on her railroad company, in fact Taggart's struggle is mostly against villainous bureaucrats who want to give her company special favors and privileges at its competitors' expense….

Rand would deny, of course, that these are problems with capitalism. Government favors to business are directly incompatible with capitalism as she understands it, while incompetent and tyrannical bosses would be unlikely to thrive in a genuinely competitive market.

Yet as I read Rand, she once again wavers — this time between two conceptions of capitalism. On the one hand, she defines capitalism as "full, pure, uncontrolled, unregulated laissez-faire" in which "all human relationships are voluntary" — thus identifying capitalism as a 100% libertarian social system which by her own admission seems never to have existed in history. (Call this ideal capitalism.) Yet on the other hand she describes capitalism as a historical reality, saying for example that it "has created the highest standard of living ever known on earth." (Call this historical capitalism.) How can capitalism have had all these wonderful results if capitalism has never existed?

Rand's answer, evidently, is that historical capitalism has been at least an approximation to ideal capitalism. But there is reason to doubt that this is so….Nor do we find a laissez-faire utopia when we turn to 19th century America; even if we set aside, as we shouldn't, the fact that women and nonwhites –i.e. a majority of the population — were largely excluded from participation in the market, that market was heavily burdened by tariffs, banking regulations, monetary monopolies, postal monopolies, corporate subsidies, licensure laws, land seizures, cartelization schemes, censorship laws, anti-union laws, and Hamiltonian "internal improvements."

Of course I don't mean to deny that the United States and other countries generally identified as "capitalist" generally owe their prosperity to their free-market elements rather than to their statist and corporatist elements; but from a radical libertarian perspective that's a bit like saying that the seriously ill owe what vitality they have to the respects in which they are not diseased.

I have been happy using capitalism in Rand's ideal sense as that which American libertarians advocate (as see my book, named after the Rand phrase Radicals for Capitalism), which I think is true and I don't think represents such a severe intellectual, marketing, or historical problem as Long says here.

I also think he is far too blithe in his conclusion that the fact that Western prosperity can be attributed to the extent that it has honored property rights, free exchange, and a price system deserves only the intellectual status of that part of our culture that is "not diseased." Still, keeping our culture's eyes on the differences between libertarian ideal capitalism and statist crony capitalism is generally a useful and true intellectual practice.