Economics

Ayn Rand, Defender of Corporate Welfare

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I am not a huge fan of Ayn Rand, and Lord knows her novels are hard to get through, but this analysis of her economic thinking by Dean Baker, co-director of the Center for Economic and Policy Research, is head-smackingly clueless:

It is misleading to imply, as Morning Edition did, that Ayn Rand's philosophy was about free markets. The idea of promoting oneself at the expense of others, advocated by Rand, is consistent with taking advantage of whatever support one is able to get from the government in this process.

For example, the top executives of Wall Street banks are happy to take advantage of the implicit government guarantee given to too-big-to-fail banks as well as the explicit guarantee that is given through deposit insurance in addition to the support given by the Federal Reserve Board through access to its discount window and other facilities. It is politically advantageous for people who benefit from these and other types of government support to claim that they are advocates of free markets even if it is not true.

Baker, author of Taking Economics Seriously, evidently does not realize that the rap against Randians is supposed to be that they would heartlessly and shortsightedly stand by as banks fail, depositors lose their savings, and the financial system collapses. Here, for example, is the Ayn Rand Institute condemning both bank bailouts and federal deposit insurance, two of the government interventions that Baker claims are consistent with Rand's philosophy.

It is clear from Rand's essays and fiction that she took a dim view of businessmen who game the system, using government to gain an artificial advantage over their competitors or customers. Her books are replete with such characters, and they are not the heroes. She was emphatically pro-market as opposed to pro-business (hence Capitalism: The Unknown Ideal), and she never would have endorsed "promoting oneself at the expense of others" in the sense of seeking special breaks, subsidies, or privileges. In her vision, a moral man promotes himself by providing value to others, not by using force to get his way. No doubt it's true that many people who profess to believe in free markets, including self-identified Rand fans, do not uphold these principles, but that does not mean Rand herself did not. If you're going to take issue with Rand's ideas, it helps to have some inkling of what she actually said.