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Rand’s Atlas: a myth for America

Many are returning to Ayn Rand’s seminal fiction novel amid recession. But they should not forget the lessons reality teaches.
Published: 05/05/2009
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When the tumult of day-to-day existence throws reality into disarray, people tend to go back to basics, asking questions like, “Who am I?” and “Where am I going?” With political and social movements, this generally translates to a little bit of electoral soul-searching and revisiting the philosophical foundation of your ideology. Considering the recent collapse of public confidence in conservative politicians and multibillionaire CEOs, laissez-faire economics is being revisited to bolster the confidence of the business class, and nowhere is this more clearly demonstrated than the resurgent popularity of Ayn Rand’s capitalist encyclical, “Atlas Shrugged.” Since President Barack Obama’s inauguration, sales of the book have been “going through the roof” according to Yaron Brook, the president of the Ayn Rand Institute. Brook claims that the book has sold more copies in the first four months of 2009 than it did all last year.

And why not? The book is an unrepentant defense of the capitalist, a defiant call that selfishness and profiteering are to be emulated, not scorned. Considering the impression much of conservative America has of Obama and a popular sentiment that regards Wall Street businessmen as slightly more palatable than Osama bin Laden, a book that offers a laudatory pat on the back while condemning “socialism” is a welcome change of pace.

Although currently en vogue, “Atlas” has been an ideological refuge for quite some time. A 1991 survey conducted by the Library of Congress and the Book of the Month Club noted that it was the second most influential book in America, behind the Bible.

But there’s a problem. Rand's vision of businessmen in “Atlas” was like Walt Disney's version of the animal kingdom in “Bambi”: the dirty and impolite aspects that actually animate their lives were handily ignored. Unlike Disney, Rand’s choice to exclude reality was not done to enable the narrative, but to make it possible to drive home a philosophical point.

Like Plato’s “Philosopher-King” (or its 18th century variant, the “Enlightened Despot”), Rand used her narrative to create a philosophical ideal in the form of the businessman. This ideal, like all ideals, embodied all “good” things, and no “bad.” Due to the pervasive effect of Rand’s book on American culture, it’s also been important in shaping a cultural perspective on businessmen as an exponent of American prosperity and a conceptual justification for complete, unbridled economic liberty, or in Rand’s words, “the separation of State and Economics, in the same way and for the same reasons as the separation of Church and State.”

However, the benefits of this ideal have been dubious because the deified philosophical ideal is fictional and the product of wholly wishful thinking. It is the result of a thought experiment that characterizes efforts to regulate business as “punishment” and manufactures a conflict that compels the public to see business as an eternal adversary.

As such, Rand’s is a conceit that we ought to banish, not because, as socialists believe, businessmen are inherently evil, but because they are not, as she believes, inherently good.

Capitalism, like any economic system, is merely a tool, and the use of that tool determines whether it is a “good” or “bad” thing. This makes it a results-oriented arrangement whose sole motivation is profit. Enamored of the notion that selfishness is the highest ideal, Rand and her ilk are unwilling to see the occasionally pathological consequences of the profit motive. Instead, they set their sights on removing any impediment to any profit. In a piece from the Ayn Rand Institute titled “Stop Blaming Capitalism for Government Failures” the aforementioned Yaron Brook emphasizes that the goal should be “no regulatory bullying, no controls, no government interference in the economy.” The government’s only job is “to protect individual rights from violation by force or fraud.”

One of the consequences of leaving business to itself is that the demand for a product and its subsequent profitability are the only important aspects worth consideration, but this kind of change would produce undesirable businesses.

For instance, in Thailand, sex tourism capital of the world, there exists a market for child prostitutes. The principal thing that keeps it from being legal is a government stipulation that all sex workers are older than 18, but in a system without laws governing business — the so-called “regulatory bullying” and “government interference” — the individual pimping a consenting 10-year-old is as legitimately a businessman as the local manufacturer of antibiotics and pediatric vaccines. The same holds true for other forms of child labor; if children are ready to go work for their share of the family take and a business were prepared to employ them, there would be nothing to stop a boom in bobbin-changing jobs.

Other businesses would spring up that are decidedly anti-growth; short sellers and “empty creditors” (lenders and creditors who make their profits by betting on business failures), bolstered by the leverage to sink as many companies as possible, would effectively become economic incinerators.

These kinds of entrepreneurs don’t come to the fore in “Atlas” because its ruins the dream; instead, the focus is on railroad executives, mining magnates and the boss of the steel foundry. Nevertheless, they would arise in a system where market-driven demand determines a business’ merit. Philosophically, the Rand set believes that government needs to practice a “hands-off” approach, but this is a solution that is no better than over-regulation and equally catastrophic. In reality, we need a light governmental touch to steer the motor of industry. To believe otherwise is fiction.

Chris Benson is the senior editorial board member. Please send comments to letters@mndaily.com.

31 Comments

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You have got to be kidding if you're suggesting that child prostitution would be condoned in an objectivist society. The ultimate role of government is to protect human rights, the human right to freedom of choice. Children who are forced into prostitution are obviously victims of coercion, manipulation, and physical violence. These are things which are intolerable in a free society. Rand did not advocate anarchy or the removal of government from all aspects of human life. On the contrary, she was very clear in specifying that the government was necessary to defend the country from foreign aggressors, arbitrate contractual disputes, but ultimately to maintain a prohibition on the initiation of coercion in people's lives. The underlying premise of capitalism is that people's choices are free choices, that they are free to make the decisions which optimize their ability to be happy, that they not be bullied into working against their own interests and thereby sacrificing themselves on the altar of the so-called "public" good.

Another point is I don't know how it's possible that you read the book and didn't notice that a large percentage of the businessmen portrayed in Atlas Shrugged were exactly the kind of deceitful, manipulative, exploitative businessmen that you accuse Rand of selectively ignoring. The point was, that these men are not the innovators, the ones who bring new ideas to the fore, the ones who truly drive the society. The point was that these people, fearful of their own incompetence drive the society into statism, because it is only with the help of their political friends in Washington that they can hold onto their sliver of prosperity. And the only vehicle open to them to force their shoddy merchandise and abusive practices on the people is their alliance with the machinery of government. Only government sanction of force in business can enable corrosive monopolies. Just look at Amtrak for an example of a legal one. And look at the Capones for an illegal one that sprung up under arbitrary legislation. Or the current drug war on the border for another glimpse of the benevolent hand of government intervention. Or take the Halliburton-Cheney fiasco for an example of how the collusion of business and government is a major part of the problem and not the cure.

Go back and read the book again before you misrepresent Rand's views in public forums. And go read some Mises while you're at it.

And while you are at it, re-reading the book (hint: James Taggart was also a businessman, one of many examples of "bad" businessmen in the book that undermines your argument), and reading some Ludwig von Mises, I also recommend reading "The Road to Serfdom" by Nobel prize winner Friedrich A. Hayek.

Giving advice is futile. The wise don't need it, and fools never accept it.

This fellow is like Whittaker Chambers, reviewing Atlas Shrugged without reading it...

Character assassination, the only tool of those who can't argue on the facts.

"We can evade reality, but we cannot evade the consequences of evading reality" clearly Benson has not read Ayn Rand

Let me know if I have this right. The author mentions two problems with laissez-faire capitalism: one, that some businesspeople aren't good, and two, that children could be forced into jobs, including prostitution. Is that it? If so, both are straw-man arguments.

In the kind of society that Ayn Rand advocated in Atlas Shrugged, government's sole responsibility is to protect individual rights. No one, including children, would be forced to do anything against their will. It is our present society - one that embraces compulsion - that risks the kind of atrocities the author warns against.

It is also a highly-regulated society that allows dishonest business people to profit from their misdeeds, since, over time, they become directed by bureaucracies, rather than customers and voluntary regulatory associations. Their focus becomes the pleasure of bureaucrats, rather than their customers. As an example, consider the service at your local cable company and compare that highly-regulated company's service to that of your local dry cleaner or restaurant, whether locally owned or part of a national chain. In almost all cases, the less-regulated company provides better customer service at more competitive prices.

Even more important, though, laissez-faire capitalism is based on the morality of rational self-interest, which embraces values such as rationality, honesty, and productiveness. The kind of regulated mixed economy that the author apparently advocates is a combination of two moralities: the rational self-interest of capitalism and the self-sacrifice of socialism. That combination is unstable, and risks devolving over time into a totalitarian state, as Germany did in the first part of the 20th century.

The only proper society is one very close to the goal of America's founding fathers, one supported by a government who's sole job is to protect individuals' rights to life, liberty, property, and the pursuit of happiness.

You're actually resorting to child prostitution in order to "prove" that laissez-faire capitalism will violate individual rights?

Do you really think that people are going to fall for that, when all it takes to demolish your "cross-section of capitalism" is a simple reminder that children cannot consent to have sex?

Or maybe it's just that, because you're writing for a website that wouldn't exist if not for stolen tax money, you don't have to consider the strengths of your arguments.

Every negative article I read about the philosophy of Ayn Rand has the same components, this is no exception albeit with the omission of Alan Greenspan as the contrived bete noir of libertarianism.

I very much doubt the writer that this commentator has actually read Atlas Shrugged as the piece reeks of the superficial dismissiveness of the uninformed. Happily the first posts here have done an excellent job of clarifying objectivism and I have little to add.

When a statist hears the name "Ayn Rand" the reaction is often visceral. The fevered imagination conjures up a lawless society with giant corporations enslaving employees, widespread destruction to the environment and incredibly in this analysis...child prostitution. Perhaps a re-reading of invidudual rights is required?

Ayn Rand did not write Atlas Shrugged as a means of teaching her philosophy, but as a means of objectifying her "sense of life." And Atlas is a thrilling emotional experience to read. I point this out for those who might be intrigued by the controversy swirling 'round this novel, but are hesitating to undertake such a "Heavy Book." Boy, do you have a surprise in store for you. Atlas is the ultimate page-turner.

But more than that, if you're the kind of persons who holds his own life as his ultimate value, you'll be swept away emotionally by her heroic vision of the human potential.

Ayn Rand did not write Atlas Shrugged as a means of teaching her philosophy, but as a means of expressing her "sense of life." And Atlas is a thrilling emotional experience to read. I point this out for those who might be intrigued by the controversy swirling 'round this novel, but are hesitating to undertake such a "Heavy Book." Boy, do you have a surprise in store for you. Atlas is the ultimate page-turner.

But more than that, if you're the kind of persons who holds his own life as his ultimate value, you'll be swept away emotionally by her heroic vision of the human potential.

I am forever amazed by the chutzpah of of those willing to expose their ignorance of Ayn Rand's clearly expressed ideas to an audience which they themselves acknowledge contains millions of her readers.

Ayn Rand is chiefly a proponent of Reason. As she so aptly defined in her philosophic non-fiction writings, Reason is man’s basic means of survival. It is clear that production is essential for the survival of mankind.

To be profitable is to be rewarded for the act of production. Profit is inailenably linked to efficient production. I.e. fewer resources required for that produced

Man's sullied history with socialism highlights the fact that if there is no profit, there will be no long term sustainable production.

A man needs to have an incentive to produce over and above the costs of production or sufficient effort will not be undertaken to make the production efficient. Production resulting in mere sustenance does not make available to all the marvelous benefits of a division of labor society, one so well described in "The Wealth of Nations" by Adam Smith, so many years ago.

Mr. Christopher Benson, read Atlas Shrugged. I DARE YOU!

HBinswanger, and the others commenting here (so far) are dead spot on. You want solid ground, not quicksand... You want 1+1 to equal 2... You want A to be A... You want to KNOW that existence exists... You want to understand whats going on right now... You want to KNOW how to fix it!?

Read Atlas Shrugged Mr. Benson, and anyone else reading these comments. I'll almost bet you can't put it down. If it interests you, there is an absolute wealth of rational info out there that you can follow up with to get proper, solid, answers to this mess, starting with The AYN RAND INSTITUTE and THE AYN RAND CENTER. I can't even keep up with it all!

Or, you can keep you heads in the sand, be part of the problem, and drag the entire globe down to your size.

Come on, get in, and stay in, reality! This mess can be solved... but a hat trick won't do it.

The following passage gives an idea why Ayn Rand's work has been so influential for so many years:
"The action required to sustain human life is primarily intellectual: everything man needs has to be discovered by his mind and produced by his effort. Production is the application of reason to the problem of survival . . . .
"Since knowledge, thinking, and rational action are properties of the individual, since the choice to exercise his rational faculty or not depends on the individual, man’s survival requires that those who think be free of the interference of those who don’t. Since men are neither omniscient nor infallible, they must be free to agree or disagree, to cooperate or to pursue their own independent course, each according to his own rational judgment. Freedom is the fundamental requirement of man’s mind."
Capitalism: The Unknown Ideal “What Is Capitalism?” Capitalism: The Unknown Ideal, 17, available at http://aynrandlexicon.com/lexicon/capitalism.html.

Rand's philosophy addresses fundamental issues of human nature, survival, and happiness.

It will never cease to amaze me how a person can speak with such ignorance in such a tone of authority. Mr. Benson, I know the book in question is rather large, but you really should read the blessed thing before rendering such flawed statements as if they were factual.

Others have said exactly what I planned to say. You need to read the book before jumping to a ridiculous review which point out that you just do not understand what the book is about.

Try reading it with an open mind if you would really like to understand the message of the book.

This article joins the ranks of thousands spewing the same uninformed set of garbage interpretations of Atlas Shrugged. Congratulations on your conformity--it will probably (unfortunately) serve you well.

*Chris Benson is the socialist editorial board member.

Why does he advocate the use of force against innocents?

After all, that's what taxation and regulation is.

But seriously though, where do these socialists come from? Is this what they are teaching in the public schools?

What else would they teach? A public school is purely a socialist construct. The perversion of our concepts of liberty, freedom, and human rights didn't start with the politicians. It starts with educators who indoctrinate their students into believing that liberty means the freedom to claim any amount of resources to further one's personal agenda regardless of the desires of the owners of those resources. It starts with redefining freedom to mean freedom from risk. It starts with redefining human rights, as a claim on the lives and livelihood of everyone around you to sustain your life even and especially when you are incapable of sustaining it yourself. It is the demand for charity as a birthright and the impudent arrogance of the incompetent made king.

Children are relatively easy to indoctrinate, as the early indoctrination techniques used by religious organizations shows. Once children grow up thinking that this is the proper and natural way to live, then anything which advocates true independence becomes bizarre and radical. Too many of our parents' and grandparents' generations were asleep at the wheel when the intellectual socialists began to subvert the ideological underpinnings of the US system. Now, the struggle will be to help people realize that what they have largely come to take for granted, i.e. the benevolent hand of government, is in fact the unnatural and bizarre alternative to what the founding fathers initially thought of as common sense.

If there is to be lasting change, it must begin in the schools. We should all be advocating the privatization of the education system, to remove the government's incestual ideological monopoly on the nation's children.

Thank you, commentators, esp. Anonymous 05/05/2009 10:13pm and Tedd — my thoughts exactly.

This article was pitiful.

You're welcome. We all have to do our bit to make sure that lies cannot be spread uncontested. I just happened to be the first one to comment here. We all have to do what we can.

Mr. Benson has not read the book and if the university has any ethics, he should be fired. I am glad to see so many people commenting and being outraged by his misrepesentation of Ayn Rand's philosophy.

Mr. Benson you need to READ Atlas Shrugged.
Objectivism is not hostile toward the weak and helpless, especially children. The children in Atlas were treated with affection and admiring respect unlike some of your "real world" representatives of religion who rape little boys, mutilate their genitals, and in the case of little girls cut away their clitoris entirely.
No Mr. Benson you are incorrect about Atlas Shrugged and the philosophy of Objectivism. Your charges are untrue and reflect only your fear and superstition. We do not excuse irrational behavior Mr. Benson. Check your Premises.

The author states that in an Objectivist world, "The government’s only job is 'to protect individual rights from violation by force or fraud.'"

Mr. Benson then goes on to tell us that "pimping a consenting 10-year-old is as [legitimate] as the local manufacturer of antibiotics and pediatric vaccines".

It's downright disgusting and immoral for Mr. Benson to portray child prostitution a peaceful trade free of force and coercion. Furthermore, the idea that a 10 year old child should be able to consent to sell his or her body is an underage rape fantasy imagined by Benson and is certainly not promoted by any Objectivists.

The argument that sexual freedom between two consenting adults naturally leads to pedophilia and child exploitation is a hackneyed straw-man that has been used by gay-bashing Christians for years to attack homosexuals.

It strikes me as ironic, to the point of being humorous, that the soldiers of objectivism in these posts are using ad hominems and generally unsubstantiated or downright illogical arguments to uphold Rand’s so-called “philosophy.” (Rand was no pioneer; she merely used fiction to regurgitate Adam Smith).

And to the commentators who did indeed try to address the argument of the column, you miss the point. Specifically, the first commentator posits that Rand was not advocating for anarchy, which is true enough. Rather, the first commentator states:

“The underlying premise of capitalism is that people’s choices are free choices, that they are free to make the decisions which optimize their ability to be happy, that they not be bullied into working against their own interests and thereby sacrificing themselves on the altar of the so-called “public good.”

Therein lies the problem with the libertarian (or objectivist, if you prefer) philosophy. The way they tell it, government can do no good; government unduly interferes with people’s lives and businesses.

Yet if the “underlying premise of capitalism is that people’s choices are free choices, that they are free to make the decisions which optimize their ability to be happy,” then what of the robber barons, the Ponzi schemers and profiteers? If Hank Reardon’s primary goal is to make a profit, and that makes him happy, then he would have to do so on the backs of other companies and people. A monopoly would ensue, and prices would become unaffordable. His foundry would pollute. There’s something to say about individual liberties and competition. But under a corporatist state, the underclass cannot worry about government intervention because it struggles to put food on the table.

There is a direct contravention between the mission of a business and the public good. That’s why coal companies continue to pollute; why food producers continue to do shoddy inspections; why banks began selling mortgage-backed securities; why we are in the deepest recession in at least 25 years. The very fact that businesses must operate under statutory constraints to prevent them from say, collusion, underscores the idea that government regulation is not necessarily socialist or evil. Unfettered self-interest, however, produces a framework for evil. Regulation is necessary.

As the author stated, “In reality, we need a light governmental touch to steer the motor of industry.” To believe otherwise would be to advocate for the privatization of all or most government services and to promote unregulated or nearly unregulated capitalism. And that’s dangerous, for when a democratic government makes a mistake—which it often does—it can be held accountable. When a business makes its profits at the expense of the public good, driving the social inequities of our society and endangering it in the process, there’s something inherently flawed with the system under which that business is operating.

Yes, Mr. Benson has provided a good, thoughtful article on the problems with turning completely to Rand's philosophy. Many of the posts here seem to think that one cannot read Rand and still disagree with her. I assure you all, one can.

Don't let these pseudo-intellectual posts bother you Mr. Benson. The volume of this attack is a testament to the quality of your opinion.

And the lack of support for your assertions is a testament to the quality of yours.

"(Rand was no pioneer; she merely used fiction to regurgitate Adam Smith)."

Of course, unsubstantiated assertions are the last resort of those who have no substance to their argument. Ad hominems anyone?

"Therein lies the problem with the libertarian (or objectivist, if you prefer) philosophy. The way they tell it, government can do no good; government unduly interferes with people’s lives and businesses. "

Once again, you must learn to actually read what one writes. I did not say that the government can do no good. No, I'm sure many have benefited from government programs. The problem that statists tend to neglect, is how does government achieve this good? The government does not produce wealth. The wealth that it uses to provide it's chosen good to some is merely taken from others. If the government has the right to take property from some, then those from whom it takes have no right to their own property. You cannot posit a society based on equal rights of citizens before the law, if the government claims the right to abrogate some citizens' rights for the sake of others. Such abrogation is an interference, of course. Yes, it may do good for some people, but is that worth the evil it does to the ones who must provide the goods and services demanded by the government? Capitalism is a system whereby people can provide services according to their judgment and conscience without the threat of government coercion. The assumption that good can only be accomplished through the coercion of elected officials is a fallacy.

"Yet if the “underlying premise of capitalism is that people’s choices are free choices, that they are free to make the decisions which optimize their ability to be happy,” then what of the robber barons, the Ponzi schemers and profiteers? If Hank Reardon’s primary goal is to make a profit, and that makes him happy, then he would have to do so on the backs of other companies and people. A monopoly would ensue, and prices would become unaffordable. His foundry would pollute. There’s something to say about individual liberties and competition. But under a corporatist state, the underclass cannot worry about government intervention because it struggles to put food on the table."

The robber barons would not have been possible without government cronyism. In a free market there exists no mechanism whereby a corporation could establish a monopoly. If it were to sell merchandise at a price that outpaced production costs, then there would be nothing to prevent another company from producing a similar product at a reduced price and thereby undercutting it. The only way monopolies are possible is if the government shelters them. Go look at the history of Amtrak, the telephone companies, etc. In a capitalist society, the government's function is to prevent the use of coercion by businesses or individuals. As long as government is fulfilling it's proper function, then such a destructive crystallization of economic power would be impossible.

Also, the assumption that Hank Rearden would have to build his fortune on the backs of others begs the question. You assume that it is impossible to create wealth, and so therefore it is. On the contrary, compare the economy a hundred years ago with the economy today and you'll see that the act of creation adds value to the process. As for environmental concerns, one of the functions of government is to protect the life, liberty, and property of its citizens. If a business was poisoning people's water and air, then they would be violating the rights of the citizens affected. As such, the community could demand adherence to certain standards of operation. I think this is well within an objectivist interpretation of law. No, the true extremists are the ones who claim that we cannot trust people to be free, but for some inexplicable reason can somehow trust a congress of strangers to rule over our lives for us.

"There is a direct contravention between the mission of a business and the public good. That’s why coal companies continue to pollute; why food producers continue to do shoddy inspections; why banks began selling mortgage-backed securities; why we are in the deepest recession in at least 25 years. The very fact that businesses must operate under statutory constraints to prevent them from say, collusion, underscores the idea that government regulation is not necessarily socialist or evil. Unfettered self-interest, however, produces a framework for evil. Regulation is necessary."

Once again you beg the question. You assume your conclusion in your premise. A business which alienates the public, is not serving its best interests and is bound to fail when faced with competition from a company that honors its clients' wishes. No business can ignore the satisfaction of its customers. The only way that such a state of affairs can exist is when it is protected by the government. All the examples you list, are situations which could have only come to be with government intervention. Freddie Mac and Fannie May were government run and subsidized firms who in conjunction with legislation motivating the proliferation of sub-prime loans repackaged them into apparently high-grade securities. If the government hadn't been playing god with the housing market and interest rates, the bubble wouldn't have happened and we might have been able to postpone the current crisis. (Ron Paul predicted the collapse of the housing market years ago.) Food producers have increasingly produced shoddy product because everyone has come to believe that the government stamp of safety is sufficient for trust and have ceased to worry about the individual responsibility of products to meet expectations. Responsibility was assumed by government and thus it is relinquished to government. In a free market, where businesses are unsheltered and unsubsidized, a business cannot afford to have shoddy quality. It will be over-run by its higher quality competitors. And once again, if a business poisons its consumers, then that is fraud and murder and punishable under any government. Only the regulatory bureaucracy is not needed in a free one.

No sir, the only irony is that you have already decided that you cannot be wrong, and so therefore choose to ignore the evidence before you and the flaws of your own Cartesian circular logic. Logic, is fundamentally the art of non-contradictory identification. If you cannot point out the contradiction, then you do not have a counter-argument. Where are my contradictions? I have already pointed out yours.

"No, the true extremists are the ones who claim that we cannot trust people to be free, but for some inexplicable reason can somehow trust a congress of strangers to rule over our lives for us."

Congress of strangers? How about a Congress of democratically-elected citizens looking to serve their constituents. Constituents and competing branches of government check those officials. You say that a true extremists cannot trust a people to be free. Remember that our government is set up because the founders didn't trust people to be free. It's called checks and balances. Ambition counteracts ambition.

"If a business was poisoning people's water and air, then they would be violating the rights of the citizens affected. As such, the community could demand adherence to certain standards of operation."

This is the real world. Companies hide transgressions from the government well enough, and they hide it from citizens even better. In 2009, we have a hard time demanding that coal companies reduce pollutants. You know why? Because those companies successfully argue that government regulation is somehow evil. You're essentially making the same argument a coal company would make: that if citizens want a cleaner company, they can demand it from the market. That's just false. It benefits shareholders for a coal company to pollute because it's cheaper. Shareholders are therefore not going to demand that the coal company reduces pollutants, and citizens concerned about the environment will not be able to change the habits of that coal company, unless they did so through a government apparatus.

"In a free market, where businesses are unsheltered and unsubsidized, a business cannot afford to have shoddy quality."

Real world example, please.

"In a free market there exists no mechanism whereby a corporation could establish a monopoly. If it were to sell merchandise at a price that outpaced production costs, then there would be nothing to prevent another company from producing a similar product at a reduced price and thereby undercutting it. The only way monopolies are possible is if the government shelters them."

-To say that a monopoly cannot exist in a free market is to say that a company cannot discover a mode of production which increases the quality of a service that makes all other products obsolete. Even if a competitor's product was not obsolete, the company who made the discovery would increase the price of their product, thus making it more expensive and therefore only affordable to the wealthy thus driving social inequality (See the pharmaceutical industry). Or it is to say that a company cannot gain complete control over a limited resource because they were the first to discover that resource.

1. Congress was not established to rule over our lives. It was constructed to preserve the inalienable rights of American citizens. So, too, the other branches of government were set to limit the powers of any one branch and thereby ensure that individual rights were to be protected. The government was not established on the premise that any branch had unilateral power over the citizenry. It was established on the premise that the government has expressly stated powers, and no more. In the Constitution, government is limited by principles.

2. You misread what I was saying about the corporate pollution. If a company is poisoning people, it is criminal, objectively. No one has the freedom to poison their neighbors. The function of government is to clearly establish the rules for property ownership of limited resources, as with the Homestead Act. If a company is selling drinking water which is unfit to drink, then it is committing fraud and possibly murder and should be held accountable for that in a court of law. But these things would be illegal without the necessity for the government's seal of approval on all processes. If the result of a company's actions result in injury to citizens then that company must be held accountable for it. Once again, I am not advocating anarchy, the idea that companies could do whatever they want. Capitalism requires that companies be free to do whatever they want with one BIG restriction. They cannot violate the rights of other citizens to life, liberty, or property.

A community has the right to say, no you can't pollute our air. But the burden of proof must be on the accusers. They must be able to prove the damage done. And the standards must be applied universally to ALL parties. So if you say zero emissions, that means you have to give up your car and get a horse-cart. But if you can agree on a reasonable compromise, a range of acceptable pollution, then every body can be held accountable equally under the law. I see no need for companies to seek government approval for their operations or to be singled out. But they must also be prepared to negotiate with local governments if their process significantly impacts the lives of their neighbors. Also, the decision must be made by local governments on a local basis. People must be working for their own interests, they cannot rely on disinterested parties to arbitrarily make a mutually beneficial decision, although one potential function of the courts is to mediate potential conflicts of interest like this by offering detached third party arbitration.

3. Real world example of how free markets drive up quality:

A company depends greatly on its reputation. Look at just how the suspicion that GM would go into bankruptcy has affected car sales. The threat that their warranties would become worthless, that they could not ensure quality anymore had a tangible and sudden effect on their business. Scandals of all sorts have immediate effects on the choices that investors and consumers make. (Look at the recent financial impact on the peanut industry of the salmonella scare). If a comparable product is provided by a competitor, then the consumer or investor is going to opt for the less risky product, or stop using the risky product all together. This will undercut profits, and hurt the company's ability to compete. Other, more trustworthy business who have a proven reputation for dependability will outstrip the more questionable ones. In a free market, businesses must compete on reputation and quality as well as price. In many ways, the inherent value of a brand is incorporated with the quality of and trust in the product.

4. Monopolies.

First of all, the pharmaceutical companies are highly regulated and subsidized by the government. So, they are not an example of a free-market monopoly. The network of regulation and restrictions on who can buy what medicine where for what price is one of the drivers of the exhorbitant prices of drugs. Another is the distortion of the entire medical industry from Medicare, insurance regulation, the regulation of doctors, and the haphazard application of malpractice legislation so as to drastically raise the risk of providing health care. Second, you must clarify what you mean by social equality. If you mean that all people should have all the same things, be paid the same regardless of work ethic, have the same health care regardless of the doctor who must work on them, the rewards he deserves and regardless of the condition of the patient...well, this is pure communism. If your ideal is communism, then there's no point debating Ayn Rand, because you're not even interested in the American system. Try the soviets. on the other hand, I'll grant you the benefit of the doubt and assume that you are sincerely interested in the argument for free-market capitalism.

Let's take your assumption: that a company discovers a new product that makes its rivals obsolete. Like, computers did to the typewriter, or Ford did to the cart and horse. But the point is that other companies could emulate their product and create cars and computers of their own. Of course, they can't make exactly the same thing outright (That's why we have patent laws) But you can't patent an idea. You can only patent a design, a process, a tangible product of some kind. For instance, someone couldn't patent the idea of books and demand a royalty for all books published everywhere. But they can copyright their book and demand royalties for any productions of that specific work. Ford could patent its car design. But it can't claim royalties for Toyota's. Once the product has been sold, the idea is exposed to the marketplace for competitors to emulate. Of course the first mover has an advantage, during which they try to recoup their R&D costs and establish brand reputation. But soon after competition drives down costs.

But let's say that this invention is so brilliant, so ahead of its time, so mind-bogglingly super-wonderful that nobody can conceive of how anything even remotely like this product was invented. I'm not sure how such a thing could be humanly possible, if you cn think of an example, let me know. Anyway, let's call this product of our thought experiment The Wuzzle. Now, the inventor of The Wuzzle has two options. He can either file a patent for his Wuzzle, or not. If he doesn't file a patent, he runs the risk of somebody perhaps (however unlikely) of recreating his work. If he does file a patent, then his secret is out there, a matter of public record. Once the patent runs out, then the Wuzzle is up for grabs.

Then again, he must have nobody in his company who is privy to his production process. Because all it would take, would be to have one executive who understood how the parts of the process fit together to go off on his own and start a rival company which could undercut costs and bring the world cheaper safer Buzzles for all. So unless the Wuzzle inventor could produce them by magic, with nobody involved in the production process, management of the company, etc. If he did it ALL himself, then maybe he could pull it off. But I doubt he would make enough Wuzzles to significantly make the market dependent on him, or to be indispensable to people's lives.

Also, such selectivity would have to mean that his invention was the result of a complete break from the scientific understanding of the age, in that the possibility of someone reaching a similar conclusion was close to zero. All of these things make the free-market existence of a monopoly highly unlikely. The only way that markets usually exist is by forming barriers to market entry. And these are not possible unless government supports those barriers.

As for resources, any resource which could be 100% owned by a single company would be statistically so scarce that it is highly unlikely that such a resource would ever achieve a significant market share. The scarcity of the resource would limit its use and therefore its significance in the market.

It is precisely the point of Rand in her writings on politics that capitalism is not a tool to achieve some societal end, it is a way of ensuring a uniquely moral social order and of preserving freedom, and should be established for that reason alone. The myth is that we are puppeteers sitting high above society, getting to decide what type of order to impose upon it; that's the method of a dictator. Men have inalienable rights and capitalism would protect them.

Contrary to popular belief neither capitalism nor theories of economics rest on assumptions that people are good or rational. Jail and financial loss await those who do wrong or are irrational. Only the bizarre mixed economy we have today, with its blend of freedom vs. prohibition, markets vs. legal favors, could give rise to such a misconception.

Rand’s book Capitalism: The Unknown Ideal will clear up such misconceptions, as well as others expressed in this piece. Many of its ideas rest on a misunderstanding of what capitalism actually is and how it would work.