Atlas Shrugged— The Answer to ‘Economic Ignorance’

Note: This article was first published in Manila Times: Click here for the actual story.

IS free-market capitalism already dead? With the enduring global financial crunch that recently triggered massive

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government intervention, most people would say “yes.” But for modern-day Objectivists inspired by Ayn Rand, a Russian-born American novelist and philosopher who died in 1982, free-market capitalism never exists in any country in the world— not today and even in the last half-a-century.

In her magnum opus entitled Atlas Shrugged, a 1,200-page book published in 1957 and now Amazon’s number 1 bestseller, Ayn Rand clearly delineated the difference between free-market capitalism and statism. The book, which centers on the striking question— “Who is John Galt,” tells what happens in case of massive government intervention.

John Galt, one of the heroes of Atlas who invented a great motor that generates electricity out of static energy, vowed to drain the brains of the world by leading an unusual strike after the government issued regulatory laws that not only choke business, but also disregard individual liberties. For 12 years, a number of great industrialists and business tycoons disappeared after being recruited by John Galt and his two best friends, Francisco D’Anconia, an heir to a great wealth, and Ragnar Danneskjöld, the antithesis of Robinhood.

Sales of Atlas peaked during the first four months of 2009, making it the most read book in the US today. People at Ayn Rand Institute credited this surge in the sales of Atlas to Washington, which issued socialist economic policies that include bail-out plans and stimulus packages to save financially troubled banks and auto companies at the expense of American taxpayers. Amid the global economic crunch, everybody seems interested in getting a copy of Atlas.

Most people see parallelism between the events in Atlas and the current global financial turmoil that severely hit developed countries like the US, Great Britain, France, Australia, Germany, among others.

So what happens in case of excessive government regulation? The answer is clearly illustrated in Atlas—market socialism would lead to the exodus of real capitalists who cherish individual rights and freedom from economic interference. In the world of Atlas, the United States fell in the hands of socialist thugs and collectivist politicians who issued regulatory laws like Anti Dog-Eat-Dog Act that aims to destroy competition, Anti-Greed Act that intends to redistribute wealth, Equalization of Opportunity Act that prevents anybody from establishing more than one business, among others.

These fictitious edicts actually have ominous parallels in the actual world. Just recently, the US government issued the $700 billion Emergency Economic Stabilization Act and the Auto Industry Financial and restructuring Act that aim to impinge on the free-market system. The Obama administration just injected a new law—the American Recovery and Reinvestment Plan—that is dangerous not only to the taxpayers but also to business.

“The solution is not to blame free-market capitalism for the global economic turmoil since it does not exist in any country in the world today, but to discover capitalism.”

But what really caused the global financial crunch? Was it free-market capitalism or government intervention?

According to Stephen Moore, columnist of Wall Street Journal, “Many of us who know Rand’s work have noticed that with each passing week, and with each successive bailout plan and economic-stimulus scheme out of Washington, our current politicians are committing the very acts of economic lunacy that “Atlas Shrugged” parodied in 1957, when this 1,000-page novel was first published and became an instant hit.”

But for some Filipino intellectuals like Dr. Benito Teehankee, what we need is “moderate” government intervention. “Free-market capitalism should be moderated by government intervention when the common good requires. The Philippine Constitution, in particular, calls for fair markets based on social justice— free markets will not achieve so government plays a role,” he told The Manila Times.

As Atlas continues to influence more people today, there is an ongoing debate between individualism and statism. Juan Gatbonton of The Times made a point—that “the widespread use of ‘state capitalism’ in the new countries suggests that their politics might continue to be authoritarian…”

For Filipino Ayn Rand readers like Ayn Rand Parel whose father who gave her the popular name is an admirer of the author, “Atlas Shrugged gave me the secret of man’s purpose—to achieve his own happiness.”

“What I believe in is that if men worked independently to their full capacity, with a goal no other than be the best at what they do, the world will become a better place,” she said.

In the Philippines, the Gloria Arroyo government tries to counter the global financial turmoil by injecting taxpayers’ money and by issuing regulatory laws. Based on the report of the Philippine Center Investigative Journalism (PCIJ), most politicians close to the President cornered multi-million peso public works deals. In the past years, a number of laws were passed in the name of social justice and common good, like the Electric Power Industry Reform Act that gives unbridled benefits to independent power producers (IPPs), the up-and-coming Generic Medicines Act that would kill thousands of sick Filipinos and would lead to the mass exodus of Filipino doctors to greener pastures, among others. Consider the result.

Perhaps the solution is not to blame free-market capitalism for the global economic turmoil since it does not exist in any country in the world today, but to discover capitalism.