rand and reynolds

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Anyone who has read Atlas Shrugged by Ayn Rand should be able to recognize the forces at work within the Republican party, where our Galtian overlords (to steal a phrase from Balloon Juice) are expending a whole lot of effort trying to make sure that those who already have a lot of money get to keep theirs (the Bush Tax Cuts, Wall Street Bonuses, the idea that “$250,000 isn’t really rich“) while taking money away from those without (public employees, poor women and children).

Rand believed (if I may be so bold as to put words into her mouth) that she was the advocate of the ultimate meritocracy: everyone succeeded only to the extent that they produced something worthwhile, and that worth was determined by the compensation ones peers were willing to give for whatever had been produced. Any intrusion of the government into these transactions served only to distort and mask incentives, such that people were no longer rewarded for those things that their peers found valuable, but instead rewarded for being able to game the system at the expense of the “movers”, those who produced goods of real value.

I’ve written before about the reasons I don’t think Objectivism works on a broad scale, so I won’t rehash that here. But the behavior of the Republican party lately seems to be shifting ever closer toward policies designed to do what Rand advocated, and reduce the role of government to solely civil defense and enforcement of property laws.  Recently, I came across this “law” from Instapundit (Glenn Reynolds) which highlighted, for me, the problems with this Randian approach:

Subsidizing the markers of status doesn’t produce the character traits that result in that status; it undermines them.

When he wrote it, Reynolds (a fairly well-known conservative blogger) was talking about the government’s subsidization of college educations and promotion of homeownership, arguing that making these things easier to attain will not increase the middle-class. Reynolds again:

[H]omeownership and college aren’t causes of middle-class status, they’re markers for possessing the kinds of traits — self-discipline, the ability to defer gratification, etc. — that let you enter, and stay, in the middle class.*

Reading Reynolds’ Law clarified the problem that I have with Republican policies these days. Republicans interpret wealth as a “marker” for the Randian ideal, someone who has achieved their prominence through providing services that their peers deem valuable. But as the recent tanking of the economy has shown us, paying someone a high salary does not necessarily mean that they have the traits to provide value to others . . . it frequently just means that they’re good at gaming the system.

I find that distinction to be very important. When I hear people arguing that you can’t tax the wealthy at high rates, I see Reynolds’ law at work. By subsidizing the accumulation of extreme wealth, we’re not producing the character traits that allow people to become wealthy, we’re undermining them. We’re undermining them by assuming that those who have money represent the best in our society, and assuming that those without don’t deserve it. We’re undermining them by allowing those with wealth to bend the political landscape to further their own enrichment and protect the status quo, at the expense of those who might possess the traits to become wealthy, but are too busy worrying about where their next meal will come from or paying their medical bills.

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2 Responses to rand and reynolds

  1. Steph says:

    I think I have already recommended it, but if you get a chance, I think you’d enjoy parts of the John Adams biography–this made me think of his vision of the Senate vs. the House.

    I am wading into dangerous waters here because I neither have read any Rand nor studied economics in a meaningful and substantive way. Nonetheless, here I wade. I worry that there are substantial barriers to success (even defined as “entering and staying in the middle class” as Reynolds put it and not as some massive accumulation of status or wealth) and social mobility throughout our society, from structural discrimination against minorities or the poor in a variety of forms (abstract here and Aspen Institute annotated bibliography on the topic here) to the impact of perceived discrimination (abstract here; old but a watershed article about this issue) to the deeply held American belief that policies that hurt the wealthy in any way are bad because one day you could be one of them, no matter how unlikely that is (see OECD report on intergenerational social mobility with US least mobile after Italy and Germany; see 2004 Economist piece on meritocracy in America). (And one more parenthetical: Americans do want some redistribution of wealth, but they also have a totally skewed perception of how wealth is currently distributed: see Norton and Ariely’s paper).

    I have issues with Reynolds’ statement that possessing traits like self-discipline is all it takes to enter and stay in the middle class because I think the idea of a meritocracy is not nuanced enough to address the unequal beginnings of each person. We are not created equal, both in the sense that not everyone is equally intelligent or self-disciplined or driven or pious or funny or whatever other “intrinsic” characteristic you would like, and also in the sense that environment matters. Two people could be born with identical personal characteristics but not have an equal chance to succeed, so a meritocracy–personal or not–seems to me to be inherently unfair and flawed. I realize objectivism is not synonymous with meritocracy but as you said, Rand’s own philosophy advanced something like the ultimate meritocracy. In the real world, in a society large enough to require a formal government, it seems the government’s actions to look out for the welfare of its citizenry, especially those actions that level the playing field and allow personal intrinsic characteristics to shape success, have lots to do with the degree to which an individual can determine her own success. Would you define that–an unequal playing field–as a market failure?

    • frouglas says:

      To clarify, I was not endorsing Reynold’s so-called “law”, but rather pointing to as one of the myriad examples of things I find inconsistent with modern conservative thought.

      I think you’re exactly right, the structural inequalities in our country do represent a failure of the free market of which Ayn Rand is so fond. A market failure is anything that prevents the free exchange of individual effort or goods on which Rand’s philosophy is based. This is a driver behind many of my political beliefs . . . I want everyone to start from a baseline that does not inhibit their reaching their full potential.

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