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M$5
January 09, 2009 11:23 PM
Did "Atlas Shrugged" really predict our current financial situation, as the Wall Street Journal implies?
This editorial argues that Ayn Rand was ahead of her time, essentially foresaw the current economic debacle, and provides some guidance about where we can go from here. I don't really agree, but want to hear more perspectives about it.
http://online.wsj.com/article/SB123146363567166677.html
http://online.wsj.com/article/SB123146363567166677.html
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| January 11, 2009 01:10 AM |
The novel also subtly warns about corporations - most of the "good guys" in the book are individuals who insist on controlling their own products. The lead character, Dagny, inherits a corporate structure that destroys her industry despite her competence because of corporate chicanery equal to - and in collaboration with - the corrupt government.
"Profits, wealth and creativity" (from the editorial) is a bit of a stretch. Certainly the corrupt businessmen and politicians - both in the novel and in the real world - were wealthy and profitable. Creativity in the book manifested in superior products and service. I could argue that the financial products recently were amazingly creative and profitable. Ethical, not so much.
I'm also not seeing the sort of individual merit at the heart of Atlas Shrugged. Corporate foolery, certainly - look at all the financial institutions that kept pushing the edge with inventive but risky instruments. Here the anti-government message falls flat, because if government regulations had been maintained and enforced we may have seen a better outcome. I have a hard time imagining corporate boards creating good schools, decent hospitals, public parks, and roads going anywhere but those places that directly serve their interests. In the book, the characters have a grasp of their long-term financial health. Our current corporate scenario has almost abolished the concept of long-term financial health in favor of insuring a profit on the next quarter's financial statement.
Like any book, Atlas Shrugged can be cherry picked to promote a number of viewpoints. There seem to be only 3 types of people in the book: brilliant, benevolent industrialists; creepy parasites; and ordinary folks at the mercy of both for their well-being and livelihood. I find the real world to be a great deal more nuanced. So, although the novel has a lot of good points about our current situation (and is very enjoyable), I don't think its prescription for change is particularly useful.
Source(s):
Atlas Shrugged
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Other Answers (5)
January 09, 2009 11:54 PM
Edward L. Hudgins seems to think that what Atlas wasn't as much predicting as it was understanding principles.
Source(s):
http://www.objectivistcenter.org/ct-1990-Rand_pro.aspx
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January 10, 2009 12:22 AM
Ayn Rand's ideas have not really led to any useful predictions regarding the current crisis. A lot of minimal-government extremists like to take credit for having "foresight" when they generally offer little more than confused Chicken Little doom-and-gloom year after year. A few in their camp may like to attack some ideological opponent for perhaps only predicting 1 out of 5 actual disasters, but they themselves may have predicted 50 out of the last actual 5. Telling people for years and years that "an economic downturn is gonna happen" and then screaming "See, I told so, and therefore everything I say must be right" when a downturn *finally* does happen is far from prescient -- everyone knows downturns happen. The earliest that I've seen of people that publically warned officials of *specific* problems developing in the banking industry go back to 2001, and those people were far from being extremist laissez-faire capitalists like Ayn Rand.
(Just FYI, while the official Wall Street Journal articles are ok, a few of their opinion pieces can be just politically charged screeds touting capitalism) The particular opinion piece posted here seems to presume that the financial crisis was not helped along greatly by a large heaping of some of that capitalism that is so praised and worshipped in Atlas Shrugged -- in other words, Rand praises the "virtue" of unrestrained human selfishness, but in regards to this current crisis, banker greed is precisely one of the largest factors in the subprime meltdown. So, that seems to be one huge fatal flaw in trying to credit Rand as being some sort of Nostradamus, when part of her suggested "solution" are actually what led to so much of the current mess..
In any case, the bottom line is that Ayn Rand's strictures have not make any useful predictions regarding the current crisis. Her ideology generally just boils down to fancy capitalist-libertarian rhetoric wrapped in enough long-winded platitudes to try to be sold as "universal truth."
(Ought to be an interesting metric to see how many "not helpfuls" this response gets....)
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January 10, 2009 12:49 AM
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Harsh, but true. Even if a book is popular on one list or another, that doesn't really do much to prove that it's statements about how society should work are not full of problems [see: book sales of "The Little Red Book (Quotations from Chairman Mao)"]
And, as far as the philosophical value of her works, I'm not the only one who doesn't exactly leap for joy.
http://en.wikipedia.org/wiki/Criticism_of_Objectivism_(Ayn_Rand)
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And, as far as the philosophical value of her works, I'm not the only one who doesn't exactly leap for joy.
http://en.wikipedia.org/wiki/Criticism_of_Objectivism_(Ayn_Rand)
January 10, 2009 01:22 AM
In both this answer and in the wikipedia article listed in answerman's reply there is no logical criticism of Rand's economic philosophy, just a lot of name calling and logical fallacies. If you disagree with Rand great, but tell us your reasons rather than an overdramatic tirade against objectivism.
In other words, don't just tell us its wrong. Tell us why its wrong.
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In other words, don't just tell us its wrong. Tell us why its wrong.
January 10, 2009 01:29 AM
PS. I didn't mark the answer as unhelpful. I only found the one sentence to be unhelpful.
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January 10, 2009 01:58 AM
"In other words, don't just tell us its wrong. Tell us why its wrong."
@pmacdon1:
Seemed a bit too far off-topic since the question on this page doesn't ask "why is Objectivism right or wrong" .... only how Atlas Shrugged relates to the current economic crisis. Also, technically I didn't address Rand being right or wrong; I did say that Rand's writings are full of platitudes. So, even if (by some miracle) her extreme claims were right, there doesn't seem to be any substantive evidence that she managed to provide proof which is as extraordinary as her claims would require.
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@pmacdon1:
Seemed a bit too far off-topic since the question on this page doesn't ask "why is Objectivism right or wrong" .... only how Atlas Shrugged relates to the current economic crisis. Also, technically I didn't address Rand being right or wrong; I did say that Rand's writings are full of platitudes. So, even if (by some miracle) her extreme claims were right, there doesn't seem to be any substantive evidence that she managed to provide proof which is as extraordinary as her claims would require.
January 10, 2009 02:28 AM
"in the wikipedia article listed in answerman's reply there is no logical criticism of Rand's economic philosophy"
@pmacdon1:
There are discussions of the specific criticisms. One huge one being her failure to resolve the "is-ought" problem as Rand claims that she managed to do.
http://en.wikipedia.org/wiki/Criticism_of_Objectivism_(Ayn_Rand)#Theoretical_content
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@pmacdon1:
There are discussions of the specific criticisms. One huge one being her failure to resolve the "is-ought" problem as Rand claims that she managed to do.
http://en.wikipedia.org/wiki/Criticism_of_Objectivism_(Ayn_Rand)#Theoretical_content
January 10, 2009 03:27 AM
May I just point out the EXTREME irony of saying that Ayn Rand's writing is full of platitudes, considering her absolute loathing of bromide?
Also, I think that this is the closest you come to a specific about why it didn't predict it:
"Rand praises the 'virtue' of unrestrained human selfishness, but in regards to this current crisis, banker greed is precisely one of the largest factors in the subprime meltdown. So, that seems to be one huge fatal flaw in trying to credit Rand as being some sort of Nostradamus, when part of her suggested 'solution' are actually what led to so much of the current mess.."
However, I think I would need more knowledge of both economics and objectivism to accurately discuss whether or not that is accurate. After all, to play devil's advocate, there WAS regulation in the system we had, just not regulation of all of the pieces of it. Ayn Rand was calling for NO regulation, and what Ayn Rand espoused is not something that I think even the most hard core libertarian would totally buy (a hard core objectivist, on the other hand...they might half way buy it.)
But to respond to ppalmer21, I agree with answerman that just because something sold a lot of copies doesn't mean it's harsh to criticize it the way he did.
The thing is, we LIKE absolutism, it is very attractive, and Ayn Rand's philosophy is a kind of absolutism, so of course it sells. Plus, she writes her crazy ideas VERY well, in interesting stories. How many pieces of dogmatic writing can have THAT said about them? :)
(Source: Reading two Ayn Rand books and writing a prize winning essay on one of them.)
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Also, I think that this is the closest you come to a specific about why it didn't predict it:
"Rand praises the 'virtue' of unrestrained human selfishness, but in regards to this current crisis, banker greed is precisely one of the largest factors in the subprime meltdown. So, that seems to be one huge fatal flaw in trying to credit Rand as being some sort of Nostradamus, when part of her suggested 'solution' are actually what led to so much of the current mess.."
However, I think I would need more knowledge of both economics and objectivism to accurately discuss whether or not that is accurate. After all, to play devil's advocate, there WAS regulation in the system we had, just not regulation of all of the pieces of it. Ayn Rand was calling for NO regulation, and what Ayn Rand espoused is not something that I think even the most hard core libertarian would totally buy (a hard core objectivist, on the other hand...they might half way buy it.)
But to respond to ppalmer21, I agree with answerman that just because something sold a lot of copies doesn't mean it's harsh to criticize it the way he did.
The thing is, we LIKE absolutism, it is very attractive, and Ayn Rand's philosophy is a kind of absolutism, so of course it sells. Plus, she writes her crazy ideas VERY well, in interesting stories. How many pieces of dogmatic writing can have THAT said about them? :)
(Source: Reading two Ayn Rand books and writing a prize winning essay on one of them.)
January 10, 2009 03:47 AM
"There are discussions of the specific criticisms. One huge one being her failure to resolve the "is-ought" problem as Rand claims that she managed to do."
Let me add that many of Rand's opinions I strongly disagree with and that I am only defending her views on government and the economy.
I didn't say that there was no criticism of Rand, I said that there was no criticism of her economic theory which was the subject of the question. Her opinion of the "is-ought" theory really doesn't change the validity of her economic theory. Attacking one idea of a person doesn't automatically invalidate all other opinions the person holds.
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Let me add that many of Rand's opinions I strongly disagree with and that I am only defending her views on government and the economy.
I didn't say that there was no criticism of Rand, I said that there was no criticism of her economic theory which was the subject of the question. Her opinion of the "is-ought" theory really doesn't change the validity of her economic theory. Attacking one idea of a person doesn't automatically invalidate all other opinions the person holds.
January 10, 2009 03:52 AM
@glaspell:
I fully agree that there's lots of irony to be found when analyzing Rand's works .... objectively. Especially since Rand strived for such precision in her use of terms.
My favorite is how she defined morality as pursuing one's own self-interest, but then had quite a different pronouncement of immorality.
"my philosophy, in essence, is the concept of man ... with his own happiness as the moral purpose of his life...."
contrasted with:
"there is a psychological immorality at the root of homosexuality. Therefore I regard it as immoral"
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I fully agree that there's lots of irony to be found when analyzing Rand's works .... objectively. Especially since Rand strived for such precision in her use of terms.
My favorite is how she defined morality as pursuing one's own self-interest, but then had quite a different pronouncement of immorality.
"my philosophy, in essence, is the concept of man ... with his own happiness as the moral purpose of his life...."
contrasted with:
"there is a psychological immorality at the root of homosexuality. Therefore I regard it as immoral"
January 10, 2009 04:13 AM
"Attacking one idea of a person doesn't automatically invalidate all other opinions the person holds"
@pmacdon1:
Rand openly acknowledges that her extremist laissez-faire principles spring from a few basic premises. If Rand can't even successfully build those premises, then such a criticism attacking the foundation that she relies upon DOES have the ability to invalidate quite a lot of Rand's other ideas.
And really .... it's not that I'm being harsh. It's her own extraordinary claims and the way that she builds them that opens her up to such attacks on her ideas.
It's irrelevant to the question asked on this page, but as a side note, I do see quite a lot of issues with Rand's extremist view of the government and the economics behind the laissez-faire that she espouses.
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@pmacdon1:
Rand openly acknowledges that her extremist laissez-faire principles spring from a few basic premises. If Rand can't even successfully build those premises, then such a criticism attacking the foundation that she relies upon DOES have the ability to invalidate quite a lot of Rand's other ideas.
And really .... it's not that I'm being harsh. It's her own extraordinary claims and the way that she builds them that opens her up to such attacks on her ideas.
It's irrelevant to the question asked on this page, but as a side note, I do see quite a lot of issues with Rand's extremist view of the government and the economics behind the laissez-faire that she espouses.
January 10, 2009 05:50 PM
@glaspell, I only felt it was harsh because one's opinion of Rand's ideology is unrelated to the question. Every other part of his answer was helpful. The last sentence just seemed to me to be mean.
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October 01, 2009 09:03 PM
The banker-greed you are referring to, is that the banker-greed that forced lenders to create instruments for borrowers that couldn't use the somewhat typical 30-year fixed rate?
No, it can't be becasue it wasn't banker-greed that created those lending instruments it was bureaucratic arm-twisting. What profit oriented banker would give a loan that can't be repaid? Does a bank really make money through foreclosing? Does it do any good for a bank to forclose on a house and then sit on it waiting for another buyer?
If you want to know why these creative financial products were invented you can look at The Community Reinvestment Act of 1977. This law forces lenders to give mortgages to people (whether they can afford houses or not).
Secondly, when banks start making bad loans, the secondary mortage market normally punishes them by not buying from them. In this case the vast majority of these bad mortgages were being purchased by pseudo-government agencies like Fannie and Freddie. So again, you have the good sense of the market being trumped by vote-buying maneuvers from D.C.
Lastly, and here's the good news, we have done nothing to reign in Fannie and Freddie, and if I'm not mistaken their mandate has been expanded. So not only have we paid for all the bad mortgages that just crippled these agencies, we're going to be paying for more in the future.
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No, it can't be becasue it wasn't banker-greed that created those lending instruments it was bureaucratic arm-twisting. What profit oriented banker would give a loan that can't be repaid? Does a bank really make money through foreclosing? Does it do any good for a bank to forclose on a house and then sit on it waiting for another buyer?
If you want to know why these creative financial products were invented you can look at The Community Reinvestment Act of 1977. This law forces lenders to give mortgages to people (whether they can afford houses or not).
Secondly, when banks start making bad loans, the secondary mortage market normally punishes them by not buying from them. In this case the vast majority of these bad mortgages were being purchased by pseudo-government agencies like Fannie and Freddie. So again, you have the good sense of the market being trumped by vote-buying maneuvers from D.C.
Lastly, and here's the good news, we have done nothing to reign in Fannie and Freddie, and if I'm not mistaken their mandate has been expanded. So not only have we paid for all the bad mortgages that just crippled these agencies, we're going to be paying for more in the future.
January 10, 2009 12:44 AM
There is alot of wisdom to that, but remember that Alan Greenspan was one of Rand's prime pupils. And here's what he had to say to Congress: "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity (myself especially) are in a state of shocked disbelief." He conceded that he has "found a flaw" in his ideology and said he was "distressed by that."
As Jon Stewart said, it's a wonderful philosophy that completely fails to take into account the sheer douchbaggery of your fellow man.
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January 10, 2009 04:59 AM
- New Source
Greenspan was a member of Rand's original clique:
http://en.wikipedia.org/wiki/The_Ayn_Rand_Collective
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http://en.wikipedia.org/wiki/The_Ayn_Rand_Collective
January 10, 2009 05:28 AM
- New Source
Here's an article discussing Greenspan's concession
http://www.bloomberg.com/apps/news?pid=20601087&sid=ah5qh9Up4rIg&refer=home
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http://www.bloomberg.com/apps/news?pid=20601087&sid=ah5qh9Up4rIg&refer=home
January 10, 2009 07:05 PM
Well Alan Greenspan knew Ayn Rand and was one of her disciples. His libertarian policies, which worked for a lot of years, may have gotten us into this mess. So the very opposite of Ayn Rand's philosophy may be proved by this debacle. Regulation which disallows too much growth or too much recession would probably be the better way. Man is partly responsible for himself but also for his neighbor so too much selfishness and too little may be both wrong.
Source(s):
http://slog.thestranger.com/slog/archives/2008/12/30/objectivism_eats_itsel...
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That's a bit harsh. Atlas Shrugged is considered one of the best books of the 20th century.
http://www.randomhouse.com/modernlibrary/100bestnovels.html