I’m currently engaged in a Facebook debate with some individuals who have utopian tendencies. It reminded me of a piece I wrote for the IPA Review some time back setting out some arguments about utopianism. Catallaxians will recognise the characters.
Ayn Rand remains a best-selling author. Nearly thirty years after her death, and over fifty years since publication, her books remain as popular as ever. Just last year The Economist proposed an Atlas Shrugged Index; the sales of her magnum opus tracking events that herald big government. To be sure her two best known books The Fountainhead and Atlas Shrugged are eerily prescient; her villains especially describe the threats to our freedoms. Her descriptions of second-handers, moochers and looters relate to people and institutions that are readily recognisable.
It is surprising that her books remain so popular in an era of instant gratification. They are long-winded, torturous reads punctuated by gems; her books need a good editing and perhaps shortening. Nonetheless thousands of people each year discover her writing for the first time, and if a long-promised Atlas Shrugged movie comes to the big screen many more millions will discover her work.
While there is steady demand for her books, it seems in recent time that there has been an increase in interest in Rand herself. The classic It usually begins with Ayn Rand by Jerome Tuccille is back in print, while Goddess of the market: Ayn Rand and the American right – a new biography – is selling well. Then there are beginners guides to Rand and many more books to choose from. Yet, for all this attention, it isn’t clear that we should learn anything positive from Rand’s life itself, as opposed to reading and enjoying her books.
Rand apparently loathed Friedrich von Hayek. He was, in her eyes, a socialist. Where he argued that individuals competed for scarce resources, she argued that individuals created resources. From their own perspective each was correct. Individuals do compete for scarce resources, but Hayek had argued that this competition wasn’t the economic problem that markets resolved. Rather markets coordinated diffuse knowledge and information. Rand had as her protagonists innovators who through their own genius and effort created new ideas and products. The entrepreneur is an important character in her thinking as it is in Austrian school economics.
So on economic matters Hayek and Rand may not appear to have had very different views. It is in their philosophy, however, that they are somewhat different. Rand was a utopian. Her homespun philosophy Objectivism lionises logic and reason. Of course, logic and reason are sensible precepts and should be applied when making decisions. But they cannot be the basis of a philosophical system of thought. In this sense, Rand was a Rationalist.
Hayek is critical of Rationalism in his first chapter of the first volume of Law, Legislation and Liberty. Rationalists believe in Human Design; the view that ‘human institutions will serve human purposes only if they have been deliberately designed for those purposes’ and ‘that we should re-design society and its institutions that all our actions will be wholly guided by known purposes’. That known purpose in the Randian sense is the morality of selfishness. In her novels selfishness conquers all; those who selfishly enrich themselves by adding value prevail, while those who selfishly enrich themselves by looting and mooching get unstuck.
That’s all well and good in literature; Rand’s novels are morality plays and the genre is well understood. Living one’s life according to a few axioms of morality, however defined, is a far more complex proposition. Humans have, with more or less some success, evolved rules that govern human interaction. Many of these rules take the form of religion and religious practice; while others are cultural. This implies that there are norms that govern our behaviour that we don’t always understand or that we cannot easily articulate. It is this type of rule that becomes problematic for Rationalists who idealise logic and reason.
Michael Oakeshott was the greatest English speaking conservative philosopher of the twentieth century. He too was very critical of Rationalism. So much so that he has a deliciously amusing back-handed swipe at Hayek’s classic The road to serfdom. Oakeshott suggests that a plan not to plan, while somewhat commendable, is a plan too many. To his way of thinking Hayek falls into a rationalist frame of mind. It is not clear what his views on Rand were.
Oakeshott characterises Rationalists as (social) engineers who engage in constant problem solving and redesign of institutions. There are two other characteristics that Oakeshott emphasises; the politics of perfection and the politics of uniformity. Imperfection, to the Rationalist, is intolerable and rational solutions can always be found for any imperfection. Once those imperfections are eliminated a rational uniformity will prevail. As Oakeshott observes, ‘The modern history of Europe is littered with the projects of the politics of Rationalism’. Writing in 1947, this is something of an understatement.
Rationalism is not self-correcting. Oakeshott makes the argument that Rationalism amounts to a corruption of the mind in that it is fundamentally mistaken about the nature of human knowledge. Rationalists believe ‘the truth’ can be discovered by a single human mind. By contrast Hayek, writing in 1945 (and probably unbeknown to Oakeshott), had argued that knowledge and information was dispersed across individuals. But the problem remains, a Rationalist cannot overcome the inherent error within Rationalism – they cannot solve the Hayekian information problem. Oakeshott argues that Rationalists are ‘ineducable’ – they can only be educated out of their Rationalism.
It is this type of analysis that could explain why Rand disliked Hayek, and probably why he disliked her too. She was stubborn, dogmatic and uncompromising. The underlying philosophical views that informed their worldviews were fundamentally at odds with each other. This then raises the interesting question of overlap within their readership.
Ayn Rand’s novels are particularly popular with libertarians who in turn are often attracted to Austrian school economics. The major economists of that school include Ludwig von Mises, Friedrich von Hayek, and Murray Rothbard. All of these men knew Ayn Rand. She had attended Mises’ New York University seminar in the 1957 – 58 academic year. Both Mises and Rothbard wrote her glowing letters after reading Atlas Shrugged. Rothbard described it as ‘the greatest novel ever written’; while Mises gushed that it was not merely a novel, but ‘a cogent analysis of the evils that plague our society’.
While it isn’t clear what influence their economic theories had on Rand, it is clear that her economic views were largely consistent with those of Mises and Rothbard and probably Hayek too. She places entrepreneurship at the centre of economic prosperity; she has strong views on sound money – favouring the gold standard, and clearly understands the role of property rights in a well functioning economy. The adverse unintended consequences of do-gooders are pitilessly exposed in her novels. She understands that government intervention and excess regulation destroys economic prosperity. She makes a strong argument for firms to be managed in the interests of their owners and not other societal interests. There is much to like in her novels and the economics of her novels are recognisable to readers versed in the Austrian school. But you don’t have to be an Austrian school economist to hold these views.
To enjoy Rand’s novels, even to learn their lessons, without accepting her morality is inconsistent with her Rationalist viewpoint. It is inconsistent with the perfection and uniformity characteristics that Oakeshott describes. In what she might have considered a bitter irony it is consistent with Hayek’s dispersed knowledge theory. It is entirely possible that a novelist can imagine a dystopia and understands the economic consequences of that dystopia and write a best-selling novel based on that understanding without being able to implement their own utopia. In this sense Hayek and Rand and Mises are all compliments to each other and not substitutes. It is possible to understand them all in isolation, but the combination of their work is far more powerful. That is why there is nothing wrong with starting with Ayn Rand, but it should never end with Ayn Rand.