(News & Editorial/ Atlas Shrugged: It’s important to know about money)
Keep in mind that Atlas Shrugged was published in 1957, over 50 years ago.
A. The Prophetic Atlas Shrugged
Fall 2009, by Edward Hudgins
Excerpts below pasted from : <http://www.atlassociety.org/atlas-shrugged/prophetic-atlas-shrugged>
— Something remarkable has happened in 2009 showing why Ayn Rand’s epic novel Atlas Shrugged is enjoying a spike in popularity. Scores of citizens took to American streets in tea parties and to town hall meetings held by elected officials to protest the economic policies of President Obama and the Congress. It was a revolt of the producers against those who take from them by the fist of government.
Consider the signs at the demonstrations:
“You cannot multiple wealth by dividing it.”
“Spread my work ethic, not my wealth.”
“Stop rewarding failure. Stop punishing success. Stop spending. Start cutting.”
“Don’t tax what I haven’t earned yet.”
“Cut the size of government, not our wallet.”
“Pro-capitalist producers, not moochers.”
“I’ll keep my money, my freedom & my guns & you keep the ‘change’.”
Many signs explicitly referenced Atlas Shrugged, showing that the book has helped spur this revolt and why the novel is growing in popularity.
Today, with the national debt growing to trillions of dollars and the collapse of major corporations, Ayn Rand’s novel Atlas Shrugged now seems prescient. In the specifics of the book we see government, controlled by alleged do-gooders, corrupt businessmen, and labor union thugs, restricting economic liberty and punishing productive individuals.
In Atlas, Rand depicts America’s economic collapse resulting from a morality that, on its surface, sounds fine—help others, love thy neighbor, don’t be selfish. But such percepts, taken out of all context and followed to the letter, have a logic all their own that drives those who accept them to destruction, taking many others with them in the process. Talk about a counter-intuitive and challenging proposition!
Accounting for Atlas’s popularity are scenarios strikingly similar in detail to what’s happening in the world today as well as deeper insights that allow us to understand our world.
Banking on Altruism
In Atlas, Rand also exposes the nature of those who, rather than simply expropriating wealth, actually destroy it in the name of high moral principle. Here too the echoes with today’s world are loud and clear.
For example, in the novel Eugene Lawson was president of the Community National Bank of Wisconsin. That bank collapsed because of the bad loans it made, destroying the economy of Wisconsin as well as several surrounding states. The final trigger that brought down his bank was lending to the Twentieth Century Auto Company, which Lawson knew was mismanaged and bankrupt.
In the novel Lawson explained his philosophy: “My father and grandfather built up … [the bank] just to amass a fortune for themselves. I placed their fortune in the service of a higher ideal. I did not sit on piles of money and demand collateral from poor people who needed loans. The heart was my collateral.”
In other words, profits are an evil end for any enterprise—or individual—to pursue; meeting the needs of others should be the goal of businesses, whether doing so brings profits or not and even if it destroys the enterprise.
Does this scenario sound familiar?
Today’s banking collapses have their origin in the same morality, in most cases mandated by law as well as adopted by bankers. For example, the Community Reinvestment Act sought to force banks to make loans to the poor, even if they were poor credit risks. Indeed, CRA and Federal Reserve regulations declared that the inability to make a down payment on a house shouldn’t be held against potential borrowers. Further, feds stated that government welfare received by such borrowers shouldn’t count as evidence that they had little income but, rather, should be counted as income.
The New York Times reported on September 30, 1999 that, “Fannie Mae, the nation’s biggest underwriter of home mortgages [and a government-established enterprise], has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people.” Fannie really didn’t need to be pushed too hard. Many of its executives followed Lawson’s morality of banking.
The Times article explained that Fannie had taken action “which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.”
You know the rest of the story—bad loans in portfolios, collapsed banks, foreclosures, dried-up credit markets.
From Starnesville to Detroit
Businesses fail during any economic downturn. But “Atlas Shrugged” depicts a kind of economic carnage that, until today, was hardly imaginable by most American.
Rand describes Starnesville, the home of the Twentieth Century Motor Company, formerly one of the country’s biggest and best enterprises which were destroyed by its founder’s heirs who ran the business on the socialist principle, “From each according to his ability, to each according to his need.”
Here’s one of the descriptions of the once-motor Mecca:
“A few houses still stood within the skeleton of what had once been an industrial town. Everything that could move, had moved away; but some human beings had remained. The empty structures were vertical rubble; they had been eaten, not by time but by men; boards torn out at random, missing patches of roofs, holes left in gutted cellars.”
Many American cities today have declined past the point of simply being dangerous, rundown, but populated ghettoes. They’ve become depopulated. Take the train from Baltimore heading north and you’ll look back on abandoned blocks of boarded up houses. Drive through parts of St. Louis and you’ll encounter urban deserts.
Think this is fiction?
Many Americans were incredulous when President Obama’s 2009 spending was projected to run a deficit of $1.8 trillion and with projected deficits over the next decade reaching over $9 trillion. The administration, in good Orwellian vision, called much of this spending “investments.” Where on earth was the money going to come from?
On top of this, Obama has pushed universal, government-guaranteed health care as a means to reduce government spending. He wants to heap new goodies on millions recipients as a means to lower costs and has promised not to reduce any current services to the elderly under Medicare. The Congressional Budget Office says such a proposal would add another $1 trillion in new government spending.
Obama claimed he’d be able to pay for a substantial part of the new spending by squeezing the waste and fraud out of Medicare. One might ask how he thinks a government that allows such huge amount of waste in one major program will be able to run a new program any better. In any case the only way to reduce Medicare costs by such a huge amount would be to cut services.
Some of Obama’s minions suggest that new taxes on the “rich” or on pharmaceutical companies could cover a sizable chunk of this spending. But even a 100 percent tax rate on the top five percent of taxpayers would bring in only a fraction of what would be needed to meet Obama’s spending plans.
More and more Americans are asking, “Can these guys really believe their own b.s.? Surely they wouldn’t be so grossly, almost criminally irresponsible as to destroy the American economy and current healthcare system with such a plan?” The answer, of course, is “Yes they can.”
Atlas offers us a way to understand the level of self-delusion we see in the world today. Rand understood that the root of all evil is first and foremost the refusal to think, the refusal to focus one’s minds, the evasion of reality. It might start with individuals deceiving others but, ultimately, it ends in individuals deceiving themselves. It might start in small matters but such a practice in the end can lead to destruction on a national level.
B. Francisco’s ‘Money’ Speech from “Atlas Shrugged”
January 03, 2009, Free republic, by Entrepreneur
This is a speech from Ayn Rand’s great book, Atlas Shrugged: [Please read the following, it’s filled with uncommon insight. Mr. Larry]
“So you think that money is the root of all evil?” said Francisco d’Aconia. “Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?
“When you accept money in payment for your effort, you do so only on the conviction that you will exchange it for the product of the effort of others. It is not the moochers or the looters who give value to money. Not an ocean of tears nor all the guns in the world can transform those pieces of paper in your wallet into the bread you will need to survive tomorrow. Those pieces of paper, which should have been gold, are a token of honor – your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money. Is this what you consider evil?
“Have you ever looked for the root of production? Take a look at an electric generator and dare tell yourself that it was created by the muscular effort of unthinking brutes. Try to grow a seed of wheat without the knowledge left to you by men who had to discover it for the first time. Try to obtain your food by means of nothing but physical motions – and you’ll learn that man’s mind is the root of all the goods produced and of all the wealth that has ever existed on earth.
“But you say that money is made by the strong at the expense of the weak? What strength do you mean? It is not the strength of guns or muscles. Wealth is the product of man’s capacity to think. Then is money made by the man who invents a motor at the expense of those who did not invent it? Is money made by the intelligent at the expense of the fools? By the able at the expense of the incompetent? By the ambitious at the expense of the lazy? Money is made – before it can be looted or mooched – made by the effort of every honest man, each to the extent of his ability. An honest man is one who knows that he can’t consume more than he has produced.
“To trade by means of money is the code of the men of good will. Money rests on the axiom that every man is the owner of his mind and his effort. Money allows no power to prescribe the value of your effort except by the voluntary choice of the man who is willing to trade you his effort in return. Money permits you to obtain for your goods and your labor that which they are worth to the men who buy them, but no more. Money permits no deals except those to mutual benefit by the unforced judgment of the traders. Money demands of you the recognition that men must work for their own benefit, not for their own injury, for their gain, not their loss – the recognition that they are not beasts of burden, born to carry the weight of your misery – that you must offer them values, not wounds – that the common bond among men is not the exchange of suffering, but the exchange of goods. Money demands that you sell, not your weakness to men’s stupidity, but your talent to their reason; it demands that you buy, not the shoddiest they offer, but the best your money can find. And when men live by trade – with reason, not force, as their final arbiter – it is the best product that wins, the best performance, then man of best judgment and highest ability – and the degree of a man’s productiveness is the degree of his reward. This is the code of existence whose tool and symbol is money. Is this what you consider evil?
“But money is only a tool. It will take you wherever you wish, but it will not replace you as the driver. It will give you the means for the satisfaction of your desires, but it will not provide you with desires. Money is the scourge of the men who attempt to reverse the law of causality – the men who seek to replace the mind by seizing the products of the mind.
“Money will not purchase happiness for the man who has no concept of what he wants; money will not give him a code of values, if he’s evaded the knowledge of what to value, and it will not provide him with a purpose, if he’s evaded the choice of what to seek. Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent. The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors. The men of intelligence desert him, but the cheats and the frauds come flocking to him, drawn by a law which he has not discovered: that no man may be smaller than his money. Is this the reason why you call it evil?
“Only the man who does not need it, is fit to inherit wealth – the man who would make his own fortune no matter where he started. If an heir is equal to his money, it serves him; if not, it destroys him. But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money? Do not envy a worthless heir; his wealth is not yours and you would have done no better with it. Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one would not bring back the dead virtue which was the fortune. Money is a living power that dies without its root. Money will not serve that mind that cannot match it. Is this the reason why you call it evil?
“Money is your means of survival. The verdict which you pronounce upon the source of your livelihood is the verdict you pronounce upon your life. If the source is corrupt, you have damned your own existence. Did you get your money by fraud? By pandering to men’s vices or men’s stupidity? By catering to fools, in the hope of getting more than your ability deserves? By lowering your standards? By doing work you despise for purchasers you scorn? If so, then your money will not give you a moment’s or a penny’s worth of joy. Then all the things you buy will become, not a tribute to you, but a reproach; not an achievement, but a reminder of shame. Then you’ll scream that money is evil. Evil, because it would not pinch-hit for your self-respect? Evil, because it would not let you enjoy your depravity? Is this the root of your hatred of money?
“Money will always remain an effect and refuse to replace you as the cause. Money is the product of virtue, but it will not give you virtue and it will not redeem your vices. Money will not give you the unearned, neither in matter nor in spirit. Is this the root of your hatred of money?
“Or did you say it’s the love of money that’s the root of all evil? To love a thing is to know and love its nature. To love money is to know and love the fact that money is the creation of the best power within you, and your passkey to trade your effort for the effort of the best among men. It’s the person who would sell his soul for a nickel, who is the loudest in proclaiming his hatred of money – and he has good reason to hate it. The lovers of money are willing to work for it. They know they are able to deserve it.
“Let me give you a tip on a clue to men’s characters: the man who damns money has obtained it dishonorably; the man who respects it has earned it.
“Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter. So long as men live together on earth and need means to deal with one another – their only substitute, if they abandon money, is the muzzle of a gun.
“But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride, or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich – will not remain rich for long. They are the natural bait for the swarms of looters that stay under rocks for centuries, but come crawling out at the first smell of a man who begs to be forgiven for the guilt of owning wealth. They will hasten to relieve him of the guilt – and of his life, as he deserves.
“Then you will see the rise of the double standard – the men who live by force, yet count on those who live by trade to create the value of their looted money – the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law – men who use force to seize the wealth of disarmed victims – then money becomes its creators’ avenger. Such looters believe it safe to rob defenseless men, once they’ve passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.
“Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed. Money is so noble a medium that it does not compete with guns and it does not make terms with brutality. It will not permit a country to survive as half-property, half-loot.
“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it becomes, marked: ‘Account overdrawn.’
“When you have made evil the means of survival, do not expect men to remain good. Do not expect them to stay moral and lose their lives for the purpose of becoming the fodder of the immoral. Do not expect them to produce, when production is punished and looting rewarded. Do not ask, ‘Who is destroying the world?’ You are.
“You stand in the midst of the greatest achievements of the greatest productive civilization and you wonder why it’s crumbling around you, while you’re damning its life-blood – money. You look upon money as the savages did before you, and you wonder why the jungle is creeping back to the edge of your cities. Throughout men’s history, money was always seized by looters of one brand or another, but whose method remained the same: to seize wealth by force and to keep the producers bound, demeaned, defamed, deprived of honor. That phrase about the evil of money, which you mouth with such righteous recklessness, comes from a time when wealth was produced by the labor of slaves – slaves who repeated the motions once discovered by somebody’s mind and left unimproved for centuries. So long as production was ruled by force, and wealth was obtained by conquest, there was little to conquer. Yet through all the centuries of stagnation and starvation, men exalted the looters, as aristocrats of the sword, as aristocrats of birth, as aristocrats of the bureau, and despised the producers, as slaves, as traders, as shopkeepers – as industrialists.
“To the glory of mankind, there was, for the first and only time in history, a country of money – and I have no higher, more reverent tribute to pay to America, for this means: a country of reason, justice, freedom, production, achievement. For the first time, man’s mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being – the self-made man – the American industrialist.
“If you ask me to name the proudest distinction of Americans, I would choose – because it contains all the others – the fact that they were the people who created the phrase ‘to make money’. No other language or nation had ever used these words before; men had always thought of wealth as a static quantity – to be seized, begged, inherited, shared, looted, or obtained as a favor. Americans were the first to understand that wealth has to be created. The words ‘to make money’ hold the essence of human morality.
“Yet these were the words for which Americans were denounced by the rotted cultures of the looters’ continents. Now the looters’ credo has brought you to regard your proudest achievements as a hallmark of shame, your prosperity as guilt, your greatest men, the industrialists, as blackguards, and your magnificent factories as the product and property of muscular labor, the labor of whip-driven slaves, like the pyramids of Egypt. The rotter who simpers that he sees no difference between the power of the dollar and the power of the whip, ought to learn the difference on his own hide – as, I think, he will.
“Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns – or dollars. Take your choice – there is no other – and your time is running out.”