Goddess of the Market: Ayn Rand and the American Right
By Jennifer Burns
(Oxford University Press, 459 pp., $27.95)
Ayn Rand and the World She Made
By Anne C. Heller
(Doubleday, 559 pp., $35)
The current era of Democratic governance has provoked a florid response on the right, ranging from the prosaic (routine denunciations of big spending and debt) to the overheated (fears of socialism) to the lunatic (the belief that Democrats plan to put the elderly to death). Amid this cacophony of rage and dread, there has emerged one anxiety that is an actual idea, and not a mere slogan or factual misapprehension. The idea is that the United States is divided into two classes—the hard-working productive elite, and the indolent masses leeching off their labor by means of confiscatory taxes and transfer programs.
You can find iterations of this worldview and this moral judgment everywhere on the right. Consider a few samples of the rhetoric. In an op-ed piece last spring, Arthur Brooks, the president of the American Enterprise Institute, called for conservatives to wage a “culture war” over capitalism. “Social Democrats are working to create a society where the majority are net recipients of the ‘sharing economy,’ “ he wrote. “Advocates of free enterprise . . . have to declare that it is a moral issue to confiscate more income from the minority simply because the government can.” Brooks identified the constituency for his beliefs as “the people who were doing the important things right—and who are now watching elected politicians reward those who did the important things wrong.” Senator Jim DeMint echoed this analysis when he lamented that “there are two Americas but not the kind John Edwards was talking about. It’s not so much the haves and the have-nots. It’s those who are paying for government and those who are getting government. “
Pat Toomey, the former president of the Club for Growth and a Republican candidate for the Senate in Pennsylvania, has recently expressed an allegorical version of this idea, in the form of an altered version of the tale of the Little Red Hen. In Toomey’s rendering, the hen tries to persuade the other animals to help her plant some wheat seeds, and then reap the wheat, and then bake it into bread. The animals refuse each time. But when the bread is done, they demand a share. The government seizes the bread from the hen and distributes it to the “not productive” fellow animals. After that, the hen stops baking bread.
This view of society and social justice appeared also in the bitter commentary on the economic crisis offered up by various Wall Street types, and recorded by Gabriel Sherman in New York magazine last April. One hedge-fund analyst thundered that “the government wants me to be a slave!” Another fantasized, “JP Morgan and all these guys should go on strike—see what happens to the country without Wall Street.” And the most attention-getting manifestation of this line of thought certainly belonged to the CNBC reporter Rick Santelli, whose rant against government intervention transformed him into a cult hero. In a burst of angry verbiage, Santelli exclaimed: “Why don’t you put up a website to have people vote on the Internet as a referendum to see if we really want to subsidize the losers’ mortgages, or would we like to at least buy cars and buy houses in foreclosure and give them to people that might have a chance to actually prosper down the road and reward people that could carry the water instead of drink the water!”
Most recently the worldview that I am describing has colored much of the conservative outrage at the prospect of health care reform, which some have called a “redistribution of health” from those wise enough to have secured health insurance to those who have not. “President Obama says he will cover thirty to forty to fifty million people who are not covered now—without it costing any money,” fumed Rudolph Giuliani. “They will have to cut other services, cut programs. They will have to be making decisions about people who are elderly.” At a health care town hall in Kokomo, Indiana, one protester framed the case against health care reform positively, as an open defense of the virtues of selfishness. “I’m responsible for myself and I’m not responsible for other people,” he explained in his turn at the microphone, to applause. “I should get the fruits of my labor and I shouldn’t have to divvy it up with other people.” (The speaker turned out to be unemployed, but still determined to keep for himself the fruits of his currently non-existent labors.)
In these disparate comments we can see the outlines of a coherent view of society. It expresses its opposition to redistribution not in practical terms—that taking from the rich harms the economy—but in moral absolutes, that taking from the rich is wrong. It likewise glorifies selfishness as a virtue. It denies any basis, other than raw force, for using government to reduce economic inequality. It holds people completely responsible for their own success or failure, and thus concludes that when government helps the disadvantaged, it consequently punishes virtue and rewards sloth. And it indulges the hopeful prospect that the rich will revolt against their ill treatment by going on strike, simultaneously punishing the inferiors who have exploited them while teaching them the folly of their ways.
There is another way to describe this conservative idea. It is the ideology of Ayn Rand. Some, though not all, of the conservatives protesting against redistribution and conferring the highest moral prestige upon material success explicitly identify themselves as acolytes of Rand. (As Santelli later explained, “I know this may not sound very humanitarian, but at the end of the day I’m an Ayn Rand-er.”) Rand is everywhere in this right-wing mood. Her novels are enjoying a huge boost in sales. Popular conservative talk show hosts such as Rush Limbaugh and Glenn Beck have touted her vision as a prophetic analysis of the present crisis. “Many of us who know Rand’s work,” wrote Stephen Moore in the Wall Street Journal last January, “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.”
Christopher Hayes of The Nation recently recalled one of his first days in high school, when he met a tall, geeky kid named Phil Kerpen, who asked him, “Have you ever read Ayn Rand?” Kerpen is now the director of policy for the conservative lobby Americans for Prosperity and an occasional right-wing talking head on cable television. He represents a now-familiar type. The young, especially young men, thrill to Rand’s black-and-white ethics and her veneration of the alienated outsider, shunned by a world that does not understand his gifts. (It is one of the ironies, and the attractions, of Rand’s capitalists that they are depicted as heroes of alienation.) Her novels tend to strike their readers with the power of revelation, and they are read less like fiction and more like self-help literature, like spiritual guidance. Again and again, readers would write Rand to tell her that their encounter with her work felt like having their eyes open for the first time in their lives. “For over half a century,” writes Jennifer Burns in her new biography of this strange and rather sinister figure, “Rand has been the ultimate gateway drug to life on the right.”
The likes of Gale Norton, George Gilder, Charles Murray, and many others have cited Rand as an influence. Rand acolytes such as Alan Greenspan and Martin Anderson have held important positions in Republican politics. “What she did—through long discussions and lots of arguments into the night—was to make me think why capitalism is not only efficient and practical, but also moral,” attested Greenspan. In 1987, The New York Times called Rand the “novelist laureate” of the Reagan administration. Reagan’s nominee for commerce secretary, C. William Verity Jr., kept a passage from Atlas Shrugged on his desk, including the line “How well you do your work . . . [is] the only measure of human value.”
Today numerous CEOs swear by Rand. One of them is John Allison, the outspoken head of BB&T, who has made large grants to several universities contingent upon their making Atlas Shrugged mandatory reading for their students. In 1991, the Library of Congress and the Book of the Month Club polled readers on what book had influenced them the most. Atlas Shrugged finished second, behind only the Bible. There is now talk of filming the book again, possibly as a miniseries, possibly with Charlize Theron. Rand’s books still sell more than half a million copies a year. Her ideas have swirled below the surface of conservative thought for half a century, but now the particulars of our moment—the economic predicament, the Democratic control of government—have drawn them suddenly to the foreground.
Rand’s early life mirrored the experience of her most devoted readers. A bright but socially awkward woman, she harbored the suspicion early on that her intellectual gifts caused classmates to shun her. She was born Alissa Rosenbaum in 1905 in St. Petersburg. Her Russian-Jewish family faced severe state discrimination, first for being Jewish under the czars, and then for being wealthy merchants under the Bolsheviks, who stole her family’s home and business for the alleged benefit of the people.
Anne C. Heller, in her skillful life of Rand, traces the roots of Rand’s philosophy to an even earlier age. (Heller paints a more detailed and engaging portrait of Rand’s interior life, while Burns more thoroughly analyzes her ideas.) Around the age of five, Alissa Rosenbaum’s mother instructed her to put away some of her toys for a year. She offered up her favorite possessions, thinking of the joy that she would feel when she got them back after a long wait. When the year had passed, she asked her mother for the toys, only to be told she had given them away to an orphanage. Heller remarks that “this may have been Rand’s first encounter with injustice masquerading as what she would later acidly call ‘altruism.’ “ (The anti-government activist Grover Norquist has told a similar story from childhood, in which his father would steal bites of his ice cream cone, labelling each bite “sales tax” or “income tax.” The psychological link between a certain form of childhood deprivation and extreme libertarianism awaits serious study.)
Rosenbaum dreamed of fame as a novelist and a scriptwriter, and fled to the United States in 1926, at the age of twenty-one. There she adopted her new name, for reasons that remain unclear. Rand found relatives to support her temporarily in Chicago, before making her way to Hollywood. Her timing was perfect: the industry was booming, and she happened to have a chance encounter with the director Cecil B. DeMille—who, amazingly, gave a script-reading job to the young immigrant who had not yet quite mastered the English language. Rand used her perch as a launching pad for a career as a writer for the stage and the screen.
Rand’s political philosophy remained amorphous in her early years. Aside from a revulsion at communism, her primary influence was Nietzsche, whose exaltation of the superior individual spoke to her personally. She wrote of one of the protagonists of her stories that “he does not understand, because he has no organ for understanding, the necessity, meaning, or importance of other people”; and she meant this as praise. Her political worldview began to crystallize during the New Deal, which she immediately interpreted as a straight imitation of Bolshevism. Rand threw herself into advocacy for Wendell Wilkie, the Republican presidential nominee in 1940, and after Wilkie’s defeat she bitterly predicted “a Totalitarian America, a world of slavery, of starvation, of concentration camps and of firing squads.” Her campaign work brought her into closer contact with conservative intellectuals and pro-business organizations, and helped to refine her generalized anti-communist and crudely Nietzschean worldview into a moral defense of the individual will and unrestrained capitalism.
Rand expressed her philosophy primarily through two massive novels: The Fountainhead, which appeared in 1943, and Atlas Shrugged, which appeared in 1957. Both tomes, each a runaway best-seller, portrayed the struggle of a brilliant and ferociously individualistic man punished for his virtues by the weak-minded masses. It was Atlas Shrugged that Rand deemed the apogee of her life’s work and the definitive statement of her philosophy. She believed that the principle of trade governed all human relationships—that in a free market one earned money only by creating value for others. Hence, one’s value to society could be measured by his income. History largely consisted of “looters and moochers” stealing from society’s productive elements.
In essence, Rand advocated an inverted Marxism. In the Marxist analysis, workers produce all value, and capitalists merely leech off their labor. Rand posited the opposite. In Atlas Shrugged, her hero, John Galt, leads a capitalist strike, in which the brilliant business leaders who drive all progress decide that they will no longer tolerate the parasitic workers exploiting their talent, and so they withdraw from society to create their own capitalistic paradise free of the ungrateful, incompetent masses. Galt articulates Rand’s philosophy:
The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus of all of their brains. Such is the nature of the “competition” between the strong and the weak of the intellect. Such is the pattern of “exploitation” for which you have damned the strong.
The bifurcated class analysis did not end the similarities between Rand’s worldview and Marxism. Rand’s Russian youth imprinted upon her a belief in the polemical influence of fiction. She once wrote to a friend that “it’s time we realize—as the Reds do—that spreading our ideas in the form of fiction is a great weapon, because it arouses the public to an emotional, as well as intellectual response to our cause.” She worked both to propagate her own views and to eliminate opposing views. In 1947 she testified before the House Un-American Activities Committee, arguing that the film Song of Russia, a paean to the Soviet Union made in 1944, represented communist propaganda rather than propaganda for World War II, which is what it really supported. (Rand, like most rightists of her day, opposed American entry into the war.)
In 1950, Rand wrote the influential Screen Guide for Americans, the Motion Picture Alliance’s industry guidebook for avoiding subtle communist influence in its films. The directives, which neatly summarize Rand’s worldview, included such categories as “Don’t Smear The Free Enterprise System,” “Don’t Smear Industrialists” (“it is they who created the opportunities for achieving the unprecedented material wealth of the industrial age”), “Don’t Smear Wealth,” and “Don’t Deify ‘The Common Man’ “ (“if anyone is classified as ‘common’—he can be called ‘common’ only in regard to his personal qualities. It then means that he has no outstanding abilities, no outstanding virtues, no outstanding intelligence. Is that an object of glorification?”). Like her old idol Nietzsche, she denounced a transvaluation of values according to which the strong had been made weak and the weak were praised as the strong.
Rand’s hotly pro-capitalist novels oddly mirrored the Socialist Realist style, with two-dimensional characters serving as ideological props. Burns notes some of the horrifying implications of Atlas Shrugged. “In one scene,” she reports, “[Rand] describes in careful detail the characteristics of passengers doomed to perish in a violent railroad clash, making it clear their deaths are warranted by their ideological errors.” The subculture that formed around her—a cult of the personality if ever there was one—likewise came to resemble a Soviet state in miniature. Beginning with the publication of The Fountainhead, Rand began to attract worshipful followers. She cultivated these (mostly) young people interested in her work, and as her fame grew she spent less time engaged in any way with the outside world, and increasingly surrounded herself with her acolytes, who communicated in concepts and terms that the outside world could not comprehend.
Rand called her doctrine “Objectivism,” and it eventually expanded well beyond politics and economics to psychology, culture, science (she considered the entire field of physics “corrupt”), and sundry other fields. Objectivism was premised on the absolute centrality of logic to all human endeavors. Emotion and taste had no place. When Rand condemned a piece of literature, art, or music (she favored Romantic Russian melodies from her youth and detested Bach, Mozart, Beethoven, and Brahms), her followers adopted the judgment. Since Rand disliked facial hair, her admirers went clean-shaven. When she bought a new dining room table, several of them rushed to find the same model for themselves.
Rand’s most important acolyte was Nathan Blumenthal, who first met her as a student infatuated with The Fountainhead. Blumenthal was born in Canada in 1930. In 1949 he wrote to Rand, and began to visit her extensively, and fell under her spell. He eventually changed his name to Nathaniel Branden, signifying in the ancient manner of all converts that he had repudiated his old self and was reborn in the image of Rand, from whom he adapted his new surname. She designated Branden as her intellectual heir.
She allowed him to run the Nathaniel Branden Institute, a small society dedicated to promoting Objectivism through lectures, therapy sessions, and social activities. The courses, he later wrote, began with the premises that “Ayn Rand is the greatest human being who has ever lived” and “Atlas Shrugged is the greatest human achievement in the history of the world.” Rand also presided over a more select circle of followers in meetings every Saturday night, invitations to which were highly coveted among the Objectivist faithful. These meetings themselves were frequently ruthless cult-like exercises, with Rand singling out members one at a time for various personality failings, subjecting them to therapy by herself or Branden, or expelling them from the charmed circle altogether.
So strong was the organization’s hold on its members that even those completely excommunicated often maintained their faith. In 1967, for example, the journalist Edith Efron was, in Heller’s account, “tried in absentia and purged, for gossiping, or lying, or refusing to lie, or flirting; surviving witnesses couldn’t agree on exactly what she did.” Upon her expulsion, Efron wrote to Rand that “I fully and profoundly agree with the moral judgment you have made of me, and with the action you have taken to end social relations.” One of the Institute’s therapists counseled Efron’s eighteen-year-old son, also an Objectivist, to cut all ties with his mother, and made him feel unwelcome in the group when he refused to do so. (Efron’s brother, another Objectivist, did temporarily disown her.)
Sex and romance loomed unusually large in Rand’s worldview. Objectivism taught that intellectual parity is the sole legitimate basis for romantic or sexual attraction. Coincidentally enough, this doctrine cleared the way for Rand—a woman possessed of looks that could be charitably described as unusual, along with abysmal personal hygiene and grooming habits—to seduce young men in her orbit. Rand not only persuaded Branden, who was twenty-five years her junior, to undertake a long-term sexual relationship with her, she also persuaded both her husband and Branden’s wife to consent to this arrangement. (They had no rational basis on which to object, she argued.) But she prudently instructed them to keep the affair secret from the other members of the Objectivist inner circle.
At some point, inevitably, the arrangement began to go very badly. Branden’s wife began to break down—Rand diagnosed her with “emotionalism,” never imagining that her sexual adventures might have contributed to the young woman’s distraught state. Branden himself found the affair ever more burdensome and grew emotionally and sexually withdrawn from Rand. At one point Branden suggested to Rand that a second affair with another woman closer to his age might revive his lust. Alas, Rand—whose intellectual adjudications once again eerily tracked her self-interest—determined that doing so would “destroy his mind.” He would have to remain with her. Eventually Branden confessed to Rand that he could no longer muster any sexual attraction for her, and later that he actually had undertaken an affair with another woman despite Rand’s denying him permission. After raging at Branden, Rand excommunicated him fully. The two agreed not to divulge their affair. Branden told his followers only that he had “betrayed the principles of Objectivism” in an “unforgiveable” manner and renounced his role within the organization.
Rand’s inner circle turned quickly and viciously on their former superior. Alan Greenspan, a cherished Rand confidant, signed a letter eschewing any future contact with Branden or his wife. Objectivist students were forced to sign loyalty oaths, which included the promise never to contact Branden, or to buy his forthcoming book or any future books that he might write. Rand’s loyalists expelled those who refused these orders, and also expelled anyone who complained about the tactics used against dissidents. Some of the expelled students, desperate to retain their lifeline to their guru, used pseudonyms to re-enroll in the courses or re-subscribe to her newsletter. But many just drifted away, and over time the Rand cult dwindled to a hardened few.
Ultimately the Objectivist movement failed for the same reason that communism failed: it tried to make its people live by the dictates of a totalizing ideology that failed to honor the realities of human existence. Rand’s movement devolved into a corrupt and cruel parody of itself. She herself never won sustained personal influence within mainstream conservatism or the Republican Party. Her ideological purity and her unstable personality prevented her from forming lasting coalitions with anybody who disagreed with any element of her catechism.
Moreover, her fierce attacks on religion—she derided Christianity, again in a Nietzschean manner, as a religion celebrating victimhood—made her politically radioactive on the right. The Goldwater campaign in 1964 echoed distinctly Randian themes—”profits,” the candidate proclaimed, “are the surest sign of responsible behavior”—but he ignored Rand’s overtures to serve as his intellectual guru. He was troubled by her atheism. In an essay in National Review ten years after the publication of Atlas Shrugged, M. Stanton Evans summarized the conservative view on Rand. She “has an excellent grasp of the way capitalism is supposed to work, the efficiencies of free enterprise, the central role of private property and the profit motive, the social and political costs of welfare schemes which seek to compel a false benevolence,” he wrote, but unfortunately she rejects “the Christian culture which has given birth to all our freedoms.”
The idiosyncracies of Objectivism never extended beyond the Rand cult, though it was a large cult with influential members—and yet her central contribution to right-wing thought has retained enormous influence. That contribution was to express the opposition to economic redistribution in moral terms, as a moral depravity. A long and deep strand of classical liberal thought, stretching back to Locke, placed the individual in sole possession of his own economic destiny. The political scientist C. B. MacPherson called this idea “possessive individualism,” or “making the individual the sole proprietor of his own person and capacities, owing nothing to society for them.” The theory of possessive individualism came under attack in the Marxist tradition, but until the era of the New Deal it was generally accepted as a more or less accurate depiction of the actual social and economic order. But beginning in the mid-1930s, and continuing into the postwar years, American society saw widespread transfers of wealth from the rich to the poor and the middle class. In this context, the theory of possessive individualism could easily evolve into a complaint against the exploitation of the rich. Rand pioneered this leap of logic—the ideological pity of the rich for the oppression that they suffer as a class.
There was more to Rand’s appeal. In the wake of a depression that undermined the prestige of business, and then a postwar economy that was characterized by the impersonal corporation, her revival of the capitalist as a romantic hero, even a superhuman figure, naturally flattered the business elite. Here was a woman saying what so many of them understood instinctively. “For twenty-five years,” gushed a steel executive to Rand, “I have been yelling my head off about the little-realized fact that eggheads, socialists, communists, professors, and so-called liberals do not understand how goods are produced. Even the men who work at the machines do not understand it.” Rand, finally, restored the boss to his rightful mythic place.
On top of all these philosophical compliments to success and business, Rand tapped into a latent elitism that had fallen into political disrepute but never disappeared from the economic right. Ludwig von Mises once enthused to Rand, “You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your condition which you simply take for granted you owe to the effort of men who are better than you.” Rand articulated the terror that conservatives felt at the rapid leveling of incomes in that era—their sense of being singled out by a raging mob. She depicted the world in apocalyptic terms. Even slow encroachments of the welfare state, such as the minimum wage or public housing, struck her as totalitarian. She lashed out at John Kennedy in a polemical nonfiction tome entitled The Fascist New Frontier, anticipating by several decades Jonah Goldberg’s equally wild Liberal Fascism.
Rand’s most enduring accomplishment was to infuse laissez-faire economics with the sort of moralistic passion that had once been found only on the left. Prior to Rand’s time, two theories undergirded economic conservatism. The first was Social Darwinism, the notion that the advancement of the human race, like other natural species, relied on the propagation of successful traits from one generation to the next, and that the free market served as the equivalent of natural selection, in which government interference would retard progress. The second was neoclassical economics, which, in its most simplistic form, described the marketplace as a perfectly self-correcting
instrument. These two theories had in common a practical quality. They described a laissez-faire system that worked to the benefit of all, and warned that intervention would bring harmful consequences. But Rand, by contrast, argued for laissez-faire capitalism as an ethical system. She did believe that the rich pulled forward society for the benefit of one and all, but beyond that, she portrayed the act of taxing the rich to aid the poor as a moral offense.
Countless conservatives and libertarians have adopted this premise as an ideological foundation for the promotion of their own interests. They may believe the consequentialist arguments against redistribution—that Bill Clinton’s move to render the tax code slightly more progressive would induce economic calamity, or that George W. Bush’s making the tax code somewhat less progressive would usher in a boom; but the utter failure of those predictions to come to pass provoked no re-thinking whatever on the economic right. For it harbored a deeper belief in the immorality of redistribution, a righteous sense that the federal tax code and budget represent a form of organized looting aimed at society’s most virtuous—and this sense, which remains unshakeable, was owed in good measure to Ayn Rand.
The economic right may believe religiously in their moral view of wealth, but we do not have to respect it as we might respect religious faith. For it does not transcend—perhaps no religion should transcend—empirical scrutiny. On the contrary, this conservative view, the Randian inversion of the Marxist worldview, rests upon a series of propositions that can be falsified by data.
Let us begin with the premise that wealth represents a sign of personal virtue—thrift, hard work, and the rest—and poverty the lack thereof. Many Republicans consider the link between income and the work ethic so self-evident that they use the terms “rich” and “hard-working” interchangeably, and likewise “poor” and “lazy.” The conservative pundit Dick Morris accuses Obama of “rewarding failure and penalizing hard work” through his tax plan. His comrade Bill O’Reilly complains that progressive taxation benefits “folks who dropped out of school, who are too lazy to hold a job, who smoke reefers 24/7.”
A related complaint against redistribution holds that the rich earn their higher pay because of their nonstop devotion to office work—a grueling marathon of meetings and emails that makes the working life of the typical nine-to-five middle-class drone a vacation by comparison. “People just don’t get it. I’m attached to my BlackBerry,” complained one Wall Streeter to Sherman. “I get calls at two in the morning, when the market moves. That costs money.”
Now, it is certainly true that working hard can increase one’s chances of growing rich. It does not necessarily follow, however, that the rich work harder than the poor. Indeed, there are many ways in which the poor work harder than the rich. As the economist Daniel Hamermesh discovered, low-income workers are more likely to work the night shift and more prone to suffering workplace injuries than high-income workers. White-collar workers put in those longer hours because their jobs are not physically exhausting. Few titans of finance would care to trade their fifteen-hour day sitting in a mesh chair working out complex problems behind a computer for an eight-hour day on their feet behind a sales counter.
For conservatives, the causal connection between virtue and success is not merely ideological, it is also deeply personal. It forms the basis of their admiration of themselves. If you ask a rich person whether he ascribes his success to good fortune or his own merit, the answer will probably tell you whether that person inhabits the economic left or the economic right. Rand held up her own meteoric rise from penniless immigrant to wealthy author as a case study of the individualist ethos. “No one helped me,” she wrote, “nor did I think at any time that it was anyone’s duty to help me.”
But this was false. Rand spent her first months in this country subsisting on loans from relatives in Chicago, which she promised to repay lavishly when she struck it rich. (She reneged, never speaking to her Chicago family again.) She also enjoyed the great fortune of breaking into Hollywood at the moment it was exploding in size, and of bumping into DeMille. Many writers equal to her in their talents never got the chance to develop their abilities. That was not because they were bad or delinquent people. They were merely the victims of the commonplace phenomenon that Bernard Williams described as “moral luck.”
Not surprisingly, the argument that getting rich often entails a great deal of luck tends to drive conservatives to apoplexy. This spring the Cornell economist Robert Frank, writing in The New York Times, made the seemingly banal point that luck, in addition to talent and hard work, usually plays a role in an individual’s success. Frank’s blasphemy earned him an invitation on Fox News, where he would play the role of the loony liberal spitting in the face of middle-class values. The interview offers a remarkable testament to the belligerence with which conservatives cling to the mythology of heroic capitalist individualism. As the Fox host, Stuart Varney, restated Frank’s outrageous claims, a voice in the studio can actually be heard laughing off-camera. Varney treated Frank’s argument with total incredulity, offering up ripostes such as “That’s outrageous! That is outrageous!” and “That’s nonsense! That is nonsense!” Turning the topic to his own inspiring rags-to-riches tale, Varney asked: “Do you know what risk is involved in trying to work for a major American network with a British accent?”
There seems to be something almost inherent in the right-wing psychology that drives its rich adherents to dismiss the role of luck—all the circumstances that must break right for even the most inspired entrepreneur—in their own success. They would rather be vain than grateful. So seductive do they find this mythology that they omit major episodes of their own life, or furnish themselves with preposterous explanations (such as the supposed handicap of making it in American television with a British accent—are there any Brits in this country who have not been invited to appear on television?) to tailor reality to fit the requirements of the fantasy.
The association of wealth with virtue necessarily requires the free marketer to play down the role of class. Arthur Brooks, in his book Gross National Happiness, concedes that “the gap between the richest and poorest members of society is far wider than in many other developed countries. But there is also far more opportunity . . . there is in fact an amazing amount of economic mobility in America.” In reality, as a study earlier this year by the Brookings Institution and Pew Charitable Trusts reported, the United States ranks near the bottom of advanced countries in its economic mobility. The study found that family background exerts a stronger influence on a person’s income than even his education level. And its most striking finding revealed that you are more likely to make your way into the highest-earning one-fifth of the population if you were born into the top fifth and did not attain a college degree than if you were born into the bottom fifth and did. In other words, if you regard a college degree as a rough proxy for intelligence or hard work, then you are economically better off to be born rich, dumb, and lazy than poor, smart, and industrious.
In addition to describing the rich as “hard-working,” conservatives also have the regular habit of describing them as “productive.” Gregory Mankiw describes Obama’s plan to make the tax code more progressive as allowing a person to “lay claim to the wealth of his more productive neighbor.” In the same vein, George Will laments that progressive taxes “reduce the role of merit in the allocation of social rewards—merit as markets measure it, in terms of value added to the economy.” The assumption here is that one’s income level reflects one’s productivity or contribution to the economy.
Is income really a measure of productivity? Of course not. Consider your own profession. Do your colleagues who demonstrate the greatest skill unfailingly earn the most money, and those with the most meager skill the least money? I certainly cannot say that of my profession. Nor do I know anybody who would say that of his own line of work. Most of us perceive a world with its share of overpaid incompetents and underpaid talents. Which is to say, we rightly reject the notion of the market as the perfect gauge of social value.
Now assume that this principle were to apply not only within a profession—that a dentist earning $200,000 a year must be contributing exactly twice as much to society as a dentist earning $100,000 a year—but also between professions. Then you are left with the assertion that Donald Trump contributes more to society than a thousand teachers, nurses, or police officers. It is Wall Street, of course, that offers the ultimate rebuttal of the assumption that the market determines social value. An enormous proportion of upper-income growth over the last twenty-five years accrued to an industry that created massive negative social value—enriching itself through the creation of a massive bubble, the deflation of which has brought about worldwide suffering.
If one’s income reflects one’s contribution to society, then why has the distribution of income changed so radically over the last three decades? While we ponder that question, consider a defense of inequality from the perspective of three decades ago. In 1972, Irving Kristol wrote that
Human talents and abilities, as measured, do tend to distribute themselves along a bell-shaped curve, with most people clustered around the middle, and with much smaller percentages at the lower and higher ends. . . . This explains one of the most extraordinary (and little-noticed) features of 20th-century societies: how relatively invulnerable the distribution of income is to the efforts of politicians and ideologues to manipulate it. In all the Western nations—the United States, Sweden, the United Kingdom, France, Germany—despite the varieties of social and economic policies of their governments, the distribution of
income is strikingly similar.
So Kristol thought the bell-shaped distribution of income in the United States, and the similarly shaped distributions among our economic peers, proved that income inequality merely followed the natural inequality of human talent. As it happens, Kristol wrote that passage shortly before a boom in inequality, one that drove the income share of the highest-earning 1 percent of the population from around 8 percent (when he was writing) to 24 percent today, and which stretched the bell curve of the income distribution into a distended sloping curve with a lengthy right tail. At the same time, America has also grown vastly more unequal in comparison with the European countries cited by Kristol.
This suggests one of two possibilities. The first is that the inherent human talent of America’s economic elite has massively increased over the last generation, relative to that of the American middle class and that of the European economic elite. The second is that bargaining power, political power, and other circumstances can effect the distribution of income—which is to say, again, that one’s income level is not a good indicator of a person’s ability, let alone of a person’s social value.
The final feature of Randian thought that has come to dominate the right is its apocalyptic thinking about redistribution. Rand taught hysteria. The expressions of terror at the “confiscation” and “looting” of wealth, and the loose talk of the rich going on strike, stands in sharp contrast to the decidedly non-Bolshevik measures that they claim to describe. The reality of the contemporary United States is that, even as income inequality has exploded, the average tax rate paid by the top 1 percent has fallen by about one-third over the last twenty-five years. Again: it has fallen. The rich have gotten unimaginably richer, and at the same time their tax burden has dropped significantly. And yet conservatives routinely describe this state of affairs as intolerably oppressive to the rich. Since the share of the national income accruing to the rich has grown faster than their average tax rate has shrunk, they have paid an ever-rising share of the federal tax burden. This is the fact that so vexes the right.
Most of the right-wing commentary purporting to prove that the rich bear the overwhelming burden of government relies upon the simple trick of citing only the income tax, which is progressive, while ignoring more regressive levies. A brief overview of the facts lends some perspective to the fears of a new Red Terror. Our government divides its functions between the federal, state, and local levels. State and local governments tend to raise revenue in ways that tax the poor at higher rates than the rich. (It is difficult for a state or a locality to maintain higher rates on the rich, who can easily move to another town or state that offers lower rates.) The federal government raises some of its revenue from progressive sources, such as the income tax, but also healthy chunks from regressive levies, such as the payroll tax.
The sum total of these taxes levies a slightly higher rate on the rich. The bottom 99 percent of taxpayers pay 29.4 percent of their income in local, state, and federal taxes. The top 1 percent pay an average total tax rate of 30.9 percent—slightly higher, but hardly the sort of punishment that ought to prompt thoughts of withdrawing from society to create a secret realm of capitalistic übermenschen. These numbers tend to bounce back and forth, depending upon which party controls the government at any given time. If Obama succeeds in enacting his tax policies, the tax burden on the rich will bump up slightly, just as it bumped down under George W. Bush.
What is so striking, and serves as the clearest mark of Rand’s lasting influence, is the language of moral absolutism applied by the right to these questions. Conservatives define the see-sawing of the federal tax-and-transfer system between slightly redistributive and very slightly redistributive as a culture war over capitalism, or a final battle to save the free enterprise system from the hoard of free-riders. And Obama certainly is expanding the role of the federal government, though probably less than George W. Bush did. (The Democratic health care bills would add considerably less net expenditure to the federal budget than Bush’s prescription drug benefit.) The hysteria lies in the realization that Obama would make the government more redistributive—that he would steal from the virtuous (them) and give to the undeserving.
Like many other followers of Rand, John Allison of BB&T has taken to claiming vindication in the convulsive events of the past year. “Rand predicted what would happen fifty years ago,” he told The New York Times. “It’s a nightmare for anyone who supports individual rights.” If Rand was truly right, of course, then Allison will flee his home and join his fellow supermen in some distant capitalist nirvana. So perhaps the economic crisis may bring some good after all.
Jonathan Chait is a senior editor at The New Republic.