Blame It On Ayn Rand

Dworkin, Leiter, and Wilkinson are All Off the Mark;
"Blame It On Ayn Rand"

First, from today's NY Times, Jerry Dworkin (UC Davis) writes:

"For more than a decade, the former Federal Reserve Chairman Alan Greenspan has fiercely objected whenever derivatives have come under scrutiny in Congress or on Wall Street. [ ]

An examination of more than two decades of Mr. Greenspan’s recordon financial regulation and derivatives in particular reveals the degree to which he tethered the health of the nation’s economy to that faith. [ ] Time and again, Mr. Greenspan — a revered figure affectionately nicknamed the Oracle — proclaimed that risks could be handled by the markets themselves. [ ]

"Put this together with Keynes:
” . . . the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back." and we get Ayn Rand as an important cause of the catastrophe we are in."

As it turns out, Brian Leiter of the Leiter Reports http://leiterreports.typepad.com/blog/2008/10/jerry-dworkin-1.html quoted Dworkin, after which Will Wilkinson http://www.willwilkinson.net/flybottle/2008/10/10/blame-it-on-ayn-rand/ criticizes blaming it on Ayn Rand as the recipient of Keynes' "wisdom," claiming, "Surely the problem is that we didn’t Keynes it up enough! But Ayn Rand… Now there’s the intellectual force behind the status quo structure of American monetary and regulatory policy!"

Wilkinson was poo-pooing the ability of Ayn Rand to be behind anything, when, by calling her "the intellectual force behind" it all, is dismissive of Rand's intellectual ability to be of any force behind anyone or anything that matters. The problem was, he improperly attributed all of this to Leiter instead of to Dworkin.

So then,

Leiter had to write: "Will Wilkinson, a former philosophy graduate student and libertarian zealot, has ripped into

Jerry Dworkin's attributing Greenspan's disastrous economic policies to the influence of the pseudo-philosopher Ayn Rand as mere "hackery" (though Wilkinson attributes the offending view and the "hackery", oddly, to me, a "professional philosopher").

"Some philosophers may know Mr. Wilkinson from his all-too-frequent appearances on Blogging-Heads TV. I think BHTV is great, but they really need to have better interlocutors for the philosophers on the show. And I certainly think Jerry Dworkin's point in the original post was apt."

So then, Wilkinson went back to his posting and crossed off "Leiter" replacing it with "Dworkin," after which he created a new posting which he titled: "Blame It on Gerald Dworkin for Blaming It on Ayn Rand."

In the second posting Wilkinson writes: "Both Dworkin and Leiter are very interested in the fact that I left grad school in philosophy, but neither has anything intelligent to say in defense of Dworkin’s risible claim about the roots of the financial crisis — a causal claim that has nothing much to do with philosophy. Leiter adds with his typical threatening charm that I am incompetent to interview philosophers on Bloggingheads TV. It’s interesting that none of the philosophers I have interviewed have given any indication of my incompetence, and clearly that can’t be because philosophers are especially gracious as a class. If either Dworkin or Leiter would like to appear on Free Will and discuss Ayn Rand, the causes of the collapse of the financial system, or any other topic, I would be delighted to have them on. If I fail to keep up competently with either of these genuinely accomplished scholars, they will be able to expose my failings in real time. I really mean this. Here is the invitation… Prof. Leiter, Prof. Dworkin: I would very much like to have a civil discussion with each of you on a set of topics of your choosing. But I would especially like to explore your thoughts on the role of ideology as a cause of the financial crisis."

But as you will notice, Wilkinson had nothing "intelligent to say [about] Dworkin’s risible claim about the roots of the financial crisis." What Wilkinson had to say the first time around was not intelligent. Whether the reader cares for Rand or not, she has influenced more economists, philosophers, and world leaders than can be named. Alan Greenspan was one of them.

I cannot speak to whether or not Greenspan's "faith" in the free market had anything to do with the impending fall of Wall Street and the irresponsible actions of Freddie and Fannie. I heard credible reports that ACORN [see Obama, Character, and American Exceptionalism] had much to do with forcing Freddie and Fannie to act in the irresponsible manner they did, by using their well-known tactics of harrassment to get mortgages for low-income people who should not have been able to otherwise buy homes.

The fact is, as a Randian myself, as on Objectivist, I do not see the objectibility in Objectivism's principles to tell business to "put its money where its mouth is," meaning, that accounting practices and owning enough capital in one form or another to back up the business dealings that businesses make with each other and for the benefit of stockholders.

In fact, Rand wrote: "There are, in essence, three schools of thought on the nature of the good: the intrinsic, the subjective, and the objective. The intrinsic theory holds that the good is inherent in certain things or actions as such, regardless of their context and consequences, regardless of any benefit or injury they may cause to the actors and subjects involved. It is a theory that divorces the concept of “good” from beneficiaries, and the concept of “value” from valuer and purpose—claiming that the good is good in, by, and of itself. “What Is Capitalism?” Capitalism: The Unknown Ideal

Making law that divorces the stockholders and other beneficiaries from the obligations owed them by those in whom they give their money is not objective.

She also wrote: "Money cannot function as money, i.e., as a medium of exchange, unless it is backed by actual, unconsumed goods. “Hunger and Freedom,” The Ayn Rand Letter, III, 22, 3. The "mark to market" accounting rule [see A Shattering Moment in America's Fall from Power] took consumed goods and devalued them.

Rand's own economic ideas were based on the concepts of Ludwig von Mises, insofar as she understood them. She was anti-Keynesian. Keynes wrote a book, "Economic Consequences of the Peace", "a book forecasting the economic consequences of the Versailles Treaty. French Economist Etienne Mantoux demonstrated in 1944 that Keynes was wrong in his details as well as his central thesis.

"Keynes predicted that, as a result of the Treaty, iron and steel production in Europe would decline; it rose. He predicted that German pre-war coal output could not be sustained; it was. He predicted that Germany could not export coal; it did. He predicted that the German merchant marine would be insufficient for Germany's trade; by 1924 it was the envy of the world. He predicted that Germany's amount of savings could not recover to its pre-war level; it did. In other words, Keynes was wholly wrong about the strictly economic consequences of the Versailles Treaty." Ludwig von Mises Institute http://mises.org/story/24

"One important message in the writings of both Ludwig von Mises and Henry Hazlitt, is that ideas had consequences, and that the future of freedom will depend on an improved understanding of free market ideas. 'Rand picked up that challenge and attempted to provide economic enlightenment to her readers through the story of Atlas Shrugged.' (Boettke, 452) During his years of teaching, Peter J. Boettke frequently used the book as a teaching tool, comparing the economic ideas it taught with those in John Steinbeck's Grapes of Wrath.

[Boettke wrote:] "Rand makes the very important point that the critique of socialism was never against rational planning per se. Rather the question was who was to do the planning and the scope and the scale of the planning proposed." (459–60) [italics added]

"In his massive treatise, Capitalism, George Reisman attempted to synthesize the teachings of Rand, Mises, and Ricardo. Here he deals with only one point. According to Reisman, Mises's "support of 'utilitarianism' and his efforts to make the case for capitalism in terms of its utility. . . . does indeed meet the test of Man's life as the standard." Therefore, Mises and Rand are in agreement on "Man's life as the standard of value." (253) And Reisman gives Mises credit for "defending the most important of all objective [italics added] values—the individual's freedom." (255)

"When Mises read Atlas Shrugged, he was so impressed by her criticism of bureaucrats that he wrote her a "fan letter": Atlas was "not merely a novel. It is also—or may I say first of all—a cogent analysis of the evils that plague our society, a substantiated rejection of the ideology of our self-styled 'intellectuals' and a pitiless unmasking of the insincerity of the policies adopted by governments and political parties. It is a devastating exposure of the 'moral cannibals,' the 'gigolos of science' and of the 'academic prattle' of the makers of the 'anti-industrial revolution.' You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you." (Reisman, 356)

LvM Institute. http://mises.org/story/1790

Do not try to convince Randians, or Objectivists, or Libertarians, that Ayn Rand's ideas are inconsequential, and do not be "dismissive of Rand's intellectual ability to be of any force behind anyone or anything that matters."

Note: I will be the featured speaker at the Center For Inquiry (CFI) meeting, October 16, 2008, in Portage, Michigan. The topic is "Atheism as a 'Religion' Protected by Courts According to the Establishment Clause" CEC


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American Socialism Is Upon Us

"Capitalism and markets [ ] are all inherently about self-interest and the pursuit of profit," said Dr. Yaron Brook. "Capitalism encourages and enables selfishness, and as long as our culture looks at profit and self-interest as vices, [ ] big government will always be preferred to free markets." [italics added] "Why Big Government Is Back, and How to Shrink It to Its Proper Size"

http://www.aynrand.org/site/MessageViewer?dlv_id=41441&em_id=44383.0&JServSessionIdr001=efh7ehivs1.app7a

This might be a surprising perspective to many people. But it really is surprising only to capitalists who simply want to earn a living--perhaps a big living, but a living that is ruled by nothing but proper market ethics and proper ethical treatment of his or her consumers. And I am one of those to whom it is a surprising perspective.

I should not be surprised. I know full well that the market situation we are currently in was caused by zealous, not ethical, pursuit of the dollar. There is a difference. We expect the neighborhood butcher, farm co-op, or shoe store to treat the community with a high standard of ethics. To do otherwise would be to risk negative letters-to-the-editor in the newspaper, and maybe an investigation by the local TV affiliate, if the situation warrants it. Consumers who feel bent out of shape by the way they were treated locally often sue.

But on the larger scale, in the bigger market places, we all know that ethics tend to become fuzzy, or even misplaced once a rule of ethics is broken the first time and not caught. The big markets can usually fend off attacks by angry customers, unless the business is WalMart or something similar. WalMart is expected to be all things to all people; that is how it grew to be so large. Big selection plus big inventory equals low low prices; that is what constitutes "all things to all people" most of the time.

But Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, explained why the reasons for the resurgence of big government are due, "not to any alleged failures of the market, but to a longtime cultural hostility to its moral basis: the selfish pursuit of profit."

We as Americans have lived with the idea of socialism long enough that most of us do not see how its operating principles-if they can be called "principled"--have crept into our nation's politics, policies, and regulations. In the Treasury Department's U.S crazy scheme to save Wall Street but they included this in big, huge piece of socialist nationalism in section 8: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." [emphasis added] [see The Last Nail in the American Fascist Takeover ]

John McCain may not be the best candidate for President. He may not make a good President if he wins. But he was calling for an investigation of the Wall Street/bank/mortgage situation since 2004. President Bush, believe it or not, had been calling for an investigation since 2002, sensing trouble along the way, and McCain and a few others saw it too.

Barney Frank and other Democrats refused to see it, and Frank specifically stated that all was fine and dandy, there was nothing wrong with the bank/mortgage markets, that Fannie Mae and Freddie Mac were sound as a whistle and there was no need for any investigation.

Literally every Democrat voted against such an investigation, and virtually all Republicans voted for such an investigation. Now that the Democrats want to go tripping merrily down the lane hand in hand with the Treasury Department and the Fed, and the Republicans have rightly condemned such methods as "socialist."

"The free market for all intents and purposes is dead in America," said Sen. Jim Bunning, (R) Kentucky. "The action proposed today by the Treasury Department will take away the free market and institute socialism in America. The American taxpayer has been misled throughout this economic crisis. The government on all fronts has failed the American people miserably." McClatchy http://www.mcclatchydc.com/244/story/52804.html

"A new chapter of the presidential legacy of George W. Bush has now become clear: He, of all people, will inevitably go down as the president who brought socialism to the citadel of capitalism -- Wall Street." seattlepi.com http://seattlepi.nwsource.com/opinion/380223_schramonline24.html

On the other hand, Stephen Griffin of Balkin.com wrote: "'State socialism' implies a one-party state, and is not democratic. 'Democratic socialism' assumes multiple political parties and thus electoral democracy, although such a state may be 'corporatist' in assuming that economic policy should be determined through bargaining among bureaucrats and organizations of labor and capital." http://balkin.blogspot.com/2008/09/why-bailout-isnt-socialist.html

So much for logic on the other side of the philosophical isle. "Socialism" is defined as government control of privately owned property, whether market-oriented or of private orientation, such as home ownership.

Not important "in such a process of transfer is the traditional terminology of Law," wrote Ludvig von Mises, the Austrian economist, in 1922 in his book "Socialism: An Economic and Sociological Analysis." It must be stated that economic terminology has changed since this was written. He said in his book, "It is the aim of Socialism to transfer the means of production from private ownership to the ownership of organized society, to the State." However, this is now the definition of Communism, since the Soviet system demonstrated such ownership to the world. But what von Mises describes further is exactly what has been "creeping" into our nation's economy, sometimes more, sometimes less, than in other so-called capitalist nations.

"Ownership is power of disposal," he further wrote, which is the purposeful end of the Treasury's proposed legislation, "and when this power of disposal is divorced from its traditional name and handed over to a legal institution which bears a new name, the old terminology is essentially unimportant in the matter. Not the word but the thing must be considered. Limitation of the rights of owners as well as formal transference is a means of socialization." [italics added]

So according to von Mises, Stephen Griffin is dead wrong. The power of disposal is the name of the game, not the fact that some "democratic" means was used to divorce the power of disposal. Democracy without absolute protection for individual sovereignty in a nation where the power is invested in government through the use of the transference of individual liberty to what is called "common sovereignty." No individual was ever asked within the boundaries set by the Constitution to give up so much of his/her own sovereignty that "common sovereignty" became democratic socialism.

"Individual sovereignty was not a peculiar conceit of Thomas Jefferson: It was the common assumption of the day." Joseph J. Ellis http://www.friesian.com/ellis.htm

"Dr. Brook also made the point that capitalism has always been defended pragmatically, on the basis that it creates wealth and economic growth--which it does; but it’s time, he said, to defend capitalism on principle, on the basis of its morality, on the basis that it protects the rights of individuals to pursue their own values and allows them freedom to act in their own self-interest."

And we must, at the same time, prevent lobbyists from donating any money or goods or services to any legislator, and at the same time hold all corporations and other businesses to a standard that prevents profit and self-interest as vices.

Every small business owner understands that the economic need for profit, and the same economic as well as psychological needs for self-interest, do not allow for the disintegration of ethics.

Neither does the actual disintegration of ethics give cause or proper power to legislators to reduce individual sovereignty in the name of common sovereignty.

No American ever voted to change the name of this nation to the People's Republic of the United States of America.

[Dr. Brook’s talk is available for free at: http://www.aynrand.org/site/PageServer?pagename=reg_ls_big_government]