Atlas Shrugged: The New Deal

Atlas Shrugged, part I, chapter X

Dagny and Hank have set out to track down the owner of the defunct Twentieth Century Motor Company factory, crisscrossing the country in the hope of digging up an employee list that will help them find the inventor of the magic motor they discovered there. But this, as they soon discover, is a Sisyphean task.

They’re able to establish that the man who built the factory and the surrounding town of Starnesville is one Jed Starnes, who died twelve years ago. But its history ever since then is a seemingly endless string of fly-by-night shell companies, legal quagmires, shady owners who bought the factory just to strip it for scrap, and even, as they find from a clerk at the county seat, missing government records:

“Can you give us the names of all the owners since [Starnes]?”

“No, sir. We had a fire in the old courthouse, about three years ago, and all the old records are gone. I don’t know where you could trace them now.” [p.274]

An unfortunate accident, to be sure. Now, as we learned earlier, even Rand’s ideal small-government libertopia would make allowances for law courts, since presumably you have to record things like the sale of a business. On the other hand, one thing Rand notably doesn’t allow for is fire departments – let alone regulations requiring buildings to have things like sprinkler systems or fireproof doors. (It probably wasn’t an accidental omission, as other libertarians have argued that fire departments should be privatized.)

Did that courthouse burn down because it was of shoddy, unsafe construction and there was no one to stop the fire once it started? Just think, if Randworld had had a slightly more activist government, Dagny and Hank might have been able to find John Galt with no trouble at all!

The clerk is able to give them the name of just one past owner, Mayor Bascom of Rome, Wisconsin, who bought the factory at a bankruptcy sale after it was shut down. Dagny and Hank hasten to meet him:

“Whose bankruptcy sale was it, when you bought the factory?”

“Oh, that was the big crash of the Community National Bank in Madison. Boy, was that a crash! It just about finished the whole state of Wisconsin – sure finished this part of it. Some say it was this motor factory that broke the bank, but others say it was only the last drop in a leaking bucket, because the Community National had bum investments all over three or four states. Eugene Lawson was the head of it. The banker with a heart, they called him.” [p.276]

We’ll hear more about the banking industry later in this chapter, but for now, let’s just linger on this one point: Rand ludicrously imagines that bank failures are caused by bankers being too nice and making bad loans to people because they feel sorry for them. In reality, bank failures and panics are invariably caused not by an excess of compassion, but by an excess of greed: bankers making ever-riskier loans because they’re chasing ever-higher profits, until the bubble finally bursts.

“When the factory busted, that was the last straw for Gene Lawson. The bank busted three months later.” He sighed. “It hit the folks pretty hard around here. They all had their life savings in the Community National.”

Mayor Bascom looked regretfully past his porch railing at his town. He jerked his thumb at a figure across the street: it was a white-haired charwoman, moving painfully on her knees, scrubbing the steps of a house.

“See that woman, for instance? They used to be solid, respectable folks. Her husband owned the dry-goods store. He worked all his life to provide for her in her old age, and he did, too, by the time he died – only the money was in the Community National Bank.”

This is an exceedingly strange point for Ayn Rand to make. She appears to be saying that even if you do everything right in her eyes – if you’re a good capitalist, if you work all your life, if you save diligently for retirement – you can still be wiped out and left penniless in your old age if the bank you put your life savings in happens to go bust. In other words, and apparently without noticing she’s doing so, Rand is making a strong case for federal deposit insurance.

This has nothing to do with whether a bank is run by good capitalists or bad looters. The only way for a bank to make a profit is to accept deposits and then loan that money out at interest. But because most of a bank’s deposits are tied up in investments at any one time, if everyone wants to take their money out at the same time, the bank won’t be able to satisfy them all. No bank, however well managed, can withstand a bank run; their business model depends on this never happening. It can even become a self-fulfilling prophecy, as the mere rumor of a bank collapse sends everyone rushing to the tellers at once.

In our world, panics and bank runs were a regular feature of the economy until the Glass-Steagall Act of 1933, which among other things established the Federal Deposit Insurance Corporation to guarantee the safety of customer deposits. Since the creation of the FDIC, bank collapses have been much rarer, and the ones that do collapse are seized and unwound in an orderly way so they don’t touch off panics. Rand chose to erase that from history in the world of her book, presumably because it would’ve been awkward for her argument if the government had stepped in to make whole the Community National Bank’s depositors and prevent total economic devastation in Wisconsin.

Also, you know what else would have saved that poor charwoman from an old age of toil? A transfer system where the government deducts taxes from a person’s paycheck during their working years, holds the money safely in a trust fund, and redistributes it back to them in their old age. This guarantees the elderly a minimum level of income and keeps them from total destitution. Of course, in the real America, this system exists and is called Social Security. Once again, Rand scrubbed that from her book.

It’s no coincidence that Rand rewrites history to wipe out the FDIC and Social Security. Those highly effective government programs were both part of the New Deal, instituted by President Franklin Delano Roosevelt, whom Rand despised. According to Jennifer Burns’ Goddess of the Market, she wrote in one letter: “My feeling for the New Deal is growing colder and colder. In fact, it’s growing so cold that it’s coming to the boiling point of hatred”. She devoted extensive time to volunteering for the campaign of his Republican opponent Wendell Willkie, whom Roosevelt trounced in the 1940 election.

But I think it’s more than a personal dislike for FDR that drove her to excise his greatest achievements from the timeline of her book. It runs deeper than that: her philosophy requires the government to be wholly evil, incapable of doing anything to improve people’s lives. Thus, when presented with evidence to the contrary – evidence of good things that government has actually done, things that benefit people and make the economy more stable – Rand has no choice but to refuse to acknowledge their existence.

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  • David Andrew Kearney

    The courthouse burned down! Ha! What lazy plotting. That’s a stock plot point which made an appearance in I Love Lucy, of all places — I wonder if that’s where she got if from?

    I wonder if she read much Sinclair Lewis — Mayor Bascom sounds an awful lot like Babbitt. I remember years ago, when I read It Can’t Happen Here, I thought there were similarities between it and Atlas Shrugged. Unfortunatly I can’t remember the details. Still, despite her fans insistance on her originality, it’s just not there. (Antham is another example — Zamyatin’s We is very, very similar.)

    She must have been very disappointed by Wilkie. He was a pretty liberal Republican.

  • eyelessgame

    From what I’ve heard (I have had the misfortune to read some of the screeds from later in the book) Frankie d’A goes on a rant about how people should only ever use gold coins, and eschew paper money (even backed by gold) or bank notes. So I think this implies she would have argued everyone should be working for gold coins and storing them under their mattress, because that’s clearly the perfect society. There’s a reason that ‘droids are goldbugs. They do have a solution to bank runs; it’s just that the solution fails to understand anything like the basics of modern economy.

  • GubbaBumpkin

    Did that courthouse burn down because it was of shoddy, unsafe
    construction and there was no one to stop the fire once it started?

    Or perhaps it was arson. This John Galt character doesn’t seem to want to be found.

  • Lagerbaer

    The libertarian naively thinks that if a Fire Department was run by a private company, that company would, through their desire to make money, provide the best service fore the lowest price.

    What they don’t realize is that a business may decide that certain things aren’t profitable enough and thus not worth doing at all: Why rush to extinguish a fire in a poor neighbourhood when those looters can’t pay up? Or what if someone’s house starts burning but they choose not to have it extinguished for whatever reason? Does the privatized fire department then wait until the fire jumps over to other houses, whose owners then pay for having their houses saved but not that other house? What if my house burns and I don’t call the fire department in the hopes that my neighbour will do (and pay) to prevent it from spreading to his house?

    Privatization makes sense where competing businesses will be good for the consumers, where it is ensured that essential services remain available, and where there is a clearly defined relationship between who purchases the service and who benefits from it. All 3 are violated by the idea of privatizing a fire department.

  • GCT

    Here’s (partial) privatization of a fire department in action:

    http://www.nbcnews.com/id/39516346/ns/us_news-life/t/no-pay-no-spray-firefighters-let-home-burn/#.UuKTRBAo5lY

    They just let the house burn down and protected the house next door since the neighbor had paid up.

  • fuguewriter

    > Rand notably doesn’t allow for … fire departments

    Again the erroneous premise that “Atlas Shrugged” is a complete blueprint for everything one should do. She doesn’t say anything about water distribution systems or implied warranty or insider trading – these are not notable omissions, either. Also, on a deeper level – and this goes to all issues of welfare too – she held philosophically one cannot start or focus on a negative, a problem, a disaster – see http://aynrandlexicon.com/lexicon/emergencies.html in part. This is one reason government is secondary in her system.

    > other libertarians have argued that fire departments should be privatized.

    Rand would argue fire departments should be private.

    > … imagines that bank failures are caused by bankers being too nice and making bad loans to people because they feel sorry for them.

    Overgeneralization. Again, Lawson is not the blueprint of EveryBanker. If you look at the professed political reasons for such things as FNMA, FHA, etc. – purportedly making housing affordable, etc. – you see there’s something in what she says.

    > bank failures and panics are invariably caused not by an excess of compassion, but by an excess of greed

    This is economic ignorance. Study the history of every bank panic, mass bank failure, and depression in the history of this country and you’ll find complex causal factors. “Greed” is the cover-all Devil when we don’t want to look at what’s really going on.

    > bankers making ever-riskier loans because they’re chasing ever-higher profits, until the bubble finally bursts.

    Educate thyself: https://en.wikipedia.org/wiki/Panic_of_1837 , https://en.wikipedia.org/wiki/Panic_of_1857 , https://en.wikipedia.org/wiki/Panic_of_1873 , etc.

    > even if you do everything right in her eyes – if you’re a good capitalist, if you work all your life, if you save diligently for retirement – you can still be wiped out and left penniless in your old age if the bank you put your life savings in happens to go bust.

    In a corrupt society. Of course, risk is always possible – ask the holders of bonds issued by governments that went out of existence in World Wars – but as ever you overweight the negative. The quest for perfect safety is illusory.

    > In other words, and apparently without noticing she’s doing so, Rand is making a strong case for federal deposit insurance.

    No, for a non-corrupt society.

    > The only way for a bank to make a profit is to accept deposits and then loan that money out at interest.

    I believe you need to work in banking a bit. Not all banking is deposit banking, by a long shot.

    > if everyone wants to take their money out at the same time, the bank won’t be able to satisfy them all.

    Under the fractional-reserve model, yes. One reason why most Austrians uphold a gold standard and 100% reserves. In that situaiton, one source of real return on savings is very gradually, smoothly fallng prices in the economy at large. Under real money, cash is a slowly appreciating asset due to innovation and efficiency in the greater economy. No speculation needed.

    > bank collapses have been much rarer

    What you don’t understand is that there are much worse things than bank collapses, like the moral hazard [ https://en.wikipedia.org/wiki/Moral_hazard ] , which is one of *the* main problems of our age. If a speculative overhand happens, there should be bank collapses to clear the system of non-working structures. What we have now are zombie banks holding useless trillions and a debased monetary base.

    > Social Security.

    An unsustainable nightmare.

    > Rand scrubbed that from her book.

    On the contrary, Rand played out that system’s premises on a grand scale. Social Security will be of no use if the value of the (illusory) trust fund is steadily eroded as it has been. No actuarial wisdom in there – they did not even provide for declining fertility or increased age.

    > her philosophy requires the government to be wholly evil, incapable of doing anything to improve people’s lives.

    Incorrect. She is not an anarchist.

    ( Since the mods have been pick-and-choose about allowing my responses up, commenters may or may not see my replies.

  • Chris

    Ancient Rome had private fire departments as well. This only provided avenues for corruption. Fires were started to “create” business. Two or more companies would show up at a fire and argue over who had the right to put it out (while the structure continued to burn). Or, the FD would arrive at a burning business, find the owner, and demand that he sell the business/building to the FD for pennies on the dollar, else they’d let it burn to the ground.

  • Shawn

    Maybe it’s lazy plotting, but courthouses actually did have a pretty bad track record of catching fire, especially before the 1960s and modern lighting/fire codes. I don’t know exactly if they are more prone to burning than other public buildings or if it was just more annoying when it happened. Many of the counties that I’ve practiced law in (in Texas) have a plaque in front of their courthouse noting the various times throughout history that it was burned down and rebuilt. I’ve always sort of wondered about that. Anyway, considering everything else that happens in this book, it’s reasonably plausible.

  • Nancy McClernan

    It should be noted that the government in Atlas Shrugged barely exists in any capacity, so we shouldn’t be surprised if it fails to provide a social safety net. And that includes even the military, which is so incompetent it can’t catch or even slow down Ragnar Danneskjold, who is sailing the high seas of the Atlantic Seaboard stealing government property at will. And Rand approved of the military.

    We know that the US in the world of Atlas Shrugged is a democracy, which is why Kip Chalmers kills himself trying to get to a voter rally, and it does have zoning laws, which is why it was necessary for Dagny and friends to bribe and threaten local officials for the sake of a high-speed train ride, and why the shithole that Dagny rents is partially condemned. And finally we know it exists because it pops out a silly bill (“Anti-Dog Eat Dog”) whenever the AS heroes need to be temporarily thwarted.

    Which is another reason why Atlas Shrugged fails, utterly, as a socio-economic critique. She isn’t criticizing any actual, functioning government as we know them on planet Earth, she is criticizing a government that exists merely as a plot device.

    And a goodly number of Libertarians and Republicans actually take the novel seriously as telling us something about the world we live in now. It staggers the mind.

  • Nancy McClernan

    Just think, if Randworld had had aslightly more activist government, Dagny and Hank might have been able to find John Galt with no trouble at all!

    Or Frankie d’A (hat tip to eyelessgame) could have just told them. Does anybody remember what reason was given for why Dagny wasn’t included with the titans of industry whom John Galt contacted? Especially since she was d’Anconia’s girlfriend at the time they hatched the going Galt scenario?

    Other than of course the obvious reason that it was needed for the plot.

  • Nancy McClernan

    Rand greatly admired Lewis, especially It Can’t Happen Here.

    And it certainly wouldn’t be the first time Rand borrowed elements of other author’s work.

  • ZMiles

    Basically, that they knew she wasn’t ready to join them yet–if they told her their secret, she’d rebuff them and keep on trying to run her railroad. So they’d be leaking their existence for nothing.

    We’ll see this later on when Dagny does learn about them but chooses to keep on fighting for her railroad anyway.

  • nfq

    That’s what I assumed when I read the book.

  • jo1storm

    Oh, I remember that news item. And I remember discussion I had at JREF forum (under username clown). You’ll be surprised at the number of people and even greater amount of their arguments that fire department did the right thing. I have never seen such a lack of empathy before in my whole life (I was pretty new to the internet forums then). The amount of people that said “No pay, no spray” was staggering and I just couldn’t explain to them that fire department provides a public good that under no circumstances can be private. here’s link http://forums.randi.org/showthread.php?t=187581&page=4

  • GubbaBumpkin

    Maybe she wasn’t sufficiently sociopathic to meet their standards.

  • David Andrew Kearney

    One thing I’d really like to know is what exactly Galt *said* during those private talks with the various merchant princies. Oh, wait, I already know — it’s Galt’s speech

    Somewhere (the Atlantic?) a critic said that (s)he thought the novel was Gnostic, and I have to agree. Rand writes things in such a way that she seems to expect the reader to know what she’s talking about, but I, at least, don’t have a clue.

    She wants to be this totally original philosopher influenced by no one save Aristotle; but at the same time, she wants all her philosophical enemies (Plato, Hume, Kant, Ellsworth Toohey) to secretly know the Truth yet work actively against it. If there really had been this 2500 year conspiracy of silence, Rand wasn’t original after all. The only thing she can take credit for is saying the emperor had no clothes.

  • David Andrew Kearney

    I know I’m getting ahead of the story, but at the mention of the Chalmers:

    I love how later Ma Chalmers is portrayed as a lunitic for pushing soybeans, as if soybeans are the most hairbrained scheme ever. Now, it’s hard to find anything prepackaged without any soy in it.

  • Nancy McClernan

    Yeah but John Galt works for Dagny (incognito) and is always stalking her and loving her from afar – as he later admits to her down in the Gulch.

  • Nancy McClernan

    Which emperor had no clothes?

    And another issue – although d’Anconia and Dagny knew each other since childhood and were lovers during college, and even though d’Anconia was Galt’s BFF in college, he somehow manages to never mention his name even once to Dagny.

  • Nancy McClernan

    I’m sure that’s another “prophecy” that Randroids believe has been fulfilled by Atlas Shrugged. They swear that our present society is what Rand warned us about.

    This piece in Psychology Today is fairly incoherent but she does sound like she’s suggesting that Rand was prophetic about soybeans:

    Ayn Rand is in the news once again. The documentary Ayn Rand and the Prophecy of Atlas Shrugged was released in the movie theaters this month and Atlas Shrugged Part II is set for release next fall. This has led me to reread Ayn Rand’s epic novel, and to think about all that’s being done to our food supply “for our own good.” Indeed we are already seeing disastrous effects on personal and planetary health from Big Brother’s wasteful and corrupt subsidies of corn, soy, wheat, dairy, and Big Pfood; from the increasing control over small, local and independent farmers through orders, directives, restrictions, and police actions; and, ever growing restrictions on what families can choose to eat and feed their children.

    http://www.psychologytoday.com/blog/naughty-nutrition/201204/atlas-shrugged-and-project-soybean

    She seems to conflate corporate agribusiness with government nutrition standards. Standard libertarian inanity.

  • Highlander

    There is a reason that gold is not the standard anymore, there is simply no means of controlling it’s value apart from hording it. In the past 40 years gold has fluctuated in value from just over $100/ozt in 1976 to just under $2000/ozt in 2012. Just in the last year gold has lost about 30% of it’s value, which would have been enough to cause a recession had we been on a gold standard.
    The old saw is that time is money, and it’s an old saw because it is so true. The only resource people have is their time, every person has exactly the same amount of time in each day of their lives, and there is no way to get more time in each day. Some people have more days than others of course, and some are more efficient with their time than others, but no one has more time in their day than anyone else. How we use our time to gather and consume things of value is measured with money. Some expenditures of time can be quite valuable, or quite costly depending on what they are. When you earn money, you are essentially storing up time, yours or someone else’s who has been willing to trade or give theirs to you. Imagine now, if you will, that from one day to the next you had no idea how much time you would have in a day. How do you plan? How do you make smart decisions? This is an economy on the gold standard.

  • arensb

    Yeah: fiat currency is volatile and unreliable because the only reason a dollar is worth a dollar is because everybody says so. Contrast this with gold, which is valuable because everybody agrees that it’s valuable.

  • Nancy McClernan

    So if they told her their secret it wouldn’t make any difference either way in her response, so why did Francisco d’Anconia have to be celibate for 8 years for nothing?

  • Nancy McClernan

    Overgeneralization. Again, Lawson is not the blueprint of EveryBanker. If you look at the professed political reasons for such things as FNMA, FHA, etc. – purportedly making housing affordable, etc. – you see there’s something in what she says.

    LOL – rightwingers never get tired of promoting the zombie idea that Fanny and Freddy caused the 2008 meltdown.

    Krugman:

    …there we go with the “Barney Frank did it” story. Deregulation, the explosive growth of virtually unregulated shadow banking, lax lending standards by loan originators who sold their loans off as soon as they were made, had nothing to do with it — it was all the Community Reinvestment Act, Fannie, and Freddie.

    Look, this is one of the most thoroughly researched topics out there, and every piece of the government-did-it thesis has been refuted; see Mike Konczal for a summary.

    http://rortybomb.wordpress.com/2011/11/01/bloombergs-awful-comment-what-can-we-say-for-certain-regarding-the-gses/

    No, the CRA wasn’t responsible for the epidemic of bad lending; no, Fannie and Freddie didn’t cause the housing bubble; no, the “high-risk” loans of the GSEs weren’t remotely as risky as subprime.

  • Nancy McClernan

    Again the erroneous premise that “Atlas Shrugged” is a complete blueprint for everything one should do.

    But Rand critics here do not believe this – it’s her followers who do.

    In fact, I believe you are well acquainted with “Objectivist Living” aren’t you?

    Ayn Rand’s Atlas Shrugged is a blueprint for the destruction of all the “welfare states” from Scandinavia to India to Latin America in order to “sweep the board clean” for unbridled laissez-faire capitalism. That much is openly admitted by her admirers who number in the millions.

    http://www.objectivistliving.com/forums/?showtopic=13212

  • Nancy McClernan

    In a corrupt society. Of course, risk is always possible – ask the holders of bonds issued by governments that went out of existence in World Wars – but as ever you overweight the negative. The quest for perfect safety is illusory.

    > In other words, and apparently without noticing she’s doing so, Rand is making a strong case for federal deposit insurance.

    No, for a non-corrupt society.

    Do you fools not realize that when John Galt comes again in glory the human race will be washed clean of all forms of corruption?

    When John Galt comes again in glory there will no longer be any need for FDIC – hallelujah!

  • Nancy McClernan

    > Social Security.

    An unsustainable nightmare.

    > Rand scrubbed that from her book.

    On the contrary, Rand played out that system’s premises on a grand scale. Social Security will be of no use if the value of the (illusory) trust fund is steadily eroded as it has been. No actuarial wisdom in there – they did not even provide for declining fertility or increased age.

    Social Security worked out pretty well for Mrs. Frank O’Connor, didn’t it?

    But of course you have no idea what you are talking about, which makes sense for someone who gets his views of the American economic system from a hack novelist who had to be pushed into investing in the stock market – long after she published Atlas Shrugged.

    Krugman:

    it’s incredible that people are still making that argument; when someone says something like that, he’s just proved himself ignorant, disingenuous, or both.

    Let me just turn this over to the Social Security administration’s post on the issue:

    If we look at life expectancy statistics from the 1930s we might come to the conclusion that the Social Security program was designed in such a way that people would work for many years paying in taxes, but would not live long enough to collect benefits. Life expectancy at birth in 1930 was indeed only 58 for men and 62 for women, and the retirement age was 65. But life expectancy at birth in the early decades of the 20th century was low due mainly to high infant mortality, and someone who died as a child would never have worked and paid into Social Security. A more appropriate measure is probably life expectancy after attainment of adulthood.

    As Table 1 shows, the majority of Americans who made it to adulthood could expect to live to 65, and those who did live to 65 could look forward to collecting benefits for many years into the future. So we can observe that for men, for example, almost 54% of the them could expect to live to age 65 if they survived to age 21, and men who attained age 65 could expect to collect Social Security benefits for almost 13 years (and the numbers are even higher for women).

    Also, it should be noted that there were already 7.8 million Americans age 65 or older in 1935 (cf. Table 2), so there was a large and growing population of people who could receive Social Security. Indeed, the actuarial estimates used by the Committee on Economic Security (CES) in designing the Social Security program projected that there would be 8.3 million Americans age 65 or older by 1940 (when monthly benefits started). So Social Security was not designed in such a way that few people would collect the benefits.

    http://krugman.blogs.nytimes.com/2013/03/05/the-life-expectancy-zombie/

    I sure hope you are getting paid by the Koch brothers to spread misinformation because otherwise what is the point of doing it?

  • Nancy McClernan

    Rand played out that system’s premises on a grand scale.

    How, exactly did she do that?

  • Alex SL

    More to the point, fiat currency is less volatile because the central bank can create or destroy it as necessary to hold the value stable, something that is not possible with specie. But of course Randroids and libertarians in general can only assume the worst of an institution like a central bank so that idea will sail right past them…

  • Alex SL

    I am fairly sure a lot of libertarians would be fine with the behaviors you describe because it does not involve the use of force. Directly comparable to the good old scenario where the somebody has the awesome freedom of chosing between dying of thirst and paying the market price of $50,000 for a bottle of water.

  • Alex SL

    Whoohoo, a Gish Gallop!

    > No, for a non-corrupt society.

    I see, in Randroid land no bank will ever go bankrupt so we don’t need deposit insurance…

    > The quest for perfect safety is illusory.

    …or there will be bankrupties? Confused now. But we shouldn’t try to help the depositors either way because…

    > there are much worse things than bank collapses, like the moral hazard

    That’s odd. How about helping the small depositors but not the conrolling shareholders and management? Problem solved.

    >> Social Security.
    > An unsustainable nightmare.

    I wish I could understand what that is always about. There are really two options: either (a) a society has the resources to feed, clothe and house all its members or (b) it cannot. In the first case, social security and similar instruments are merely the way to make that feeding, clothing and housing happen. If those things are possible then how can they be unsustainable? Are we talking depletion of fossil fuels here? Didn’t really get that impression. In the second case, the issue is moot because the society in question has bigger problems than the money that is in the social security fund: famine, riots, disruption.

    I assume the libertarian belief in the unsustainability of pensions has something to do with the illusion that money is what the economy is about, instead of fulfilling the material needs of human beings.

  • fuguewriter

    > in Randroid

    The sure sign of brilliance: leading off with nast. Well, you’re in key with our times: it’s critical for all good clickbait articles and blogs to start off with sharp negativity (or goopy positiveness).

    > no bank will ever go bankrupt

    In the kind of society she advocated, at least one bank would go bankrupt. Yes. And – ?She never claimed total safety (whatever that is) or held it was a legitimate prime goal. Y’all are the most risk-averse people! (Yet you want paper money. Astonishing.) Consider if things would be systemtically awesomely better by permitting non-government-covered risk *and* consequent creative destruction: https://en.wikipedia.org/wiki/Creative_destruction . Don’t be so stodgy and afraid of change, flow, and growth. You’re the conservatives.

    > so we don’t need deposit insurance

    Likely pointless to say, yet again, “does not follow.” First off, not all deposit insurance need be *government* deposit insurance. Secondly, it should not be government deposit insurance; one reason is moral hazard. See above. Thirdly, if we want to talk about scary risk, government deposit insurance created a horrible mess in the 1980s because it held deposit rates down below the market, causing an exodus out of deposit banking. This is always the case with government intervention, because it’s one-size-fits-all. Not good to have financial/economic monocultures or zombie banks. Besides, under real money (i.e., or at least e.g., gold), the banking sector wouldn’t be so swollen. We have incredibly too much debt all over and all the derivative(s) garbage. Asset valuations are completely deranged by debt feedback loops, made possible by non-real money.

    > we shouldn’t try to help the depositors either way because

    We best help depositors by keeping a free market in all institutions and not having government lock-in (or favoritism), avoiding moral hazard. You’re of course assuming there would be fractional-reserve deposit banking there. In fact, there’d be some fractional-reserve banks, and some 100%-reserve banks and some non-bank things (e.g., prepaid Visas doling out gold milligrams) impossible to predict. People would be free to find a place on the risk spectrum that they were most comfortable with. And the press (new and old media) would have a valuable function to test and report risk.

    >> there are much worse things than bank collapses, like the moral hazard

    > helping the small depositors but not the conrolling shareholders and management?

    Moral hazard doesn’t exempt “small depositors.”

    > a society has the resources

    Magical collectivism already. Society doesn’t have resources. You’re inserting a paradigm into the description to preload your conclusion. The demonstrated best solver of poverty and early death *inherited from past systems* is free-market trading under Western-style law. Social Security is a non-sustainable not-even-Ponzi scheme as we see from the statements of its own trustees. The words “trust fund exhausted” would make you sit up and take notice if it were a hated private bank. Also, a given society is not the reigning government, and vice versa, and *government does not rightly run society.* Social Security, aside from its unsustainabilty, has been a plague upon us all by removing funds from the productive sector, vanishing them (after c. 1983) into the general fund, and then this ludicrous t-bill investment system. One cannot calculate how much innovation and efficiency was lost – and the huge gains people were cheated out of.

    > the libertarian belief in the unsustainability of pensions has something to do with the illusion that money is what the economy is about

    That is not a libertarian belief.

    > fulfilling the material needs of human beings.

    Command economies do not create abundance, but misery and (some proportion of) terror. You cannot point to any successful command economy. Look into the reasons, and you’ll see – if honest – that maximal free trading under Western-style law has.

    It’s not compassionate to uphold economic destruction. Please, think of the poor, the sick – and everyone else! Compassion is very important.

  • fuguewriter

    > LOL

    Nancy’s most honest premise.

    > rightwingers

    AKA Devils. Every ideology needs ‘em

    > never get tired of promoting the zombie idea that Fanny and Freddy caused the 2008 meltdown.

    Nancy should note that even Krugman spells it right: Fannie. And once again she pastes in Krugman.

    > CRA wasn’t responsible for the epidemic of bad lending

    No one mentioned CRA. It was part of an orgy of interventions.

    > Fannie and Freddie didn’t cause the housing bubble

    They aided, but VA (and FDR’s racist FHA before it) were there before. Subprime was government-initiated, directly and indirectly, (When I was a mortgage underwriter I handed some of the loan agents’ most difficult, worst-qualified files to the S&L rep who always came about 20-30 days before the end of the quarter, so he could get his racial/CRA quotas up.

    No, the general Austrian/Objectivist take on the housing bubble is that CRA, Fannie, Freddie, VA, etc. were small fry each in isolation. A more essential problem has been every government intervention *en masse* – there are huge numbers of interventions, including the beloved mortgage interest deduction – going on for many decades, resulting in compounding under the guise of an apparent prosperity and wealth effect. But *the* essential problem is that of non-real money. That makes toxic debt spirals occur, just as we see all around us inside and outside of government

  • smrnda

    Why do these gold nuts not realize that the idea that gold is valuable is just as subjective and arbitrary as MONEY being valuable? In fact, gold has never even been a truly universal currency. The British ran into some trouble when they wanted goods from China. The Chinese liked silver better, and of course, the British were heavily invested in gold. Their solution was to fight the opium wars since opium ended up being a hot commodity in China. At least you can smoke opium though.

  • smrnda

    The truth is that this is a feature, not a bug. Poor people are supposed to be disposable, and rich people are not. That’s the real message of libertarianism or objectivism.

  • smrnda

    Wait… so the world in Atlas Shrugged is already nearly totally libertarian, and it’s near collapse, but apparently, this is a treatise against the evils of big government? I guess it really is just about life without a functioning government – you get corporate feudalism.

  • smrnda

    “The quest for perfect safety is illusory.”

    But yet we see that nations with strong social welfare systems provide far better security than more libertarian ones. I want the safest system I can find.

    The Austrian idea that prices will fall because of increased efficiency is not a naive notion, but a purposefully deceptive one. If producers of goods found ways to make their products at lower cost, why would they reduce the cost? If the currency is backed by gold, then the amount of money is fixed. If the costs of making goods goes down and the prices stay the same, then you make more profit. You can also increase prices and reduce wages, and with the amount of money relatively fixed, people will just not be able to afford what they need to survive, so they will either have a reduced standard of living or else they’ll have to take on loans, and with a highly restricted money supply you’ll never get out of the hole. Speculation is not needed under the Austrian model since money is a finite asset, and simply having enough of it means that gradually, you will squeeze everybody else until they have no choice but to submit to whatever conditions you can impose on them. You’re presenting economic problem falsely, as if the main function of an economy is to make investors money. No, an economy is about delivering a reasonable standard of living to most people, unless you basically are going to argue that a system can be ‘good’ but bad for almost everybody.

    The Austrian economic school was nothing but a bunch of mathematically illiterate hacks who were doing anything to advocate for a society that would be basically feudalism. They were all obsessed with power and authority, and horrified that the *wrong people* (people without money) actually had rights. The Von Mieses institute is all about ‘voluntary slavery’ and such.

  • smrnda

    Because life is so much better in Somalia?

  • X. Randroid

    When John Galt comes again in glory there will no longer be any need for FDIC – hallelujah!

    But of course! When John Galt comes again in glory, you’ll be able to tell which banks are safe to deposit your money in, just by looking at their owners. All you’ll have to do is look at Eugene Lawson, then look at Midas Mulligan.

    Until then, I’ll take the FDIC, thank you very much.

  • Nancy McClernan

    Rand apparently decided that government represented corruption- and we see how that impacts her followers as on this very discussion fuguewriter suggests that if we lived in a “non-corrupt” society we wouldn’t need the FDIC.

    She also doesn’t bother actually explaining how the democracy works in Atlas Shrugged, outside of the voter rally, other than to portray it as a series of deals made in back rooms by cronies.

    Rand’s superhero businessmen are incapable of the standard back-slapping and deal-cutting that happens in all businesses. Which is another indication that Atlas Shrugged is not about real-world capitalism vs. communism, but about Good, which Rand equates with capitalism (while excluding the activities that real live capitalists actually engage in ) and communism (and democracy) with Evil – which is why Ivy Starnes isn’t just misguided when she decides to trick the workers into collectivizing her family’s business – through a vote (LOL) she’s actually a sadist – who later becomes a mystic.

    The more you examine the novel the more incoherent and bizarre it turns out to be. It helps that the book is almost 100% pure Rand, undiluted by professional editors.

  • Nancy McClernan

    If the bank owner has an angular face your money is safe.

  • X. Randroid

    The whole sequence around the quest for the inventor is a revelation about Rand’s mental functioning. Without giving too much away, notice that each person Dagny (and Hank, at least until he has to go back to single-handedly digging iron ore and pouring his Metal) meets is able to provide exactly one clue — the name and location of the next person on Rand’s list of People Dagny Should Meet — until the sequence reaches an end. Dagny never bothers with obvious shortcuts, like searching newspaper archives (tedious, but less time-consuming than all the traveling).

    Her fans call this brilliant plotting and logical integration. To my mind now, the sheer linearity of it all is suggestive of a writer unable to handle complexity.

  • X. Randroid

    “She is not an anarchist.”

    Officially, no, of course she isn’t. Rand is on record as saying unequivocally that a “proper” government is necessary; as I recall, she even went so far as to call it a “necessary good.”

    But, with respect to the necessity of government, the logic of her position takes her in the direction of a state-free utopia. She admitted the necessity of government in the real world, but only to resolve disputes (courts) and retaliate against initiators of force (police, military). Anything else — including “anything to improve people’s lives” in the sense Adam is talking about (i.e., economic security) — is improper and unnecessary.

    Now consider the logical implications of her views, not just what she said. On Rand’s own theory, the things she labeled “proper” government functions are only necessary because in the real world, there are people who are not morally perfect (which Rand defined as “unbreached rationality”). In Galt’s Gulch, land of the morally perfect, there is no government nor any perceived need for one. They have a judge available to resolve disputes, but we’re told he has never had to be called upon (in roughly ten years), because “there are no conflicts of interest among rational men.”

    It follows that if humanity achieves moral perfection, then the state can and will just wither away. I’m amused by the parallel to Marxist theory, which also has the state withering away, though on an opposite theory of human nature.

  • X. Randroid

    She started by fundamentally misrepresenting those premises. Then she added a series of false dichotomies, seasoned it with some jargon from formal philosophy, stirred for roughly fourteen years … and called the result “Atlas Shrugged.”

    Her followers think this concoction has something to do with the system we have. Unfortunately, it is extremely hard to disillusion them.

  • eyelessgame

    > > if you save diligently for retirement – you can still be wiped out and left penniless in your old age if the bank you put your life savings in happens to go bust.

    > In a corrupt society.

    [...]

    > If a speculative overhand happens, there should be bank collapses to clear the system of non-working structures.

    In a corrupt society.

    (Objectivists remind me so much of Marxists. “Once all the corrupt bourgeois ideas are purged from society, everything will be perfect.” And then again of premillennial dispensationalists – “once all the sinners are sent to Hell after the Tribulation, we will have the Kingdom of Man.”)

  • http://www.patheos.com/blogs/daylightatheism Adam Lee

    Well, Rand does have a banker character, Midas Mulligan, whom we’ll meet shortly. But yes, the storing-gold-coins-under-the-mattress scheme does seem to be the kind of sound financial planning she’d endorse.

  • http://www.patheos.com/blogs/daylightatheism Adam Lee

    She was. She initially thought that Willkie was an philosophical individualist just like her (because some of his campaign speeches emphasized his business background, and he came to prominence through a legal fight against Roosevelt’s Tennessee Valley Authority), but once he lost, she concluded that he had never really been the kind of rock-ribbed laissez-faire capitalist she’d hoped and wanted him to be.

  • David Andrew Kearney

    I guess that wasn’t the best idiom to use. What I was getting at is that Rand wants to be this great original thinker, while at the same time she wants to claim that the evil people *know* what they’re doing, and Rand is the only one with the courage to expose them. Meaning that Rand and her enemies have the exact same understanding of the world, but everyone else is just evil for the hell of it.

  • http://www.patheos.com/blogs/daylightatheism Adam Lee

    That does seem like a reasonable guess, but I don’t think the text ever explicitly confirms it. When we finally meet Galt, we find that he takes a lax attitude to secrecy; after all, he left his magic motor to rust on a junk heap, confident that without his brain no one would ever be able to reproduce it. He even works as a day laborer under his real name (!).

    Of course, it’s the author-on-board syndrome again, with Rand scripting events so that he can just vanish without even taking a special effort to cover his tracks.

  • eyelessgame

    Indeed. And I can’t quite figure out why one would eschew banking if one is to be Rational. Clearly if someone *could* offer a positive rate of return in exchange for your deposits, it would be more rational to loan them your money, as a year from now you’d have more money from the deposit than you would have if you’d simply stuffed your mattress.

    And said depository could legitimately offer this rate, if they were to take your money and prudently loan it to others eager to innovate and expand their business, charging them a higher rate for the loan than they were paying their depositors. They would, in the net, turn a profit, yet deposits would earn interest.

    There is of course a nonzero risk, as there is in any venture. That said, running a savings-and-loan institution seems, to those of us uninitiated in the One True Belief, to be a perfectly cromulent way of “making money”, something Frankie d’A approves of heartily (and unjustifiably accuses we Americans of having invented, him having never heard of, for example, the Dutch.) Yet to the Objectivist, evidently that way lies madness, since in their universe there would be no “fractional reserve banking”, as such moneymaking ventures lead, in the absence of a regulatory state, not only to bank failures (a regrettable necessity, and infinitely preferable to regulation and healthy banks) but to the true horror that is a nondeflationary economy.

    An odd sort of capitalism, this.

  • eyelessgame

    There’s a completely legitimate reason for gold to be an objectively valuable item. It is shiny.

    Also, the global supply of gold is under control of the mines in Russia and South Africa, either of whom could spike global inflation with a new gold strike or just by throwing more miners at their known locations. And that’s objectively a good thing, as those two nations are completely stable and neither would ever adjust the global monetary supply for narrow nationalistic reasons.

  • Alex SL

    Either you believe that the market should clear itself without intervention, leading to the loss of the old lady’s retirement money, or you have compassion. Pick one.

    Humans are social beings (argh! collectivism!) and humans crave stability and safety. That is what we are, that is our intrinsic nature. If your ideology needs to ignore those facts to make sense then maybe you should get yourself a new one.

  • Loren Petrich

    Note also the name of that bank: Community National Bank. It’s not named after its founder, but instead it has a collectivist name, like the other villainous businesses in Atlas Shrugged. Businesses not named after their founders but are instead Consolidated or Amalgamated or some other collective of something.

    If it was named after its founder, it would be Lawson Banking or something like that.

  • jo1storm

    Here we go again… Ok, how many times do people have to repeat to you, it is not either 100% command economy or 100% “free market” no government at all choice. Both market and government have certain advantages and disadvantages, certain problems that they solve better than the alternative. But that’s not even the main problem with your argument. The main problem is an illusory thought that “free market” (and, according to the meaning you put into it with every post you make, perfect market) can exist in the real world and that such a market would fix all the world problems.

    It cannot exist. It’s a purely theoretical construct, used because of it’s explanatory power in economics models of reality (which are, as with all scientific models, simplified). Even if perfectly free market suddenly popped into existence, it wouldn’t stay that way for longer than a day, maybe even a minute. Why? Because the moment one of the actors on that market gets enough money (maybe even by being a genuine genius when it comes to cheaply producing the product and selling it for high (as in higher than branch average) prices, like Hank Rearden), here comes in money’s (as in capital’s) natural tendency to grow and multiply. And the rational decision of the owner to buy his own competition and get higher market share, thus destabilizing our hypothetical free market further towards monopoly. And monopoly is the opposite of free market and the worst thing that can happen to anyone but the monopolist.

    Further more, there is and will always be a market that couldn’t even hypothetically be free and perfect: labor market. There will always be higher supply of labor (workers) than demand for it. And when it comes to power balance, between owner of the capital and workers he needs, the power is squarely in the hands of the owner of the capital. Why? Because the workers need the money more than the owner needs the worker. It’s “work for a pocket change or starve to death” choice. Of course, this is also a simplification. There are certain labors that are more needed and better appraised by the capitalist and, as such, owner of the capital is ready to pay higher price (salary) for them. But we’re still having supply and demand problems here, because the moment more workers get the same qualifications, the price of said labor drops sharply. And there will overall always be higher supply of workers than the demand for them.

    And yet, there’s another thing. There are such things as public goods, which private companies have no reason and economic incentive or interest to provide. And there are such things that private companies are unable to provide, such as economic stability, because, as strong as they are, they can never be strong enough.

    There’s another problem with economics as science, which is more a general attitude problem. Economics name came from Greek words, Oikos nomos, which translates as household management. And it shows. Economics use everyday language, which every layman thinks they understand. Lawyers have their own terms, doctors have their own, physicists have their own, IT people have their own… but when it comes to economics, everybody is an expert. Everybody, from the lowest beggar on the street to the *insert-your-own-example here*, thinks they “get” it and that they can understand what all those people are saying. Which leads to mix-up of terms of epic proportions. Hell, scientific meaning of the word theory and layman’s meaning of the word theory are just a beginning when compared to the size of economics mix-ups.

    All in all, your premises are flawed. They have nothing to do with reality. They are as real as the world in which we all ride candy-pooping unicorns to work in dream making factories for genie-wishes as payments. Just because you can imagine something, it doesn’t mean it exists and can exist.

  • jo1storm

    What is for you real money? There are certain functions a thing has to do before we can call it money. So, what is the meaning of the words you just used, “non-real money” and it’s implied opposite “real money”?

  • Nancy McClernan

    Why do you even bother to discuss details of US economic policies when your answer to everything is the gold standard?

    And it is understandable that I quote Krugman often, not only is he one of our greatest economists, he reliably calls out politicians for getting their economic theories from an eccentric hack novelist’s work – which is the subject of this ongoing discussion at Daylight Atheism.

    Krugman:

    So the GOP has decided that we must reject the evils of fiat money and go for the gold standard at precisely the moment when events have demonstrated that fiat money is a really useful thing and the loss of flexibility that comes from ending fiat currencies can be utterly disastrous. What’s going on?

    I think Yglesias has this right:

    Commodity-backed money is basically a solution to a non-problem. Or at least it’s not a problem you have if you don’t accept a Randian deeply moralized view of market outcomes. The existince of fiat money is embarassing to that kind of ideology, so it inspires quests for alternatives to modern central banking even when the alternatives don’t make sense.

    In this sense fiat money is like, oh, Social Security. The problem it creates for conservatives is not that it doesn’t work, but that it does — which is a challenge to their philosophy. And so it must die.

    http://krugman.blogs.nytimes.com/2012/08/24/gop-intellectual-decline-monetary-edition/?_php=true&_type=blogs&_r=0

  • Nancy McClernan

    Yes, I generally agree, but I want to see how a current Objectivist explains it. When fuguewriter says (my emphasis):

    On the contrary, Rand played out that system’s premises on a grand scale. Social Security will be of no use if the value of the (illusory) trust fund is steadily eroded as it has been.

    it indicates he believes that what Ayn Rand did was make a coherent statement about a real-world social program – Social Security – through Atlas Shrugged.

    Given how the analogies between the world of Atlas Shrugged and our world break down at every turn, I find that an amazing feat of logical dissonance. By asking the question, I’m trying to figure out exactly what about Atlas Shrugged “plays out” the “premises” of the Social Security system.

    I realize that it’s probably futile, but since he is our pet Objectivist it’s worth giving it a shot.

  • Nancy McClernan

    I think a huge problem with Atlas Shrugged’s connection to the real world is that Ayn Rand did not actually get analogies. It becomes clear throughout the book – and we know that this is what Rand was attempting to do because she later claims that the book had prophesied events of the mid-1960s.

    But we get to see a pure example of Rand’s inability to get analogies when she has Frankie d’A compare John Galt to Prometheus.

    Of course rightwingers, being starved for pop-culture champions, will invent proper analogies that are not actually in the work, which is what I think is happening here.

  • Nancy McClernan

    Several times Eddie Willers corners Galt in the company cafeteria to spill his guts to him and never once says something like: “hey your name is John Galt – do people ever tease you about the fact that you have the same name as that ‘who is John Galt’ guy?”

    Of course why a management higher-up would routinely deliver monologues to a worker is never explained either.

  • Nancy McClernan

    Sure because according to libertarian/objectivism if you are poor it’s a sign that you are lazy and stupid and vice-ridden and generally worthless. That’s why Cherryl Brooks had to light out for the big city to get away from the low-life scum (i.e., her family)

    What’s interesting is that for all Rand’s belief in Social Darwinism, she didn’t seem to believe in actual genetic heredity – her Ubermensch so often are related to people who not only don’t think like them, or act like them, but are extremely physically different from them.

    My theory is that Dagny’s mom and Rearden’s mom (neither of whom are given first names) had a thing going on with the mailman (a government employee, so obviously a parasite-rotter) and that’s how they ended up with James Taggart and Phillip Rearden.

  • http://www.patheos.com/blogs/daylightatheism Adam Lee

    That’s the explanation the novel presents, but I never really thought it made sense. John Galt’s speech is portrayed as having a near-miraculous persuasive power, even on capitalists who are smarter and more devoted to their jobs than Dagny, like Francisco. Rand never attempts to justify what it is about Dagny that would have made her more resistant than any of the others.

  • http://www.patheos.com/blogs/daylightatheism Adam Lee

    It follows that if humanity achieves moral perfection, then the state can and will just wither away. I’m amused by the parallel to Marxist theory, which also has the state withering away, though on an opposite theory of human nature.

    It’s an endlessly amusing exercise finding the philosophical parallels between Objectivism and Marxism. Two others I’d point out are that Rand seemingly agreed with Marx that history is best understood as a class war; it’s just that in her eyes, the heroes and villains were reversed from Marx’s conception. And like Marx, she believed that the ultimate triumph of her philosophy was foreordained.

  • uykhvasdrvtjyku

    Extreme forms of libertarianism such as Rand’s are difficult to maintain with consistency, and there seems to be a tendency for fellow travelers to either go whole-hog and become anarcho-capitalists, or to come to their senses and abandon the philosophy altogether. I think the attempt to render the government as the source of all evil while also being a “necessary good” introduces serious cognitive dissonance. It’s an unstable belief system.

  • uykhvasdrvtjyku

    > Social Security.

    An unsustainable nightmare.

    An unsustainable nightmare that has been successfully sustained for nearly 80 years, has drastically reduced poverty among the old, and is wildly popular with the public.

    On the contrary, Rand played out that system’s premises on a grand scale. Social Security will be of no use if the value of the (illusory)
    trust fund is steadily eroded as it has been. No actuarial wisdom in
    there – they did not even provide for declining fertility or increased
    age.

    Do you have any idea how Social Security works? You call the trust fund “illusory” yet you also seem to believe that the system will collapse if its value is “eroded”. Which is it? Is the trust fund merely an accounting gimmick, or does it represent real money that the system depends on to function? Either one could be true, depending on how you look at things, but both cannot.

    Social Security is actually very simple, so simple that it causes endless confusion among people who twist themselves in knots to prove that it can’t work. All the system does is transfer money from working people to retired people. That’s it. There are some supplementary programs involved with disability and whatnot, but it’s basically just a transfer system where the government taxes some people and gives the money to other people. The trust fund is an intermediary and bookkeeping device. We could get rid of it tomorrow and nothing would change; people get their checks and taxes pay for it.

    The system cannot fail to “sustain” itself, or become bankrupt, or any other nonsense like that. You can fail to allocate enough funds to pay legally entitled benefits, but the same is true for every government program. If need be you just raise taxes or reduce benefits, and life goes on. If Rand believed that the system would inevitably fail, then we can confidently conclude that it was Rand’s beliefs that failed.

  • Leeloo Dallas Multipass

    > “she held philosophically one cannot start or focus on a negative, a problem, a disaster”

    Exactly the sort of person you want to have in charge during a disaster!

  • Nancy McClernan

    When I say incognito I’m not claiming he uses an assumed name. All he has to do to be incognito is not walk up to Dagny and say “hi, I am THE John Galt and I’m the one who’s screwing up your railroad system by proxy.”

  • Leeloo Dallas Multipass

    Prometheus? That collectivist who wants to seize YOUR FIRE at gunpoint and redistribute it to the parasites?

  • Nancy McClernan

    LOL – right?

    And the best part is, that isn’t even the main reason why her analogy doesn’t work.

  • http://www.patheos.com/blogs/daylightatheism Adam Lee

    Prometheus? That collectivist who wants to seize YOUR FIRE at gunpoint and redistribute it to the parasites?

    This comment wins the internet for today.

  • https://www.facebook.com/michael.carteron Michael

    Lack of fire safety caused things like the 1911 Triangle Shirtwaist Fire, where female garment workers died. Fire departments actually used to be private in some parts of the United States, working about as you’d expect: subscribers had to put up a medallion on the front of their houses or the firefighters wouldn’t help them. Rival fire departments would also fight (literally, as in street brawls) over getting to fires. Ancient Rome also had private fire services (and police)-that’s actually how the famously rich Croesus made a lot of his money, since the tenement buildings were notorious fire traps. He would offer to buy up the buildings from the owners or let them burn down. As to bank runs, some libertarians have proposes “full reserve” banks in which depositors’ money is not loaned out, just the interest the bank charges. I don’t think this has ever actually been tried, and it doesn’t seem like a bank would make enough profit that way to be viable, though strangely enough, the Gringotts Bank in the Harry Potter books appears to operate this way, with people’s money stored in its vaults to deliver on demand. Of course, anything works in fiction.

  • https://www.facebook.com/michael.carteron Michael

    Ayn Rand wasn’t fond of evolution or genetics, according to Nathaniel Branden, once her closest disciple, although she also didn’t explicitly deny them either.

  • Jack Jones

    Crassus, not Croesus ;)

  • smrnda

    Isn’t it also an incentive to light fires so you can make more money if you’re a private fire department? I hear that fire departments already have to do some psychological screening to make sure pyromaniacs don’t get jobs there just so they can start fires to put them out (or learn to avoid having it look like obvious arson.) Given that this problem is recognized by fire departments, the free market solution makes it much, much worse.

  • smrnda

    Ha. I think gold points out that things are valuable either because 1. they are useful, like a potato or 2. because of consensus. Gold and fiat money are under 2.

    The advantage of fiat money is that it’s easier to control the supply. Your point about who controls the gold supply is a very good one.

  • smrnda

    There is no such thing as a non-corrupt society. Corruption always exists, and all you can hope for is better oversight, or to adjust incentives to limit the rewards of corruption.

    Let’s take something like the police. I feel like police corruption will always exist, though you can limit it by better oversight, having some kind of citizens review board, putting cameras on cops (to document their behavior) and such.

  • smrnda

    The book is full of stuff like that. We have a person deciding a signal on a train is faulty without testing it earlier, and Dagney does this because the trains always run on time so if the signal is *wrong* it must be broken. I mean, if the trains always run on time, and you always ignore the signal when it says something that goes against the schedule, why even have signals?

  • smrnda

    I suspect Randoids would argue that if you die in a workplace accident, you chose to work in an unsafe place. Of course, this assumes other choices exist, and assumes that it’s an imposition for workplaces to have to meet minimum safety standards. Some go so far as to just express a belief that proles really are disposable, but most won’t be honest about what they feel there.

  • smrnda

    In an economics course in college, the prof spent a lot of time dismissing what she called the ‘piggy bank’ view of Social Security – the idea that somehow, it is money that you store/invest that you will claim later.

    She pointed out that it cannot be that, since as soon as Social Security came into existence, people were soon able to obtain benefits who had not spent a lifetime paying into the system. It’s simply a transfer of $ from working people to the elderly or disabled.

    There are some challenges to the system if you have an aging population, or if people retire and then live for an additional 30 years, but you can find ways to deal with these things – increase taxes (or continue to increase them for higher income brackets) increase the retirement age, or you can reduce benefits for seniors who don’t need Social Security.

    These are standard solutions used in all welfare states. In some, benefits that were once universal (because universal benefits tend to be the most popular) get scaled back to need based benefits if they become hard to sustain. Sometimes taxes have to go up. (We could survive that, given that our taxes are at record lows right now.) However, just because a welfare state *requires work to sustain* does not meant that it should be abandoned. We’ve seen welfare states that have worked for decades, and we have ZERO EVIDENCE of a libertarian society functioning anywhere.

  • smrnda

    “Magical collectivism already.”

    Collectivism is the only thing that works as human beings, as individuals, are incapable of doing anything.

    A welfare state is not a command economy. Nobody here is promoting a command economy. Command economies only work when the only objective is war, and they only work in the sense of *kill people.*

    The welfare state takes on the tasks that private sector firms have no reason to do. There is no absolute list in my mind of these tasks – some like police, fire departments, military, education come to mind but overall, I think that it’s best to be flexible here. In some nations at some times, governments might not need to handle some functions that they do need to handle elsewhere. I mean, I think we could get on fine without the level of agricultural subsidies. I think the private sector does a good enough job keeping us supplied with video games.

    The mixed system – free enterprise with a welfare state – is the most successful model we see anywhere. We should do that.

  • http://www.patheos.com/blogs/daylightatheism Adam Lee

    The Guild of Firefighters had been outlawed by the Patrician the previous year after many complaints. The point was that, if you bought a contract from the Guild, your house would be protected against fire. Unfortunately, the general Ankh-Morpork ethos quickly came to the fore and fire fighters would tend to go to prospective clients’ houses in groups, making loud comments like ‘Very inflammable looking place, this’ and ‘Probably go up like a firework with just one carelessly-dropped match, know what I mean?’

    –Terry Pratchett, Guards! Guards!

  • Nancy McClernan

    Yes, well that’s what is so utterly batty about Rand’s “philosophy” – she actually seems to believe that if we were all “rational” – or barring that, were ruled by rational men like the Galt’s Gulchers, there would be no more corruption.

    Other than religious leaders I can’t think of anybody who promises that it’s possible to eradicate evil through their way of thinking.

    If you disagreed with her, you were accused of believing in a “malevolent universe.” That’s why she didn’t like Beethoven, she said:

    Beethoven is great because he makes his message so clear by means of music; but his message is malevolent universe: man’s heroic fight against destiny, and man’s defeat. That’s the opposite of my sense of life.”

    Of course how Rand discerned that Beethoven’s message was “man’s defeat” is not explained, other than Rand’s own imaginings.

    And as an atheist, Rand realized that we all die, and that’s the end, so it’s natural to consider that a kind of defeat. For Beethoven to acknowledge it (if he actually did) through his music is simply not denying reality. It’s only people who believe in an afterlife who would consider death a victory.

    And this excerpt makes Rand much more accepting of Beethoven than she actually was – she would pester her friends until they couldn’t stand it any more and stopped coming around.

    “She was relentless in pursuit of psychological errors,” Allan (Blumenthal) recalled, and she seemed abnormally preoccupied with uprooting all deviations from her convictions and aesthetic tastes. Throughout the 1970s she needled Allan about his penchant for playing Beethoven and other pre- or post-Romantic composers privately, on his own piano, and ridiculed Joan for her appreciation of painters including Rembrandt… After an evening’s bickering about the immorality of the Blumenthals’ ‘sense of life’ she would phone the next day to find out whether they had reconsidered their opinions: if not, she renewed the argument the following evening, and the evening after that.

    – Ayn Rand and the World She Made by Anne C. Heller p. 399

    And that is the guru of the Republican party.

  • https://www.facebook.com/michael.carteron Michael

    They do argue that, along with many libertarians. Some libertarians claim that employers that didn’t have safer work environments would be less competitive with ones who did. That assumes, however, that the cost of providing a safe environment would be lower than not providing it. For this, some claim that lawsuits over workplace injuries and deaths would make that cost-effective. In actual history, businesses supported workers comp precisely to avoid such lawsuits. Assuming many libertarians and Objectivists got their way, however, the bar to make a successful lawsuit would no doubt be raised. I’ve read some libertarians who do in fact propose higher standards to prevent “frivolous” lawsuits and we’ve seen those laws enacted across many states. Anyone interested might watch the “Hot Coffee” documentary on that. Short version: many of the “frivolous” lawsuits are exaggerated or fabricated to push tort reform. The ”burglar who falls through ceiling suing homeowner” being a perennial example.

  • Guest

    “Creative destruction” – how to hell did I miss that phrase? I remember it used often. I actually lived in the country with the highest hyperinflation in 20th century, which was actually produced by the decision that “Let’s destroy the economy and create one stronger from the ashes”. Here, let me google that for you: https://www.google.rs/search?q=hyperinflation+yugoslavia+1994

    The solution was simple: they just stopped printing money. If it was the gold standard economy, there would have been no solution at all.

  • Cactus_Wren

    Which is another reason why Atlas Shrugged fails, utterly, as a socio-economic critique. She isn’t criticizing any actual, functioning government as we know them on planet Earth, she is criticizing a government that exists merely as a plot device.

    A bit like the caricature of “democratic government” in Heinlein’s Friday. In his “California Confederacy”, land of “clear-quill, raw-gum, two-hundred-proof, undiluted democracy”, where “voting age starts when a citizen is tall enough to pull the lever without being steadied by her nurse” and “the corpsicles at Prehoda Pines Patience Park constituted three precincts all voting through preregistered proxies”, a ballot initiative (not a bill, a voter-sponsored initiative — see how foolish ordinary people are?) was passed mandating that “all California high-school graduates and/or California citizens attaining eighteen years were henceforth awarded bachelor’s degrees” — this to counter the “undemocratic condition” that college graduates earn more than people without college degrees. This somehow demonstrates that the franchise should be limited to smart people, or educated people, or (as RAH suggested elsewhere) people who can solve a quadratic equation, or something.

  • Cactus_Wren

    Carl Sagan was once asked if it wasn’t annoying, having the same name as (and surely being often confused with) “that scientist guy”. Of course, the person asking him this was a cab driver named William F. Buckley.

  • DavidCheatham

    The thing is, the idea of ‘fiat’ money is nonsense. Money *itself* is by fiat. The entire concept of a money existing is that we have picked some thing to trade that does not have some value, but is merely a notational device. *All* money works this way, it’s the different between money and *barter*. (The thing we use might also have some intrinsic value, but that’s *not* why we’re using it as money.)

    The actual question is: Are we going to use something as money that cannot be created or destroyed by the government, but is instead created by random factors in random amounts and destroyed randomly (or at least removed from circulation) because of its unrelated intrinsic value in jewelry and electronics, *or * are we going to use something as money that is created and destroyed by (quasi-)governmental policy, allowing it to match the needs of the economy?
    *Both* those thing are ‘fiat’. Money only exists because we call it money.
    And people who say ‘the former’ have no idea how money actually works in the economy, or why the money supply levels need to sometimes change. (And people who say ‘the former’ and pick the thing to be *gold* also need to explain where the hell we’re going to get enough gold to operate the existing economy.)

  • fuguewriter

    Since you speak of “human beings” – note the plural – you’ve already denied magical collectivism (which no one really believes in or practices except insane people). Collectivism means organic oneness or wholeness, a la Fascism, Communism, and the Godwin-party that shall remain nameless – notice the emphasis in each on oneness? Societies, nations, groups, etc. are made up of concrete individuals in space and time – you cannot have human dignity without this? – who also are not atomized, separate, or disconnected. It’s yet again a false dichotomy. What works best is a free society of highly empowered, lit up individuals who connect positively and freely. (One of the places I part from Rand is on the matter of reserve: it could never work for me. It’s also of another era.)

    What you do not grasp is that an economy marked by government intervention in key areas, even apparently small ones (e.g., what is legal tender), gradually becomes more intervened-in. It’s a vicious circle and requires no conspiracy thinking. You can probably get there from moral hazard alone, but there’s so much more – like buying votes with largess [or providing corrupt businessmen with favors] provided by “progressive” taxation (a horrid thing) or [far worse] by deficit spending.

    > welfare state takes on the tasks that private sector firms have no reason to do

    The error here is that government and private for-profit firms is not exhaustive of the types of organizations. You forgot charity, which Rand was not opposed to. And even wellish-run charities do a much, much better job than government can. Contrary to propaganda, later 19th c. America was full of charity. See Trattner: http://books.google.com/books/about/From_Poor_Law_to_Welfare_State_6th_Editi.html?id=r0PZdo5fXfgC

    > police
    This is not social welfare.

    > fire departments

    Should be private. (And government fire departments have left out-of-jurisdiction houses, etc., burn, in case the usual meme of some private fire department who did evil in 1860 or 2013.)

    > military

    Not social welfare.

    > education

    Should most definitely be private.

    > we could get on fine without the level of agricultural subsidies

    There should be none whatsoever. And no other government “help” to business.

    > The mixed system – free enterprise with a welfare state – is the most successful model we see anywhere.

    You’re not looking long-term. It’s not a fully-free market by a long shot. And the mixed component is going to torpedo the productive sector.

  • fuguewriter

    Nancy claims my one-size-fits-all answer to “everything” (economically) is the gold standard. This is another of her errors.

    The gold standard is a fundamental help, because it would cut out some of the major very bad things in government interventions, like currency debasement, debt spirals, and so on.

    By no means is it the only thing. Other interventions would be possible, such as starting government gold mines and funneling gold to favored cronies, and all sort of not-directly-currency-related interventions, like the insane One Bay Area plan in California – http://transformca.org/advocacy/rtp-scs – but it gets at the heart of things.

    The government should have nothing to do with issuing currency, and there should be nothing known as the dollar, the euro, the yen, etc. – all prices should be denominated in grams, decigrams, milligrams (etc.) of gold.

  • X. Randroid

    Yep. It’s yet another example of how Rand’s heroes can just know things about each other’s mental states without any need for actual communication. So Hank just knows by looking at her that Dagny wants him to manhandle her, and Francisco just knows on his last night with Dagny (and every subsequent encounter) that she’s not ready to hear about the strike.

    Even better, in 12 years of recruiting, the strikers always reveal their secret at just the right time, when the recruit is ready to sign on immediately upon hearing their spiel — no thinking it over, no discussing it with anyone they know and trust. (“Hey, Ted, this total stranger came to my house last night and explained for three hours why I should abandon my entire life and hide out in the Rockies until the world destroys itself … he had some interesting arguments, but this is a major life decision … what do you think?”)

    Maybe on top of their other superpowers, Rand’s heroes are psychic!

  • X. Randroid

    As I recall, she put it in print herself, that she was “neither a supporter nor an opponent” of the theory of evolution.

    It may be the only subject she officially declined to offer an opinion on. I think that’s because evolution presented an insoluble conundrum for Rand. Accept it, and she’d have to accept that human beings, like their evolutionary forebears and cousins, do in fact have instincts — in particular altruistic instincts — and a number of other things that are at odds with her version of human nature. Deny it, and she’d end up on the side of the theists — at odds with her atheistic view of reality. So she took the middle ground.

  • fuguewriter

    This is almost a primitive understanding of economics, though. You can’t postulate a process predicated on an underlying set of terms, change the underlying terms, then maintain the condition will magically remain the same.

    Show me an economy on a gold standard that had “high hyperinflation” and how, exactly, that worked. (The closest thing you’ll come to is probably the very high local prices in gold for things in Gold Rush California near the gold fields.)

    A more cogent criticism of the gold standard is going in the opposite direction – that it constrains the circulation of money and thus hampers business. But that’s addressed by the existence of short-term liquidity providers *based in gold* like this: https://en.wikipedia.org/wiki/Real_bills_doctrine

  • uykhvasdrvtjyku

    Right, a major misconception people have (even people not trying to destroy the system) is that Social Security is like an IRA where the payroll taxes you pay get squirreled away in an account somewhere that you draw on when you retire.

    Actually, the great strength of the system is that it doesn’t work this way. There’s no account to be wasted on bad investments or pension fund to be raided. The revenue stream that pays the benefits will always exist, so it nicely complements private retirement plans that have a higher risk/return factor. No matter what else gets screwed up with the economy or bad planning, you’ve got Social Security to fall back on.

    The creation of the trust fund, which was supposed to be a temporary measure to get baby-boomers to pay ahead, has caused endless confusion and actually defeated its own purpose by giving politicians something to steal. One of their favorite tricks is to pretend that the trust fund is an “accounting gimmick” that doesn’t contain any actual money, but that when it runs out, Social Security becomes “insolvent”. As I said above, both can’t be true; it’s just a scam to take money from beneficiaries and give it to rich people.

  • Nancy McClernan

    Not to mention not a single person Galt tries to recruit says: “Hm, so if I understand you correctly, you plan to bring down the United States of America and install a new regime with you in charge. I kinda think that’s treason. Not only will I not join but I’m going to report you to HUAC.”

    But of course they wouldn’t because in Rand’s world none of the producers would ever side with the parasites, any more than Galadriel would suddenly decide to join up with Sauron. We’re talking a strict Good/Evil binary.

  • smrnda

    The biggest problem with that is that there isn’t really any way to decide what human behaviors are ‘rational.’ You can say someone is irrational if their behaviors don’t help them achieve their goals, but what goals are worth pursuing is totally subjective and open to debate, so we’re stuck with no objective measure of ‘rational.’ You can’t define an absolute and objective ‘rational’ if you’re focusing on self-interest, since people’s interests conflict. Rand’s argument that there are no conflicts of interest among rational people is utterly absurd, because it requires that some people either *rationally* decide to act against their own interests (which defeats her purpose of life.)

    We are living in a malevolent universe. Most of it would kill us instantly.

  • smrnda

    I hear all about frivolous or stupid lawsuits, but they all end up being oft-repeated urban legends, or else once you did deeper, you find the lawsuit wasn’t frivolous (I have seen hot coffee) but that there has been a massive amount of spin.

  • smrnda

    “Creative destruction” seems like something a person can fantasize about being great only so far as it’s an option not likely to happen. Kind of how anarcho-primitivists can talk about how the downfall of civilization would be great.

  • smrnda

    I don’t understand why they do not teach this fact in schools. Social security is NOTHING LIKE any other investment/retirement programs since it isn’t an investment at all. In fact it’s a better strategy because (as you said) it can’t lose money owing to bad investments.

    I worry that if you told people the truth though, they would disbelieve you and believe in conspiracy theories. Kind of how I once told someone ‘taxes on the rich were higher under Eisenhower.’ No matter how many graphs, statistics I could pull up, the person was convinced that *it has to be false* and that the evidence was all fudging the numbers. That’s what Fox News does to your brain I guess.

  • smrnda

    Actually, it is very intelligent to figure out worst case scenarios ahead of time and try to avoid them. This is one reason why we need anti-discrimination laws. Some people argue that *most businesses won’t discriminate* since they want the business, but they forget that, in the worst case, everybody wants to discriminate and screw some minority group. The laws are built around the worst case,which is why all such discrimination is outlawed.

  • Nancy McClernan

    That’s why Rand – and Alan Greenspan – argued against regulating the stock market. Greenspan actually said that stock brokers considered their reputation to be so precious that that alone was enough to prevent wrong-doing. And to try to regulate the market was to make them feel like criminals and therefore counter-productive.

  • Nancy McClernan

    Well it’s clear that Rand felt that long speeches had tremendous capacity to alter reality. This happens not only with John Galt’s speech but also when Rearden is arrested and put on trial. He gives a long speech and then everybody agrees with him and he’s freed.

    Simply giving long speeches that declare the universe is benevolent is all Rand needed to make it so – “objectively.” And she surrounded herself with sycophants who told her she was right.

    Of course Rand herself demonstrated just how irrational people can be. In spite of her presenting her heroes as completely accepting of being dumped, when she was dumped by her married boyfriend for a third woman she had a complete meltdown. Because according to her benevolent universe, SHE should have been Nathaniel Branden’s “highest value” – when she was almost 60, domineering, and not big on hygiene (according to several reports) she could not accept that Branden could prefer a pretty, sweet-natured young woman to herself. It was against her philosophy. And so instead of accepting what most people could have brought themselves to accept (in spite of the pain) in exchange for friendship and an institution (the NBI) devoted to promoting her work, she destroyed it all.

    If she couldn’t have it all, she wouldn’t have any of it.

    You don’t have to look any farther than Ayn Rand herself to see that people often behave irrationally. What makes most people different from Ayn Rand is that most people are not in complete denial about their potential for irrationality.

  • https://www.facebook.com/michael.carteron Michael

    Those are indeed major problems for an empiricist theory of mind, which she held to (it’s funny to me that Rand would support it, since it’s mainly supported by the left historically). Instead, Rand chose a cop-out that she would hardly have accepted from anyone else, I am sure.

  • https://www.facebook.com/michael.carteron Michael

    I can’t say there’s never been a frivolous lawsuit, but most stories of them are, as you say, either highly exaggerated, not actually frivolous, or merely urban legends. Even my law professor, a retired judge, presented some of these urban legends without apparently realizing they were false, which is disturbing.

  • Nancy McClernan

    The Blank Slate is a load of evolutionary psychology bullshit and Steven Pinker is an asshole who hobnobs with racists. Don’t dare mention Steven Pinker and empiricism in the same sentence. We can thank Steven Pinker for Larry Summers assertions about the relative weakness of ladybrains in math and science.

    And Elizabeth Spelke ripped Pinker a new one by demonstrating empirically that his “just so” stories are without supporting evidence.

    http://www.edge.org/3rd_culture/debate05/debate05_index.html

  • Nancy McClernan

    Here we see Malcolm Gladwell (for whom I have no great love either) calling Pinker out for using professional racist Steve Sailer to support his claims (separate from the Blank Slate.)

    (Pinker) had three sources, he said. The first was Steve Sailer. Sailer, for the uninitiated, is a California blogger with a marketing background who is best known for his belief that black people are intellectually inferior to white people. Sailer’s “proof” of the connection between draft position and performance is, I’m sure Pinker would agree, crude…

    http://gladwell.typepad.com/gladwellcom/2009/11/pinker-on-what-the-dog-saw.html

  • Nancy McClernan

    In the Blank Slate Pinker reveals that his idea of a real feminist is Rush Limbaugh’s friend Camille Paglia.

  • https://www.facebook.com/michael.carteron Michael

    There, I have removed the offending mention of Pinker. I will read the critiques of his work you had linked, never fear (some I’ve read already). I’m hosting a discussion of his book in a week, so doubtless all this will be raised there as well.

  • Nancy McClernan

    Whaaaa-? I did all that ranting for nothing?

    ;)

  • https://www.facebook.com/michael.carteron Michael

    Well…I do hate to disappoint, but I’m unequipped to debate this. I guess I’d just point out that my reference was to an empiricist theory of mind, rather than empirical data. On The Blank Slate overall, it seemed convincing to me as I read it, but that means little-it’s hardly something I know much about. It did seem to me that Pinker identified a strong trend in 20th century intellectual movements (i.e. the aforesaid empiricist theory of mind, or “blank slate”). That seemed to explain some assumptions underlying various ideologies which I’d found puzzling. Another thing identified seemed to be a strong hostility to any innatist position (understandably so, as he acknowledged, given the past history of it). Still, that is all just going on my personal readings, so I’m reading the Edge debate at the moment to enlighten myself further. It’s good I posted this anyway, since your reply spurred me to learn more before my discussion on it.

  • Azkyroth

    Gold is objectively valuable because it’s relatively resistant to corrosion, biologically inert, and has good electrical and thermal conductivity. That’s pretty much it.

  • eyelessgame

    What I don’t get is this. There are many circumstances where corruption and cheating may be rational choices. The individual contemplating unfair behavior can weigh the benefit of that behavior against the likelihood and consequence of being caught, and may well make a completely rational decision that the cheating behavior provides the best risk/reward ratio.

    One purpose of government – and nonselfish ethics – is to raise the cost of corrupt behavior, so that choosing corrupt behavior ceases to have a positive reward versus risk.

    I don’t understand what their answer to this is. I’d like to.

  • eyelessgame

    The examples that spring to mind are situations where the more-informed party makes a deal that they know is bad for the less-informed party: anything from deceptive advertising to concealing risk, from hidden costs to fine print. Legislation regarding these practices has historically been done *specifically to facilitate more economic activity*, because it allows greater levels of trust between the actors in an economy: it raises the cost and reduces the benefit of these asymmetric interactions, making people more willing to engage in deals and economic activity in arenas where they’re not experts.

    Any economic sphere that requires people to be experts before they can safely participate (whether it’s purchasing cars, purchasing houses, purchasing stocks, purchasing medications, or depositing money in banks) is going to remain a small area with few customers. And if everything is like that, no one trusts anyone, no one makes deals without absolute certainty that they can’t be screwed over in ways they didn’t anticipate, and you get a permanently tiny economy and extreme poverty.

  • eyelessgame

    That near-miraculous persuasive power reminds me more than a little of the (inconsistently-portrayed) Antichrist from the Left Behind books – he literally reads the phone book out loud and everyone cheers wildly and signs on to his world government plan. Galt’s speech is a whole lot like reading the phone book, and its effects seem eerily similar.

  • eyelessgame

    … and that you knew going in exactly how (un)safe it was, or at least you could find out with the resources you have available to you (prior to taking the job). And that you made a rational, self-interested decision to take on that risk, in the full knowledge of the likelihood of a fatal fire.

  • smrnda

    I think Pinker is taking something that’s really relatively uncontroversial to say (there is such a thing as human nature in the sense of a biological basis to human behavior) but part of me thinks he’s arguing against a straw-man (almost nobody really believes in the ‘blank slate’ ) and that he isn’t really concerned with the possible abuses of promoting the idea of some kind of underlying ‘human nature’ and seems quite willing to use nonsense evo-psych reasoning to do the ‘ladybrains don’t do maths’ where he’s just trying to find easy justifications for lazy prejudices.

    Better to go with actual psychologists and neuroscientists than this popular treatment. I also think that Pinker isn’t willing to admit that his brain is hardwired to be biased towards his privileged in-group.

  • smrnda

    In the post-apocalypse, I bet a potato would be worth more than gold.

  • smrnda

    Rand seems at times to promote the idea that if you aren’t informed enough and get screwed, well, sucks to be you since a MOVER knows EVERYTHING.

    Of course, this comes from her faulty belief that you can simply *know everything.* In some areas, I am an expert, but in many others, I have to trust other people since I can’t both be an expert in 1 or 2 areas and know EVERYTHING ELSE since life doesn’t permit that. Rand herself is living in a world where if it weren’t for other, more competent people she’d been dead.

    Rand, and many people, are in denial of this fact, or else they don’t care. However, promoting a society that would fall apart is ridiculous.

  • https://www.facebook.com/michael.carteron Michael

    I don’t know, I’ve heard or read many people say things along the line of “there is no such thing as human nature” or that’s it’s so negligible as to be almost non-existent (and Pinker discusses many of these examples). Plus, an entire section of the book is devoted to discussing the fears of the ideas he defends, and he discusses at length why the blank slate idea was appealing, given the abuses of innatist views in the past. That said, I can’t say that he’s right on everything, like women being poorer at math. It’s very difficult not to justify one’s prejudices, or attack others’ ideas in caricature form, of course. Another problem is that most academic treatments are more difficult to understand (for me at least) so a popular book can have more appeal to lay people.

  • Nancy McClernan

    An excellent high-level view of what is wrong with The Blank Slate:

    http://www.newyorker.com/archive/2002/11/25/021125crbo_books

    Excerpt:

    Unless you are a creationist, there is nothing exceptionable about the approach. If opposable thumbs are the result of natural selection, there is no reason not to assume that the design of the brain is as well. And if we inherit our eye color and degree of hairiness from our ancestors we probably inherit our talents and temperaments from them, too. The question isn’t whether there is a biological basis for human nature. We’re organisms through and through; biology goes, as they say, all the way down. The question is how much biology explains about life out here on the twenty-first-century street.

    Pinker’s idea is that it explains much more than some people—he calls these people “intellectuals”—think it does, and that the failure, or refusal, to acknowledge this has led to many regrettable things, including the French Revolution, modern architecture, and the crimes of Josef Stalin. Intellectuals deny biology, according to Pinker, because it interferes with their pet theories of mind and behavior. These are the Blank Slate (the belief that the mind is wholly shaped by the environment), the Noble Savage (the notion that people are born good but are corrupted by society), and the Ghost in the Machine (the idea that there is a nonbiological agent in our heads with the power to change our nature at will). The “intellectuals” in Pinker’s book are social scientists, progressive educators, radical feminists, academic Marxists, liberal columnists, avant-garde arts types, government planners, and postmodernist relativists. The good guys are the cognitive scientists and ordinary folks, whose common sense, except when it has been damaged by listening to intellectuals, generally correlates with what cognitive science has discovered. I wish I could say that Pinker’s view of the world of ideas is more nuanced than this.

  • Nancy McClernan

    If you want a more in-depth discussion of what is wrong with socio-biology (exactly like evolutionary psychology except for the name) I recommend the work of anthropologist Marvin Harris:

    http://books.google.com/books/about/Cultural_Materialism.html?id=N8K0AAAAIAAJ

  • Nancy McClernan

    And for a Rosetta Stone-like comparison of sociobiology (what Pinker believes), cultural views (also what Pinker believes when addressing human culture in a less-than-evolutionary time span) and cultural materialism, check out for free online R. Brian Ferguson’s “Materialist, cultural and biological theories on why Yanomami make war”

    http://anthroniche.com/darkness_documents/0559.pdf

    Although Ferguson mainly focuses on another proponent of sociobiology Napoleon Chagnon and others associated with the CEP in Santa Barbara.

  • Nancy McClernan

    Finally, a debate between Stephen Jay Gould and those he considers “Darwinian Fundamentalists” which includes Stephen Pinker and Daniel C. Dennett:

    http://www.nybooks.com/articles/archives/1997/jun/12/darwinian-fundamentalism/?pagination=false

    and

    http://www.nybooks.com/articles/archives/1997/oct/09/evolutionary-psychology-an-exchange/

    And IMO you can throw in Dawkins, Harris, and Hitchens into the fundamentalism group.

    Basically the entire “new atheist” leadership are sold on sociobiology, although except for Pinker’s favorable citations of Sailer and Razib Khan they tend to shy away from ethnic essentialism and focus on gender essentialism. But since Pinker is so shameless about publicly connecting his name to Sailer and Khan I suspect that he buys into ethnic essentialism too, but is too savvy to come right out and admit it.

    And just like Khan, Pinker maintains that Gould was too left-wing to trust his views on sociobiology. The fact that Khan is a right-wing political operative funded by Ron Unz, former publisher of The American Conservative doesn’t appear to phase Pinker in the least, in a stunning display of right-leaning double standards.

  • smrnda

    I studied cognitive and social psychology so I’ve spent some time looking into cognitive and social biases. I just find that Pinker seems to associate with some *types* and advocates some *ideas* that make him someone I don’t recommend.

  • smrnda

    I think he is confusing actual cognitive psychology research with say, evo-psych just so stories. Because cognitive psychology confirms things like there existing little difference in mathematical ability between boys and girls or men and women, but that the boys and men rank their competence much higher.

    Just an anecdote, I have a PhD in mathematics, and I once overheard a guy talking about how he was great at mathematics (he was probably late 30s early 40s) since he’d actually taken geometry in high school. I tend to tell people that, on a scale of 0 to 100 (100 being like, maybe Alan Turing level?) I’m maybe a 20.

  • smrnda

    So, Pinker believes that only certain people are susceptible to confirmation bias? That’s absurd.

  • https://www.facebook.com/michael.carteron Michael

    Well from what I’ve seen now, if that’s unintentional, then he shows a surprising naivete.

  • smrnda

    The problem with limiting voting to ‘smart people’ is that some smart people can be incredibly, selectively dumb.

    Any ‘test’ to be able to vote would end up having nothing to do with competence, but would just find ways for the powerful to restrict the power of other groups. I mean, imagine if Christians wrote the test – we’d have all Bible questions and nothing on science .

  • smrnda

    He’s a privileged white jackass. What he’s doing is automatically having the prejudices one would expect of someone like that, with zero self-awareness that he, too, is prone to biases. His problem is his belief that he is part of some Elite Objective Group, as opposed to everybody else motivated by ideology.

  • https://www.facebook.com/michael.carteron Michael

    I’m sure it’s hardest to recognize bias within yourself if you believe your view is wholly objective.

  • J-D

    Why gold? Why not silver? or cowrie shells?

    And in any case, how is this result to be achieved? Should the government enact — and then enforce — a law stipulating pricing in grams of gold? Wouldn’t that amount to a massive government intervention in the economy?

  • Glynn

    Could someone please explain what “moral hazard” is in this context? I’m lost.

  • fuguewriter

    The first paragraph shows the importance of knowing the requirements of a monetary mental.

    Gold does not tarnish and is otherwise non-reactive (compare with silver), is rare (but not too rare – the growth in world supply is 2% per year, about the growth of population at present), is found in many areas (ensuring competitive suppliers), is the most ductile and malleable of elements (rendering it readily divisible – these two qualities are also very important for non-monetary uses, which are significant as a sort of quasi-banking function), non-toxic (silver can be absorbed, though is not classed as toxic), and so on. Gold is also understood incredibly well, from its rarity to where it’s found to how it behaves in markets to its ornamental and industrial/electronic applications to its long history as a store of value.

    Cowrie shells do not fit the bill outlined above. Not a serious proposal, of course.

    > how is this result to be achieved?

    In a purely free market, people would be free to use whatever currency they see fit or no currency at all. I’m advocating for gold as the chosen standard – and the form in which government accepts and gives out payments. Probably should be how legal proceedings are transacted also, since it is a constant standard of value.

    > Should the government enact — and then enforce — a law stipulating pricing in grams of gold?

    Clearly not.

    > Wouldn’t that amount to a massive government intervention in the economy?

    In some respects, though a case might be made for the government only enforcing precious metals terms in contracts – it’s arguable. The essential is not that it’s an intervention per se but that it would violate individual rights.

  • J_Enigma32

    Because Faith in the Market, that’s why.

    [Insert mumbo-jumbo about Free Market Fundamentalism being the solution to everything from corruption to diarrhea here].

    And that’s how you build a utopia. With *Maaaagic*

  • Donalbain

    19th Century America had charity. Yes. Nobody disagrees with that. However it also had levels of grinding poverty and hunger that those of us alive in the west today would find unimaginable. It took government intervention to change that. Charity was not, and is not up to the job.

  • jo1storm

    Define “fully-free market” please. Also, I have a personal question for you: Did you ever study economics in any shape or form?

  • Loren Petrich

    The military and the police may be interpreted as a sort of social welfare. They provide a service: protection. The appropriate privatized approach is to be a vigilante or hire guards. That’s what criminal gangsters do, so one shouldn’t whine that one wants to be protected with other people’s money and other people’s lives.

  • Loren Petrich

    fuguewriter, you are completely free to try to use gold coins to pay for everything. You are even free to use Monopoly play money for that purpose. However, the intended recipients of this money are likely to reject it, and since you believe that everything ought to be voluntary, you are stuck.

  • smrnda

    I don’t see the slippery slope you do. Has Sweden ever been Fascist? The UK? It seems many nations have welfare states without turning into dystopias.

    In a libertarian economy, your human dignity doesn’t exist once you go to work, or don’t have lots of money. The way to resolve these problems is *some* regulation and *some* welfare and then permit a high degree of individual liberty. Many nations have done this.

    Your SKY IS FALLING on mixed systems is just chicken little nonsense. The ‘free market’ might be ‘sustainable’ in the sense that ‘the government can’t run out of money’ but at best, such a system would provide 3rd world standard of living.

    And here:

    “Societies, nations, groups, etc. are made up of concrete individuals in space and time – you cannot have human dignity without this? – who also are not atomized, separate, or disconnected. ”

    People are not separate and disconnected. None of us are self-reliant. We don’t produce all we consume ourselves, and people exist as members of groups – in fact, one person can be part of many groups. Sometimes the group you are part of like likely to face discrimination, and your dignity can only exist if there exist laws and government interventions. I am disabled, female, I’m an atheist from a Jewish family, and I am a lesbian. In many ways, because I’m not a white, Christian heterosexual male without any health issues, I would be squished like a bug if it weren’t for government programs. I have been disabled and unable to work. When charities in the past took on people, they often took away their dignity, because charities are run by people who believe they are good and virtuous and noble. Government aid is actually accountable to everybody, including those who receive it.

    Government isn’t the only thing that can take away your dignity. I mean, sexual harassment legislation prevents your employer (who you don’t really *choose* to work for freely) can’t demand sex in exchange for work.

    The difference between successful, liberal welfare states and Fascist ones is the rejection of that ‘oneness’ that leads to racism, militarism , imperialism and war. A pluralistic society built on inclusiveness is going to function very differently since appeal to nationalism and ‘sacrifice for the mother/fatherland’ just don’t work.

    On fire departments, publicly funded fire departments are working. There are sound reasons why private sector firms would not do so good, and adequate historical evidence for this. Are we to put our own self-interest aside and decide that we must do what Randoids find to be *metaphysically beneficial?* In the few cases where public fire departments failed, it was ‘small government’ at work.

    “It’s yet again a false dichotomy. What works best is a free society of highly empowered, lit up individuals who connect positively and freely. ”

    There is no such thing as a voluntary exchange, only varying degrees of necessity, in which ‘choice’ is clearly proportional to privilege. “Empowered” is a meaningless buzzword. “Lit up” is another buzzword, but I take it you mean that anybody sinking in your system it just not ‘lit up’ enough. People should be fine being average and getting a decent standard of living. I am not a mindless Randoid who views paid employment as the only legitimate thing to do with your life.

    So, why should I support your system? All you do is tell me other systems are unsustainable, but you fail to provide proof.

    Another add :

    ” And the mixed component is going to torpedo the productive sector.”

    EVIDENCE please? The private sector is not being overtaxed at all. Businesses can claim all sorts of tax breaks, which means roads don’t get fixed and schools fall apart and teachers teach classes of 40 kids.

  • Science Avenger

    “A transfer system where the government deducts taxes from a person’s paycheck during their working years, holds the money safely in a trust fund, and redistributes it back to them in their old age.”

    Apologies if this is covered elsewhere in the comments, but this is incorrect and should be changed. Social Security transfers taxes collected from workers to benefits received by retirees. There is no trust fund, not in any meaningful sense of the word. There are accounting elements that deal with over and under collecting by the program (as with all government programs), but they are not the defining aspect of the program.

  • Science Avenger

    “Social Security will be of no use if the value of the (illusory) trust fund is steadily eroded as it has been.”

    You have no idea what you are talking about. The “trust fund” is just an accounting gimmick that politicians use to sway ignorant voters like yourself. It’s a program of transfer payments, from workers to retirees. There is no big pool of money sitting there waiting to be used by retirees.

  • Nancy McClernan

    As diverting as it may be to engage fuguewriter over his rightwing extremism, we mustn’t forget that arguments over social welfare programs have very little to do with Atlas Shrugged. While fuguewriter naturally considers collectivist states like present-day USA and Sweden and the UK to be rotter-induced hellscapes, they have almost nothing in common with Atlas Shrugged – as Adam has pointed out, the world of Atlas Shrugged doesnt have a social safety net. So if you want to argue about our SS system that’s fine, but just realize its technically OT.

  • Nancy McClernan

    You didn’t refute my claim – you merely doubled down in your goldbuggery. Especially since if we adopted a gold system corruption would magically end among “rational men” and there would be no worries about cronyism.

  • Nancy McClernan

    If we all came together and agreed to respect the gold standard isn’t that a form of collectivism?

  • Nancy McClernan

    It’s a standard EP tactic to claim that anybody who challenges the conclusions of EP is either anti-science or politically correct. Obviously they couldn’t go the anti-science route with Gould.

  • fuguewriter

    Actually, none of us is.

    First off, legal tender laws have a profound influence, and our junk paper money is legal tender. In a sense, Gresham’s Law kicks in. The “dollar” is a well-honored fiction, in fundamental terms.

    In another for-instance, gold contracts were (disgustingly) abrogated by the FDR administration as part of its mad seizure of gold and devaluation of the dollar. See http://en.wikipedia.org/wiki/Gold_clause (the Appeals decision has by no means been considered binding – also, once burned, twice shy).

    Most important, the entire economy is off-center and has been for many, many years as fiat currency has induced all the predicted distortions (like sustained, systemic asset bubbles).

    > the intended recipients of this money are likely to reject it

    Not in an economy in which legal tender is not fiat money. In a truly free economy, people could choose to use any medium they like for daily trading – or no medium at all.

  • Science Avenger

    Swift covered this brilliantly in Gulliver’s Travels. In the land of intelligent horses, the equines were confused by the behavior of the stupid simians, who hoarded shiny stones for no apparent reason, and would wail terribly when the equines took them away.

  • Science Avenger

    It was because of his piercing understanding gaze, or something overly romantic like that. Sounds like a bromance to me.

  • Science Avenger

    The rule of thumb is never assign to the market something you want less of, because creators of products will do what they can to create said market. Think private prisons…

  • Science Avenger

    Funny, given Rand’s love of amphetamines, since an inability to follow analogies is a tell-tale sign of a meth addict.

  • Science Avenger

    ‘>Social Security is a non-sustainable not-even-Ponzi scheme…’

    Correct, but not in the way you think. SS is a welfare program for old people. Taxes are collected, benefits paid, with a few niggling accounting issues that one should not allow to cloud the big picture. It’s not a pension and its not a ponzi scheme. The latter term these days is Rightwing for “a financial program I don’t like”.

    ‘>The words “trust fund exhausted” would make you sit up and take notice if it were a hated private bank.’

    That’s because “trust fund” has a clear meaning with regard to banks, whereas with social security its an analogy, and a bad one, to confuse the rubes.

  • Science Avenger

    “>What works best is a free society of highly empowered, lit up individuals who connect positively and freely.”

    Sure, as long as the society has the power to prevent individual behavior that does or threatens to do serious harm to the group. Sans that, said free society will last only as long as it takes a Galtian loner to try to build a nuke or create smallpox (or worse) in his garage.

  • Science Avenger

    Of course other choices exist all over the country, and getting to them should be no problem at all. Look how easily Galt bounces around the country snatching away titans of industry, and on a mere rail worker’s income!

  • smrnda

    But the fact that people tend to believe the biases of their own culture is a scientifically established fact, so anyone using evo-psych is suspect already, since so much of it depends on speculation.

    I mean, I have a *really hard time* believing that evolution has wired men or women to be different in mathematical ability, since we haven’t really been *doing advanced maths* for much of human history. A case could probably be made that many traditionally feminine tasks like weaving cloth and such require mathematical sophistication, or at least good counting and pattern recognition.

    Of course, that is pure speculation on my part.

  • smrnda

    The same type of people seem to think that when it comes to ethnic minorities, the poor, or the disabled, making these people feel like suspected criminals is good. It’s pure in-group bias at work.

  • smrnda

    So, you want to impose the gold standard on us, whereas we want nothing with your political system. What gives you this right?

    I mean, I can accept compromises, but this is just *INITIATE FORCE POINT OF THE GUN* you’re proposing.

  • Nancy McClernan

    If you enjoyed fuguewriter’s comment you’ll love 12 Rules of Goldbuggery

    http://www.ritholtz.com/blog/2013/04/the-10-rules-of-goldbuggery/

    And of course the Mighty Krug-man has many things to say on the subject:

    http://krugman.blogs.nytimes.com/?s=goldbug

  • Nancy McClernan

    EP theories are pure speculation too, completely unsupported by evidence. A favorite EP tactic is to study a cultural phenomenon and then claim that the phenomenon is an example of innate tendencies. David Buss did a “study” of marriage preferences that consisted of a survey – sometimes mailed out – asking people their attitudes about sex, marriage etc. And on the basis of that “study” Buss proclaimed that it proved the EP theory that women preferred older men and men preferred younger women. As if culture – and the economic infrastructure that creates culture – had no impact on such things.

    Meanwhile an inconvenient truth for the EPs is that in the parts of the world where women have become increasingly economically self-supporting, thanks in large part to anti-discrimination laws, more women are marrying younger men. And in fact, this was a statistical trend at least as early as 1987, fifteen years before The Blank Slate was published.

    http://articles.chicagotribune.com/1987-12-20/features/8704040354_1_health-statistics-analysis-younger-men-victoria-houston

    The EPs don’t want to ruin their beloved theories with actual facts.

  • Nancy McClernan

    I’d never heard that. Do you have a reference?

  • Nancy McClernan

    BTW – an excellent web site with videos on a great number of subjects is Khan Academy. Highly recommended. And for the purposes of this chapter in the Atlas Shrugged analysis check out these:

    What happened to the gold?
    https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/banking-and-money/v/banking-17–what-happened-to-the-gold

    Social Security Intro
    https://www.khanacademy.org/humanities/american-civics-subject/american-civics/v/social-security-intro

  • Science Avenger

    Nothing more than vast personal experience from another time. Once you know what to look for, you can spot a meth addict from across the room. It’s like they are wearing neon. Other traits are being self-absorbed/important, and blameless in all things. Sound familiar?

  • Science Avenger

    “>I don’t see the slippery slope you do.”

    Slippery slope thinking is standard for Objectivists. “Whittle the proportion of poison down to one drop, and it still kills” was Rand’s way of thinking, displaying a dismal ignorance of both the apothacarial arts as well as basic logic.

  • smrnda

    This is why I’m happy that I did my psychology work in experimental psychology. EP is largely an unfalsifiable discipline, but you actually *can* see the effects of gender stereotypes on performance and choices in experimental psychology.

  • smrnda

    Private prisons are a great example, though in a way, public prisons create a similar problem. Part of the reason is that prisons are often located in remote areas and might be the major employer for an entire region.

    Another issue – I live in Illinois, and we have a problem with prison being located in rural, white areas, with a prison population that is certainly *less white* than the state average, so it creates this whole problem of pitting the interests of poor rural white people against poor urban Black and brown people.

  • smrnda

    There was an Aesop’s fable that was much the same, which mean the understanding of ‘shiny == valuable’ being silly is pretty much as old as dirt.

  • smrnda

    Just wondering – is it known if it’s just because courthouses tend to be full of flammable paper, or is arson a factor? I mean, burning courthouse records back in the day before cloud storage on the internet might be a sensible way to clear your record or obscure legal facts like who owns mineral rights in a given area.

  • smrnda

    The poison analogy reminds me of a time a Christian tried to explain why the Xtian god cannot tolerate ANY sin. The guy said ‘would you drink that glass of water if you knew there was FECES or URINE in it?’

    I pointed out that our water does contain minimal levels (measured in parts per million) of feces and urine. The human body is well-adjusted to a filthy environment, and in some ways, too clean is bad for us. It seems to be a thing with fundamentalists of sorts, that slippery slope.

  • J-D

    So are you predicting that in the absence of government people would voluntarily choose to denominate all prices in gold, and only in gold? That seems massively unlikely to me. It’s not how people behaved in the millennia of recorded history in which there were no laws regulating currency.

    If it’s not a prediction, and it’s not a proposal for regulatory action, what is it? An expression of your personal preference? You’d prefer it if people voluntarily chose to denominate all prices in gold? If that’s what you mean, then all I can say is that I sympathise with your disappointment.

    Although not much.

  • J-D

    Nominative determinism?

  • Nancy McClernan

    If ever anybody was Ayn Rand’s polar opposite it was Pete Seeger. He died yesterday. He didn’t write This Land is Your Land but it represents his spirit perfectly:

    This land is your land, this land is my land
    From California to the New York island;
    From the red wood forest to the Gulf Stream waters
    This land was made for you and me.

    A big high wall there that tried to stop me;
    Sign was painted, it said private property;
    But on the back side it didn’t say nothing;
    That sign was made for you and me.

    Nobody living can ever stop me,
    As I go walking that freedom highway;
    Nobody living can make me turn back
    This land was made for you and me.

    http://www.youtube.com/watch?v=HE4H0k8TDgw

  • fuguewriter

    Yes. “People” would. All people? No. And there’s no need for all. What’s needed is government out of monetary media, or at least to stop issuing paper money and work in grams of gold.

    In a totally free economy, people would tend to gravitate toward the best medium based on their perception of merit. Gold’s the best, but nothing would stop some folks from using silver, platinum, cowrie shells as mentioned – whatever they please. Or no medium at all.

    > If it’s not a prediction, and it’s not a proposal for regulatory action

    It’s a) a proposal for getting rid of a ruinous class of government intervention, b) advocacy for the gold standard, and c) a suspicion that government would/should bias toward requiring gold as payment for fees, voluntary contributions, etc. as the most prudent medium to receive and store in reserve for government needs.Some other media (e.g., silver) could be accepted, perhaps at a slight premium, and then traded out for gold.

    > You’d prefer it if people voluntarily chose to denominate all prices in gold?

    I advocate doing so, for the above-given reasons.

  • fuguewriter

    [ Patheos is falling down on the job in sending me notifies. I answer just about every one of them. Whether they are posted is another matter. ]

    Why is “moral hazard” in the normal sense seeming strange in this context?

  • ORAXX

    Rand’s only, dubious, achievement lies in helping truly awful people feel better about themselves.

  • J-D

    It seems to me, then, that your position that the government should have nothing to do with issuing currency is logically separable from your advocacy of gold. Governments were involved in issuing currency long before they started issuing paper money, by minting coins from various metals, including gold. Does your advocacy of government retreat from the issuing of currency include advocacy of cessation of all governmental minting of coins?

  • fuguewriter

    The two positions are separate: one’s what government must do, the other’s what I recommend non-government people do (and many have done through history).

    Government shouldn’t be in the money business. No minting, printing, ledger-book prestidigitation – zero. No Fed or other central bank. No foreign exchange operations. Total disconnect.

    Government should require gold or the equivalent as payment of fees, taxes (if there were any), and government bonds (if any) should be denominated in gold grams – all for prudential purposes.

  • GCT

    So, the government shouldn’t mint coins to back up the gold that we use to pay for things? OK, so I guess I should be carrying around gold to pay for everything I buy? Perhaps I should have a room in my house dedicated to storing gold so that I’ll have money to pay for things? Do you even know how ridiculous that is?

  • fuguewriter

    > the government shouldn’t mint coins

    Correct.

    > to back up the gold that we use
    to pay for things?

    This doesn’t mean anything. Prices should be denominated in grams/decigrams/milligrams/etc. of gold.

    > OK, so I guess I should be carrying around gold to
    pay for everything I buy?

    You guess wrong. You should study the history of when banking was left (somewhat) free and there was (somewhat of) a gold standard, (This is one of the problems with discussions attempting to nail down exactly what would happen in a market, when human ingenuity and entrepreneurship specialize in making what is unexpected.) For instance, a major form of daily spending could be transfer cards, moving gold from one account to another at a trusted depository. There were checks written in the gold standard era.

    > Perhaps I should have a room in my house
    dedicated to storing gold so that I’ll have money to pay for things?

    This is the problem of not taking questions seriously.

    > Do
    you even know how ridiculous that is?

    There’s ridiculousness, but not on my side.

    An essential problem with all this throwing up of hands at how absolutely insoluble some basic problem is – is that the very alleged importance of it *incentivizes solutions.* This answer holds across the board – private fire departments, parks, welfare versus charity, and the rest of the things used to defend statism. You don’t see humans as active and problem-solving. I do.

  • Science Avenger

    Most of the attributes you give for the preference of gold as tender would apply to government paper money as well, and those that don’t (found in many areas) don’t seem relevant. You are also failing to address the fact that despite all these wonderful reasons, its still an arbitrary nonobjective value placed on the gold. A loaf of bread has more objective value than a lump of gold.

  • J-D

    Government involvement in the currency business (whether the currency is specie, paper, plastic, or electronic) is something that has developed independently more than once, has lasted for millennia, and has spread all over the world. That doesn’t automatically mean it’s a good thing, but it does mean that it’s not a recent innovation or a freak occurrence. It’s the norm, and that suggests it’s worth asking why. I could give you my explanation of the prevalence of the phenomenon, but what’s yours?

  • fuguewriter

    A strikingly conservative argument. The subjugation of women is also something that developed independently more than once, had lasted for millenia, and spread all over the world.

    As for why governments were involved in such things, he same reason they were wrongly involved in so many other things: we’re primates, the early tribe held dominion, and we’ve been slowly liberating ourselves. Thus qualified, my answer is: power, and a certain apparently tribe-protecting mercantilish default.

    Says Wiki: Coins were typically minted by governments in a carefully protected process, and then stamped with an emblem that guaranteed the weight and value of the metal. It was, however, extremely common for governments to assert that the value of such money lay in its emblem and thus to subsequently reduce the value of the currency by lowering the content of valuable metal.[citation needed]

    - http://en.wikipedia.org/wiki/History_of_money#Standardized_coinage

    The next line is of note: Gold and silver were used as the most common form of money throughout history. – http://en.wikipedia.org/wiki/History_of_money#Standardized_coinage

  • J-D

    The conservative move is to assume without inquiry that there’s a good reason for established practices. Inquiring into the reasons for established practices (without assuming that they must be good ones) is the reverse of conservative. Many people inquire into the reasons for the subjugation of women without being conservative. I could give you my explanation for the subjugation of women, just as I said earlier I could give you my explanation of the prevalence of government involvement in currency. I don’t see that you can, though.

    ‘Government is involved in currency because we’re primates’? No, other primates don’t have currency, or even governments.

    ‘Government is involved in currency because of power’? Obviously incomplete.

    ‘Government is involved in currency because the early tribe held dominion’? What? Which early tribe held dominion over whom, and how does that have anything to do with government or with currency?

    ‘Government is involved in currency because of a certain apparently tribe-protecting mercantilish default’? Yes, it appears that government involvement in currency is the default, or close to it, but why? Isn’t explaining why it’s a default the question? And how does government involvement in currency appear to protect the tribe?

    Seems to me you’ve got some muddled ideas there.

  • fuguewriter

    > other primates don’t have currency, or even governments.

    Other primates don’t have to have currency for our primatehood to be relevant: namely, we are aggressive/hierarchical *and* cooperative/anti-hierarchical higher animals. Your concept of causality’s simple in the extreme.

    > how does that have anything to do with government or with currency?

    If you cannot see how government, tribalism, and our nature as primates relate, you’re beyond my help.

    > Isn’t explaining why it’s a default the question?

    The “tribe-protecting mercantilish” idea does that.

    > how does government involvement in currency appear to protect the tribe?

    By a) adding to the glory/power of the Leaders and b) defending against bad actors (through the force of arms) and that other tribe beyond the horizon that wants to do us ill, take our females, etc.

    > Seems to me you’ve got some muddled ideas there.

    “Seems” appears often in your comments.

  • J-D

    Tribal societies, by definition, don’t have governments and so can’t possibly have government involvement in the currency.

    An explanation that says ‘humans are both aggressive/hierarchical and cooperative/anti-hierarchical, therefore we have government involvement in the currency’ has a yawning gap in the middle that needs to be filled in before it is remotely plausible.

    I understand how it might appear to people that their leaders need more power in order to defend against external enemies or potential enemies. I see that going on around me. But I still don’t see the connection with government involvement in the currency. Nobody’s saying that we need government regulation of Bitcoin in the interests of national security.

  • fuguewriter

    Tribal societies are universally leaderless? This will be news to ethnographers.

    The yawning gap is asserted but not proved. The question is: *what makes people have leaders?* Answer: we are, among other things, hierarchical primates. So money fell naturally under leaderly control as groups developed.

  • A Real Libertarian

    “Directly comparable to the good old scenario where the somebody has the awesome freedom of chosing between dying of thirst and paying the market price of $50,000 for a bottle of water.”

    Directly comparable to the good old scenario where the somebody has the awesome freedom of choosing between dying of thirst or paying the market price of $50,000 for a bottle of water or drinking out of their well that the water merchant has just poisoned.

    TFTFY.

  • A Real Libertarian

    “The courthouse burned down! Ha! What lazy plotting. That’s a stock
    plot point which made an appearance in I Love Lucy, of all places — I
    wonder if that’s where she got if from?”

    Again, John Galt would have burned the courthouse to hide his past. Or he would have if he was written by a competent author.

  • A Real Libertarian

    “that’s actually how the famously rich Croesus made a lot of his money”

    That was Crassus:

    https://en.wikipedia.org/wiki/Marcus_Licinius_Crassus

    Croesus minted the first gold coins:

    https://en.wikipedia.org/wiki/Croesus

  • A Real Libertarian

    And building a larger and more powerful cult then L. Ron Hubbard, despite having no self-awareness.

  • J-D

    Tribal societies may have leaders, but they don’t have governments.

    To say that we have leaders because we are hierarchical is to restate the same fact in different terms, not to offer an explanation for it.

    Other hierarchical animals (primate or not) have leaders, by definition, but they don’t have governments, and they also don’t have currency.

    Leaders, by definition, wield power, but they don’t all exercise power to the same degree or over the same things. For example, leaders of governments in state-level societies wield more power than tribal leaders in tribal societies. So the question is not ‘Why do people have leaders?’ The question is ‘Why do governments wield power specifically over currency?’ It’s not because everything naturally falls under the power of government, because that’s not true.

  • fuguewriter

    We’re now down to word usage: http://en.wikipedia.org/wiki/Government . A human tribe with a leader has a government, certanly sufficiently for the purposes of this discussion.

    > ‘Why do governments wield power specifically over currency?’ It’s not because everything naturally falls under the power of government

    Which ignores previous answers in our thread. The leader/government/authority/council will naturally take interest in anything touching significantly on the perceived power, survival, expansion, defense, etc. of the tribe. That’s the relation to money. Ditto arms of any power.

  • https://www.facebook.com/michael.carteron Michael

    You’re right, my bad.

  • A Real Libertarian

    No problem. It’s an easy mistake to make.

    Both are Classical era Greco-Roman historical leaders famous for being absurdly wealthy and with similar names.

  • J-D

    If you argue like this:
    Premise 1: Government gets involved in anything perceived as affecting the survival or power of the society
    Premise 2: Currency is perceived as affecting the survival or power of the society
    Conclusion: Therefore, government gets involved in currency

    – then I want to see how you justify your second premise.

  • fuguewriter

    Premise 1: anything substantial, yes.

    Premise 2: consider what a possessor of a large proportion of known wealth can do, especially in a more primitive/smaller tribal setting: raise armies, control resources, fund/ally with enemies, etc. Having much money increases the ability to get things done. (A good argument for government not having a monopoly on it.)

  • J-D

    The aggregate level of resources available to an entire society affects its ability to raise armies and its power and chances of survival generally. But currency doesn’t affect the aggregate level of resources available to an entire society.

    The more uneven the distribution of wealth, the greater the power of wealthy individuals, but this doesn’t make society as a whole more powerful.

    Government involvement in currency has neither the intention nor the effect of reducing the ability of individuals to accumulate great wealth.

    As a side note, in societies that are smaller or with less development of technology or of social organisation, the scope for raising armies and controlling resources is less, not greater.,


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