Atlas Shrugged: Offshore Accounts

Atlas Shrugged, part II, chapter II

All the movers and shakers, including Hank and Lillian, have showed up for James Taggart’s wedding in New York. Dagny is also there, and obviously she and Hank have to keep up the pretense that there’s nothing between them. This makes Hank grit his teeth at his inability to, I don’t know, have sex with her right there on the ballroom floor:

…he wondered why he stood here, he wondered who had the right to demand that he waste a single irreplaceable hour of his life, when his only desire was to seize the slender figure in gray and hold her through the length of whatever time there was left for him to exist.

There’s a short, uninteresting confrontation between Dagny and James’ bride Cherryl, who inexplicably somehow still thinks he’s the capitalist hero of the Taggart family. She berates Dagny, who simply stands there and smirks. Then James proposes a toast:

“We are at the dawn of a new age,” said James Taggart, from above the rim of his champagne glass. “We are breaking up the vicious tyranny of economic power. We will set men free of the rule of the dollar. We will release our spiritual aims from dependence on the owners of material means. We will liberate our culture from the stranglehold of the profit-chasers. We will build a society dedicated to higher ideals, and we will replace the aristocracy of money by—”

“—the aristocracy of pull,” said a voice beyond the group.

They whirled around. The man who stood facing them was Francisco d’Anconia.

…”What’s the matter?” he asked in the midst of their silence. “Did I say something that somebody here didn’t know?”

Francisco says that he’s dropped by the party to thank them, all the stockholders who’ve invested heavily in his company: “I seem to be popular with an astonishing collection of public figures from all over the world – from People’s States where you wouldn’t think there’s any money left at all.”

Despite the fiasco of the San Sebastian Mines, the stock of d’Anconia Copper has been skyrocketing. Francisco says that it’s not surprising: “there’s not much competition left in the world,” he says, because a set of economic directives agreed on by “your boys in Washington and the boys in Santiago” have all but shut down America’s copper industry. “And the result is that this country suddenly has to import much larger amounts of copper. And where in the world is there any copper left – unless it’s d’Anconia copper? So you see that I have good reason to be grateful.”

“I assure you I had nothing to do with it,” Taggart said hastily, “and besides, the vital economic policies of this country are not determined by any considerations such as you’re intimating or—”

“I know how they’re determined, James. I know that the deal started with the boys in Santiago, because they’ve been on the d’Anconia pay roll for centuries – well, no, ‘pay roll’ is an honorable word, it would be more exact to say that d’Anconia Copper has been paying them protection money for centuries – isn’t that what your gangsters call it? Our boys in Santiago call it taxes. They’ve been getting their cut on every ton of d’Anconia copper sold. So they have a vested interest to see me sell as many tons as possible. But with the world turning into People’s States, this is the only country left where men are not yet reduced to digging for roots in forests for their sustenance – so this is the only market left on earth.”

This doesn’t make sense. Chile has collapsed to the level of pre-agricultural subsistence, which must mean mass starvation and societal breakdown, with all the chaos and violence that would have to entail… and yet they still have a government capable of enforcing laws, collecting taxes and making international trade agreements?

This leads back to the much bigger question, never more than glancingly addressed in the pages of Atlas Shrugged, of what’s happening in the world outside the United States. From this passage and a few other cursory hints, we can glean that every other country has become a communist dictatorship and the U.S. is the last redoubt of capitalism. What we’re never told is the how or the why. How could this be happening in every country at the same time, and why doesn’t any country see that it’s not working and reverse course, especially if things are as bad as Francisco says?

After all, the world itself is a free market in citizenship. Just as companies compete for employees, nations and localities compete to attract businesses and investors (as we saw when the hedge-fund billionaire John Paulson flirted with the idea of moving to Puerto Rico to avoid taxes). If socialism is destroying the wealthy countries, there ought to be plenty of smaller, poorer nations that would put out the welcome mat for capitalist refugees carrying suitcases full of cash. Even the villains are doing this; that’s why they’re parking their money in d’Anconia Copper stock. Why haven’t Hank and Dagny considered cashing out and moving to the Cayman Islands, or some other friendly tropical tax haven?

Of course, that is more or less what the heroes do in the end. But to maintain suspense throughout the second half of the book, Rand has to keep up the premise that there’s nowhere to retreat to, that no one has any idea where the disappeared capitalists could have gone. And that could only happen if every country in the world independently decided to adopt the same wealth-redistributing policies, despite the advantages that could be reaped by any one that broke away. (The alternative is a powerful and sinister conspiracy – the Illuminati, perhaps? – that’s secretly pulling the strings on all the world’s governments, but that would take a degree of competence which Rand is adamant her villains don’t possess.)

As I said in my first Atlas post, Rand treats the decay of capitalism like the breakdown of a machine, or the spread of an illness: something that happens of its own accord, requiring no external cause. And if you find that implausible, well, so did Ayn Rand. According to Anne Heller’s biography Ayn Rand and the World She Made, she penned these words in her Romantic Manifesto:

“If I see that the good is possible, yet it vanishes, I do not take ‘Such is the trend of the world’ as a sufficient explanation. I ask such questions as: Why? – What caused it? – What or who determines the trends of the world?”

Other posts in this series:

About Adam Lee

Adam Lee is an atheist writer and speaker living in New York City. His new novel, City of Light, is available in paperback and e-book. Read his full bio, or follow him on Twitter.

  • eyelessgame

    I would naively think her notion of “breakdown” would be much like the anticommunist hysteria of the 1950s imagined it – the Communists were infiltrating governments and turning them into something Stalinesque. Given the time the novel was written I can’t imagine she was varying much from the assumptions of the time. There were many paranoids with the real fear that communism was going to take over the world – the whole “bread and circuses”, taking all the money from the bourgeouisie and paying it to all the proles, buying their (initial) support, then cementing control before it gets really bad – that’s how the anticommunist movement feared things were going to go in the 1950s, at least if we didn’t show ‘em what’s what by fighting in Korea and so on.

  • J-D

    According to Francisco d’Anconia, the ‘boys’ in Washington and the ‘boys’ in Santiago have collaborated in a plan which has effectively shut down copper production in the US, impelling the US to import more copper from Chile. He goes on to explain the motivation of the ‘boys’ in Santiago: the more copper Chile exports, the bigger the cut they take in the form of taxation. But what’s the motivation of the ‘boys’ in Washington? Don’t they have the same desire as the ‘boys’ in Santiago to take the biggest possible cut in the form of taxation? But doesn’t that mean they want US producers to sell as much copper as possible, the way the ‘boys’ in Santiago want Chilean producers to sell as much copper as possible? How are we supposed, then, to interpret the complicity of the ‘boys’ in Washington in the shutting-down of the US copper industry? Is this a sign that the Santiago ‘boys’ are smarter than the Washington ‘boys’ and have played them for suckers? But how did they manage that? Or is there supposed to be some other explanation?

  • Adam Lee

    That’s possible, although one odd thing is that the USSR (and the Warsaw Pact nations in general) don’t seem to exist as far as this book is concerned. They’re never mentioned or alluded to.

  • Enopoletus Harding

    The book is science fiction. It does not bother to work with existing specific states, companies, unions, and ideologies as that might make the reader think Rand was criticizing only those specific states, companies, unions, and ideologies.

  • arensb

    Yes, apparently it’s set in a strange parallel universe that has unlimited natural resources, a sharp dichotomy between smart and stupid people, perpetual-motion engines, and Colorado.

  • skyblue

    hold her through the length of whatever time there was left for him to exist.

    That sounds out of character for him, and for their relationship. “Hold” her? Where’s the violence, the he-needed-no-consent attitude?

  • Benn

    It might be “science fiction”, but it is VERY bad sf. Rand does a incredibly poor job of world building; hardly bothering to show how such a world as shown in “Atlas Shrugged” could come into existence. Worse is the “science” in the book, which is about as believable as the science found in the average 1960s comic book. Personally, I could almost excuse the ridiculous science if the socio-political environment of the book was better developed. As it is, “Atlas Shrugged” is about as much science fiction as the old “Lost In Space” TV show. And often just as laughable and bad.

    (And honestly, better science and a better job of world-building, might have made Rand’s political philosophy more credible and persuasive. As it is, unless you already buy into that particular mindset, it’s easy to dismiss her ideas as merit-less and highly flawed.)

  • X. Randroid

    I think what you’re missing is that the “Washington boys” (legislators and bureaucrats) in Rand’s fictional US have absolutely no ideas of their own (good or bad) and not even the ability to come up with ideas. They are nothing but the puppets of whoever can get some kind of leverage over them. She describes head bureaucrat Wesley Mouch as “the zero at the meeting point of forces unleashed in destruction against each other” and Head of State Mr. Thompson as “a product of chance [who] knew it and aspired to nothing else.” So whatever the puppet masters want, the Washington boys will stamp the “public good” label on and adopt.

    At the present juncture of the narrative, the puppet masters are Jim Taggart and Orren Boyle. Taggart and Boyle hold a lot of d’Anconia Copper stock and therefore stand to profit from choking Francisco’s competition. So they manipulate their Washington puppets into collaborating with the “Santiago boys.” Never mind whether it’s actually in the interest of the US or not; that’s not a question Rand’s Washington boys care about.

  • X. Randroid

    I think that’s pretty much it. Rand was loudly and proudly among the “paranoids with the real fear that communism was going to take over the world.” She was a supporter of Joe McCarthy’s communist-hunt and testified as a friendly witness to the HUAC (mostly about a movie called “Song of Russia” that apparently painted an unrealistically rosy picture of life in the USSR).

    Given this mindset, I think Rand assumed her readers would just take her assumption that everywhere else had become a “People’s State” as plausible. She didn’t think she needed to explain how or why, people would just know.

  • X. Randroid

    I can think of a couple of explanations for omitting the USSR. One is that she was trying to convey to the readers that this is a world where Communists have taken over almost everywhere, without spending time on how and why. So she mentions People’s States of places her readers wouldn’t expect, like Norway and England and Mexico and skips the places where Communism wasn’t already established.

    Another is that it’s her paranoia at work. She claimed at various times to fear what Soviet officials would do to her family (who remained in the USSR) if they ever figured out who she was. This, supposedly, was why she kept her real name a secret from all but her closest associates. Maybe she was afraid that if she said anything about the People’s State of The USSR being behind the ruination of the world’s economies, that would somehow draw their wrath. Of course, fear for her family didn’t stop her from publishing We the Living in 1936, but maybe her paranoia increased with age and/or the onset of the Cold War.

  • X. Randroid

    Adam, you skipped the hilarious moment where Cherryl is at some party and feeling bewildered by how Jim’s friends don’t seem to accord him the respect due to the great “capitalist hero” she thinks he is. So she goes out onto the balcony, where:

    She looked at the lone straight shaft of the Taggart Building rising in the distance—and then she thought she understood: these people hated Jim because they envied him.

    Paging Dr. Freud ….

  • J-D

    That still means the ‘boys’ in Santiago are smarter than the ‘boys’ in Washington, able to act in their own interests without the manipulation of puppet masters, not being simply played for suckers the way the ‘boys’ in Washington are.

  • GubbaBumpkin
  • Enopoletus Harding

    I don’t think Rand was actually praising the then-existing government of Colorado.

  • Randy Owens

    And, to nitpick on one particular minor word choice, a decent author wouldn’t write “then she thought she understood;” it’d just be “then she understood,” and then give clues that lead the reader to realize she doesn’t really understand. About the only reasons for doing otherwise would be because you’re not even taking your own characters in good faith, or you assume your readers are idiots who won’t catch on on their own, unless they’re led by the nose to it.

    What’re the Vegas odds on that one?

  • Adam Lee

    Francisco does say that the Washington cabal probably got something in exchange for this, although he doesn’t know what it was: “I don’t know what they offered to the boys in Washington, or who traded what and to whom”.

    That said, in the name of being fair to Rand, there’s at least one possible explanation: most of the looters have invested their ill-gotten gains in d’Anconia Copper for safekeeping, because according to Francisco, it’s the oldest and safest company on earth. If that’s true, they’d naturally want to shut down other sources of copper to increase the value of their investment.

  • J-D

    So Francisco says that it doesn’t make sense without some kind of additional explanation, which he’s unfortunately unable to provide.

    Because Ayn Rand knows that it doesn’t make sense without some kind of additional explanation that she doesn’t provide, because fitting together everything in her book in a way that actually makes sense is unfortunately beyond her.

  • unbound55

    This is probably the strongest section so far that points to the psychological projection of Ayn Rand’s own philosophy on the government. In the world of money is everything, it is actually the corporations that are buying up competition and pushing hard towards either monopolistic or oligopolistic markets. We’ve seen this ramp up considerable starting in the late 70s (about 20 years after this book was publish), and it really hasn’t slowed down.

    Whereas the government tried a few times to create more market competition (in the 80s with the break up of ma bell, and more recently with the ACA), the corporations are ever-ready to gobble up competitors to keep competition low and prices high. Amusingly, it seems like the more conservative leaning people are the ones that are complaining about the attempts to create competition when they are supposed to be the ones that should embrace such things.

  • BeaverTales

    I would love to see more written in the media about the intellectual forebears of Objectivism who preceded Ayn Rand. One connection I think that needs to be made is Herbert Spencer, the discredited and mostly forgotten 19th century architect of Social Darwinism who was wildly popular among both American social conservatives and liberal intellectuals alike from 1870 until 1900 or so.

    He believed that industrialists like Andrew Carnegie and Cornelius Vanderbilt were the epitome of human evolution, and that giving charity and assistance (even postal service!) to the lower classes was working against the process of Natural Selection by supporting their intrinsic inability to sustain themselves, therefore allowing them to breed. Giving them an education that would ultimately be wasted on them was also seen as pointless. Of course, his ideas flattered the wealthy elite whom he lionized as the next step in the inexorable ascendancy to divine grace, and they flattered him back with checks and speaking engagements.

    The implicit assumption was that man was evolving into a more noble, divine and “pure” state (and all the supernatural implications that come with it) that should rightfully be hastened by society creating the conditions ripe for the emergence of this Super-being, rather than Darwin’s simpler and scientifically sound idea that environment shapes the successful species of the day, without prejudice toward any particular organism, other than its ability to adapt to changing conditions.

    Like Rand, his Synthetic Philosophy “viewed private charity positively so long as it did not encourage the procreation of the unworthy”…it had the paradoxical effect of supporting those who believed in ascendancy through Divine Grace, and solipsistic cults of personality among those who claimed an affinity towards science. His writings were used as a justification for imperialism, eugenics, racism by theists atheists and agnostics alike. I find it disturbing that his ideas (and Rand’s) are being resurrected and taking on lives of their own among modern day intellectuals.

  • X. Randroid

    It’s not that hard to imagine that Taggart and Boyle (who have a lot of money) are giving the “Washington boys” something they want. Campaign contributions, bribes, maybe keeping them out of jail (which is implied in the case of Mouch). So even if Rand can’t be bothered to spell out—or even work out in her own mind—the exact scheme, the lack of specifics doesn’t strike me as that big a problem. And, as we’ll soon see, Francisco doesn’t need to know specifics in order to make his next move, so it’s not surprising that he didn’t invest the effort to figure it all out.

    But you do raise a good point, well worth considering in connection with later chapters. Skipping ahead, we will see the Taggart/Boyle influence start to fade, in favor of a cadre of “intellectuals” and random thugs who will steer the Washington boys into policies that make even less sense than killing off the domestic copper-mining industry at a time of sky-high unemployment. And the question is never answered as to what leverage these intellectuals have.

  • David Andrew Kearney

    The intellectuals and thugs don’t need leverage, do they? I thought the idea was that the Washington boys went to college, thus their rational faculty was irredeemably corrupted by evil modern philosophy.

  • J-D

    No, it’s not hard to imagine that, but it’s no harder to imagine wealthy Chileans holding stock in US copper mining companies and bribing the ‘Santiago boys’ to shut down the Chilean copper mining industry so that Chile will need to import more US copper, If unscrupulous looters are using the strategy of bribing governments to shut down companies that compete with the ones they own stock in, why are there no unscrupulous looters holding stock in US copper mining companies and bribing governments in their interests? Does the pure and stainless Americanness of US companies make them proof against the taint of unscrupulous stockholders?

  • J-D


    Did the Santiago ‘boys’ not go to college?

  • J-D

    When you think about it, the goal of pure competitiveness is to eliminate competition. Competition can be maintained if the competitors are closely enough matched, or if their motives are not purely competitive (a desire to keep the competition going is a cooperative and not a competitive desire); but if you can’t count on either of those two then the only way to keep the competition going may be intervention from outside.

  • eyelessgame

    I don’t think that washes – not as a reason for her book to mention Finland, Mexico, and Washington D.C. but not the USSR, when the clear implication was that all other nations were turning into what the USSR, at the time of her writing, already was. If the US et al were becoming the USSR, what had the USSR become? Were there, at the time of Atlas Shrugged, Galt enclaves emerging from their Gulches and rescuing Russia, since by the time the US was falling the USSR clearly would have already fallen? (Well, except for the fact that the ideology was also conquering the world – a peculiar sort of collapse. Which does explain why she avoided the topic, but not to the benefit of the story’s verisimilitude.)

  • L.J. Lim

    I know that the deal started with the boys in Santiago, because they’ve been on the d’Anconia pay roll for centuries – well, no, ‘pay roll’ is an honorable word, it would be more exact to say that d’Anconia Copper has been paying them protection money for centuries – isn’t that what your gangsters call it? Our boys in Santiago call it taxes. They’ve been getting their cut on every ton of d’Anconia copper sold.

    Hm. Given that Rand recognized a “night watchman” role for government (i.e. she wasn’t an anarchist), and her protagonist is seen here describing taxes in most unfavourable terms, how did she think government should be funded? Somehow I don’t think she’d approve of, say, state-owned enterprises.

  • unbound55

    One of things I remember in an economics class was the requirements to allow for a truly competitive market to exist. Sadly, I never see those conditions mentioned by the people that advocate this mystical force called “capitalism”. The conditions that I recall include:

    - Ease of entering market
    - Near perfect knowledge of the products / services by consumers
    - Large numbers of competitors
    - Large numbers of consumers
    - Near identical products / services

    When you think about the overwhelming majority of markets that exist today (TBH, all markets that I can think of), about the only condition that is true in the current markets is the large numbers of consumers. This is the primary reason I laugh when people talk about capitalism and competition being answers to anything. The basic conditions for that to work simply don’t exist anymore.

  • Jeff

    On the theme of “If socialism is destroying the wealthy countries, there ought to be
    plenty of smaller, poorer nations that would put out the welcome mat for
    capitalist refugees carrying suitcases full of cash” is the issue of Galt’s Gulch, and the whole “capitalists on strike” plot point that drives the novel.

    John Galt and his friends are going on strike, refusing to offer up their awesome capitalist superpowers in defense of a dying system. They want to let the broken system die, so that they can rebuild a new society from the ashes. But in Chile and apparently other places around the world, this has already happened. Society doesn’t get much more destroyed than in a complete reversion to hunter-gatherer subsistence.

    There is no need for the capitalists to ruin America in order to enact their super awesome plan. They could just enact their plan somewhere else.

  • uykhvasdrvtjyku

    I had the impression that it was a deliberate move on the part of Taggart and the other villains to get rich(er) off of d’Anconia copper stock. Conversations between Jim and Boyle seem to indicate that all of their Washington intrigues were designed one way or the other for their immediate self-interest, without regard to long-term consequences. Of course their interests diverge, so they’re reduced to squabbling and trying to out-flank each other.

    Which of course makes no sense given their supposedly sincere beliefs in altruism and the public good, but this is Rand world, which is almost perfectly Bizzaro.

  • uykhvasdrvtjyku

    …he wondered why he stood here, he wondered who had the right to demand that he waste a single irreplaceable hour of his life…

    Yeah, wouldn’t that hour be much better spent toiling away in a steel mill in order to make money that you’ll never enjoy?

  • J-D

    I quote from the earlier exchanges above: ‘If unscrupulous looters are using the strategy of bribing governments to shut down companies that compete with the ones they own stock in, why are there no unscrupulous looters holding stock in US copper mining companies and bribing governments in their interests? Does the pure and stainless Americanness of US companies make them proof against the taint of unscrupulous stockholders?’

  • Loren Petrich

    Being “reduced to digging for roots in
    forests for their sustenance” seems like a rhetorical overstatement, but did Ayn Rand elaborate on what was happening outside the US? Collapse all the way to a Paleolithic sort of economy seems rather unlikely. I’d more likely expect subsistence farming, anything from 18th cy. technology to the Neolithic.

  • uykhvasdrvtjyku

    I never said it made sense. Only that this was the implied reason for the looters’ scheming according to my recollection of the text. As for why there aren’t counter-interests pulling in the opposite direction, perhaps Taggart and Boyle are just more powerful. How they got so powerful is anyone’s guess, especially since they’re totally incompetent as businessmen.

    I think this is instance #264 where questions get raised about the plot and narrative background that have no reasonable answer, and we’re not even halfway through.

  • PacaL

    Rand screamed, and writhed in foam flecked seizures about the wickedness of government and the evil looters, who according to her were the great majority of the population of the world and she gave the Russian revolution as a outstanding example of the mass of “looters” taking it from the people who actually created wealth.
    Of course what actually happened was that the new revolutionaries gave that wealth to the government and not to the mass of “looters”, frequently keeping, at least in the early days the former owners to manage the property. Thus the wealth was transferred from one some set of the 1% to another in effect. Further the new elite in the interest of accumulating wealth for further industrial development proceeded to screw the mass of workers via rather hefty turnover taxes. Thus the new Russian state very ruthlessly exploited the huge mass of “looters” in the interest of the state i.e., the new 1%.
    The similarity between Capitalist and Communism exploitation and “looting” of course escaped Rand completely it seems.

  • Adam Lee

    No, she never does explain what’s going on outside the US. There are passing mentions like this one, and IIRC, a few lines of dialogue which imply that Europe has become a continent of slave-labor camps. Probably the clearest scene depicting what she thinks a capitalist-less society looks like is Starnesville, whose inhabitants do seem to be practicing subsistence farming.

  • Loren Petrich

    Seems almost like a stereotype of Europe that some Americans seem to have: Europe = socialism = Communism = gulags.

    But more broadly, she does not seem to have thought it through very carefully. Despite being born and raised in Russia, she seems almost like the provincial-American stereotype.