Atlas Shrugged: The Incorruptibles

Atlas Shrugged, part II, chapter II

The time has come for the first of The Speeches. These are Ayn Rand’s infamous filibusters in which the action comes to a halt so that one of her characters can deliver a lengthy philosophical lecture expounding their author’s views. The speech in this chapter is one of the shorter ones – a mere 2,600 words, scarcely a footnote compared to what’s coming later – but even that would take at least 20 minutes to recite at normal speed. Naturally, in the world of the book, no one walks away or interrupts while one guy blathers.

This time, the lecturer is Francisco d’Anconia. We saw last time that he mocked the villains and looters at Jim’s wedding for creating an “aristocracy of pull” – his point being that government thugs and crony businessmen peddle influence, trade favors and blackmail each other, while real honest capitalists are unwaveringly virtuous, deal only in money and don’t play favorites. Rand’s capitalists are so spotless, in fact, that earlier in the chapter she said this about Hank Rearden:

He remembered the time when, aged fourteen, faint with hunger, he would not steal fruit from a sidewalk stand.

And according to Rand, this isn’t a coincidence: valuing money is what makes you moral and honest, and the more money you make, the more moral you are. That’s the whole point of this chapter’s monologue. Take it away, Francisco:

Rearden heard Bertram Scudder, outside the group, say to a girl who made some sound of indignation, “Don’t let him disturb you. You know, money is the root of all evil — and he’s the typical product of money.”

Rearden did not think that Francisco could have heard it, but he saw Francisco turning to them with a gravely courteous smile.

“So you think that money is the root of all evil?” said Francisco d’Anconia. “Have you ever asked what is the root of money? Money is a tool of exchange, which can’t exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force.

…To love a thing is to know and love its nature. To love money is to know and love the fact that money is the creation of the best power within you, and your passkey to trade your effort for the effort of the best among men. It’s the person who would sell his soul for a nickel, who is loudest in proclaiming his hatred of money — and he has good reason to hate it. The lovers of money are willing to work for it.

…But money demands of you the highest virtues, if you wish to make it or to keep it. Men who have no courage, pride or self-esteem, men who have no moral sense of their right to their money and are not willing to defend it as they defend their life, men who apologize for being rich — will not remain rich for long.

…Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence.”

OK, I’ll cut it off here; I’m sure you get the point. In the Objectivist worldview, true capitalists are impartial and incorruptible, and would never resort to any dishonest or fraudulent tactics no matter the temptation. But people in the real world aren’t so noble.

Earlier this year, you may have heard of a class-action antitrust lawsuit in Silicon Valley. The suit stemmed from the discovery of a huge wage-fixing cartel, where dozens of the world’s wealthiest tech companies, Google and Apple among them, secretly agreed to not try to poach each other’s employees, so as not to create competition that would have driven wages up for all of them.

But this collusion, far-reaching as it was, probably wasn’t the biggest corporate fraud in history. That title may well belong to the still-unfolding Libor scandal.

Libor, essentially, is the rate that banks charge to loan each other money. It’s set by an industry association that averages out the numbers reported by many different member banks. Worldwide, over $300 trillion in financial instruments is based on the Libor rate – from mortgages and student loans to CD rates, municipal bonds and futures contracts – so even a hundredth-of-a-percentage-point shift can move billions of dollars. And in the last few years, we’ve learned that traders and managers at different banks were colluding, agreeing to report false numbers, to nudge the value of Libor up or down in a way that benefited their trades and reaped huge profits, while costing borrowers thousands or millions of dollars. This blatant manipulation has been going on since at least 2007, and probably much earlier.

The truth, contra Francisco’s assertions, is that profit incentives distort morality; they always have and always will. Rand seems to think that the aristocracy of money and the aristocracy of pull are non-overlapping magisteria, but in fact, capitalism has always been about influence and connections. People play favorites, give sweetheart deals to their friends, and scratch each other’s backs. And when large corporations are left unwatched, what we see time and again is that those connections develop into collusion, conspiracy and fraud at the expense of both customers and potential rivals. Free and fair competition isn’t something that just happens: it only arises and persists when a watchdog is there to make sure everyone’s playing by the rules.

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  • Peter Milley

    No true capitalist…

  • busterggi

    Of course no one walks away or interrupts a Rand ‘hero’ who’s blathering – its no secret that they are cold-blooded killers and would execute anyone that tried.

  • Loren Petrich

    Yes, I’ve encountered that “not true capitalists” apologetic.

  • Loren Petrich

    In 1 Timothy 6:10 in the Bible, we find that “the love of money is the root of all evil”. Francisco d’Anconia’s speech could be summarized as stating that “the love of money is the root of all good”.

  • 8DX

    I would have been giggling to hear such idiocy the speach of a marginally intelligent person. Whe he got to ” for money is men’s protection and the base of a moral existence.”, I’d have laughed out loud, right in his face…

    But then maybe my huge facepalm would’ve covered that up.

  • Michael

    Such price-fixing agreements would be perfectly legitimate in Objectivism and libertarianism (so long as no one was forced to make them). Now, Objectivists and libertarians sometimes claim they would collapse, due to parties breaking the agreement. Even if we assume this is true, since the agreements would be fully legitimate under their theories, they could be made by enforceable contracts that punish violations like any other breach of contract. Someone, if they haven’t already, should write a story about an Objectivist or libertarian “utopia” which portrays the implications realistically…

  • eyelessgame

    Will you be saying more about Frankie D’s speech? Because this is one I’ve actually read, and also read some legitimate economists giggling about. This is the speech where he goes completely gaga over the gold standard and is completely anti-banker (everyone should carry gold coins, not paper money or bank notes, because those are the tools of the looters out to destroy money), right?

  • eyelessgame

    Well, Micro 101 claims that price-fixers would collapse because there would be new competitive entries into the market, not parties to the price-fixing, and they’d undercut the trust and collapse it. But – to repeat the statement that refutes libertarian fantasies – the behavior of the real world does not match Micro 101.

  • David Cortesi

    Thank you for correcting the frequent misquote, although obviously it’s too late to correct Rand and Jim Taggert, who put up “Money is root of evil” as a (possibly unconcious) straw-man argument. Then D’Anconia gullibly attacks that scarecrow. The actual motto speaks not about money but about greed, named metaphorically as love of money. Greed is indisputably at least one major root of All Evil, although I’d name Ignorance and Fear also. Greed, Ignorance and Cowardice: the banana slugs of the apocalypse.

  • Alex SL

    Take it away, Francisco:

    Oh dear, for a moment I thought you would paste the entire speech there…

    Apart from the No True Scotsman already pointed out by Peter Milley, a perennial favorite of libertarians is No True Capitalism. Every time one points out that this or that policy (say, the gold standard or deregulation) has been tried and the results were bad they will reply that what made it fail was that the society that tried it wasn’t Real True Capitalism. Every failure can only be the government’s, and if only libertarianism were implemented fully then there would be no corruption, no cartels, no starvation, etc. Conversely, the existence of those ills can always be taken as proof that we aren’t capitalist enough yet.

    The funny thing is, Trotskyists, Maoists and Stalinists kept saying the same about not being communist enough whenever the failures of their policies became apparent. I am usually skeptical of the “the extremists of both ends of the spectrum are alike” stance, but in this case there is a point.

  • arensb

    I was willing to let this one slide, simply because the Bible verse has been misquoted so many times by leaving off the “love of”, that it has entered the public consciousness. In context, as I read it, it doesn’t even matter that it’s a misquotation.

  • Jeff

    What this really comes down to is that these systems only work on paper. And their adherents, despite what I’ll assume are noble intentions, are generally more interested in seeing their pet philosophy work than in establishing something that actually benefits society. They would happily do real harm to real people in order to avoid doing philosophical harm to hypothetical people.

  • arensb

    It seems that in a rough-and-tumble free-market economy, there are two main ways to make money: 1) provide a better product or service than your competitors, or 2) be an unprincipled bastard who gets rid of competitors so they don’t compete with you anymore. I think what Rand failed to realize is that you can pick both; the effects can be cumulative.
    Adam’s example illustrates this perfectly: even if we grant that Steve Jobs was a genius, and deserved to make a mountain of money by bringing things like Macintoshes and iPods to market, there still remains the fact that he made a second mountain of money by being a dick at best and a criminal at worst.

    On top of that, Rand’s idea of morality seems rather… elastic. On one hand, Hank Rearden wouldn’t steal an apple when he’s starving. On the other hand, he and Dagny are wiling to lie and bribe to get their way, and Dagny admires the way her ancestor Nat was willing to kill a man who got in the way of his railroad.

  • Cerebus36

    Rand wasn’t unaware of the full quote. Later in his speech, Francisco says, “Or did you say it’s the *love* of money that’s the root of all evil?” He then proceeds to justify (or attempt to justify) a love of money.

    The amazing thing to me is that no one listening to him ever tries to debate or argue with D’Anconia’s thesis. Nobody tries to tell his reasoning is flawed and he’s full of it. They just let him rant. That would never happen in real life.

  • raylampert

    Right. Those who claim that additional parties would enter into the market completely ignores the fact that a) barriers to entry exist, and b) collusive oligopolies conspire to keep barriers to entry artificially high.

  • raylampert

    Greed is the root of all evil. Greed and Ignorance- the TWO roots of evil are Greed, Ignorance and Cowardice – the THREE roots of evil are Greed, Ignorance, Cowardice and Lack of Empathy- I’ll start again.
    Amongst the roots of evil are such elements as Greed, Ignorance, Cowardice, Lack of Empathy, and Rigid Adherence to Inflexible Dogma – oh damn!
    All right – The root of evil is Greed, blah blah blah blah blah…

  • Enopoletus Harding

    Ah, but the latter acts were relating to government, a hive of villainy so great, that two wrongs against it make a right. I speak with sarcasm.

  • Enopoletus Harding

    You haven’t read the speech. He counters that non-scarecrow, too.

  • Enopoletus Harding

    They just let him rant.

    -Either they’re transfixed by his charisma, or they are not listening.

  • arensb

    Earlier, didn’t D’Anconia build a dormitory out of shoddy materials, just to screw the government, in effect killing people to make a point about looters?
    Who knows what he might do to someone who walked away from one of his rants?

  • Jeff

    Or more likely, since this is Randworld, they are unable to offer a counter-argument because one does not exist. He shames them into silence with his rightness.

  • Cerebus36

    Yeah, but do those are “awestruck” by D’Anconia’s words of wisdom know at this point he did that? If there has to be an in-story reason why no one argues with him, a better one would be that everyone (or just about everyone) in the room has invested so heavily in D’Anconia Copper. (Hank and Dagny don’t, of course, argue because to them he really is a Font of Wisdom.)

    In Real Life, having invested in a company wouldn’t prevent anyone from arguing with Francisco. But this is the Rand Universe, so that explanation would be the one that, ahem, makes sense.

  • Annerdr

    “Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns – or dollars. Take your choice – there is no other – and your time is running out.”
    Would this be the counter you mention? A false dichotomy?

  • Enopoletus Harding

    Yup, though it does have some truth to it-one does not attack one’s most vital trading partners unless one plans to stop trade.

  • X. Randroid

    The other bizarre claim about price-fixing, which I’ve heard a lot more from Objectivists than the rest of the libertarian fringe, is that no rational businessman would make such an agreement because he (yes, “he”; these are Objectivists) would know that it’s in his interest to be free to set prices as he sees fit. In the case of labor, the claim is that the rational businessman will outbid the competition to get the best workers. Rand “proves” this by telling us that Rearden voluntarily pays higher wages than any other steel producer, in order to get the best workforce, and he never has any labor trouble because he is so fair and just. As for irrational businessmen who would indulge in price-fixing, they’ll magically be defeated by their own irrationality … once True Capitalism is established, of course!

  • KennethJohnTaylor

    Please refresh my memory, it’s been so long since I read the book:

    What happens immediately after one of these immaculately spontaneous speeches? Does anyone still listening at that point offer a worthy rebuttal? Is there more conversation/dialogue about the topic or does the chapter just end there?

    What does Rand think the proper reaction to her lectures should be? Counterpoint or silent agreement?

  • X. Randroid

    Well, not quite silence. Immediately after the speech, a random woman declares her disagreement. Francisco politely invites her to refute him, but she doesn’t even try, She just says her mind “doesn’t work that way” but “I don’t feel that you’re right, so you must be wrong.” Which, I guess, is supposed to prove to the reader that Francisco can’t be refuted.

  • X. Randroid

    I hope so … there is so much to pick on. In addition to the gold-currency thing, our dear Frankie propounds the completely bogus notion that the US was the first country to understand that money could be made, i.e., that the amount of wealth existing in the country could be increased, not just redistributed. (And a story about the origin of the dollar sign that turns out to be as fictional as Rand’s economic theories.)

  • X. Randroid

    I think it’s supposed to be vocal agreement, but silent agreement would be better than counterpoint.

    A few years after Atlas Shrugged, Rand got to know John Hospers (philosophy professor and 1972 Libertarian Party presidential candidate). Hospers arranged for Rand to present a paper on esthetics at a philosophy conference. She presented, and Hospers, in his role as commentator, offered what he described as gentle criticisms and questions. She was nevertheless furious, regarding this as a horrible betrayal. Hospers was immediately excommunicated and never saw her again. Hospers’ recollection is here.

    Later in life, she famously declared “I am not looking for intelligent disagreement any longer. What I am looking for is intelligent agreement.”

  • KennethJohnTaylor

    Reportedly, she was an absolutely despicable person according to EVERYONE who ever had the misfortune of working with or even meeting her. She was indomitably defiant, obscenely difficult to talk to (she interrupted you constantly while you were not permitted to interrupt her once) and she was known to completely suck the life out of a room. She never smiled or laughed, she abhorred small talk, and she would often approach random strangers with openers like “Tell me about your premises.”

    She just didn’t get people — she was a pure autistic in every sense of the meaning. And her problem with her philosophy was, like all philosophers, she self-righteously asserted that everyone ought to think just like her.

  • Azkyroth

    She just didn’t get people — she was a pure autistic in every sense of the meaning.

    Please don’t do that.

  • James Jarvis

    Of course no one walks away or interrupts Francisco. He has been anointed by the the spirit of laissez-faire capitalism and is speaking in the tongues of the Profits. However, it would sound like drunken gibberish to non-objectivists.

  • Michael

    Yep, I’ve read it. Not even Rand would support that, although I wonder how she’d prevent it.

  • Loren Petrich

    Worse than I thought. He actually *says* something like “the love of money is the root of all good.”

  • Cerebus36

    Oh, yes. I’d forgotten about the woman who attempts the half-assed rebuttal.

  • uykhvasdrvtjyku

    I got an actual lol when after Francisco’s speech, a woman says something to the effect of “Who talks like that at parties?”

    It would have been a clever example of lampshading if Rand had the self-awareness to do it intentionally.

  • uykhvasdrvtjyku

    He only gets around to mentioning the real quote toward the end after spending several minutes slaying the straw-quote. I don’t recall the exact thrust of the argument (something about loving things being awesome without bothering to put the two together), but I recall it being rather weak and unpersuasive. At least with strawman he wasted, what he said was agreeable (if extremely obvious and long-winded).

  • J-D

    During most of the existence of the human species there was no money; also, there were no guns and no whips.

    There was blood, obviously.

  • eyelessgame

    Yes, that well-known American, Adam Smith… the magnificent American East India Company … those well-known Renaissance American Dutch merchants… the glorious American mercantile empire centered in Venice… that famous American merchant, Marco Polo…

    Note, though, that if you’re only using gold, and not currency, you cannot, by definition, “make” money. You can only loot it from the ground or take it from someone else (possibly in exchange for goods or services). “Making” money requires an expandable money supply and/or fractional reserve banking.

    (Of course, “making” money generally means “getting money”, in the vernacular, anyway. But the entire speech is preposterous, beginning to end, and books could be written about its wrongness.)

    The only reason I’ve read this rant is that the Republican nominee for Vice President in 2012 identified it as his primary source for fiscal policy.

    It only took us four years to disprove the proposition that Sarah Palin was the most dangerous and absurd candidate for Vice President either major party would ever nominate.

  • Tova Rischi

    “And her problem with her philosophy was, like all philosophers, she
    self-righteously asserted that everyone ought to think just like her. ”

    very few philosophers want that
    In fact it’s part of the argument that she can’t be called a proper philosopher in the first place.

  • Loren Petrich

    I’ve seen various translations, so I decided to check on the original Greek version.

    ῥίζα γὰρ πάντων τῶν κακῶν ἐστιν ἡ φιλαργυρία
    rhiza gar pantôn tôn kakôn estin hê philarguria
    root for of-all of-the of-evils is the love-of-money (silver)
    For money-love / the love of money is the root of all the evils

  • Pacal

    So Rand is colossally ignorant of basic History. Did Rand have any idea of the history of the Venetian Republic, Florence in the later Middle Ages, the Dutch Republic or heaven forbid Britain!! To say nothing of China under the early Manchu dynasty. All of which had people who believed wealth could grow.
    The idea that per capita and yes total wealth of a society could grow is actually fairly old. And it was most definitely not the USA who originated the idea. Rand could also have benefited from some study of the Greeks and Romans.

  • Pacal

    You got to be kidding? There is simply not enough Gold available for that. Aside from the rather absurd fetish that Gold has huge intrinsic value. It doesn’t. And does Rand want to get rid of well over 1000 years of banking practice using letters of credit and related instruments all of which are absolutely essential in order for a modern Capitalist economy to work. Hell they are necessary for a 14th century European economy to work! Talk about being a Luddite!

  • Jason Sartin

    “However, it would sound like drunken gibberish to non-objectivists.”

    Would and does.

  • Space Blizzard

    “she was a pure autistic in every sense of the meaning”

    Apart from actually having autism, you mean.

  • Science Avenger

    Case in point, the witch hunt over voter fraud.

  • Science Avenger

    Its the standard GOP trope: conservatives use their minds, liberals use their feelings.

  • Jeff

    Yes, that would be a fine example: completely disenfranchise tens of thousands of people so that the remaining voters can not have their votes “devalued” by some ridiculous fraction of a percent.

  • X. Randroid

    Another case in point: Objectivists think it is better to let sick people with no money just die (assuming no one volunteers to foot the bill), rather than “enslaving” doctors through the evil of “socialized medicine.” It does not matter to them that so many countries with nationalized health care systems obtain better outcomes while spending less money than the US. The hypothetical harm of having doctors paid via tax dollars (aka “theft”) at rates set by bureaucrats is all that matters, not whether anyone actually gets well or not.

    Ditto for physician licensing, regulations that demand drug companies establish some level of safety and efficacy before selling their wares, etc.

  • Adam Lee


  • Adam Lee

    Yes, I’m planning to write a part II to this post, pointing out one other line in his speech which I think is the most amazingly idiotic thing Rand has written so far. The gold-standard stuff is coming as well, but I’m going to address it in a later chapter which I think is a better entry point.

  • Adam Lee

    This is pretty much the extent of the reaction to Francisco’s speech:

    There were people who had listened, but now hurried away, and people who said, “It’s horrible!”—”It’s not true!”—”How vicious and selfish!”—saying it loudly and guardedly at once, as if wishing that their neighbors would hear them, but hoping that Francisco would not.

  • Adam Lee

    I agree with Azkyroth: speculating about whether Rand had autism is hurtful to people who actually do have it (and not, to my mind, even particularly useful in explaining the origin of her philosophy). I’d appreciate it if you could refrain from this in future.

  • J-D

    Could we demand the free and unlimited coinage of silver at the ratio of 16 to 1?