Atlas Shrugged: Intellectual Property

Atlas Shrugged: Intellectual Property April 12, 2013

Atlas Shrugged, p.25-32

After solving her little railroad problem, Dagny returns to New York to report to her brother, Jim, on the state of the decaying Rio Norte Line. She proposes rebuilding it – actually, that’s not right. She’s already placed the orders to start rebuilding it, without consulting anyone. More, she’s canceled their contract with Jim’s preferred supplier, Orren Boyle’s Associated Steel, since he never delivers what he promises, and is placing the order with a competitor, Rearden Steel, who charges less and always fills orders on time.

“If we give Rearden such a large order for steel rails—”

“They’re not going to be steel. They’re Rearden Metal.”

She had always avoided personal reactions, but she was forced to break her rule when she saw the expression on Taggart’s face. She burst out laughing.

Rearden Metal was a new alloy, produced by Rearden after ten years of experiments. He had placed it on the market recently. He had received no orders and had found no customers. [p.27]

Jim reacts angrily to her making these decisions without his knowledge, but when she tells him to cancel them if he wants, he refuses. As Jeff noted in the comments last time, this is one of the major recurring themes of the book: it’s only Rand’s heroes who take responsibility and make things happen, while the only real concern of the villains (although they claim to value things like the public good) is to avoid responsibility and never be blamed.

According to Jim, “the best metallurgical authorities” are dubious about Rearden Metal, but Dagny brushes this off. She says that “I don’t ask for opinions”, and that she made the decision – remember, the decision to completely rebuild an important line of a transcontinental railroad using a new, untested alloy – relying only on her own judgment, without seeking any outside advice or consulting anyone.

Again, I’m not an expert, but this doesn’t seem to be how a large corporation should work. Having Dagny order a train crew to proceed through a red light on her say-so is one thing, but this is a major, multimillion-dollar business venture that could easily decide the future of the company. Shouldn’t you have, I don’t know, feasibility studies? Pilot projects? Trial runs on a proving ground, before committing to use this new metal to build hundreds of miles of rail through the Rocky Mountains? But no.

This warped idea of how a business should run springs from Rand’s hyper-individualistic worldview, where all of civilization is sustained by a handful of superhuman capitalists who act as the prime movers. Since Rand is the author, she can script events so that these plans always succeed. In reality, when executives make unorthodox business decisions on a whim, they often turn out disastrously – like Reed Hastings, the CEO of Netflix, who came up with an idea to split his company into two while soaking in a hot tub and had to retract it in the face of investor fury. (The spinoff company was going to be called “Qwikster”, which was already the Twitter handle of someone whose avatar was a pot-smoking muppet – something many observers took as a hint that this plan hadn’t been very carefully researched in advance.)

And that was just a DVD-rental service, whereas this is a railroad responsible for the lives and safety of passengers and crew. Jim’s skepticism, to me, seems more than warranted:

“Then what on earth do you know about Rearden Metal?”

“That it’s the greatest thing ever put on the market…. it’s tougher than steel, cheaper than steel and will outlast any hunk of metal in existence.”

“But who says so?”

“Jim, I studied engineering in college. When I see things, I see them.”

“What did you see?”

“Rearden’s formula and the tests he showed me.” [p.27]

This exchange made my eyebrows rise. Dagny has seen Rearden’s formula, really? He’s invented a revolutionary new alloy after ten years of work, and the first thing he does is disclose this precious trade secret to whoever asks?

Now, I suppose you might say that this is inevitable. After all, a well-equipped industrial laboratory could buy some Rearden Metal and work out what it’s made of anyway, so there’s no point trying to keep the formula a secret. But that leads into an interesting question: How does the idea of intellectual property work in Rand’s ideal libertarian world?

We know that Ayn Rand believed in patents and copyrights, not least because the idea of forcing the industrialists to give them up is an important plot point later in the book. But at the same time, she repeatedly makes the assertion that the only proper role for government is to protect people from crime and enforce voluntary contracts (something that Penn Jillette has also said). Anything else means initiating force against innocent people and is therefore an illegitimate use of power.

But there’s a serious contradiction here that Rand never comes to terms with. The concept of a patent means that if I invent something that someone else has already come up with, even if I invented it independently, the government (or as she might put it, “men with guns”) will come to my door and prevent me from making or selling it. That’s a highly intrusive use of government power to limit individual rights! (This isn’t just my opinion: other libertarian writers claim, in opposition to Rand, that intellectual property is an indefensible concept and ought to be abolished.)

There is, of course, a good argument for the existence of patents – they give people an incentive to invent new things, which encourages creativity that benefits all of society. There’s no motivation to be an inventor if just anyone can steal your idea and profit off it. But this collective-good argument shouldn’t be available to someone who believes that individual rights reign supreme above all else.

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