Boyle
agrees to provide the votes needed in the National Alliance
of Railroads and in exchange Taggart uses his Washington
connections to pass the Equalization of Opportunity Bill
which forbids any one person or corporation from owning more
than one type of business concern. This, of course, prevents
Rearden from owning the mines that supply him with the
resources that he needs. In order to preserve the steel
industry, "as a whole" (i.e., to save Boyle's company),
Reardon is stripped of his ore mines which are placed in the
hands of someone else who will give Boyle first priority for
the ore. Although the stated rationale for the Equalization
of Opportunity Bill is that it is unfair to permit one
individual to own several business enterprises, the hidden
agenda is to allow Boyle's Associated Steel to compete with
Rearden Steel. The result is the sacrifice of Rearden's
productive firm for Boyle's unproductive company.
Throughout Atlas
Shrugged, both the government and liberal politicians
say that people must sacrifice for the public welfare.
Atlas Shrugged illustrates the depraved consequences of
following the principle of need rather than the principle of
productivity and of adhering to the communist slogan "From
each according to his ability, to each according to his need."
For example, the State
Science Institute does not want Rearden to put his new metal
on the market because of the "social damage" it will cause
to steel producers (like Orren Boyle) who can't compete with
him. When Rearden says that he does not worry about other
firms, the State Science Institute attempts to bribe and
eventually to threaten Rearden to keep his new metal off the
market. Rearden understands that true corporate social
responsibility is to make profits for the owners while
respecting the natural rights of individuals.
Then there is the story
of the destruction of the Twentieth Century Motor Company
due to the results of the Starnes heirs' small-scale
socialist experiment. Illustrating the consequences of
communism in practice, the employees as a group vote to
decide the needs of each worker as well as the expected
production of each laborer based on an assessment of his
ability. The story of this company shows that when earnings
are cut off from production, incentives diminish,
productivity plummets, and bankruptcy results. It thus
serves as a precursor for the ultimate fate of a country as
a whole that is heading toward collectivism.
In addition, there are
the Colorado Directives which are intended (at least
officially) to help with the national emergency by forcing
Colorado to share the suffering. These directives were due
to the efforts of economic interest groups who wanted the
industrially successful state of Colorado to force its
profitable firms to redistribute their earnings. Of course,
these laws put Wyatt Oil and other firms out of business and
wiped out the Rio Norte Line. Ultimately, these destructive
directives hastened the retirement and disappearance of many
Colorado industrialists who had created enormously
productive enterprises and who had been forced to carry less
competent businessmen along with them.
We also encounter the
Railroad Unification Plan and the Steel Unification Plan.
The Railroad Unification Plan was James Taggart's desperate
scheme to keep Taggart Transcontinental from going out of
business by means of existing off its competition. The plan
provides that the total profits of all railroad companies be
allocated according to the number of miles of track each
owns instead of according to the amount of service that each
supplies. Then there is the Steel Unification Plan which
would bankrupt Rearden. The Steel Unification Plan is
patterned after the Railroad Unification Plan. All of the
steel companies' earnings are to be rewarded according to
the number of furnaces each owns. Because Boyle has a great
many idle furnaces he would be paid for almost double his
actual output. In turn, Rearden would be paid for less than
half of his actual output. Both the Railroad Unification
Plan and the Steel Unification Plan require companies to
produce "according to each one's ability" with the profits
to be allocated "according to each firm's need."
Directive 10-289 provides the knockout punch to economic freedom in Atlas
Shrugged. Its purported purpose is to stop the country's
economic decline by freezing the economy in its present
state. The directive employs comprehensive central
government planning to freeze the status quo. It actually
allows top government officials and politically-connected
businessmen to retain power and enhance their own control of
the economy. This directive mandates that all workers remain
at their current jobs, that no business is permitted to
close, and that all patents and copyrights be "voluntarily"
turned over to the government. It also forbids the
introduction of new products and innovations and requires
firms to annually produce a number of goods identical to the
number produced during the preceding year. In addition, the
directive freezes all wages, prices, and profits, and
requires every person to spend the same amount of money as
he did in the preceding year. Of course, given that appeals
for exceptions can be made to the Unification Board, such
government control inevitably leads to the buying and
selling of economic favors.
Galt's Gulch (also known
as Mulligan's Valley and Atlantis) sharply contrasts with
Directive 10-289. Atlantis is a microcosm or model of a free
society enshrouded by the collapsing interventionist one.
This paradigm of a free society consists of a voluntary
association of men held together by nothing except every
man's self-interest. Here productive men who have gone on
strike are free to produce and trade as long as they observe
the valley's customs. In this secret free society each
individual is unencumbered in the pursuit of his own
flourishing and happiness.
As we have seen, Atlas
Shrugged contains a great deal of economic content. In
it Rand provides a literary description of economic
institutions and conditions within a particular context. She
is able to explain the proper principles and workings of a
free market system. Rank skillfully illustrates the cause
and effect relationships of events in a society's economy.
As a lesson in economics, Atlas Shrugged illustrates
the necessity to analyze the immediate and long-term, direct
and indirect, and intended and unintended consequences of a
governmental action or policy. Rand explains that the mind
is the source of well-being and that the mind must be free
to invent and produce new products and services. Atlas
Shrugged illustrates that government intervention
discourages innovation and risk-taking and obstructs the
process of wealth creation. It also demonstrates that wealth
is not causeless and that by removing the cause (i.e., the
mind) the strike removes the effect (i.e., wealth).
Capitalism is thus shown to be the only moral economic
system because is protects a man's mind, his primary means
of survival and flourishing. Atlas Shrugged is a
powerful tool to educate, persuade and convert people to a
just and proper political and economic order that is a true
reflection of the nature of man and the world properly
understood.
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