I’ve never been all that interested in Ayn Rand either as a novelist or a thinker, though she’s existed out there in the periphery of my awareness of intellectual currents for almost as long as I knew what an intellectual was. I can remember way back in high school a girl I had a thing for suggesting that I read Atlas Shrugged. I ended up buying Rand’s book Philosophy: Who Needs It? instead ( probably because it was cheaper, or maybe because I wasn’t in a novel reading period at the time). The only thing I took from it was that I didn’t need any more books written by Ayn Rand.
In the eons since then I’ve studiously avoided any of Rand’s books even when I thought they might help me understand some person (such as Peter Theil) or trend, (as in right-wing transhumanism), though I did manage to survive the 1949 film version of The Fountainhead starring Gary Cooper. It might seem weird, then, that I’m turning to the subject of Rand so late, at the very moment where the movement the woman stood for has seemingly lost all relevance. Libertarian individualism doesn’t seem to have much of a future (or even a present) among the right or (less surprisingly) the left as we speak.
The late 20th century revolt against the state has revealed itself to be a failure, and individualism has fared no better. Laissez-fairehas brought us what anyone even superficially familiar with Victorian era history knew it would: robber barons, surging inequality and class war. As for individualism, rather than replace twentieth century mass society with liberated individuals free to decide on their own definition of the Good (as was promised by the sexual and cultural revolutions of the 1960’s and 70’s) we’ve instead chosen to create a balkanized society held together via ostracism and technologically empowered shame.
These were the kinds of issues that obsessed Rand, but for a person of a left-of-center bent such as myself, any useful reflections she had on the questions gets lost in her abhorrent moral philosophy and grating self-certainty. The one place we might be able to avoid getting lost is where Rand’s not telling us what she believes, but how she came to those beliefs in the first place. For that we have her quasi-autobiographical novel We the Living.
It’s hard to be sympathetic for a person who denied the existence of any sort of mutual obligations within society such as Rand. Yet while she herself would have expressed nothing but disdain for my sympathy, that’s nevertheless what I felt for her once I understood her biography. Everything she wrote makes sense in light of the fact that she had been scarred by her experience of playing a part in a historical tragedy. Once one remembers that the woman was an exile from the early days of the USSR, and knows what she and her family has suffered through before she made her escape, one can see how ill equipped she was to understand the true nature of American social democracy at the time. What is more surprising, and thus in need of greater explanation, is why her alien literary works and philosophical theories, having originated in such a wildly different political and economic system, proved so attractive to a certain segment of US society at the particular point at which they did.
Alisa Zinovyevna Rosenbaum, the woman we know as Ayn Rand, was born in Russia in 1905 to a world that was rapidly falling apart. She came from a thoroughly bourgeois family- her father was a businessman- a condition that in the upside down world of the Revolution would prove to be a risk rather than a privilege.
For those of us living in the early 21st century, over 30 years since the collapse of communism, the world shattering nature of the Russian Revolution is difficult to appreciate. This was not just a continuation of the democratic transformation that could be traced back to the American Revolution and French Revolutions and their 19th century offshoots, it was the first revolution that promised not merely a new political order, but to bring into being a new social and economic world as well. One should not discount its liberatory attraction or its having brought into existence, if only for a moment, a new and freer form of society.
“October, for an instant, brings a new kind of power. Fleetingly, there is a shift towards workers’ protections and the rights of peasants to the land. Equal rights for men and women in work and marriage, the right to divorce, maternity support. The decriminalization of homosexuality, 100 years ago. Moves towards national self-determination. Free and universal education, the flourishing of adult schools. A change in the soul, as Lunacharsky might put it, as much as in the factory. And though these moments are snuffed out, reversed, become bleak jokes and memories all too soon, it might have been otherwise.” (317)
It was not to last. The Revolution was followed by civil war, terror, and most importantly for the future course of Rand’s intellectual development, the Bolshevik’s adoption of war communism.
What that meant was the abolition of private businesses and the expropriation of the wealth of the owning classes. Almost overnight the young Alisa went from a world of bourgeois comforts to one of deprivation and the constant struggle to meet even basic needs.
What may have started as a tactic born of necessity in the face of economic collapse quickly morphed into a savage class war. Martin Latsis, chief of the Ukrainian Cheka (the forerunner to the KGB) stated the objective with brutal clarity:
“We are not fighting against single individuals. We are exterminating the bourgeoisie as a class. Do not look in the file of incriminating evidence to see whether or not the accused rose up against the Soviets with arms or words. Ask him instead to which class he belongs, what is his background, his education, his profession. These are the questions that will determine the fate of the accused. That is the meaning and essence of the Red Terror.”
The protagonist of We the Living is a young woman named Kira Argounova whose experience clearly mirrors that of Rand herself. The Russian Revolution casts the formerly well-off Kira and her family into miserable poverty. Her businessman father reduced to selling handmade soap or compelling his children to stuff vials of saccharine to sell on the streets of Petrograd. Family meals consist of tasteless gruel, which at points are replaced by far worse starvation.
One hope Kira has for her future is that she is a university student. But even that does not last as students with bourgeois backgrounds are eventually purged from academia, as Rand was in real life. The other source of Kira’s hope is that she is in love. Actually, resonating with the liberatory aspects of the time, she is engaged in a love triangle made up of herself, a dashing figure straight out of Hollywood’s golden age named Leo Kovalensky, and an austere, tragically romantic character Andrei Taganov who is torn between his devotion to the ideals of communism and his love for Kira.
It is with the latter that Kira has a clandestine affair in order to pay for Leo’s convalescence after he contracts tuberculosis. The revolution ends up killing all three of them with Leo transformed into a self-destructive smuggler, Angrei dead from suicide after he chooses his love of Kira over his loyalty to the party in order to save Leo (and therefore Kira) after his arrest. Kira herself dies tragically alone crossing the snow covered borderland between Russia and the freedom of the West bleeding to death on the ice after having been shot by a border guard.
The great short story writer, John O’hara, once opined that the whole point of the novel was to serve as a kind of social history, documenting not just what the past looked like, but what it felt like to live there, and while I think his sentiment goes too far in dismissing the power of fantasy, I also think he managed to capture a basic truth.
What literary fiction from the past possesses that other arts largely lack is the ability to give us insight into what people thought while they were caught up in whatever historical drama they were fated to live through. As all of us in the midst of history today have been made painfully aware of, the difference between us and the future is that whoever exists decades or even centuries from now will know how our current tribulations and concerns ultimately played out. People in the past were thinking events through in real time in the same way we are, and as is the case with us, even extremely smart and good people could make what in hindsight were clearly colossal errors of judgement.
We the Living is a window into history in precisely this sense. What it documents is how the petit-bourgeois of the Russaian Empire experienced a communist revolution. A class whom novelists are perhaps inclined to paint as shallow, or even villainous, is instead shown to be human through the common currency of suffering.
The kinds of fears and very real suffering that We the Living depicts are precisely those that obsessed Rand after her escape from the Soviet Union. And her escape was made just in time, for Stalin would soon after impose an even more brutal form of totalitarianism.
What Rand’s family had suffered was crippling expropriation followed by poverty, and the brutality of a world where merit was replaced with a form of political conformity that was all too easily weaponized by individuals set against one another by conditions of scarcity.
Whatever one’s view of the Soviet experiment during the first days of the revolution, it’s not easy to find many defenders of hard core Leninism, let alone the nightmare that was Stalinism, within the left these days. The more common view being that which was anticipated by Andrei Platanov, namely, that what happened in the USSR amounted to a tragic betrayal of the humanistic promise of communism. At least as far as the truth of Soviet history, Rand’s view is much more honest than an apologist such as Sartre, and indeed much closer to the view of state communism of the contemporary left than many might like to admit.
Where she failed was in applying these historical experiences whole cloth to her new homeland of the United States. As if there was no difference between New Deal liberals and Bolsheviks, or Keynesian management for the purpose of creating a politically stable capitalism and the mass expropriation of capital in the name of imposing a command economy. Indeed, exiles from totalitarian regimes making obscene comparisons between communist dictatorships and social democracy since Rand has been an all too common and very lucrative form of grift.
Rand was a pioneer in peddling this myth. It was precisely this form of political confusion that she would not only help to popularize, but one which would guide economic policy in the US and elsewhere in the final decades of the 20th century. This was a category error that led to a return of exactly the same sorts of economic inequality and financial instability that the welfare state had been created to prevent in the first place. Capitalism had undermined the very political compromise that we had discovered through the tragedy of history was necessary for its stability and continued existence.
Just how deeply we have fallen into the shadow of this error can be seen in an amazing television interview of Rand with Mike Wallace in 1959.
In the interview Wallace, who is obviously reflecting what were then commonly held opinions on the matter, is consistently shocked that Rand rejects a large role for the state in managing capitalism’s excesses and preventing poverty by the use of social welfare programs. For my purposes here are what I think are the most important quotes:
Mike Wallace: Let’s move ahead. How does your philosophy translate itself into the world of politics? Now one of the principle achievements of this country in the past 20 years, particularly, I think most people agree, is the gradual growth of social and protective legislation based on the principle that we are our brother’s keepers. How do you feel about the political trends of the United States, the Western world?
Ayn Rand: The way everybody feels, except more consciously. I feel that it is terrible, that you see destruction all around you, and that you are moving toward disaster until, and unless, all those welfare state conceptions have been reversed and rejected. It is precisely these trends which are bringing the world to disaster, because we are now moving towards complete collectivism, or socialism. A system under which everybody is enslaved to everybody, and we are moving that way only because of our altruist morality.
And from later in the interview:
Mike Wallace: When you say, “take the property of others,” I imagine that you are talking now about taxes.
Ayn Rand: Yes I am.
Mike Wallace: And you believe there should be no right by the government to tax. You believe that there should be no such thing as welfare legislation, unemployment compensation, regulation during times of stress, certain kinds of rent controls, and things like that.
Ayn Rand: That’s right. I’m opposed to all forms of control. I am for an absolute laissez-faire, free, unregulated economy. Let me put it briefly. I’m for the separation of state and economics. Just as we had separation of state and church, which led to peaceful co-existence among different religions, after a period of religious wars, so the same applies to economics. If you separate the government from economics, if you do not regulate production and trade, you will have peaceful cooperation, and harmony, and justice among men.
Mike Wallace: You are certainly enough of a political scientist to know that certain movements spring up in reaction to other movements. The labor movement for instance, certain social welfare legislation. This did not spring full blown from somebody’s head. I mean, out of a vacuum. This was a reaction to certain abuses that were going on, isn’t that true, Ayn?
Mike Wallace: When you advocate completely unregulated economic life in which every man works for his own profit, you are asking in a sense for a devil-take-the-hindmost, dog-eat-dog society, and one of the main reasons for the growth of government controls was to fight the robber barons, to fight laissez-faire, in which the very people whom you admire the most, Ayn, the hard-headed industrialists, the successful men, perverted the use of their power. Is that not true?
Ayn Rand: No, it isn’t. This country was made not by robber barons, but by independent men, by industrialists, who succeeded on sheer ability. By ability, I mean without political force, help, or compulsion. But at the same time there were men, industrialists, who did use government power as a club to help them against competitors. They were the original collectivists. Today, the liberals believe that the same compulsion should be used against the industrialists for the sake of workers, but the basic principle there is, “Should there be any compulsion?” And the regulations are creating robber barons, they are creating capitalists with government help, which is the worst of all economic phenomenon.
Within a generation the truths Wallace believed to be undeniable had collapsed to have been superseded by a form of political economy that in rhetoric if not in actual policy was something Randian in its essence.
Of course, I could be accused of overstating the degree to which Wallace is reflecting a bedrock consensus for social democracy in the US at that time. Individualism was and remains a deep part of American culture. The real historical dialectic of US culture has always been between the English with their need for management and control that dominated the coasts and the clan based individualism of the cracker culture of Scotts-Irish refugees who conquered and settled the American interior. Rand’s ideas did not fall on completely barren soil.
Still, there are profound differences between what heroic individualism meant in cracker culture and how it was portrayed in the Randian mythos. The cracker ideal was the frontiersman, the Yeoman farmer, the small businessman. Freedom meant freedom from control by others, which with the end of slavery also meant the absence of control over anyone else. But Rand’s heroes were free to work their will on the world only because they had clawed their way to the top of systems in which others as a consequence of their failure or lack of ambition were forced to serve.
We the Living wasn’t really part of this Randian mythos whose core texts were didactic fantasies of heroic individualism, Howard Roark in The Fountainhead or John Galt in Atlas Shrugged. What Rand was creating with those works was a vision of heroes who could overcome the barriers that Joseph Schumpeter had identified as the inevitable fate of a mature capitalism. As early as the 1940’s Schumpeter knew that the age of the entrepreneur was largely over. The creative business man or inventor had been superseded by the organization and the employment of vast teams of researchers, and PR men. His pessimism regarding the future of capitalism would prove to be both partially right, and partially wrong.
“The perfectly bureaucratized giant industrial unit not only ousts the small or medium sized firm, but in the end it also ousts the entrepreneur and expropriates the bourgeoisie as a class but also what is infinitely more importantly its function. The true peacemakers of socialism were not the intellectuals or agitators who preached it but the Vanderbilts, Carnegies and Rockefellers.” (142)
Schumpeter’s premature eulogy for capitalism, his book Capitalism, Socialism, and Democracy was published in 1942. What followed was the golden age of social democracy in the US and larger West. But this era of egalitarian prosperity was far from perfect. Vast segments of society that had been excluded from having a say in political, social and economic life, namely women and African Americans, would soon demand the recognition they were still denied. And in yet another example of the tragic irony of history, the fight for civil rights would eventually unravel the regional political alliance between Northern and Southern Democrats that had been the primary vehicle for social democratic forces.
But even before this unraveling many felt crushed under the weight of mass conformity and the dictation of every element of their lives by faceless corporate and government bureaucrats, their whole life tabulated on computer punch cards.
The second half of the 20th century would witness the rebellion against a society and individuals whose dimensions had been so reduced. The revolt of individuals against the constraints of what was once called the “establishment”. It’s hard to remember but this revolt was just as much a left- wing as a right-wing phenomenon. The Beats, the “Small is Beautiful” flower children, the push for sexual revolution, all were born in this same revolt against mass society.
If socially the New Left has essentially won the culture war its fellow travelers on the libertarian right inherited the actual keys to the kingdom, for they became the ruling ideology of a generation. In some ways, then, it shouldn’t be surprising that some of the heroes of the New Right during the last century, people like Rand or her fellow travelers Heinlein, were in their day such non-conformists in their personal lives. Both the cultural and the economic revolts against the post-war order had sprung from the same source.
Of course, Rand was just a minor figure among a small cohort of thinkers, one whose intellectual heavy hitters were people like Milton Friedman and Fredrick Hayek, that appeared to provide an alternative to Keynesianism and the corporatist trifecta of corporations-state-labor after that system seemed to unravel in the economic crisis of the 1970s. But she was perhaps the movement’s best popularizer, managing to turn the once so easily villainized character of the businessman into a strange new type of hero.
And in a way the road to a post-schumpeterian capitalism had indeed been discovered, or at least one last era of creative destruction before the dead equilibrium of managerial capitalism was reached. The catalyst for this new cycle of creation and destruction would be Moore’s Law, the exploitation of what was in effect a never before tapped territory.
Capitalism constantly requires the opening of new frontiers, and while many had thought the frontier of the late 20th century would be outer space, in fact it the new frontier ended up being the realm of the small.
The conquest of this territory created heretofore unforeseen opportunities which economic incumbents proved either unable or unwilling to exploit. Smart and ambitious individuals were able to seize on these opportunities and amass fortunes by creating products in their garages that accessed dimensions formerly inaccessible and created brand new ones in the forms we would come to call cyberspace or the Infosphere.
That the new class of billionaire titans who had been able to exploit the new frontier opened up by Moore’s Law could easily cast themselves as Randian heroes in the style of Howard Roark or John Galt is mythical only because it ignores how much of this revolution was driven and supported by the national security interests of the American state.
Yet the neoliberal revolution that began in earnest with the elections of Ronald Regan and Margaret Thatcher in the 1980 promised more than an era of creative destruction in a handful of economic domains. The dismantling of the old corporatist order, the end of the alliance between corporations-state-labor was supposed to open up countless opportunities for clever individuals to enter, compete and improve.
Little of this happened in the way it had been promised. Instead of a golden age for entrepreneurial individuals we got the rule of finance capital. Old industries were dismantled only to give rise to larger even more monopolistic ones, the regulatory state was pushed aside, but was quickly relocated in state and local planning boards or reconfigured by deep- pocketed corporate lobbyists who reshaped regulations to favor themselves.
Unionized labor was crushed to the point that many of us indeed did become owner-operators of our own firms. Although what this meant was that we contracted our vehicles and hours to Uber. Becoming one’s own boss now meant doing some else’s chores as a task rabbit. And even professionals who avoided such a fate now found themselves compelled by competition to turn themselves into a brand.
Outside of the innovation unleashed by the IT revolution, what the neoliberal era represented was not the liberation of aspiring individuals from their corporatist fetters, but a new golden age for finance capital. The Gordon Gekkos of the world were now free to dismantle sclerotic and vulnerable corporations at will.
The deindustrialization brought about by this restructuring was to have tragic consequences, robbing African American men in the cities of what had once been a path to middle class life and eroding the wealth that working class whites in what was now called the Rust Belt had thought was secure.The idea that neoliberalism would mean an end to corporatism and usher in a golden age of small proprietorship and individual entrepreneurs proved to be a myth.
Here is arch villain and uber-capitalist Peter Theil himself in one of the most honest and insightful business books ever written Zero to One admitting just as much.
“Americans mythologize competition and credit it with saving us from socialist bread lines. Actually, capitalism and competition are opposites. Capitalism is premised on the accumulation of capital, but under perfect competition all profits get competed away. The lesson for entrepreneurs is clear: if you want to create and capture lasting value, don’t build an undifferentiated commodity business.” (25)
In case Thiel’s implications for small businesses aren’t clear he later continues.
“The problem with a competitive business goes beyond lack of profits. Imagine your running one of those restaurants on Mountain View. You’re not that different from dozens of your competitors, so you’ve got to fight hard to survive. If you offer affordable food with low margins, you can probably pay employees minimum wage. And you’ll need to squeeze out every efficiency: that’s why small restaurants put Grandma to work at the register and make the kids wash dishes in the back.” (31)
Theil points out that large corporations often treat their workers much better than small proprietors. They pay them better, offer benefits such as healthcare. The favorable policies of large companies towards minorities have led them to be charged with “wokness” by the cultural and libertarian right, but it’s as much a reflection of their necessarily well educated workforce.
Such largess may be a matter of competition against other big firms for talent, but it’s also a question of capacity. Large companies can afford to treat their workers well. The scale of their profits means they can afford to do things for their employees, which small firms find themselves priced out of- like providing healthcare benefits.
What Theil fails to mention is the way large firms externalize their costs onto smaller ones. Whole sectors exist now whose foundations rest on the arbitrage of differences in labor and environmental standards across countries.
This is the brutal materiality of globalization and it is a story that is well known. What is less well known is how much of the seeming logistical brilliance of behemoths such as WalMart and Amazon is in reality an externalization of cognitive costs– a lot like a virus does. As Miriam Posner has so brilliantly pointed out, what makes an entity the master of a supply chain isn’t so much what it can see as what it doesn’t have to.
Here’s an admittedly extremely oversimplified summary of events. The 1940s to the 1970s was a period of large corporations in an alliance with the state and labor. The late 1970’s witnessed the beginning of a breakdown of this alliance, the scrambling of whole industrial sectors, birth of new ones, destruction of the power of organized labor, and the hollowing out of the state.
Within a generation the behemoth corporations were back, but this time its former allies – the state and labor- were mere shadows of their former selves. These trends towards bigness and inequality weren’t in the least derailed by the twin economic crises and pandemic of the early 21st century, but instead vastly accelerated by both their immediate effects and our policy responses to them. What we do next is the question.
The economic crisis of the late 20th century didn’t have to give rise to a series of policies that would create levels of corporate concentration unseen since the days of the great industrial Trusts of the 19th century. Pro-business Republicans certainly played the largest role in getting the US to this point, but their Democratic opponents who were supposed to be the party of labor are only a little less guilty beginning with Jimmy Carter, Ted Kennedy and Stephen Bryer, becoming worse with Clinton, and ending with Obama. Yet some had seen it coming and even sketched out alternatives.
In the late 1970’s the great French historian Fernand Braudel was finishing up his monumental three volume history of capitalism: Civilization and Capitalism, 15th-18th Century. Coming towards the conclusion of his tome, Braudel used his history to try to better orient us in the present. What we should be at pains to distinguish, he insisted, was capitalism from the market economy. Capitalism was old, but market economies were far older. Capitalism had to do with massive concentrations of productive capacity, vast networks of trade that were global in scope and led back to a dominant metropole. Capital was old but the modern era had given it unprecedented political and social power through which it has reshaped every aspect of life.
Market economies were far older. They catered not just to human economic needs, but to our social needs as well. They were the realm of the shopkeeper, the small craftsman, the tailor and barber. Braudel lamented as he witnessed cities that he loved like New York and Paris lose their smallholders even as capitalism continued its relentless march towards concentration. He doubted if democratic socialism was the answer. Could we not, he suggested, help tip the scale back in the direction of the small?
“But what kind of socialism will be able to maintain the freedom and mobility of the individual enterprise? As long as the solutions put forward amount to replacing the monopoly of capital with the monopoly of the state, compounding the faults of the former with those of the latter, it is hardly surprising that classic left-wing solutions do not arouse great electoral enthusiasm.” (632)
Thankfully, we are reasking Braudel’s question. An increasing number of critics on the right, left, and center have provided us with a sort of forensic investigation of bigness that allows us to locate its source, in distorted law, captured politicians, regulatory overreach, and policy errors that have been rectified in surprising places, and thus know what we need to change to fix it.
I am under no delusion that we could return to a world whose foundation isn’t large complex structures that require a high degree of centralization and bureaucracy. My hope is that even in this state of dependence we can retain spheres of humanity and freedom. Ironically, while this might seem like a natural project for the right, the only way small businesses will be able to thrive under modern conditions is if a whole slew of expensive and necessary services are provided to workers by robust welfare states.
While the state moves to restore some aspects of dirigisme, which our environmental crisis makes necessary, it can simultaneously promote a vibrant economy at the human scale. Surprisingly, some of our political figures appear to be groping their way in that direction. Let’s hope they find it.