Ayn Rand & Laissez-faire Capitalism

[willow]

Since she came up recently on the chat I thought I would link this article that was posted on fark.com

http://nymag.com/arts/books/features/60120/

Whenever Ayn Rand met someone new—an acolyte who’d traveled cross-country to study at her feet, an editor hoping to publish her next novel—she would open the conversation with a line that seems destined to go down as one of history’s all-time classic icebreakers: “Tell me your premises.” Once you’d managed to mumble something halfhearted about loving your family, say, or the Golden Rule, Rand would set about systematically exposing all of your logical contradictions, then steer you toward her own inviolable set of premises: that man is a heroic being, achievement is the aim of life, existence exists, A is A, and so forth—the whole Objectivist catechism. And once you conceded any part of that basic platform, the game was pretty much over. She’d start piecing together her rationalist Tinkertoys until the mighty Randian edifice towered over you: a rigidly logical Art Deco skyscraper, 30 or 40 feet tall, with little plastic industrialists peeking out the windows—a shining monument to the glories of individualism, the virtues of selfishness, and the deep morality of laissez-faire capitalism. Grant Ayn Rand a premise and you’d leave with a lifestyle.

[Azmodan Kijur]

I somehow tend to doubt that she was capable of such a smooth act of conversion. I have read her materials and find her far from a maven of logic as that article would imply. Rather, I find her instead to trumpet a vision of the world that ignores the actual physical reality of living.

Don't get me wrong here - there is much of the opening ideals of Objectivism that would seem to appeal to a logical individual such as myself. It purports itself to be a philosophy based on reality - reality exists independent of individuals, that you are in contact with reality through the senses, and that information can be obtained objectively about the world outside through inductive and deductive reasoning. To anyone that desires a rational thought system, these tenet are paramount. So, one might ask, what is my problem with it? Well, that can be summed up fairly well, though I will dig into it for your amusement. The answer is - though it might claim the mantle of rational existence and logical analysis, it's other tenets and its history make it clear that it does not actually engage in any such thing.

The "proper" moral purpose of life is the pursuit of one's own happiness or rational self-interest - this is an oxymoron. Rand claimed that man is inherently a rational being which is bullshit, to put it bluntly. Crystal healing, multi-billion dollar sports industries, "sport drinks" for the layman, hysteria over remote possibilities, helicoper parenting, and thousands of other things forces one to realize that the nature of man is not definitively toward rational action. It is, rather, directed toward humans filling any desire that crosses their nose when it does so, for those of the correct social situation. For others, it is the daily struggle to eat something, anything, to give them life - even if that thing is unhealthy or dangerous. One might be tempted to call the pursuit of a meal rational, but a desperate search for food often causes one to neglect common sense, doing things that can easily harm ones self in the pursuit of sustenance. The same can be said of sex - sex is not a rational motivation. This is from the deeper animal parts of our brains and like the need to defecate, sleep, or eat, it is a driver of action that can override the rational portions of the brain. You WANT to fuck - no matter that you shouldn't touch person X with a ten foot pole let alone trust them.

Humans are not rational beings unless they actively try to be rational. I try to be rational at all times, though I do not always succeed. Belief in a god is irrational, believe in Tarot is irrational, belief in pseudo-science nonsense is irrational, belief in miracle healing is irrational. Many of these beliefs are ubiquitous in the species. Rand makes a cornerstone of her philosophy something that does not exist.

Objectivism trumpets individual rights, reduced government and capitalism. This ignores completely anything to do with collectivist requirements or the group rights that one might find are needed. In fact, objectivism rejects the idea of any collective right, such as animal rights, leading one to conjecture that one can harm animals under objectivism without feeling any moral compunction about it. That may not be a fair assertion, but it is a valid assertion under the circumstances.

Capitalism is not the be all and end all of human economic or political endeavor. Rand holds that it is not just capitalism, but "pure, full, uncontrolled, unregulated laissez-faire capitalism". That is asinine - the only reason that our capitalistic system operates effectively is that it is not pure nor unregulated. We keep tight control over it now as the alternative has been demonstrated hundreds of times - Standard Oil and the like - unrestrained capitalism leads to concentrations of money and power into the hands of the few. There is also the problem of the examples of such action we have even now - every other western nation on this planet employs a collective health care system that is cheaper and more effective that the capitalist laissez-faire system of the US. Such a thing is counter completely to the supposed ideal that Rand tries to put forward.

In short, Rands idea is grand and wonderful or it would be if it were possible. Much like a lot of other such movements - ones that can be characterized as libertarian in origin - the system only operates if you are able to ignore human nature at the front. This is similar in notion to the problem with modern economics - that is, the reason that it is an art and not a science discipline. The key lies in the faulty assumption it must make that runs counter to human nature - that people will all seek to maximize their utility - that is, that they will act rationally. It is a very poor assumption.

[Intercourseman72]

I don't see why capitalism is the major economics philosophy associated with individualism and and 'rational self-interest.'

Communitarian organizations can just as well be within someone's rational self-interest. That's how insurance works, how fraternity societies used to work, how charities work, etc. The point about having a free market isn't so that it's laissez faire capitalism. It's so it's free an voluntary.

And btw azmodan, @ your comment about the 'capitalist laissez faire' health care system in the US. It's mercantilistic and corporatocratic. From top to bottom. WAY OFF from free market capitalism. As was most of the Gilded Age and the "Robber Barons."

They said at the time that "if God ordained these people to be wealthy and successful, he ordered the federal government to send the delivery truck." Not laissez faire capitalism.

[Azmodan Kijur]

I will concede that the health care system of the US may not be laissez faire capitalistic in the purest sense, but would request an example as to how it is mercantistic. As I understand it, Mercantilism is the economic state of hoarding gold bullion, establishing colonies, raising a merchant class of entrepreneur and maintaining a balance of trade. Not sure what it has to do with health care, but I am willing to find out. In the same vein, Corporatocracy is a form of government in which corporations or private business is the directors of government action. While corporations operate the health care system in the States, it is by the whim of the Government that they do so. You could remove them overnight if such was your will. Again, I'd like to know how private business operating the health care sector is akin to a corporation running the government.

Health care is certainly capitalistic, given the profit motive and the private operation and ownership. it should be noted that Mercantilism is a somewhat primitive forerunner of capitalism, but anyway. On the matter of laissez faire, one must admit that it is not pure, but given the lack of tariff and government monopoly in the industry, it is mostly left to its own devices save that of the technology and techniques that might be employed and this comes more from the educational section of society as opposed from directive control. Hospitals pursue profit in a field that one might argue that such a motive is detrimental to humans.

[Intercourseman72]

I suppose corporatism is a better term than mercantilism, but corporatism is really just another manifestation of the same ideology. Note that the pursuit of acquiring a favorable balance of gold bullion is only one component or pursuit of mercantilism. Both corporatism and mercantilism advocate protectionism of companies and corporations that best serve the interests of the state. In classical mercantilism, the state would simply grant companies monopolies. In modern mercantilism/corporatism, the state creates artificial barriers to entry through what it calls "regulations" in order to favor certain corporations(most coincidentally, the ones who contribute most to campaigns and lobby the most). Like in mercantilism, corporatism pursues indicators of output that poorly describe the amount of a nations wealth; for one, this would be GDP.

I would say that mercantilism was a more savage and barbaric form of corporatism and capitalism is one of the only real consorted attempts to rid society of idiotic un-economic practices such as subsidizing less efficient industries and companies at the expense of more efficient ones. Rather than reading Ayn Rand on capitalism, try Adam Smith (but ignore his labor theory of value). After Adam Smith, try Friedrick Bastiat. Then try Henry Hazlitt's "Economics in One Lesson" to fully understand where classical liberals are coming from and their views on this thing called "capitalism", which i must contend is a highly tainted and almost useless word. After that, compare these authors and their works to Keynes's "General Theory of Economics" and all the ideas he incorporated in the book from people before him.

About the pursuit of profit. What you are referring to is strictly the pursuit of monetary profit. I know it sounds nit-picky, but it is important. All people and all institutions pursue profit. It's just not always monetary profit. The state is not excluded from this by any means. If private companies get a reputation for fiercely pursuing the greatest market share, then it can only pale in comparison to what the state does in this regard. The state effectually monopolizes it. I think (guess) that in Canada, each province allocates healthcare services and draws funds mainly from the federal government. If that's the case, then each provincial state has a monopoly in that whole provincial market.

Btw, you may not know this unless you are involved with the US medical system, but the government does virtually dictate the practices of all hospitals and doctors both private and public through medicare and medicaid. The health care system in the US is the second most regulated industry from top to bottom after the financial industry. And... it just so happens to be the second most disastrous industry too. The thing about all these regulations is that they serve the interests of both the state and the corporations. Hence the terms mercantilism and corporatism. Both corporations and the state share interests under both systems and lead to very similar outcomes. Their key similarities are that corporations and states collude to fulfill each other's interests. With mercantilism, it was usually the state that used the corporation as its tool as a means to an end. Now it's usually the most connected members of the corporations who seek out the state as a means to an end. Kind of like a swap in parenting styles. First the parents exploit the kids to get what they want, now it's the kids who can guilt and pressure the parents into getting what they want. That's what you get with such unwarranted, un-deserved, intrusive authority figures. And i will end my digression there.

Again, I must contend that I don't think pure capitalism = free market. As Ayn Rand advocates capitalism, the capitalism is paramount to the free market. In this case, she would rather there be a state ensuring that society be entirely capitalistic in the strictest sense rather than allowing for non-capitalistic things to occur in the market. I tend to agree that people want to profit in everything they do, but it's not always monetarily and not always capitalistic.

[Azmodan Kijur]

Interestingly, ICM, the health care industry in Canada is as regulated, if not more regulated than it is in the states. Yet, our system is much better off. One wonders if part of the problem in the states is not more your politics (conservatives) than it is regulation. But it is difficult to say - one would need a point by point comparison of all regulation. The health department in the states dictates acts and actions and our bill of rights, federal regs, and provincial departments of health do the same. You have state oversight - we have government created and funded heatlh authorities that operate the hospitals and manage their operations. Hospitals are private in the states - clinics are the only private health agencies we get here, though the doctors in them are all effectively Government employees. Hard to say, but it is obvious that ours is not the cluster fuck the one in the states is.

[Intercourseman72]

When we talk about regulation, I am assuming we are referring to government regulation. What this more appropriately should be called is government controlled. The market puts regulations upon itself due to conflicts of interests by consumers and producers.

That aside, i would wager that canada, france, denmark, sweden, etc have a regulatory industry of health care as well as other industries more resembling a market. It's less centralized, there are more NGO's, there is more oversight, etc. Whereas in the US, it's more bureaucratic, more centralized, and more staist and more anti-market.

I guess we would have to analyze the regulatory differences point by point, but it is clear, to me at least, that there are more "checks and balances" in OECD nations outside the US because of their market-leaning structures of regulation. Rather than simply throwing tax dollars and bureaucratic government at it, regulations are done more on behalf of the consumers. (many regulations are implemented in the US on behalf of producers in forms of barriers to entry and so forth).

[Azmodan Kijur]

Interesting ICM. I believe that your post has given me insight to what it is that your concerns are about in regard to the government. More particularly, what you find to be reprehensible about the exercise of Governmental power and why I do not find the same. It is because we are in very different governmental systems, despite the closeness of our countries. Though this is obvious when you think about it, the actual differences are more than in name (President versus Prime Minister). There is a very real power, policy, and political motivations difference between Canadian politicians and American ones.

When you speak of Regulation, you picture Senators making rules that ensure that a given business can gain more monopolistic power over the industry. You picture congressmen placing weighty bureaucracy in front of a simple operation. You see the transit department take in toll monies for a road only to have them continue long after with no accounting for the money. You look at NGO's, GBTE's, GNPE's, and OGO's and see bloat, pandering and poor management. Basically, you see the problems around you and (rightfully) dissent as is your right in a democracy.

But that is not the way it is in Canada. Again, this might seem obvious, but it is important to recognize that one country is diametrically different in these areas from another. Government agencies in the States are run like blunt objects, rolling over the innocent for the laugh value. That is not the way it is here. Health Authorities here are regulated under Government Legislation and are operated by the Government. So, government employees manage them? Well, no. The Government created special organizations called Health Authorities that run a given regions hospitals. So they are government employees? Well, technically. The Authority is a Government agency that operates separately from central government, though it is funded by way of grant by that government. They are given the money to operate their systems and pay their staff and so forth.

Our transit authority is a central government agency, operated by the Department of Government Services. Here in Newfoundland, this refers to the Motor Registration Division. An American would picture being in line for hours to get a document filled and a pile of red tape wrapped around everything. Ummm, not quite. When I changed my address last year, I called the division and told them that I changed address from the one on my license. They asked for the new one and asked me to wait 3 - 5 business days for processing. 3 days later, I received a new license in the mail with the same expiry date as my current one with the file picture of me on it. No fuss, no red tape. Renewals are done online and mailed - there's very little you need to be there in person for (photo for a new license every 5 years is the main one). Obtaining a birth certificate is done with the same relative ease. We have our problems, of course, but they are just not comparable with those that the states seem to have.