Rebirth of Reason


Modern Capitalism Under Siege
by Francois Tremblay

It is no secret that capitalism is little appreciated by public opinion. Most people would rather see a return to a comparatively poor, mom-and-pop- shops, heavily-controlled world, at least in theory. Whether the statist, anti-corporation activist could live without modern technology is another issue altogether.

While economic freedom is on the rise in general, this rise is mostly manifested in poorer countries. Rich states are mostly stagnant in terms of getting their hands off people's property, and we see a number of setbacks such as in France, Russia, and New Zealand. We can say that while the violent taxation and protectionist hiccups of the World Wars are over, the days of the classical liberal spirit are also pretty much over. Statist monetary policies, inflation, taxation, and protectionism still plague the world.

Respect for economic progress among the general population is also declining. Violent globalisation protests, centrist voting, accelerating centralization of powers, crackdowns on tax "havens," all illustrate this problem. Added to this is another recent phenomenon in the United States, the CEO scandals.

The Chief Executive Officer (CEO) is synonymous with the expansion of capitalism. To attack modern capitalism implies an attack on CEOs as such (and by extension on consumers, of course). It is therefore no surprise that the anti-capitalist activists have jumped on the Enron/WorldCom bandwagon to attack the practices and privileges of CEOs.

But it is more surprising to see CEOs turn to Objectivism for inspiration. After all, as the stereotype would have it, businessmen are not men of philosophy but men of action. It would seem they would have little need for the world of John Galt and Objectivist philosophers, where concepts flow like a waterfall and logical propositions march like an ideological army, in military lockstep and precision.

Yet a recent article in USA Today ("Scandals lead execs to 'Atlas Shrugged,'" September 24th 2002) tells us quite the reverse. It seems that hits at the website of The Objectivist Center rose by 159 percent between August 2001 and August 2002, which is cheerful news.

CEOs are also rereading Atlas Shrugged and turning to Objectivism for answers. From the USA Today story: " 'Business is an available scapegoat,' says Frank Bond, founder of Holiday Health Spas, now Bally's, and a developer and manager of real estate, an industry that he says is overtaxed and 'regulated to death.' "

But critics also expressed their doubts in that same article:

" 'Ayn Rand creates a perfect capitalism, which in my mind relies too heavily on individual integrity to work,' says Nicolas Boillot, president of ad agency Hart-Boillot.

"The philosophy of Atlas Shrugged does not explain successful CEOs such as Milton Hershey, who during the Depression provided employees of his chocolate company with free medical care and paid off the mortgages of every church in town, Sonnenfeld [another critic quoted in the article] says."

These objections would be understandable from people on the street, but difficult to explain when coming from people who work in the system. Indeed, they are nonsensical on the face of it. If providing employees with extra incentive was a success for a Depression-era employer, then how could it be irrational? As they say, the proof was in the pudding. We can discuss whether such a policy would be good right now, but if it was successful at the time, there is little else that can be said against it being rational.

Likewise, it is statism which demands that we rely on integrity--more precisely, on the integrity of politicians and other public figures, who are most of the time not held accountable for their actions. Furthermore, they have little incentive to work for the good of their constituents, but are rather more likely to work for votes and money, especially from powerful interest groups. For them, that is simply good sense. However, in a capitalist system, the lack of political power keeps everyone in check, and each actor is held accountable for his own actions--individuals by objective law and by market forces, politicians by the constitution and its checks and balances.

The function of the CEO is part of the modern economy--to attack that function undercuts Western society itself. We should take such attacks seriously, and respond by pointing out the undeniable proof of capitalism's superiority, and all it has brought us since the Industrial Revolution. If there ever is to be a revival, we--Objectivists, intellectuals, capitalists, lovers of freedom, self-made men and women, freethinkers, realists--must be at the forefront of that defense.

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