Recently at Target, I happened to notice a misplaced book. “Atlas Shrugged” was in the self-help section. I joked about how Ayn Rand needed all the help she could get, and a passer-by stopped and commented about how that book was amazing. I replied that it failed in that the underlying structure was impossible, therefore the core element of the story falls apart under any reasonable analysis.
Simply put, Rand was wrong.
For those of you who have not read the story, one of the key elements to it is that business leaders decide on withholding their services, in a kind of blackmail, in order to topple the government as people cry out for what only they can provide. A kind of libertarian paradise of no government would then erupt. So long as these businessmen were absent, conditions would collapse, so it was written.
This is absolutely why the whole book is not only fiction, but a fairy tale. This could not happen, and I’ll explain to you why.
For it to occur, a fundamental element of nature must be suspended. To wit: Nature abhors a vacuum. If a business were to withhold its services or products, another one would rise up to fill the void left in the market place. That is the nature of the business world, otherwise there would be no competitive advantage to a monopoly, to isolate out new entries into a market. For a business to intentionally seal itself out of the market, in a kind of “do it or else,” the market soundly tells them to bugger off and finds a replacement.
Let’s use a real world example. At one time, all household and small business computers ran a single operating system. This software dominated the market, virtually no minicomputer or personal computer system made was sold without it. The company making this OS was the must-have-could-not-be-without end-all-be-all. Then, the CEO of this company misbehaved, he did not enable its use on a new machine, cutting off access in the same way in which those at Galt’s Gulch did.
The company was Digital Research, the OS was CP/M, and the machine he did not put his OS onto, the IBM PC. IBM could have waited for DR to get its act together, possibly delaying themselves by months or years. Instead, they picked an upstart, a new company, and handed the keys of the kingdom to them. That company, Microsoft, and it’s OS, DOS.
This is but one example out of many possibilities to use. Rand’s idea, that business leaders control through what they provide is absolute fiction. The customers control, the business only supplies to the customers. If the business does not supply, the customers will seek an alternative. If no alternative is there, an entrepreneur will step up to fill that need. That is what a free market is, and for all of Rand’s endorsement of it, she failed to grasp even the most basic structure by which it works.
The real Atlas in the end is not these giants of industry like Miss Taggart, but the workers who themselves are consumers. The real Atlas would only shrug off these yolks as the blinders were removed. They purchase what is available, remove that and the demand remains. Something will step in to fill that demand as rapidly as it can, no matter the market. You find history rife with such, companies shutting down product lines in order to sell some other product, or to kill off a market which competed with their desires, only to have one step into that place.
Ponder the auto industry a moment. When a company ends production of a popular model with high demand, aftermarket firms step in to continue the work, as demonstrated by the various kits based on the AC Cobra or Lamborghini Countach. Or when it is something more simple, like basic transportation, while the VW Bug was the low-cost basic transportation from decades past, today you would be more likely to find a Tata Nano or Kia Rio taking that same spot in the consumption pool, the original companies holding the spot abandoning the position. That is the market, niches to fill and when a company abandons its position in that niche, someone will come to fill it.
Then there is the practicalities of Galt’s Gulch itself. It is described as self-sufficient, but how could it do that? Did Mr Galt build all of the roadways and pathways needed by himself? Of course not. In the real world, Galt’s Gulch is based on the town of Ouray, Colorado, which has had billions (adjusted) invested into it over the 120+ years of existence, from the million dollar highway of the 1920′s to the premiere water management system. The cost of the endeavor is staggering, especially then the support costs for these giants of industry who suddenly could go from being bank managers or auto executives to being able to build their own homes using only the resources they had available. How do she expect it to even work? Simply put, it was a farce.
Those which espouse the philosophy of Ms. Rand have time and again proven themselves dangerous, for they believe that the business is the key to the market. This inversion of the nature of the market instead breeds corruption, and collapse, undermining the supports needed for the market to function.
This is why when the focus is, instead, on the worker, which then expand the consumer base, the market works so much smoother. This is why in the 1950′s, we could support dozens of airlines, multiple automobile manufacturers, both fast food as well as mom and pop restaurants. Because the focus was on the consumer, the middle class worker. Until we stop believing in Rands delusional state, and start focusing on the true engine of our economy, the true master of our fate as it were, we shall never again achieve the greatness that we once had.
Forget John Galt, embrace Rosie the Riveter!