The Dangers of Randian Economics

May 11, 2011
By DAlexander SILVER, Spring Hill, Tennessee
DAlexander SILVER, Spring Hill, Tennessee
9 articles 0 photos 0 comments

Favorite Quote:
"Chivalry!-why, maiden, she is the nurse of pure and high affection-the stay of the oppressed, the redresser of grievances, the curb of the power of the tyrant-Nobility were but an empty name without her, and liberty finds the best protection in her lance and her sword."-Ivanhoe

Imagine for one second that you are a great, innovative mind. You as this great innovative mind are a lynchpin upon which society relies to survive and thrive. Because you are this lynchpin you do anything within your power to improve yourself because the better, happier, and more content you are the more society relies upon you because it is a parasitic social construct. If you cannot hold up society on your own you deserve to be brutally crushed under it just like all the homeless people you walk past on your way to your hyper-competitive job in which you are constant getting your co-workers fired for their incompetence and inability to keep up with your overwhelming power.

You’re currently imagining the most selfish person in the world. Someone who does not care if everyone got the same initial opportunities they did. In fact in most cases this person did not have to stress for a thing in their entire lives. They were born into money, went to college on their parents’ dime, and then graduated right into a high level job due to connections. They have never had to go without health care, they have never been discriminated against because they come from a rich, white, protestant family. They believe that because they are some all powerful lynchpin that society rests on society owes them; instead of the other way around.

This is the social aspect of Ayn Rand’s Objectivism that many groups, such as Paul Ryan’s Republican and Libertarian supporters, attempt to apply to economics. When applied to economics there is intense deregulation, no policing of industrial activities, tax cuts for the rich, and a complete lack of welfare or similar plans for the less fortunate citizens that cannot help themselves. The United States of America has seen the negative effects of Randian Economic Theory with the actions of Alan Greenspan, which burst three markets and caused the current recession we are just barely recovering from.

Greenspan was a reactive Chairman of the Federal Reserve, every time a market situation looked bad he would wait until after it got to it’s worst stage before implementing any countermeasures. In 2000 Greenspan sat and did nothing until after the dot com bubble burst, at which point he raised interest rates in a hope to clean up the mess. Between 2001 and 2004 due to 9/11 and multiple corporate scandals he lowered interest rates to around 1% and according to his critics, such as Steve Forbes, caused massive inflation. These policies within the years ending his term and the years directly after his term led to the collapse of the faulty delivery market, the collapse of the housing bubble, and the crash of the highly unregulated credit industry. Greenspan was one of Ayn Rand’s most loyal acolytes.

Randian Economics is a dangerous economic theory, which allows blatant exploitation of the less fortunate citizens and in the long run only helps the already rich. Under Randian Economics the Lorenz Curve of the United States of America grew to show an unprecedented level of economic disparity between the classes for a developed nation. The Lorenz Curve of the USA has at its worse under this policy resembled that of aristocratic or oligarchic societies. Deregulated industries do not regulate themselves, instead they cause a danger to the citizens of the nation and exploit them viciously.

The author's comments:
Wrote this for Economics Honors

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This article has 4 comments.

DAlexander said...
on May. 27 2011 at 9:12 am
Err...sorry for some reason it tried to double my comment?

DAlexander said...
on May. 27 2011 at 9:10 am

I've actually read all three of Rand's major pieces. 

Every single country you've mentioned has an atrocious standard of living except for Hong Kong which had an okay standard of living for a while. Japan initially had horrible standard of living when it industrialized and actually now has a very regulated system that isn't very laissez-faire at all. That supports my point of the economic practice being socially and morally bankrupt.

And yes the housing boom and bust had other factors due to mortgages, etc. but interest rates certainly did not help one bit.

I never said take money away from people that had earned it. I just said don't make the people that weren't born with it suffer for that lack. If there is no possibility of vertical movement in a society that's not a free society, that's an oligarchy.

I guess you just have to make a judgement call on this. What's more important: People or money?

on May. 27 2011 at 6:31 am
Treefiddy BRONZE, Tarzana, California
1 article 0 photos 158 comments
Laissez-faire capitalism is the only justifiable economic system. Under such a system, the government exists for the sole purpose of protecting the unalienable rights of the citizenry. Government may make no sanction of violence, but exists to provide a police force, a military, a judiciary, and a prison system. Government exists as a response to force, ensuring that no man sanctions violence against another. A judiciary is needed to handle disputes between labor, to force contracts, and to protect against fraud. The initiation of force is the only warrant for government to respond with force.
You mentioned that it is unfair that children with wealthy parents may necessarily have greater opportunity to succeed in business because they were given tools that other children were not. To declare that inequality of opportunity is sanction for the state to deprive one man of his property so that he may be lower, is not only philosophically unjustifiable, it is inherently asserted on evil means. There is nothing equal about one man being born blind and another being born with sight, but that is not proper sanction for the state to engage in the threat of force against the man with sight. Your attitude toward the rich shows your true intentions: the purpose of egalitarianism is not to elevate the poor, but to deprive the rich. It is a philosophy which glorifies the ignorant over the intelligent, the evil over the virtuous, the slothful over the productive. It is not proper that we are equal by means of birth; we must all be equal by means of result.
As for everything you stated on economics, I can't see a single general principle that is correct. As world economies have liberalized, we have seen vast improvements globally. The miracle of market in countries like Hong Kong, Chile, Japan, China, have created the most productive economic engines in the world. We are not living in a laissez-faire, unregulated society. The financial systems are among the most regulated sectors. The housing bubble and bust was based upon years of government requiring lending institutions to give loans to unqualified buyers. Barney Frank, Chairman of the House Financial Services Committee, was at the epicenter of the financial mess, and when his policies led to collapse, he blamed capitalism and deregulation to save himself.
Your piece is essentially a homage to the ideas of Kant and Marx. You should read Atlas Shrugged. Your understanding of objectivism is thin to say the least. You should also read Free to Choose by Milton Friedman, The Housing Boom and Bust by Thomas Sowell, and perhaps the Constitution, The Federalist Papers, and The Declaration of Independence.

on May. 27 2011 at 6:30 am
Treefiddy BRONZE, Tarzana, California
1 article 0 photos 158 comments
All wealth which has ever been created on this Earth, is the product of man's mind. Man's faculties for interpreting his surroundings, including that he lives by a rational code of morality and objective set of ethics are the only means by which man may survive. Wealth will not be created by arbitrary whims, appeals to emotion, or the appeals to need. The world exists independant of consciousness, and man's judgement ultimately determines the nature of his existance in relationship to this Earth.

Man's rational faculty requires that he lives according to his own set of values and is able to determine the meaning of his life. He must be free to exercise his own independent judgement, for which his survival as a human being depends. He must be uncoerced, free to manage the interests of his life by a rational standard. When man is confronted with the instrument of coercion, his life is ultimately sanctioned, and he is not free to act in accordance with his rational judgement; his survival is compromised. For this, man has unalienble rights, which exist naturally; they were proclaimed in the Declaration of Independence. Man's unalienable rights are the extension of his being. Man rightfully owns his body by means of nature and is entitled to all the wealth which is produced from his own being. Man must be free to make free and mutual exchange with eachother, for specific knowlede and instruments of skill are not implanted in the mind at point of conception or birth.
No man may deprive the unalienable rights of another man. Man has no right to initiate force to acquire the unearned from another. The tools of coercion are of the brute who sanctions the property, and by extention, the life of another. No man is entitled to the life of another man by means of resorting to force to acquire the unearned.

Parkland Book