Free Market Revolution: How Ayn Rands Ideas Can End Big Government, by Yaron Brook and Don Watkins (Palgrave Macmillan, 272 pp., $27)
One of the many unfortunate things about the Great Recession and the weak recovery since is that the free-market economy has taken so much of the blame. Here was the central narrative as the panic hit four years ago: predatory lenders, complex derivatives, and even tax cuts (all of which either operated beyond government oversight or scooted government out of the way) stoked the housing bubble and poisoned the economy, bringing the terrible bust. Then, as the recession settled in, critics found examples of deregulation over the past generation—one favorite was Senator Phil Gramms 19992000 legislation permitting larger financial enterprises and options trading—and argued that they, too, played a role in bringing the economy to the brink. A sense has unsurprisingly formed among many Americans that the driving force of the private economy is greed. Leftists, liberals, and Democrats assert this as an obvious truth. Then they impute to their conservative and Republican rivals the crude justification for greed offered up in the 1987 movie Wall Street: Greed is good. For their part, supporters of the free market too often concede that the Wall Street line does, in fact, represent their position.
So its cause for optimism that Ayn Rands books have flown off the shelves since 2008 and now sell a half a million copies a year, as Yaron Brook and Don Watkins tell us in Free Market Revolution. The celebrated author was never one to shrink from taking the fight to free-market critics—or statists, in her preferred term. The first thing that Brook and Watkins clear up is that greed has next to nothing to do with the well-formed capitalist personality, much less with getting the free market humming. Through thumbnail profiles of several business titans, including Steve Jobs, they show that what motivates such people is not acquisitiveness but a rare and admirable form of self-respect. Here is Jobs on the success of the iPod: We won because we personally love music. We made the iPod for ourselves, and when youre doing something for yourself, or your best friend or family, youre not going to cheese out. If you dont love something, youre not going to go the extra mile, work the extra weekend, challenge the status quo as much.
The authors endorse the Randian argument that remarkable people need extra space to achieve self-realization. Their capacities are larger than most peoples, their horizons broader, and their scope of impact more vital—so get out of the way, government. And when remarkable people succeed in business, the authors note, the public benefit is often immense. But such people arent greedy, according to the authors. Rand described the motivation of businesspeople and entrepreneurs as rational selfishness, and Yaron and Brook elucidate Rands view that purely acquisitive or greedy types are not rationally self-interested—that they havent thought fully about the proper goals of life.
Discussing our current economic state of affairs, Free Market Revolution offers some strong arguments. The book makes plain that the chief blame for the current economic crisis should be placed on the government. The cheap money from the Federal Reserve (dating back to the early 2000s), the goosing of the housing market by multiple federal agencies and policies, and the comprehensive regulation of the mortgage markets combined catastrophically. The authors remind us that before the crisis hit in 2008, the government-sponsored housing-market warehouses, Fannie Mae and Freddie Mac, had at least $60 in liabilities for every $1 on hand. Any movement in interest rates would destroy everything. So came the bust.
The book is full of provocative free-market reform ideas. Wiping out regulation and licensing in the automobile, food, and construction industries might sound scary, but the authors maintain that the result would be greater safety and efficiency. Instead of appealing to state-sponsored approval agencies (as they must do today), enterprises would compete for the publics approbation for their products and services. The common assumption that the governments standards for quality and reliability are higher than those of the marketplace has no basis in fact.
Then there is the monetary issue. The authors stress the point that should now be obvious to most Americans: a government bent on devaluing its currency will stifle the risk-taking that comes naturally to a free people yearning to be entrepreneurs. And finally the authors dwell on health care, arguing that we can kiss medical innovation goodbye if the state continues its regulatory takeover of the sector.
Free Market Revolution is often persuasive in its arguments about the nature of capitalism and entrepreneurial life and in its economic diagnoses and prescriptions. So you have to ask why the Randian ideal hasnt caught on more broadly, especially with Rands novels selling so well. The reason, Id argue, is that the oeuvre has a penchant for the fatal non sequitur. Free Market Revolution is no exception. Though the book is primarily about the economic crisis, how to get out of it, and the self-regarding character of the well-formed entrepreneur, the authors also write lines like these: It was Christianity that banished the Aristotelian conception of ethics from the philosophic scene. . . . In the twentieth century, Ayn Rand revived the Aristotelian tradition, making it more rigorous, more consistent, more scientific. Monks passed down an unchanging body of dogma to their understudies. Freedom arose only during the Enlightenment. History shows that the greater religions influence is on a culture, the less free it becomes. And also, quoting Rand: From the fall of Rome until about the sixteenth century, science was virtually extinguished by Christianity. . . . Science finally began to reemerge in the Renaissance, thanks to a few heroes willing to risk their lives to bring men out of the Dark Ages.
Each of these statements is either baldly inaccurate or sophomorically tendentious. To take just one example, there is no credible way to defend the proposition that it was Christianity that banished the Aristotelian conception of ethics from the philosophic scene. In the vast history of Aristotelianism, no greater pinnacle of comprehensive achievement occurred than that of the Latin High Middle Ages—the only competition (and it is stiff) being the Islamic Renaissance that preceded it. As for Aristotelian ethics in particular: rarely, in the handful of papal condemnations pertaining to Thomas Aquinass Aristotelianism, is there an example of churchly discomfort at the system of justice, personality formation, and ones due to the community that Aquinas appropriated wholesale from Aristotle. The denunciations that did come concerned esoterica about certain details of cosmology and whether intellectual processes have a common source. The Church canonized Thomas a mere half-century after his death and graced him with the title of Angelic Doctor.
Randians are notoriously intransigent interlocutors, as well as great pointers of fingers: You, government and altruists, have screwed things up. Its time for them to look inward to discern and repair their own argumentative shortcomings. Surely a major reason that Randianisms actual influence today is so circumscribed is that its adherents insist on melding their economic logic with callow philosophical and historical braggadocio. Those who otherwise might be swayed by the economics find that they have to check their intellects at the door when it comes to matters of culture and civilization. If the Randians either limited themselves to economics or beefed up their philosophical and historical knowledge, they would do a lot more to advance the free-market cause.