Atlas Shrugged: Its Philosophy and Energy Implications (Part II: The Book)

By Robert Bradley Jr. -- April 19, 2011

[Editor note: With the Atlas Shrugged movie (Part I) opening this week, MasterResource is examining the book (Part II–today), the philosophy behind the book (Part III–Wednesday), the moral obligation of capitalists according to Rand (Part IV–Thursday), and Atlas shrugging in the energy market (Part V–Monday).]

Ayn Rand’s first major novel, The Fountainhead, is the story of a lone architect struggling against the altruistic, collectivist norms of his profession. Atlas Shrugged describes the process by which men and women of accomplishment and honor withdraw their talent to defeat a parasitic, collectivist society.

Rand described her major plot device, an anti-Industrial Revolution:

Reverse the process of expansion that goes on in a society of producers: Henry Ford’s automobile opened the way for industries: oil, roads, glass, rubber, plastics, etc. Now, in a society of parasites, the opposite takes place: a shrinking of industries and productive activities. (1)

Originally titled The Strike, the novel revolves around John Galt, a theorist and inventor in the field of energy who leads the exodus, refuses under torture to save the bankrupt society, and then returns with the strikers to rebuild America on a rational, individualistic basis. “Who is John Galt?” has become a literary phrase that, like “Atlas Shrugged,” is still in use today.

Atlas Shrugged contains a variety of business and business-government situations that impart Rand’s views of positive and negative attributes of firms and their leaders. Although the work is fictional, a number of its insights anticipated the real-life blind spots of major business and political figures from Ken Lay to Barack Obama.

Energy in the Novel

Rand’s book about the anti-industrial revolution finds government and society working against the master resource of energy.

There is John Galt’s abandoned motor, his secret energy, that represents a foregone quantum leap for energy creation and usage.(2)

There is Ellis Wyatt’s oil, which Atlas Shrugged refers to “the black blood … because blood is supposed to feed, to give life….” (p. 9). Rand continues: “[The discovery of oil] had shocked empty slopes of ground into sudden existence, it had brought new towns, new power plants, new factories to a region nobody had ever notices on any map.”

Throughout Atlas Shrugged, energy is light and goodness and the torch to a better economic future. But there is the corrosive, wealth-destroying force of government intervention with energy. As Part V in this series will document, Atlas Shrugged goes from fact-to-fiction with oil shortages, gasoline shortages, and electricity blackouts. There is energy rationing and other conservation edicts–and even the Industrial Efficiency Award.

There is the energy planning agency: Bureau of Economic Planning and Natural Resources. There is public utility regulation and common carrier edicts.

There are crony capitalists and trade associations bringing capitalism down and gamed regulation.  There is the dynamics of government intervention as one regulation spawns another.

And there is much more that the energy scholar can document in the novel and trace to actual U.S. experience both before and after publication of the book in 1957. (3)

Business Enterprise: Good and Bad

The ideal in Atlas begins with the foundation of meaningful, inspired work and wealth creation. The rational, indeed heroic, business practices frugality, attends to detail, and strives for continual improvement, even perfection. The firm is reality-centered, forward looking, and authentic. Government favors are not sought—market solutions are.

On the other hand, there are warnings about emotions in the workplace, conflicts-of-interest where business men and women are put under obligation, cronyism and nepotism, extravagance, and a failure to take responsibility. The flash-in-the-pan company is focused on public relations and politics. It seeks and welcomes government subsidies. It appeases, rather than confronts, enemies of business.

The style-over-substance leader has “a gift” for making his business popular and receiving “good press.” He is detached from the nitty-gritty of the home office, working on what is considered bigger things in a marquee city. He has “Washington ability” where skillful actions result in legislative favor. There are “glossy” annual reports and many speeches to make. Great importance is given to the company’s slogan, symbol, and “noble plan.” Decision-making is very hierarchical. Formalities are relished and public-relation events emphasized. Diversity and “fairness” are considered alongside merit.

The flawed leader takes comfort in hiring “very promising young men, all of them guaranteed by diplomas from the very best universities.” The CEO is a Great Man creating a legacy with an autobiography in mind. He is extremely confident, believing that reality will be what he wants it to be. When things go sour, this leader is full of excuses.

The above insights about substance versus façade bring an understanding the fate of Enron and Ken Lay—and the ongoing success of the “anti-Enron” companies. Regarding the former, think of the old “beyond petroleum” BP; regarding the latter, think of Richard Kinder’s Kinder-Morgan and Charles Koch’s Koch Industries, Inc.

Conclusion

The movie captures what happens in a society when a philosophy of achievement and individualism is replaced by one of mediocrity and collectivism. Government policy hurts the productive and rewards the incompetent. The Ken Lays win and the Charles Kochs lose. The welfare state runs amok with the top burdened by the bottom until the top sinks toward the bottom.

The Obama-era resurgence of interest in Atlas Shrugged , first with the book and now with the movie, is testament of how good fiction can mimic real life.

FOOTNOTES

(1) Rand, quoted in Barbara Branden, The Passion of Ayn Rand (Garden City: NY: Doubleday, 1986), p. 222.

(2) “Like the man who discovered the use of steam or the man who discovered the use of oil, I discovered a source of energy which was available since the birth of the globe, but which men had not known how to use except as an object of worship, of terror and of legends about a thundering god. I completed the experimental model of a motor that would have made a fortune for me and for those who had hired me, a motor that would have raised the efficiency of every human installation using power and would have added the gift of higher productivity to every hour you spend at earning your living.” Speech of John Galt in Ayn Rand, Atlas Shrugged (New York: Random House, 1957), p. 1048.

(3) Robert Bradley, “The Energy of Atlas Shrugged” (forthcoming),  presentation at the Atlas Society/Free Minds 2011 Summer Seminar, Anaheim, CA, July 7–13, 2011.

————————-

APPENDIX: ECONOMICS PROFESSOR PETER BOETTKE (GEORGE MASON UNIVERSITY) ON ATLAS SHRUGGED

I am on record as stating that Atlas Shrugged is the most economically informed novel ever written.  I teach from Dickens and Steinbeck as well, but the underlying economics in those works is confused at best.  Rand’s economic message is coherent, consistent, and follows from the classic teachings of the mainline of economic thinking from Smith through Say onward to Mises.

The narrative she spins in Atlas Shrugged captures well the consequences of public policies that stifle entrepreneurship and private enterprise, substitute state planning for market coordination, and justify fiscal irresponsibility and inflationary monetary policy.  In short, such policies destroy wealth in the name of redistributing it.  Justice is not served by such efforts, instead we get naked injustice.

As politicians of both parties (Team Obama cannot take full credit) pursue similar policies to the one’s Rand describes as responsible for destroying the economy in our world today, is it any wonder that Rand’s book is flying off the shelves? Amity Shlaes sums up  the situation with respect to Atlas as follows:

Imagine a novel of more than a thousand pages, published half a century ago. The author doesn’t have a talk-radio show and has been dead for 27 years.

As for the storyline, it is beyond dated: Humorless executives fight with humorless public officials over an industry that is, today, almost irrelevant to the U.S. economy – – railroads. The prose itself is a disconcerting mixture of philosophy, industrial policy, and bodice-ripping: “The wind blew her hair to blend with his. She knew why he had wanted to walk through the mountains tonight.”

In short, you would think “Atlas Shrugged” might be long forgotten.

Instead, Ayn Rand’s novel is remembered more than ever. This year the book is selling at a faster rate than last year. Last year, sales were about 200,000, higher than any year before that, including 1957, when the book was published.

I just returned from a conference of BB&T Professors held at Clemson University, and co-sponsored by the Clemson Institute for the Study of Capitalism, and the Ayn Rand Institute.  The conference focused on teaching the moral foundations of capitalism at both the undergraduate and graduate level, and included faculty from some forty universities and in disciplines such as philosophy, politics, history, religious studies, as well as of course economics.  I learned a lot from the different people there about how they approach the subject of the study of capitalism and what sort of programs are effective in different environments and what programs are less effective.

I will be teaching Atlas Shrugged again this coming fall term.  I teach Rand’s novel within a comparative literary analysis alongside Dickens and Steinbeck guided by the lens of the economic way of thinking.  I have fun teaching the course, the students seem to enjoy the course, and we get to explore the deepest issue of our (or any) age – the preconditions for social cooperation and human betterment….

—————–

This series at MasterResource on Rand, Objectivism, and Atlas Shrugged is in five parts:

Part I: Overview

Part II: The Book (Atlas Shrugged)

Part III: The Philosophy (Objectivism)

Part IV: Immoral Businessmen (Political Capitalists)

Part V: The Energy Crisis (Richard Nixon, Jimmy Carter)