Economy  
comments_image Comments

Welcome to Ayn Rand Planet: Why the Rich Prosper from the Stock Market While We Get Screwed

On Planet Rand, the stock-market boom is a wonderful thing precisely because it rests upon the recent rise in corporate profits.
 
 
Share
 
 
 

This morning I received an email blast form Amazon. It was pushing The Fountainhead and Atlas Shrugged, the old and new testament of the Ayn Rand nation, which includes much of the Tea Party and its Republican allies.

How appropriate to be promoting Ayn Rand books just as the stock market and corporate profits both reached record highs. How appropriate to think of the infamous John Galt withdrawing from society in comfort while the rest of us face high unemployment, oppressive student loans, increasing healthcare costs, upside-down mortgages, and declining real incomes. But, according to Rand's philosophy, this is as it should be -- the wealthy getting all the rewards while the rest of us get nothing.

None of this is accidental. Our two-tiered economic recovery is the direct result of policies, or the lack thereof, that flow directly from Randian principles. If we don't do something soon, we'll all be living on Planet Rand.

Who Owns the Stock Market?

Before exploring this Randian policy coup, let's be clear on who owns how much stock in America, and therefore who is benefiting most from the record rise in the equity markets.

As of 2010, the top 1 percent of households owned 35 percent of all the stocks in America while the bottom 80 percent of us owned only 8 percent. These percentages include both direct ownership of stock shares and indirect ownership through mutual funds, trusts, and IRAs, Keogh plans, 401(k) plans, and other retirement accounts. (See "Wealth, Income and Power" by G William Domhoff.) So the current market boom is extremely profitable for the well-to-do, especially the super-rich, which is precisely what an Ayn Rand true-believer would cherish. Why is that?

On Planet Rand, each individual pursues his or her own rational self-interest. That is the definition of morality. It excludes altruism, which is posited as a negative, guilt-driven trait that should be avoided at all costs. Yes, this sounds selfish, but that's a good thing on Planet Rand, because acting in your own rational self-interest leads to improvement, success, fulfillment and happiness. That's how you can become a "maker" instead of a spineless moocher. (When I hear all this talk about the "makers," the Yiddish word macher always comes to mind -- a word used to describe an ambitious, puffed-up schemer. )

So on Planet Rand, the stock-market boom is a wonderful thing precisely because it rests upon the recent rise in corporate profits. (The New York Times reports that corporate profits as a share of national income are at their highest levels since 1950.) Aren't those corporations run by the smart, successful CEOs who are society's "makers"? Aren't those CEOs applying Randian reason in pursuit of their self-interest? Surely, this is why these makers deserve everything they can get.

Why Are We Being Left Behind?

It's easy to see why the Randians would adore the super-rich. After all they're not alone in their idolization of the wealthy. It's seems like most of Congress adores the super-rich as well. But why do the Randians refer to everyone else as moochers? Why be so hard on the rest of us?

This becomes clearer when we look at two kinds of answers to the question of why most of us have been left out of the current economic recovery. The first set of answers comes from a straightforward analysis about how our economy works, and doesn't work:

  • High unemployment depresses wages of low- and middle-income wage-earners

  • Increases in the use of advanced technologies allow corporations to produce more with less labor, thereby keeping unemployment high

  • Increased global production creates jobs elsewhere

  • Fiscal austerity leads to job, wage and benefit cuts for public employees

  • Fiscal austerity also prevents the additional stimulus we need to create jobs

  • Attacks on unions further erode workers' bargaining power and keeps wages low

  • Wall Street is using indirect government support to gamble rather than to rework mortgages and invest in businesses

You'll find many of these causal explanations coming from insightful political economists like Paul Krugman and Robert Reich.

Screw the Rest of Us!

The second kind of explanation is what you'll find on Planet Rand. In that world, there is no such thing as the "public interest." Even the family doesn't count for much. It's all up to the individual.

Randians love the free-market for entirely different reasons than Adam Smith. They make no pretense that the invisible hand of deregulated markets will make all boats rise. That's just guilt-driven altruism parading as economic analysis, they say. The point of under-regulated markets is that they allow individuals to succeed on their own. Regulations of all kinds are opposed because they represent the evil hand of government. In fact, on Planet Rand, there's a constant state of war between the collectivists -- as represented by the government -- and the individual "makers." If you're not a maker then you're a parasite. We deserve only what each of us can get on our own, they would claim. We live to pursue our rational self-interest, not to better anyone else's.

Washington Moves Toward Planet Rand

This world view has become the heart and soul of the Tea Party and a good portion of the Republican Party as well. As a result, any and all efforts to help spread the recovery are vehemently opposed:

  • Unemployment insurance? It prevents the unemployed from seeking jobs. Let them get by on their own wits, not on our money. It's bad for them. It's bad for the rest of us.

  • Increase the minimum wage? All money transactions are fair trades. You get what someone is willing to pay you, no more, no less. The government shouldn't be telling a businessman what to pay anyone.

  • Public job creation to reduce unemployment? You must be kidding. The government is an ever present threat to liberty. It should only provide for defense, courts and police. Job creation only comes from the makers.

  • Aid to states and localities to prevent layoffs of teachers and other public employees? No, lay them off. Get rid of public education. Get rid of as much government as possible.

  • Close tax loopholes for large corporations and hedge funds?Not a chance. Under no circumstances do we want one penny more going to government.

Romney's 47 percent/maker-taker comments were no fluke. After all, he tapped Paul Ryan, a self-syled Randian acolyte, as his running mate. It's also not a fluke that the Republican Party will oppose any and all efforts to make Wall Street pay for the damage it has done to the economy. Sure, they get lots of fat campaign donations. But in addition to the corruption that infects both parties, we find a new philosophical meanness that particularly permeates through the Tea Party/Republican Party. In the name of fighting for individual freedom and against government, they are more than happy to screw those who are harmed by Wall Street's insatiable greed.

The Randian policy coup helps explain why facts no longer matter in policy debates, why failed and disproven economic policies (like supply side economics) never go away, and why compromise is out of the question. These folks are at war against anyone who supports the public interest and the very notion of the common good.

Let me repeat: on Planet Rand, there is no common good, there is no altruism, there is no whining about CEOs and Wall Street barons. There is only individual self-interest and the crusade against government.

Democrats Become the Old Republicans

Here's the scary part. The more the Randian philosophy infects the Republicans, the more the Democrats move to the right. As President Clinton sarcastically quipped in 1993, "Where are all the Democrats? I hope you're all aware we're all Eisenhower Republicans...Here we are, and we're standing for lower deficits and free trade and the bond market. Isn't that great?"

President Clinton was onto something. Aren't President Obama and a large chunk of the Democratic Party still "standing for lower, deficits and free trade and the bond market"? (BTW, when President Clinton reappointed Alan Greenspan as chairman of the Federal Reserve in 1996, did he know or care that Greenspan had been among the most loyal members of Ayn Rand's inner circle?)

The Randian Antidote: Movement-Building

It's almost a cliché now to suggest that we need to build a progressive populist movement if we really want to do something about increasing inequality, unemployment, the student debt burden, and the continuing Wall Street rip-offs. Nevertheless, it's still true. Nothing much will happen if all we do is put forth wonky policy proposals from our many 501c3 non-profit organizations.

Also, hoping that a few solid Democrats can do it all for us is a pipe dream. For more than a generation progressives have been trying to put more people like Elizabeth Warren and Bernie Sanders into Congress, and we're still going backward.

Both the Tea Party and Occupy Wall Street proved that mass mobilization can dramatically shift the terms of debate. Yes, the Tea Party has some very rich donors, but I doubt that money alone accounts for the success of that formation, or for why no sustained progressive movement has emerged. But this much is clear: If we want out of the Randian economy, we need to break out of our separate issue silos to form a common vision and organization that can take back America from its corporate rulers. For most Americans, the spirit of solidarity, community and commonwealth trumps greed and selfishness. They are waiting for a way out of Planet Rand.

Les Leopold is the executive director of the Labor Institute in New York, and author of How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning Off America's Wealth (J. Wiley and Sons, 2013).

 

 
See more stories tagged with: