Well, I'm sure this will be balanced by the profile of Hayek that they plan to do tomorrow.

Why would any serious economist be familiar with John Galt anything?

Serious economists, i.e., ones that actually analyze capitalist reality and not the neoclassical chimera of perfect competition, don't have any notion of utilitarianism. They reject motivations based on balancing utility and disutility at the margin of constrained choice.

The question Ayn Rand and her acolytes can't answer and don't even want to ask is: what is profit's origin in capitalism?

They're afraid to answer this question because it undermines everything they think they know. They're unable to answer it because capitalism's surface appearances conceal its deeper layers. Thus, without any scientific economic analysis, they can't answer it. They're out in a fantastical wilderness wishing their ideological nonsense was the truth.

This "strike of the mind" seems to have hit Rand before she ever started writing. Her followers are profoundly deluded if they believe anything she said has any relevance to a scientific understanding of capitalism's operation. That's the problem when ideology trumps science.

The NPR piece was exceptionally well burnished by featuring pithy quotes from Congressmen Steve King and Alan West...two of our nation's truly deep and visionary thinkers on economic issues.

Many's the person who reports that reading "Atlas Shrugged" as a teen "changed their life". Lovely for them.

What is missed is that "Atlas Shrugged" is a story. So is "Romeo and Juliet" and "The Celebrated Jumping Frog of Calaveras County". While one can hold one's own views regarding the literary value of each, none is "true" in any important sense. There are plenty of points to be made against Rand's story, but they don't really need to be made. Rand's story is just her view of things, unsupported by any objective fact. On the next bar stool, there's another story, just as valuable as Rand's.

I do look forward to NPR's treatment of Hayek. To a large extent, he, too, told stories. Yes, he also did real work in economics, among other areas of endeavor. That real work can be considered directly on its merits, and it would be great if NPR were to do just that. If, however, NPR addresses Hayek's stories about how the world works instead of his more serious contributions, well, who'll be surprised?

Amusingly, in one of her essays Ayn Rand attacked Woodstock and praised the US space program. Which of these was finanaced by evil, collectivist taxes?

Ayn Rand, Alan Greenspan's dear friend, was such a "free market" advocate that she deigned to accept Medicare when she was dying of cancer. No doubt feebly saying "Keep government out of my Medicare"!

Don't confuse these. That's like reading Jesus words and then looking at Jerry Falwell and going "huh?"...

The problem is there is no counter to Rand from the statists...Orwell? ha ha..

BTW, the most evil characters in Atlas Shrugged are the corporations taking stolen money from the government....not the blatant socialists..

So I suddenly find I've stumbled into a determined mindset of visceral Rand-wrecking. What do I do?

As intriguing as it is dishonest, as tragic as it is heinous, the crudeness of the misrepresentation in the original article is relentlessly and trivially upheld by the comments. It's a shame that serious consideration of ideas don't play a part in this feed - only dogmatic deception.

If the author and commentators have read Rand they are guilty of deliberately misleading their readers and perpetuating intellectual vandalism and they must know it, if they haven't read her, I guess at least they won't realise the enormity of the betrayal they are committing to their lives. But ignorance isn't bliss it's a recipe for self-destruction.

You should have a field-day with this, friends. Will it even get published??

Check your premises, Rand used to say, but that and this'll be laughed off the blog. Shame. It'd be interesting to cut through the falsehoods and have genuine dialogue to try and unearth where the mistakes are being made. I'll always be gruesomely fascinated with this mindset that so massively misses the point.

Jacob Sullum recently made an entry in response to this on the Reason Hit and Run blog in case anyone is wondering why Randites probably have no reason to think highly of this article.

@Matt: To go into greater detail than David did, Dean Baker claims that Rand would have supported the bailouts or government handouts to business when there is no evidence to support this.

Baker needs to check his facts, not his "premises."

Not sure why people bring this up, but I guess it is a popular talking point for those who lack a better argument...

@Namaimo - She paid taxes into the services, correct? If someone is forced to pay into a given social service, and then takes it upon themselves to get their tax dollars back, how is that hypocritical?

http://memegenerator.net/instance/11077333

http://reason.com/blog/2011/11...te-welfare

Liberals progressives unions the right, all fear Rand because the fundamental issue is being in charge of ones own life. In the 60s/70s, even the left argued for self-actualization...be who you want to be...Mamas and the papas...Go where you want to go.... But of course this ultimately conflicted heavily with the liberal/corporatist/statist mantra of take what you want to take. The economics are interesting, of course, but the heart of the issue is not the economics (a byproduct), it is the fundamental philosophy...hence Ron Paul gets 89 seconds in a debate...the only antiwar candidate in either party!

The funny thing about this post is, I guarantee you Dean Baker is a big advocate of deposit insurance, TBTF backstops (oh sure, with some more conditions on executive pay no doubt, but backstopped all the same), and the existence of a central bank as a "lender of last resort." But Ayn Rand was opposed to all of these things. (A fact I'm sure will be shortly recycled to casigate Rand for being *too* consistent in her views!)

Of course, he betrays his near-total ignorance of her ideas within the very first sentence when he calls her philosophy "promoting oneself at the expense of others." Here's what she actually wrote in Galt's oath: "I swear, by my life and my love of it, that I will never live for the sake of another man, *nor ask another man to live for mine.*" And yes, a great number of today's corporate executives and CEOs, especially at the big banks, could stand to take the last part of that oath to heart.

I am amused that at Jeffrey Stewarts ignorance of the origin of profit according to Randians. Ayn Rand promoted the economic theories of Ludwig von Mises (who kept Austria from having the wheel-barrow-full-of-money-to-buy-a-loaf-of-bread inflation that plagued Germany between the World Wars).

His explanation, grossly oversimplified.

1) When people act purposefully their actions are intended to improve their happiness in comparison to inaction or other potential actions.

2) When people engage in trade, each participant values the traded goods or services differently. The news-stand owner wants 50 cents more than he wants a paper. The businessman wants the paper more than he wants 50 cents. Each one profits psychically from the exchange.

3) Money is a commodity that people find beneficial to use in commerce because it has properties that make it uniquely fungible. It's arises whenever people are desiring goods and services that cannot be provided by barter alone. It comes to dominate transactions because it eliminates the problem of having to satisfy the double coincidence of wants (In a barter economy, if Mr Steward wanted an egg, he'd have to find an egg-farmer who was interested in hearing one egg's worth of political commentary).

4) People engaging in production will produce more then they want to consume in order to save for a rainy day. Accross an economy this saving rate results in a 'natural rate of interest' based on the savings rate of the population. (NB the mismatch between the Federal Reserve's target for interest rates and the natural interest rate leads to booms and busts)


5) The profitability of individual ventures depends on the ability of the owners of the venture to satisfy consumer demand by taking less desired goods and services and converting them to forms in greater demand. Because people are constantly changing their wants, and because new ideas or disasters happen unpredictably, it is very difficult to predict what ventures will be very profitable and which ones will not.

6) The natural interest rate becomes the baseline profitability of every commercial venture. An investment that earns more than the natural rate of interest in return will attract entrepeneurs who want to get in on the action who divert capital from less profitable lines of work.

One can actually read this discussed more fully here:
http://mises.org/humanaction/chap15sec8.asp

I see that the previous posts from Ayn Rand fans missed the mark. Dean Baker is commenting on the Randian objective on maximizing one's own self-interest and its contradiction with her putting value in a free market. The free market does not maximize the self-interest of any parties involved; the completely free market optimizes the economic footprint of all parties involved and nothing more.

Yes, I've read Rand. She does great gymnastics to argue that the "thief" is subhuman since he has misplaced value. That's really a form of begging the question, in my opinion. How does one objectively discern what values truly define oneself to be human and what ones are misguided? She attempts to create a system of justice from this elaborate sorcery. If this is how she feels, then so be it. I cannot complain since she is maximizing her own self-interests. But the robber baron does maximize his own self-interest, and his actions that interfere with the self-interest of others does not disgrace the values of the robber baron. He is living just as ethically as Rand, which is the point of Baker's comment.

Shawn: I think maybe we missed all those deep arguments because they were not at all what Dean Baker wrote in his original post.

It's amazing sometimes, the logical contradictions that some people are willing to entertain in order to dismiss Ayn Rand. For instance, Rand is alleged to have argued for "promoting oneself at the expense of others" while also engaging in "great gymnastics" to show that pursuing your self-interest need *not* come at others' expense!

I mean, never mind that the businessmen who seek government favors, protections, and handouts are *mercilessly* attacked by Rand in "Atlas Shrugged," let's just pretend she wrote whatever we find easiest and most convenient to criticize.

Shawn:
"The free market does not maximize the self-interest of any parties involved; the completely free market optimizes the economic footprint of all parties involved and nothing more."

One has self interest. One does not maximize self interest. One may act on self interest to maximize something that we call utility. Freely exchanging with one another, without coercion from the government, certainly does, almost by definition, improve oneself. As a by- product, under certain conditions, this might optimize some social welfare function. But that is beyond the scope of Smith/Hayek/Rand/Rothbard. So, it is not unreasonable to assume that free markets do in the process of making each person better off maximize the social well being...but that again requires a social welfare function.

For example, a Rawlsian social welfare function would allow taxing the rich, i.e., those in the U.S. and Europe, and sending money to the poor, i.e., those in Africa and south Asia. This would require coercion, not free markets. I have not seen a social welfare function that says it is optimal to tax the top .001 % to give to the top 10%, i.e., within the rich U.S./European populations.

This was funny, I almost took it seriously. Good one.

Pete,
I'm sure Adam Smith would be horrified at the company you put him in. Or did you have another Smith in mind?

Startling falsehoods from the author of "AR Is Not a Supporter..." In Atlas Shrugged she damned the "pull-peddlers" who attempt to use government coercion to gain privileges and throttle competitors. I mean James Taggart is a major, major character in the novel. Lesser, but still prominent are Wesley Mouch and Orren Boyle. Also she wrote extensively on the moral imperative of preventing businessmen--just as for anyone else--from using government to initiate force.

She was utterly consistent, demanding "the total separation of state and economics."

But her politics was the smallest, least important of her philosophic contributions. Take a look at the 400 topics covered in my "Ayn Rand Lexicon," which I have now permitted to be put up for free use, at: www.aynrand.lexicon.com

Tarran should be knowledgeable enough to know that argument by authority isn’t a strong reason for supporting any conclusion. Wow! Really? Mises?

What’s so hilarious and pathetic about tarran’s comments above is s/he apparently thinks those commonplaces are unknown to anyone else, Nothing is easier than asserting a problem is solved when one didn’t do the gut wrenching work of actually solving it.

The first explanation isn’t about profit. It’s about mutual subjective gains from trade. Of course this doesn’t answer the question and so it buttresses my original point. It doesn’t in any way refute it.

Then tarran ventures into comedy. Apparently /s/he thinks exchange based on a double coincidence of wants explains profits. Of course, even a dim bulb ideologue like tarran has to recognize in his/her sober moments that it doesn’t explain anything about capitalist profit’s origin.

Next tarran abstracts from capitalism itself in the midst of an non-answer concerning capitalist profit’s origin. Notice it’s “people” producing more than they consume in order to save for a rainy day. Well, this might be some other economic system, but it’s not capitalism. What “people” produce more than they need for a “rainy day?” This grossly misrepresents the purpose of capitalist production. Production for direct use may happen, but does tarran want to argue that the motivation for the production of the vast majority of output is for direct use? I thought not! Since when do capitalist corporation produces more than it consumes in order to “save for a rainy day?” taran avoids the question I asked and answers one of his own choosing! HILARIOUS, but it doesn’t take one step closer to an answer to capitalist profit’s origin.

Next, tarran has apparently never heard of derived demand. The demand for consumer goods is the demand for inputs to produce these goods. This is the center of his argument. Capitalists buy inputs for a certain price and through a capitalist production process produce outputs and sells them for higher prices. Voila! Says Tarran! There’s profit!

It’s unsurprising tarran doesn’t realize that buying low and selling high may explain one person’s “profit,” but it doesn’t explain capitalist’s profit’s origin. What’s more is that if everyone buys low and sells high, then in the aggregate all the pluses and minuses cancel out and there’s ZERO profit. What one person gains by selling high someone else loses by buying high!

The question, for those slow on the uptake, is what is the origin of capitalist profit? What is capitalist profit’s origin in the aggregate?

It's time to learn the difference between science and ideology!

Could you explain your point instead of asking questions? I would prefer you tell me what you think the answers are to the questions you asked.
"What is the origin of capitalist profit? What is capitalist profit’s origin in the aggregate?"
If you feel people should be educated by science please provide some.

Well, Pete, when someone so knowledgeable chimes in claiming to know an answer to a question I asked and doesn't answer it because s/he doesn't know the answer, how is that my responsibility? I evaluate the non-answer. What more do I owe anyone, especially someone authoritatively claiming to know the answer and didn't?

I'm not selfless. I'm no Ellsworth Toohey. This is capitalism after all. Where is the benefit to ME to take the take to educate the ignorant when they won't do it for themselves? Whatever happened to self reliance among the randians?

I usually charge for such economic tutorials. This is capitalism after all and you like it.

taran/Mises didn't answer the question because they have no answer. It's all abstract gobbledygook that bears no orderly relation to capitalist reality. That is, it's foolish ideology.

Peter, what's your explanation for capitalist profit's origin? Do you have one? I look forward to critiquing your feckless attempt at an answer.

All the randians talk a great game about self reliance, freedom, blah, blah, blah, but when it comes to science, they don't know jack all! Ideology's their game.

If economies worked the way you think they do then we'd be able to break windows and dig ditches and fill them back up again and then.....PROFIT!! If in fact people have actually paid you to teach how economics works then I'd suggest they ask for their money back...

Ad hominem attacks are the first refuge of someone with no substantive points. That may work with your ilk, but it won't work with me.

You don't know how I think capitalism works. I didn't put it in any of my comments.

Moreover you confuse Keynes with someone else. It was Keynes who argued that putting people to work digging up bottles with money in them as a solution to massive unemployment as a result of captialism's normal, profitable operation.

You have no logic, reasons or evidence for your assertions. This seems to be a trait of randians. They're all slogans and no analysis!

Ayn Rand applauded the most grotesque government intervention in the economy - the genocide of the USA's original inhabitants.

To her, the government stealing from mere "savages" then handing over the loot to private industry was not really stealing.

Though she singled out "savages" with extra contempt, her world view saw the vast majority of people as pathetic and expendable. She was quite open and honest about it. Her fans are gerenally not so honest.

40 % Social Security recipients are living on SS only.
Dont even talk about senior wealth.

It doesn't matter how much Ayn Rand herself demonized those types of business practices. It doesn't easily follow from the basic premises of rational and ethical egosim, i.e. objectivism.