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Monday, June 15, 2009

Ayn Rand Fanboy

I am a big fan of Ayn Rand. I knew nothing about her before I picked up "Atlas Shrugged" from somewhere. I found that I just couldn't put the book down. The satirical twists and turns of the plot were most entertaining, but the entire philosophy of capitalism for the sake of capitalism was captivating to me.

The idea that money is not evil, but the basis for everything we do today is well-known to everyone though few will acknowledge it. It is a unit of measurement just like all other units of measurement are. The idea that money is evil is tantamount to declaring gallons as evil or meters as vile. Everything is worth something to somebody and the quantity of this worth is measured in dollars or pounds sterling or any other monetary unit to choose to measure it in. You could choose to measure it in gallons of milk, but it would be inconvenient, and it would result in milk being declared the root of all evil!

The worth changes over time, not just because of people's perceptions about the value of something but more importantly because of changes in supply and demand of both the object and the unit it is measured in (dollars or pounds or whatever). In short, increase the number of dollars in the world by a few trillion and everything becomes more valuable in dollars because dollars just lost a whole lot of value. Simple, you would think, but the number of boneheads for whom simple concepts of supply and demand and value are too demanding is astounding. For instance, in Eddie Murphy Raw, there is a part where Eddie Murphy thinks he is very clever by saying that if shit had any value, there would be people born without assholes. This is a classic case of confusing cause and effect: People are not born without assholes because shit is valuable, shit is valuable because some people are born without assholes.

That is one of the reasons why I think the educational value of Ayn Rand is enormous. You don't have to agree with every idea espoused by her, but at least you can learn what economics means and why people throughout the ages have tried and failed to control economic forces that nobody can control. You only have to look at Robert Mugabe and how he has ruined Zimbabwe to understand what I mean.

The problem lies in basic human nature. Everybody wants something valuable for what they have to offer to society. If you don't do anything useful, you don't get paid. Society does not owe anybody a living, contrary to the beliefs of the pseudo-communist governments of most of Europe. If you don't add value to society, you deserve to live like a beggar, on the alms and charity of others or by dumpster-diving. And that brings us to the bigger question of communism itself. Obviously, now it is recognized as a failed experiment, but the fact that the experiment went forward at all and was tried by so many different people at different times is proof that the world is full of idiots. Nobody, at least not me, likes to work so that the value they add to society can be used to feed somebody else who decides he is too good to trouble himself with productive work.

Obviously, the idea that money is evil originated with people who went after it for the sake of going after it. It is like someone obsessed with traveling more and more miles, and accumulates more miles to the exclusion of everything else. He does not travel to interesting places or enjoy the places he visits, but just travels non-stop, because each step he takes results in him accumulating more miles. That is obviously destructive and does not produce good results for the person doing it or those around him.

One of the passages in Atlas Shrugged revolves around the author's demolition of Robin Hood as a role-model. I agree with the basic premise of the author's arguments, but I wonder what the limits are for disadvantaged people to try to gain a leg up against people whose best interests are served by keeping them disadvantaged. What should the serfs of medieval Europe have done? What should the blacks in America have done to get over generations of being stolen from? I am sure greater minds than mine have mulled over and dissected arguments and counter-arguments about this and gotten much farther than I have.

My philosophy is that capitalism is good in and of itself as long as there are no opportunities for anybody to cheat anybody else. The role of government should be to regulate capitalism and its players so that everyone gets a fair shake. How do you design such a regulatory system such that nobody has the opportunity to cheat anybody else? That I will have to leave as an exercise for better minds.

As a tangential point to all of this, this ideal regulatory framework would ensure that employers can not collude or otherwise collaborate with each other to reduce wages or benefits for employees. Employees would be paid exactly how much they are worth and not less or more. But by the same token, employees would not be able to collude to increase wages or benefits.

Essentially, employees are selling a product or service (their labor) and should not be able to set the price for this in a collective fashion just as producers of other products are services are enjoined from doing so (cartels, anti-trust law, etc.). So, by this argument, unions should be declared illegal cartels and not allowed to negotiate wages on behalf of employees. Now, this argument always lights up a firestorm of incendiary rhetoric when I mention it. So much so that I don't mention it much nowadays. There are two types of people I have encountered based on their reaction to this argument. One type agrees with me and has nothing much to add to it. They think it is completely rational and makes perfect sense.

The other type of person gets all bent out of shape about the whole issue. They have no arguments to back up their case except that the rights of employees to associate with whoever they choose should not be infringed upon. They don't even understand that this has nothing to do with association. I am not saying the government should control who people should be friends with. I am sure the government does not control who CEO's of companies can be friends with either. But when such CEO's get together, the government expects them not to discuss pricing and other issues that can raise antitrust concerns. All I am saying is that employees should operate under the same rules. But, as I said, I can't make any headway with this type of person at all.

Perhaps unions are necessary at this point right now because the ideal regulatory framework does not yet exist that would prevent employers from colluding and pushing down wages and benefits. But I don't see much evidence for that argument in my profession, so it seems a specious argument by certain groups of employees to collude together and extort higher wages and benefits from their employers. And this means lower wages for other employees who are not quite so lucky and/or higher prices for the products sold by this company. So, everyone has a stake in this argument even when they don't know it.

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