Posted by: bridget | 15 September 2007

Ayn Rand, Objectivism, and Forced Charity

Stranger thing have happened: the New York Times opines about Ayn Rand without maligning her.  (Perhaps this can be attributed to the fact that the business section contained the review.)  CEOs state that Atlas Shrugged is one of books which influenced them above all others:

But the book attracted a coterie of fans, some of them top corporate executives, who dared not speak of its impact except in private. When they read the book, often as college students, they now say, it gave form and substance to their inchoate thoughts, showing there is no conflict between private ambition and public benefit.

America is often criticised for having an “inequitable” distribution of wealth (comparatively, other countries have a tighter bell curve): 

In the United States, wealth is highly concentrated in a relatively few hands. As of 2001, the top 1% of households (the upper class) owned 33.4% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 51%, which means that just 20% of the people owned a remarkable 84%, leaving only 16% of the wealth for the bottom 80% (wage and salary workers).

Aside from the problem of treating wealth as a static resource (i.e. zero-sum reasoning), such analyses do not parse out the wealth created by such individuals, nor the relative effort put into creating such wealth.  Surely, an educated person who works 80 hours per week ought to earn at least double what an uneducated person, doing menial labour, earns.  (Note that higher-educated people have less leisure time than those with less education.)  Likewise, an individual who creates a company and jobs should not be criticised for earning more than his employees, who would be unemployed without him.

The United States has one of the strongest economies in the world; nevertheless, people complain about the distribution of income.  Rand and her disciples believe that these two circumstances are not a contradiction in terms; rather, one follows rationally from the other. 

Yet, there are still people like Hunter Lewis, an investment advisor, who has asked if the wealthy are necessary. The basic premise of any such query is to presume that people do not choose their relative level of wealth; or, if they could so choose, they are only prevented by circumstances beyond their control from not obtaining said wealth.  Unlike most people, however, Mr. Lewis advocates for a private-sector redistribution of wealth:

There would also be one or two higher brackets for the rich, who could either pay these additional taxes directly to the government or receive a full tax credit by donating the same amount to registered charities.  An estate tax whose revenues would go to nonprofit organizations is another possibility.

At least he is clear that the government desires to act as a charity but does it badly (as it does all things not within its specified function of effecting the safety and happiness of the governed).  Nevertheless, it is absurd to suggest that the rich are responsible for rectifying the income inequality in America, or that it is the proper function of government to ensure a “just” or “equitable” distribution of income (as it surely cannot guarantee a just and equitable distribution of talent, ambition, education, and productivity); it is even more absurd to suggest that the wealthy do not already voluntarily give away much of their money.  (This pachyderm’s law school and alma mater have been the beneficiaries of $100 million gifts; one is to establish scholarships (based on merit and need); the other is a microfinance partnership.) 

It is quite odd to suggest that the function of government is to serve as a super-charity for all its citizens, not as an agent of civilisation; stranger still is the suggestion that the wealthy would be capable of making effective decisions about where to put their wealth, but need politicians (backed by a less-wealthy populace) to force them to do so.  Miss Rand had quite a few things to say about the latter theory.

The elephant lives for the day when the government will mandate community service for those with an excess of leisure time, or penalise those who drop out of high school for not investing in human capital.  As it stands now, though, the government and modern leftists only make demands from those who produce. 

(Hat tip: Volokh and Total Transformation, respectively.)



  1. “The elephant lives for the day when the government will mandate community service for those with an excess of leisure time, or penalise those who drop out of high school for not investing in human capital.”

    That would be a good campaign platform to run on!

    It is amazing how far off track these folks get with their covetous redistribution efforts. Their foundation is flawed. Why can’t they see that those who work hard AND take risks deserve rewards, and that it benefits consumers and employees it done right?

    I read an interesting premise (in Forbes, I think) about how so many of the settlers in the U.S. had larger than average risk appetites that there was something genetic or at least cultural to it. Therefore, America thrived relative to the rest of the world in terms of wealth and inventions.

    Seems to me the answer would be to encourage such behavior, but communist countries stifle the very creativity they need to improve.

    Great post!

  2. Great post.

    I do not favor redistribution schemes, but I am concerned about a wealthy class that would actively inhibit lower classes from also becoming wealthy by imposing (through political clout) protectionist policies that restrict free economics. Maybe that is the real reason why the middle class is fading.

    The love of money is a funny thing with intoxicating power. And while we may not like the liberal proposals for redistibution, protectionist policies advocated by the wealthy classes are just as dangerous.

  3. Neil,

    Thank you. :)

    One of my former colleagues theorised that America is populated with ADD people who run away from their home countries out of boredom. ;) I like your theory better.

    As for any cultural residue of invention and achievement – may I guide you to Art. I, Sec. 8, cl. 8 of the Constitution?

  4. Jay,

    Could you give any examples?

    While I have no problem with abstract principles, I do find it quite difficult to envision what you are describing.

    IMHO, the reason the middle class is fading (if it is at all) is due to increased taxation (notice how the AMT, originally designed to get high-income earners, leaves Teresa Heinz Kerry to pay 15% of her income in taxes but is now moving towards those who earn $50,000/year); increased costs of education (most of which are not deductible after $60,000/year income); and the increasing need to be educated for many jobs. There is an enormous outlay of capital needed to get a good job; most of that capital (unlike for a business) is not tax-deductible. Voila – vanishing middle class.

  5. Oh I see Vokohl gets a link and I don’t. I see where I rank.

    BTW, since you seem to enjoy those articles I forward to you, here is a classic. Have you seen the latest topic that has the liberals’ mouths foaming in paroxysms of hysteria?

  6. Hey Bridget I think your anti-spam filter blocked my last comment.

  7. TT – whenever I link to someone on my blogroll (i.e. to just your site), the link rebounds to my home page. So I can link to a specific post without problems, but I can’t do :(

    My spam filter has been eating a lot these days. I didn’t notice until you said something.

  8. “As it stands now, though, the government and modern leftists only make demands from those who produce.”

    – A great argument. But isn’t making demands of those who produce only logical? Certainly, they are the populace most likely to satisfy them. I suspect that demands made of undereducated/unambitious people would be left unrealized or unfulfilled. It’s ridiculous to ask more of them than those with more money and education, because they simply don’t have the means to swing it. It sucks, I know. And I suppose these people are a detriment, economically speaking. But do you honestly believe they have the capacity to bear as much of the financial burdens in our country as someone who’s earnings are among the top 5%? The people at the top, those with money, are the ones who get things done, we suppose. So, let them be take on the extra responsibility that accompanies their higher-standing. That’s the thing about money, it comes with strings attached.

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