This is my latest book review for the Financial Times.
Those looking for a fiercely uncompromising defence of free-market capitalism can do no better than consult the works of Ayn Rand. Before the Russian-born writer died in 1982, she developed a philosophy that celebrated selfishness, lauded entrepreneurs as heroes and rejected all state welfare.
These beliefs mean she is often a hate figure for liberals and the left. Typically they see her as the leader of a pro-rich cult that is happy to see the poor suffer in a Darwinian struggle for survival.
Yaron Brook and Don Watkins of the Ayn Rand Institute in Irvine, California, have done a good job of applying her approach to present-day conditions. Free Market Revolution is a critique of contemporary America from what Rand called an objectivist perspective.
The first thing likely to strike those new to objectivism is how hostile it is to other forms of free-market thinking. Those who are only prepared to utter two cheers for capitalism, or to advocate compassionate conservatism, are seen almost as traitors.
Brook and Watkins attack many free-market icons. They blast economists Milton Friedman and Friedrich Hayek for not making a moral defence of capitalism. For objectivists it is not sufficient to support the market economy simply on the grounds of efficiency. It is also morally superior to any other social system.
The authors attack Alan Greenspan, a one-time follower of Rand and former chairman of the US Federal Reserve, for failing to adhere to her ideas. For Rand, the existence of a central bank was itself anathema.
Brook and Watkins berate even Gordon Gekko, the villain in the movie Wall Street, for having insufficient faith in the free market. He was the arbitrage king who famously insisted “greed is good” and “lunch is for wimps”.
But Gekko also claimed there are winners and losers in a capitalist system. For Rand’s followers this will not do. Objectivists insist everyone benefits from a genuinely free market.
Not that objectivism lacks heroes. Rand admired the insights of Aristotle, philosopher David Hume and the US founding fathers. Adam Smith, often seen as the intellectual founder of the free market, was another influence, although she saw him as too soft in places.
Objectivism’s starting point of selfishness is often misunderstood. In Rand’s view it did not mean setting out to harm others or be dishonest. Individuals may even decide to behave charitably at times. But to make sacrifices – or to harm yourself for the benefit of others – is foolish, from her perspective.
Two other key principles follow from this premise. Objectivists see productiveness – the creation of wealth – as worthy of moral reverence. Brook and Watkins compare Mother Teresa and Pfizer, the drugs company, to illustrate this point. The Catholic nun is routinely lauded as a moral saint for her self-sacrifice. Objectivists argue, in contrast, that it is Pfizer that should be admired. The company has benefited millions of customers while allowing executives, stockholders and employees to become wealthier.
Objectivism also lauds the importance of business more generally. It most admires business leaders who determinedly pursue their own interests, as this creates a wealthier society. Brook and Watkins point to Steve Jobs, the late chief executive of Apple, the technology company, as an example of such a figure.
It is not necessary to accept all of Brook and Watkins’ points to recognise some insights. For example, they are surely right to argue that many in the contemporary US, along with other western societies, have become uncomfortable with productiveness. There is a heightened sensitivity to the problems it creates and a gross underestimation of its benefits.
Objectivism’s extreme individualism has serious weaknesses, however. It fails as a description of modern capitalism, as it cannot grasp the complexity of social institutions. Market economies are not simply Robinson
The philosophy is also one-sided in its emphasis on strong individuals. While more Randian assertiveness would be welcome, the challenge is to combine it with a more cohesive society. Rand herself would no doubt despise such a compromise.
Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government, by Yaron Brook and Don Watkins, Palgrave Macmillan, RRP£17.99
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