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Ayn Rand: Defending Capitalism On Moral Grounds

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Few thinkers of the classical liberal tradition elicit the kind of strong reactions that Ayn Rand does. Love her or hate her, the Russian-born American novelist polarizes like nobody else. Since September 2nd is Atlas Shrugged Day (the date of the opening scene of her widely read novel), it's as good a time as any to look at one of the most polarizing aspects of Rand's thought: her moral defence of capitalism.

Born in St. Petersburg in 1905, Ayn Rand--or Alisa Rosenbaum as she was then called--lived through the Russian Revolution, after which her father's pharmacy was confiscated and her family, like many others, went through hard times. She managed to obtain permission to leave Russia to visit relatives in the United States in 1926, and she never returned.

Her personal experience of life under the repressive communist regime informed her first novel, We the Living, published in 1936 when many intellectuals were singing the praises of the "noble Soviet experiment." It would not be the last time Rand dared to challenge the received wisdom of the day.

Yet in addition to actually bucking the intellectual trend, Rand also courted misrepresentation with titles like The Virtue of Selfishness, a later collection of essays. How can selfishness possibly be a virtue?

Clearly, this was designed to shock and get people's attention. Rand was not a booster of petty, garden-variety, short-sighted selfishness. Rather, she promoted rational or enlightened self-interest. Your life is your own, and you have a right to live it as you see fit. You have a right to pursue your own happiness, as long as you do so peacefully.

This notion of self-interest being a virtue and your life belonging to you is very appealing, especially to the young who tend to yearn for freedom--and especially when illustrated in exciting novels like The Fountainhead and Atlas Shrugged, which feature compelling characters striving to pursue their values and lead fulfilling lives.

It is in Atlas Shrugged, and in her later non-fiction writing, that Rand made explicit her conviction that the moral principle of rational self-interest has clear political and economic implications. Specifically, if my life is my own, and your life is your own, then human society should be organized through a system of limited government whose primary responsibility is to protect people and their property.

Rand understood and appreciated the practical arguments put forth by classical economists like Adam Smith. She realized that the invisible hand of the market leads people to pursue their peaceful interests in such a way as to be of benefit to others. Trade, it is undeniable, has widespread benefits, and economic freedom can and should be defended on these practical grounds.

But Rand further believed that in addition to being beneficial, capitalism is moral, and that a more fundamental defence of economic freedom has to be made on moral grounds. In short, if your life belongs to you, then no one has the right to initiate force against you, which means that all human interactions must be voluntary.

This in turn means that when we do interact with others, especially with people we do not know well, we must do so as traders. We must treat each other not as masters or slaves, but as independent equals, dealing with each other "by means of a free, voluntary, unforced, uncoerced exchange--an exchange which benefits both parties by their own independent judgment."

In a free market, she pointed out, wealth can only be achieved by a kind of "democratic" process, where consumers of goods and services "vote" with their dollars. And when people vote with their dollars, they only vote on matters that they are qualified to judge: their own preferences, interests, and needs. As she wrote, in a free market, "[n]o one has the power to decide for others or to substitute his judgment for theirs; no one has the power to appoint himself 'the voice of the public' and to leave the public voiceless and disfranchised."

Rand was regularly accused of being "pro-business." But while it is certainly true that she unabashedly celebrated the productive businesspeople who contribute so much to society, it is also the case that many of the villains in Atlas Shrugged are businesspeople. Unlike the novel's heroic entrepreneurs, though, these crony capitalists get rich by currying favours from crooked politicians and influencing regulations to their benefit and to the detriment of their competitors at home and abroad.

If she were alive today, Rand would rail against the tariffs and quotas that continue to limit free trade in the name of protectionism for favoured industries, and against the subsidies and other privileges accorded to special interests that have the ear of government.

In a truly free market, government would be powerless to dole out such unearned spoils, and the only way to get rich would be by serving your fellow man and woman. There would be, to use Rand's terminology, a separation of state and economics, and both the boardroom and the legislature would be the better for it.

*This blog was written with the help of my colleague Bradley Doucet, an expert on Ayn Rand and her philosophy