My response to a polemic by an English gentleman
About two months ago, I published my admission of “How I fell into Ayn Rand’s snares.” I was inspired by two earlier articles on Medium, critical about Ayn Rand and her most famous book, “Atlas Shrugged.” I did not try to defend the controversial author and her book, but to present how my life experiences made me identify with her ideas when I learned about them in my 50s.
That article brought more readers and comments than any of my other texts on Medium. Rarely do abstract ideas raise so much interest. It is not about Ayn Rand; it is about our disagreements today, which she skillfully described a long time before many of her zealous opponents were born. For this reason, talking about her concepts might help us with understanding the problems we face today. In this spirit, I encouraged readers to write formal polemics challenging my article.
Why do we need polemics?
Only Tony Atkinson responded with a polemic. As an Englishman, he started with reservations about the very concept of a polemic. He felt uncomfortable aggressively attacking my opinions, erroneously identifying this with assaulting me personally. This part of his polemic told us how far we had departed from the times when we could converse respectfully with people of opposite views.
Fortunately, after warming up, Tony presented a comprehensive critique of Ayn Rand’s ideas, referring to them as a “Cloud-Cuckoo Land.” Then, realizing what he had done, he assured readers and me that he does not care what we think about him. I think highly of Tony out of respect for his courage and effort in presenting his arguments in the debate. I disagree with his point of view, but this is for the next chapter. His article allowed me to learn more about his reasoning. Now I can be more precise in pointing out his errors. Polemics are not about what Tony thinks about me or what I think about Tony. They are about presenting in one place a comprehensive discussion, which readers can find both entertaining and educational.
The underlying misunderstanding of capitalism
Tony, like most critics of Ayn Rand, does not like capitalism. In the section of his polemic titled “The Underlying Error in Capitalism,” he explains why. He sees it as a religion that has “its share of myths and legends.” What Tony thinks about capitalism has very little in common with what it really is.
Capitalism emerged as a social contract, beginning in the early medieval times in Italian cities and maturing in the early 19th century in Western Europe. The underlying concept was in broadening the spectrum of people freely participating in the economic process. In his article “The Recipe For Capitalism Hasn’t Changed in 400 Years,” Sam Young writes about capitalism bringing prosperity. It stipulates technological progress, advancing the level of living for all involved and enriching tremendously the very few. Readers interested in finding more about the emergence of capitalism can check my old article “Capitalism, socialism and communism.”
Most critics of capitalism take as a given the betterment of living conditions for all and instead focus on the disproportional enrichment of the few, especially if those individuals abuse the power that money provides. Anti-capitalists prefer forgetting that in January 1914, Henry Ford doubled the wages of his workers. Not out of his good heart, not because of a government regulation, not because of the unions, but in his egoistic self-interest. He calculated that the increased wages were the minimum his workers needed to earn to afford one day to buy the cars they were making. In its essence, this is the concept of a “trickle-down” economy, criticized so vividly by Tony and other foes of capitalism.
The term “capitalism” appeared in the middle of the 19th century and was “popularized” by socialists who criticized wealth inequality. In that sense, using a comparison to religion, socialism is a religion invented to civilize capitalistic pagans. The critique of capitalism boils down to taking a distorted picture of it and contrasting that with the idealized vision of socialism.
Tony does it when accusing his opponents of claiming that “if you work hard enough, you can become wealthy in capitalism.” Define “wealthy.” Is Tony wealthy? We can assume that he can afford at least a halfway decent roof over his head, clothes, food, a computer, and internet service; otherwise, he could not write. He mentioned that he has the experiences of a long life; hence, we know that personal computers and the internet were not around yet in his youth. We can reasonably assume that he might drive a better car than he did years ago. He might have a better TV and enjoy many more conveniences. But he forgets about all those life enhancements that he has experienced himself.
Most of all, he forgets that on the eve of capitalism, about two centuries ago, famine was the biggest social problem in most of the civilized world. People were dying of starvation. Capitalism could not survive with hungry workers. Capitalists could not get rich if workers did not have at least a minimum level of comfort under the roof over their heads. Where capitalism could function, starvation was not the problem, and the living conditions for the masses improved. But Tony writes that “the core myth, the one the capitalists themselves fall for, is the idea that wealth can be created.” What is lifting the living conditions of billions of people around the world, if not wealth?
Explaining his risky statement, Tony strides into economic theories, looking for analogies between thermodynamics and social-economic processes. With my engineering education, I am familiar with those theories as well. After wading around, Tony concludes that the smaller organizations have lower entropy than the big ones; in layman’s terms, they are more efficient than the large ones. For Tony, it means a critique of capitalism as we know it. I see the same conclusion as supporting Ayn Rand’s ideas. With the increased government regulations, many large corporations receive an unfair market advantage. The case of General Motors is a classic example. For Ayn Rand’s opponents, this is the weakness of capitalism requiring more government intervention. For me, this is proof that Ayn Rand was right in asking for less government intervention.
According to the theories using entropy comparisons, as quoted by Tony, the more extensive the government involvement in making society work better, the less effective it is. Again, it is an argument that Ayn Rand was right that we need a smaller government. For readers interested in more details in that aspect of economic theories, I recommend the essay “The Role of Entropy in the Development of Economics,” explaining it in easy-to-understand terms.
The irony of Tony’s argument is that the capitalism he criticizes is not the free-market system that Ayn Rand advocates for. It is the same capitalism that Ayn Rand criticizes, seeing that it is soaked with socialistic ideas. For Ayn Rand, the conclusion is obvious: We need more of the free market, less government control. For her opponents, we need even more government control.
As this is the crux issue in understanding our problems, I have written about it many times. After joining Medium, I posted here my old essay “Capitalism versus socialism.” To my surprise, despite being very long, it is one of my most popular articles.
By the end of the 19th century, Argentina was on par with the United States in economic development. Next, they implemented socialistic ideas. I looked at that case and wrote “Argentina — a warning to the United States and China.”
Ayn Rand saw good character as a necessary component of one’s success. Tony gloomily notices that “in today’s world of profiles and algorithms, you get promotion through statistics, not character!” A few months ago, in “Socialists are taking over Wall Street,” I wrote about one case of how those algorithms are created. By the way, that diversity regulation was approved in August 2021. Can one find a better example of proving that the faults of capitalism do not arrive from its “evil” nature, but rather they stem from well-intentioned socialists trying to improve it?
Does Tony Atkinson objectively exist?
This question comes to mind in response to Tony’s declaration that he objects to objectivism. Starting with things that are hard to see or imagine, Tony concludes that “even the idea of ‘rock’ is a subjective construct, differing between individuals.” “Shared reality is not reality itself, but a human construct, (…) at base, entirely subjective,” he writes.
In his defense, this line of philosophical thinking has a long and noble tradition. From my first philosophy courses about half a century ago, I remember that I could not comprehend how one could question the objectivity of the world around us. With my technical background, I knew how the picture showed up on the TV screen. And I knew that if that picture disappeared, there was just one objective cause of it. In my head, I could have thousands of subjective ideas on how to fix it, but with knowledge and strict reasoning, I could pinpoint the actual cause. I could see that a set of similar abilities can make someone a better craftsman in all human roles, as a teacher, writer, parent, business leader, or politician.
Tony objects to that rationale. “Humans run on their emotions. It’s our emotions, not reason, that makes us different from animals,” he writes. He is right, precisely 2%, as the adage says. Tony’s error is in forgetting that genetically we are still predominantly animals, sharing 98% genes with chimpanzees, and 85% genes with dogs. Our human emotions override our animal self-preservation instinct. As I wrote earlier, in the not-so-distant past, basic existential needs such as food and shelter were the primary daily objectives of our ancestors. Those who followed reason had a better survival rate than those following emotions.
Thanks to capitalism, although not liked by Tony, most of us enjoy at least a minimum of existential comfort. In developed nations, even unlucky or reckless citizens receive rudimentary food and shelter. The poorest people in the United States do not die of starvation; they are more likely to die because of obesity. Thanks to capitalism, we have the comfort of enjoying our lives to a greater extent by exploring our feelings.
It is a luxury that is earned but not given. If we forget that we are still 98% animals, the wealth needed to enjoy our happiness will fade away. That is the message of “Atlas Shrugged.” We have to preserve what produces our wealth.
Tony lists two sources of our wealth, and he dislikes them both. The first is laissez-faire capitalism. The second is individualism. Tony interprets individualism as a glorification of irrational sociopaths acting alone against the rest. Then Tony claims that this is “the typical corporate CEO, proclaiming his own success and productiveness whilst living off the work of others.” I doubt that Tony does not know better. There is no way for any CEO to succeed without being a good leader. Those are rare talents, and it takes a lot of work to prosper. What some talentless bureaucrats might claim before being removed from the CEO position cannot be a valid argument in this conversation.
Tony correctly defines laissez-faire capitalism as a “system which allows the empowered to do all they can to improve their own lives while not violating the rights of others to pursue their own happiness.” Then he calls it nonsense.
He makes two mistakes. First, he claims that in the free-market system, “business is conducted without the intervention of government.” The truth is different. The government should not participate in the business operations, but it should secure the rule of law. Otherwise, we would have the rule of organized crime. Tony mixes the two.
Tony’s second mistake on this issue is bringing his false thesis again that wealth is not created; ergo, we live within the limited resources. Tony does not see the difference between the limits of some natural resources and unlimited human ingenuity. For example, there is a limit to how many trees we can cut without depleting the forest. But there is no limit to human resourcefulness in finding alternative materials to wood.
Just a few days ago, I read on Medium an update about graphene. It is just one example of a recently invented material with almost miraculous features. Today it is hard for us to imagine how many more things we can do with graphene. There is no reason to assume that this is the last invention of this magnitude.
Tony is also wrong when he claims that a wealthy Englishman owning a barely used house in Wales deprives less affluent Welsh people of decent housing. There are many rocks in Wales, and there are plenty of spaces where those rocks could be arranged into pleasant houses. The right question is why the Welsh do not do it. I do not know the details there, but I know how things work in the United States.
Poor people complain that they do not have a fair share in the wealth distribution and press politicians to do something about it. Let us say, the issue is decent housing. Politicians spend public money and build apartment buildings for low-income people. Whatever money the government needs to build and maintain these buildings will come from the taxes paid by the middle class. The richest influence the tax law, so they pay proportionally less than others. Some of them will get richer by building and maintaining the government housing.
With the increased taxation, some of the middle class will have difficulty maintaining their economic status and will slide down, perhaps eventually seeking public housing. Gradually there would be two distinct classes: a few opulently rich and the masses using the government support to stay afloat. Argentina got poor this way. Tony, as well as American socialists, do not see it coming.