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Wealthcare

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There is a common belief that people exist in two distinct classes. One is the affluent, industrious and productive class. The other consists of the lazy masses who free-ride on the hard-work and high taxes contributed by the rich.

On these grounds wealth redistribution is opposed. It’s an idea that has a strong footing in certain parts of society. It is made not just on economic grounds, that taxes on the wealthy hurt everyone by hampering economic growth. But also on moral ones.

That taxing the rich punishes them for their hard work, rewarding the laziness of others. And that the use of governance to reduce inequality should be resisted. Some have even called for the elite to go on strike.

This is the ideology of Ayn Rand. Presented in two of her bestselling novels, The Fountainhead, released in 1943, and Atlas Shrugged, published in 1957.

TE_Join Yaron Brook on September 29 for the Annual Atlas Shrugged Revolution Dinner and Auction in New York City

Atlas Shrugged

The protagonists of both novels are strong, individualistic males punished by the masses and these books still resonate with readers today, particularly with young men. Attracted by Rand’s black and white ethics and her worship of the under-appreciated and alienated outsider. Her books are more often read as self-help guides than as fiction.

Rand considered Atlas Shrugged to be the pinnacle of her work, depicting her philosophy. Her belief that a person’s value derives from their worth to society and reflects in their income. This showed how much society valued them and is an inverse Marxist perspective.

Marxism held that capitalists exploited the working class. Rand suggested the opposite. It was the brilliance of the industrious which was exploited.

Thus began the concept of the rich as an oppressed class. John Galt, the hero of Atlas Shrugged, personifies this philosophy. He leads all the industrialists to an ideal world where no one scrounges off them while the society they left behind begins to rot.

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Post-Depression

The 1920s depression era ruined businesses and almost destroyed the economy. Rand’s creation of romantic capitalist heroes played well to the damaged business fraternity. Rand was speaking aloud a view they privately held. Elevating the elite back into its position of power and leadership.

There was also a latent elitism that had become less acceptable but never disappeared. Ludwig von Mises marveled at Rand’s courage to tell the masses what no politician had dared to say before. ‘You are inferior and all the improvements in your condition which you take for granted you owe to the effort of men who are better than you.’

Rand reflected the fear felt by the elite in the era of the New Deal. A time in America where equality was at the forefront of the political agenda.

She depicted the world in stark terms. In which the smallest of governance actions, such as minimum wages and public housing were tyrannical and oppressive.

And she spoke to the fears of the elite. Fears that the mob was singling them out.

She supported a ‘principle of no regulation of industry’, or ‘laissez-faire’ underpined by two theories of economics: Social Darwinism and neoclassical economics.

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Ethical?

Social Darwinism assumed that progress relied on the transfer of successful characteristics from generation to generation. In this light the free market was akin to natural selection.  Neoclassical economics considered the market to have an inherent capacity and capability to self correct itself.

The commonality in both theories was the assumption government intervention would have adverse consequences. That it impedes progress.

Rand maintained an ethical view about laissez-faire capitalism. The rich, according to her, uplifted society. Taxing the rich was an offense, even if it was to help the poor. Her biggest legacy was to infuse this outlook with a moral justification. Giving rise to the idea of the poor as undeserving.

And this unfortunately despite failure of the economic predictions and misunderstanding about right and wrong, luck and hard-work. The rich do not always work harder than the poor. And adjustments to the tax code do not always have the dramatic effects predicted either way. The economy growing much the same as it did before.

 

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