Do you want to live in the world of Atlas Shrugged?

Jennifer Burns,

Release Date
May 6, 2011


Free Markets and Capitalism

In her masterpiece of fiction, Atlas Shrugged, Ayn Rand emphasizes three key classical liberal themes: individualism, suspicion of centralized power, and the importance of free markets. In this video, Prof. Jennifer Burns shows how Rand’s plot and characters demonstrate these themes, principally through innovative entrepreneurs who are stifled by laws and regulations instituted by their competitors. In the world of Atlas Shrugged, free markets and individual liberty have been traded away for equality and security enforced by the government. Burns ends by reviving Rand’s critical question: do you want to live in this kind of world?

Jennifer Burns is an assistant professor of history at the University of Virginia and author of Goddess of the Market: Ayn Rand and the American Right.


Do you want to live in the world of Atlas Shrugged?
There’s an ongoing debate on where to place Rand in the American intellectual and political tradition, because she was such a unique thinker. She combined elements from so many different things and it’s hard to figure out exactly where she should fit. What is clear, though, is some of the most important themes in her work really resonate with classical liberal themes, specifically her emphasis on individualism, suspicion of centralized power, and her advocacy of free markets. These are all staple themes of classical liberal thought and they’re also fundamental to Rand’s thought.
So on individualism, individualism is really the key theme for Rand; it’s the motive power of her writing; it’s the most important idea she wants to convey. And, in Atlas Shrugged, her choice is to show how individuals matter in business and how their productive contributions to business power society as a whole.
So, a good example of this would be Hank Reardon and his work inventing a new steel alloy. Now, Reardon runs his own business. He’s a manager but he’s also an engineer and a creator. And Rand really makes clear that it’s his contributions, his genius, his thinking that lie at the heart of his businesses.
The same thing with Dagny Taggart, who runs a railroad. It’s a family business, she’s inherited it, but she’s very entrepreneurial within the context of this business, developing new lines, using new materials, always paying attention to what her competitors are doing.
So Rand is, in Atlas Shrugged, really focusing on the individual as entrepreneur and then showing what the entrepreneur contributes to society as a whole. So even though these two stars of Atlas Shrugged are within large corporate structures, Rand really focuses on the individual autonomy of agency they have and the difference that individuals make within these broader corporate structures and within the broader society as a whole.
Now, centralized power. Suspicion of centralized power is fundamental to all classical liberal thinkers. A really good example of this in Atlas Shrugged is Reardon metal. This is a new invention, it has potential to revolutionize the way transportation and all types of industrial processes are done. It also has the potential to revolutionize the marketplace and make one person much more successful than the rest because he has invented this incredible new steel alloy.
And so what happens is that those who haven’t invented Reardon metal go to the government and get the government to pass a series of laws that restricts the sale of Reardon metal, imposes quotas on it. It’s because they’re not willing to compete openly and fairly and try to go back to their own labs and create a new alloy. They don’t want competition. They want to hold back the person who’s innovated and who’s broken ahead. So, it’s a very vivid story, the “dog eat dog law,” the “equalization of opportunity law.” All these laws are passed specifically to inhibit Reardon metal.
And so Rand is saying that in a system of crony capitalism, you don’t really have objective rule of law. You have subjective laws that are passed when certain people are more connected with the government and are able to use to the government to gain competitive advantage over others in the marketplace. This is what economists call regulatory capture. This is an idea that‘s really fundamental in Atlas Shrugged, but she shows it not by using an abstract economic term but by painting the relationships at work.
So although Rand is remembered as a critic of state power and the federal government, she’s also in some way s a very subtle critic of capitalists and of capitalism by showing what it means when crony capitalism is the order of the day, when people are able to seize the power of the government and use it to get ahead of their competitors instead of having a fair, honest fight in a free market. And that’s what Rand would support, and that’s really what her work is trying to advance. She called capitalism the unknown ideal. She considered the U.S. economy to be a mixed economy not a true capitalist economy because there were so many government interventions in economic life. And these are what she’s trying to detail and bring to life and show through all the action of Atlas Shrugged.
Now, Rand is known as a great advocate of free markets. Again, free markets are a fundamental organizing principle of classical liberalism. What Rand offers in her work, which is new and unique and important, is the real emphasis on free markets as a place for personal creativity. It’s not just an economic argument. A lot of people will make an argument for the free market: It’s more efficient; it makes things run better; it makes society more prosperous. Rand is not really interested in those. Those are side effects to the fact that free markets provide the only space for individuals to be creative and to really flourish and to live up to their highest potential.
So for her, it comes back to the individual. And what’s tremendously important about Atlas Shrugged is it takes the world of business, the corporate world, a world that in the 1950s was considered boring and humdrum and full of conformists, and it makes this world exciting and glamorous. And it shows how the business person can be an artist in their own way, a creator in their own way. And so what’s she’s really making is as much a cultural argument for free markets as an intellectual argument for free markets. She’s saying, here is the best of all possible worlds in the free-market system when it allows people to have a new idea, work really hard, and bring it to fruition. That, for her, is the individual living up to their highest potential. And as a side benefit, society as a whole may become more prosperous. But it’s really the freedom of the individual and the creativity of the individual that’s at the core of her concern.
I think the most important way that we can understand Rand as a classical liberal is that she considers liberty the primary political value. With Atlas Shrugged, Rand asks her readers to envision a world where liberty has been traded away completely for equality and security. And the question she first asked in 1957, and she continues to ask us today is, do you want to live in that kind of world?