Money, Morality, and Ayn Rand

Back in March there was a brief media flurry over a libertarian rant by Rick Santelli. I was struck at the time by the persistently moral language used by the right to describe economics and capitalism. Making money has become a moral obligation for the right and a reflection of the moral worth of a person. If you’re poor then you are a moral failure, if you are rich then you are an angel.

The language of morality pervades the discussion of economics and may be a cause of so much of the regular debate about economic policies that occurs. Economic decisions, for all the pontificating about rational man, are always moral decisions as much as they are rational decisions.

I recently heard an acquaintance talking about the difficulty of knowing whether the recent economic stimulus is working. Not even the putative experts can agree about whether it is working. A scientific controversy, like global warming or dark matter, is much easier to adjudicate because the moral dimension is reduced or non-existent.

At the New Republic Jonathan Chait reviewed two books on Ayn Rand and found her writings to be a major source for the moralistic tone of right-wing capitalists.

In these disparate comments we can see the outlines of a coherent view of society. It expresses its opposition to redistribution not in practical terms-that taking from the rich harms the economy-but in moral absolutes, that taking from the rich is wrong. It likewise glorifies selfishness as a virtue. It denies any basis, other than raw force, for using government to reduce economic inequality. It holds people completely responsible for their own success or failure, and thus concludes that when government helps the disadvantaged, it consequently punishes virtue and rewards sloth. And it indulges the hopeful prospect that the rich will revolt against their ill treatment by going on strike, simultaneously punishing the inferiors who have exploited them while teaching them the folly of their ways.

There is another way to describe this conservative idea. It is the ideology of Ayn Rand. Some, though not all, of the conservatives protesting against redistribution and conferring the highest moral prestige upon material success explicitly identify themselves as acolytes of Rand. (As Santelli later explained, “I know this may not sound very humanitarian, but at the end of the day I’m an Ayn Rand-er.”) Rand is everywhere in this right-wing mood. Her novels are enjoying a huge boost in sales. Popular conservative talk show hosts such as Rush Limbaugh and Glenn Beck have touted her vision as a prophetic analysis of the present crisis…..

Rand’s most enduring accomplishment was to infuse laissez-faire economics with the sort of moralistic passion that had once been found only on the left. Prior to Rand’s time, two theories undergirded economic conservatism. The first was Social Darwinism, the notion that the advancement of the human race, like other natural species, relied on the propagation of successful traits from one generation to the next, and that the free market served as the equivalent of natural selection, in which government interference would retard progress. The second was neoclassical economics, which, in its most simplistic form, described the marketplace as a perfectly self-correcting
instrument. These two theories had in common a practical quality. They described a laissez-faire system that worked to the benefit of all, and warned that intervention would bring harmful consequences. But Rand, by contrast, argued for laissez-faire capitalism as an ethical system. She did believe that the rich pulled forward society for the benefit of one and all, but beyond that, she portrayed the act of taxing the rich to aid the poor as a moral offense.

Countless conservatives and libertarians have adopted this premise as an ideological foundation for the promotion of their own interests. They may believe the consequentialist arguments against redistribution-that Bill Clinton’s move to render the tax code slightly more progressive would induce economic calamity, or that George W. Bush’s making the tax code somewhat less progressive would usher in a boom; but the utter failure of those predictions to come to pass provoked no re-thinking whatever on the economic right. For it harbored a deeper belief in the immorality of redistribution, a righteous sense that the federal tax code and budget represent a form of organized looting aimed at society’s most virtuous-and this sense, which remains unshakeable, was owed in good measure to Ayn Rand.

I started a series on language and money last spring which I should return to. Once you start listening you realize that all of our talk about money is filled with moral judgments. My first post of the series talked about the difference between borrowing and leveraging, two terms for the same action but one used by the poor and the other by the rich. Some other terms that need pondering: angel investor, consume/invest, save/debt. Accounting also has a rich vocabulary for examination: asset, liability, appreciation, depreciation, balance sheet, double-entry, etc.