Capitalism: The Unknown Ideal
by Alan Greenspan, Ayn Rand, Nathaniel Branden, Robert Hessen

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Book Reviews of Capitalism: The Unknown Ideal

Book Review: A Utopian Ideal?
Summary: 4 Stars

Back in the '60s, it was controversial simply to argue that capitalism was more economically efficient than socialism; to claim, as Rand did, that capitalism was morally superior to socialism was revolutionary.

Times have changed. Nowadays it would require an invincible ignorance to believe that socialism can compete economically with capitalism. And to believe that socialism is morally superior to capitalism, now that everyone knows the truth about actually existing socialism in the former Soviet Union, would be morally depraved.

Intellectually, the battle is over. Capitalism has won; socialism has lost. Capitalism is no longer an "unknown" ideal.

Our new historical situation makes it possible to look more clearly at Ayn Rand's political writings.

Rand was unquestionably right about the moral and economic superiority of capitalism.

But was she also right about the political, cultural, and historical conditions required to create and preserve a free, capitalistic social order?

Rand consistently argued that the motive force of history was ideas. Ultimately, it was intellectuals who control the course of human events.

For example, in the second essay in this book, "The Roots of War," Rand declares:

"Just as the destruction of capitalism and the rise of the totalitarian state were not caused by business or labor or any economic interest, but by the dominant statist ideology of the intellectuals -- so the resurgence of the doctrines of military conquest and armed crusades for political 'ideals' were the product of the same intellectuals' belief that 'the good' is to be achieved by force."

In the same essay, she explains that it was not economic interest but rather collectivist intellectuals who pushed America into involvement in both World Wars. (True to her principles, Rand opposed the military draft and the American involvement in Vietnam.)

However, Rand and her followers, by focusing on the contribution collectivists have made to militarism have tended to neglect the other side of the coin, the contribution militarism, war, and imperialism have made to advancing the power of government.

As Randolph Bourne said, "War is the health of the state." War provides an unparalleled opportunity for government to increase taxes, expand its control over the economy, suppress civil liberties, and pump up popular faith in the state.

While intellectuals facilitated the destruction of Constitutional government in America during the twentieth century, the primary proximate cause of the growth of Big Government was the two World Wars and the Cold War.

Rand failed to convey this lesson to her followers, most of whom have supported the current American imperial adventure in the Mideast.

What then of Rand's basic analysis of the nature and purpose of government, laid out in two appendices, "Man's Rights" and "The Nature of Government"?

Rand defines "government" as "an institution that holds the exclusive power to _enforce_ certain rules of social conduct in a given geographical area." Note that government is defined abstractly as "an institution," even though any actual government must consist of particular, concrete human beings.

A couple pages later, Rand declares, "A government is the means of placing the retaliatory use of physical force under objective control."

Really?

Given the historical record of war, militarism, imperialism, rape, pillaging, slavery, taxation, and mass murder in which governments have routinely engaged, is there any "institution" that is _less_ credible as a means of placing "objective control" over "physical force" than government?

It would make as much sense to define the Mafia or street gangs as "the means of placing the retaliatory use of physical force under objective control"!

Even the officials of a minimal government, endowed only with a monopoly over legislative, judicial, and peacekeeping functions, as Rand advocated, have already, by virtue of that very monopoly, been given powers not possessed by their fellow citizens.

Rand argues for a written constitution "as a means of limiting and restricting the power of government." But of course, it is government officials who will interpret the provisions of the constitution, and they will have both the power and every incentive to use their power so as to evade any restrictions embodied in the constitution.

This is not idle speculation. Precisely this experiment was carried out in 1787 in Philadelphia. Two hundred years later, we know the result -- a massively rapacious, militaristic, and imperialistic government which imperils the civil liberties of the American people, buries us in taxes, and claims the right to invade and dominate any other country anywhere in the world.

If Madison, Franklin, Washington et al. could not make Rand's program work, it is fair to dismiss her program of limited constitutional government as a Utopian fantasy.

A better definition than Rand's would be "a government is a bunch of guys that have managed to get themselves in a position where they can get away with things (bombing, taxation, etc.) that most people could never get away with." That accurately describes pretty much all governments in the real world (and subsumes Rand's definition of government as a privileged monopoly over legislative, judicial, and peacekeeping functions as a special case -- since most ordinary people could not get away with seizing such a monopoly).

Of course, any society does need some minimal consensus on how to deal with and generally avoid violent conflict. All human societies do in fact have various means for maintaining the peace, most of which have nothing to do with government. Ask yourself: how many times have you peacefully settled a serious disagreement with a friend, relative, or neighbor without involving the government at all?

It is not in the nature of government to be successfully limited. Government has never existed to serve the governed. If we want a free, prosperous, and peaceful society, government must go.

For more realistic, less Utopian views on government, I recommend Murray Rothbard's "The Ethics of Liberty," H. Hoppe's "Democracy: The God That Failed," and A. John Simmons' "On the Edge of Anarchy."

Summary of Capitalism: The Unknown Ideal

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