"We have it in our power to begin the world over again."
--Thomas Paine, Common Sense, 1792.
Spring 2009 -- The crisis in financial markets has set off a predictable torrent of anti-capitalist sentiment. Despite
the fact that government regulations were a major cause of the crisis, anti-capitalists and their enablers in the media have
blamed the market and called for new restraints. The government has already exerted an unprecedented degree of intervention
in financial markets, and it now seems clear that new economic controls will expand far beyond Wall Street.
Regulation of production and trade is one of the two basic things that government does in our mixed economy. The other
is redistribution—transferring income and wealth from one set of hands to another. In this realm, too, anti-capitalists
have seized the moment to call for new entitlements such as guaranteed health care, along with new tax burdens on the wealthy.
The economic crisis, along with the election of Barack Obama, has revealed a huge pent-up demand for redistribution. Where
does that demand come from? To answer that question in fundamental terms, we need to look back at the origins of capitalism
and look more closely at the arguments for redistribution.
The capitalist system came of age in the century from 1750 to 1850 as a result of three revolutions. The first was a
political revolution: the triumph of liberalism, particularly the doctrine of natural rights, and the view that government
should be limited in its function to the protection of individual rights, including property rights. The second revolution
was the birth of economic understanding, culminating in Adam Smith's Wealth of Nations. Smith demonstrated that when
individuals are left free to pursue their own economic interests, the result is not chaos but a spontaneous order, a market
system in which the actions of individuals are coordinated and more wealth is produced than would be the case if government
managed the economy. The third revolution was, of course, the Industrial Revolution. Technological innovation provided a lever
that vastly multiplied man's powers of production. The effect was not only to raise standards of living for everyone, but
to offer the alert and enterprising individual the prospect of earning a fortune unimaginable in earlier times.
The political revolution, the triumph of the doctrine of individual rights, was accompanied by a spirit of moral idealism.
It was the liberation of man from tyranny, the recognition that every individual, whatever his station in society, is an end
in himself. But the economic revolution was couched in morally ambiguous terms: as an economic system, capitalism was widely
regarded as having been conceived in sin. The desire for wealth fell under the shadow of the Christian injunction against
selfishness and avarice. The early students of spontaneous order were conscious that they were asserting a moral paradox—the
paradox, as Bernard Mandeville put it, that private vices could produce public benefits.
The critics of the market have always capitalized on these doubts about its morality. The socialist movement was sustained
by allegations that capitalism breeds selfishness, exploitation, alienation, injustice. In milder forms, this same belief
produced the welfare state, which redistributes income through government programs in the name of "social justice." Capitalism
has never escaped the moral ambiguity in which it was conceived. It is valued for the prosperity it brings; it is valued as
a necessary precondition for political and intellectual freedom. But few of its defenders are prepared to assert that the
mode of life central to capitalism—the pursuit of self-interest through production and trade—is morally honorable,
much less noble or ideal.
There is no mystery about where the moral antipathy toward the market comes from. It arises from the ethics of altruism,
which is deeply rooted in Western culture, as indeed in most cultures. By the standards of altruism, the pursuit of self-interest
is at best a neutral act, outside the realm of morality, and at worst a sin. It is true that success in the market is achieved
by voluntary trade, and thus by satisfying the needs of others. But it is also true that those who do succeed are motivated
by personal gain, and ethics is as much concerned with motives as with results.
In everyday speech, the term "altruism" is often taken to mean nothing more than kindness or common courtesy. But its
real meaning, historically and philosophically, is self-sacrifice. For the socialists who coined the term, it meant the complete
submersion of the self in a larger social whole. As Ayn Rand
put it, “The basic principle of altruism is that man has
no right to exist for his own sake, that service to others is the only justification of his existence, and that self-sacrifice
is his highest moral duty, virtue, and value". Altruism in this strict sense is the basis for the various concepts of
"social justice" that are used to defend government programs for redistributing wealth. Those programs represent the compulsory
sacrifice of the people taxed to support them. They represent the use of individuals as collective resources, to be used as
means to the ends of others. And that is the fundamental reason why they should be opposed on moral grounds by anyone who
Demands for Social Justice
Demands for social justice take two different forms, which I will call welfarism and egalitarianism. According to welfarism,
individuals have a right to certain necessities of life, including minimum levels of food, shelter, clothing, medical care,
education, and so on. It is the responsibility of society to ensure that all members have access to these necessities. But
a laissez-faire capitalist system does not guarantee them to everyone. Thus, argue the welfarists, capitalism fails to satisfy
its moral responsibility and so must be modified through state action to provide such goods to people who cannot obtain them
by their own efforts.
According to egalitarianism, the wealth produced by a society must be distributed fairly. It is unjust for some people
to earn fifteen, or fifty, or a hundred times as much income as others. But laissez-faire capitalism permits and encourages
these disparities in income and wealth, and is therefore unjust. The hallmark of egalitarianism is the use of statistics on
the distribution of income. In 2007, for example, the top twenty percent of U.S. households on the income scale earned fifty
percent of total income, whereas the bottom twenty percent earned only 3.4 percent. The goal of egalitarianism is to reduce
this difference; any change in the direction of greater equality is regarded as a gain in equity.
The difference in these two conceptions of social justice is the difference between absolute and relative levels of well-being.
The welfarist demands that people have access to a certain minimum standard of living. As long as this floor or "safety net"
exists, it does not matter how much wealth anyone else has, or how great the disparities are between rich and poor. So welfarists
are primarily interested in programs that benefit people who are below a certain level of poverty, or who are sick, out of
work, or deprived in some other way. Egalitarians, on the other hand, are concerned with relative well-being. Egalitarians
have often said that of two societies, they prefer the one in which wealth is more evenly distributed, even if its overall
standard of living is lower. Thus, egalitarians tend to favor government measures such as progressive taxation which aim to
redistribute wealth across the entire income scale, not merely at the bottom. They also tend to support the nationalization
of goods such as education and medicine, taking them off the market entirely and making them available to everyone more or
Let us consider these two concepts of social justice in turn.
Welfarism: the unchosen obligation
The fundamental premise of welfarism is that people have rights to goods such as food, shelter, and medical care. They
are entitled to these things. On this assumption, someone who receives benefits from a government program is merely
getting what is due him, in the same way that a buyer who receives the good he has paid for is merely getting his due. When
the state dispenses welfare benefits, it is merely protecting rights, just as it is when it protects a buyer against fraud.
In neither case is there any necessity for gratitude.
The concept of welfare rights, or positive rights as they are often called, is modeled on the traditional liberal rights
of life, liberty, and property. But there is a well-known difference. The traditional rights are rights to act without interference
from others. The right to life is a right to act with the aim of preserving oneself. It is not a right to be immune from death
by natural causes, even an untimely death. The right to property is the right to buy and sell freely, and to appropriate unowned
goods from nature. It is the right to seek property, but not a right to a dowry from nature, or from the state; it is not
a guarantee that one will succeed in acquiring anything. Accordingly, these rights impose on other people only the negative
obligation not to interfere, not to restrain one forcibly from acting as he chooses. If I imagine myself removed from society—living
on a desert island, for example—my rights would be perfectly secure. I might not live long, and certainly would not
live well, but I would live in perfect freedom from murder, theft, and assault.
By contrast, welfare rights are conceived as rights to possess and enjoy certain goods, regardless of one's actions;
they are rights to have the goods provided by others if one cannot earn them oneself. Accordingly, welfare rights impose positive
obligations on others. If I have a right to food, someone has an obligation to grow it. If I cannot pay for it, someone has
an obligation to buy it for me. Welfarists sometimes argue that the obligation is imposed on society as a whole, not on any
specific individual. But society is not an entity, much less a moral agent, over and above its individual members, so any
such obligation falls upon us as individuals. Insofar as welfare rights are implemented through government programs, for example,
the obligation is distributed over all taxpayers.
From an ethical standpoint, then, the essence of welfarism is the premise that the need of one individual is a claim
on other individuals. The claim may run only as far as the town, or the nation. It may not embrace all of humanity. But in
all versions of the doctrine, the claim does not depend on your personal relationship to the claimant, or your choice to help,
or your evaluation of him as worthy of your help. It is an unchosen obligation arising from the sheer fact of his need.
But we must carry the analysis one step further. If I am living alone on a desert island, then of course I have no welfare
rights, since there is no one else around to provide the goods. For the same reason, if I live in a primitive society where
medicine is unknown, then I have no right to medical care. The content of welfare rights is relative to the level of economic
wealth and productive capacity in a given society. Correspondingly, the obligation of individuals to satisfy the needs of
others is dependent on their ability to do so. I cannot be blamed as an individual for failing to provide others with something
I cannot produce for myself.
Suppose I can produce it and simply choose not to? Suppose I am capable of earning a much larger income than I do, the
taxes on which would support a person who will otherwise go hungry. Am I obliged to work harder, to earn more, for the sake
of that person? I do not know any philosopher of welfare who would say that I am. The moral claim imposed on me by another
person's need is contingent not only on my ability but also on my willingness to produce.
And this tells us something important about the ethical focus of welfarism. It does not assert an obligation to pursue
the satisfaction of human needs, much less the obligation to succeed in doing so. The obligation, rather, is conditional:
those who do succeed in creating wealth may do so only on condition that others are allowed to share the wealth. The goal
is not so much to benefit the needy as to bind the able. The implicit assumption is that a person's ability and initiative
are social assets, which may be exercised only on condition that they are aimed at the service of others.
Egalitarianism: “fair” distribution
If we turn to egalitarianism, we find that we arrive at the same principle by a different logical route. The ethical
framework of the egalitarian is defined by the concept of justice rather than rights. If we look at society as a whole, we
see that income, wealth, and power are distributed in a certain way among individuals and groups. The basic question is: Is
the existing distribution fair? If not, then it must be corrected by government programs of redistribution. A pure market
economy, of course, does not produce equality among individuals. But few egalitarians have claimed that strict equality of
outcome is required by justice. The most common position is that there is a presumption in favor of equal outcomes, and that
any departure from equality must be justified by its benefits to society as a whole. Thus, the English writer R. H. Tawney
wrote that "inequality of circumstance is regarded as reasonable, in so far as it is a necessary condition of securing the
services which the community requires." John Rawls's famous "Difference Principle"—that inequalities are permitted as
long as they serve the interests of the least advantaged persons in society—is only the most recent example of this
approach. [See the sidebar on these two pioneers of egalitarianism.
] In other words, egalitarians recognize that strict leveling would
have a disastrous effect on production. They admit that not everyone contributes equally to the wealth of a society. To some
extent, therefore, people must be rewarded in accordance with their productive ability, as an incentive to put forth their
best efforts. But any such differences must be limited to those which are necessary for the public good.
What is the philosophical basis of this principle? Egalitarians often argue that it follows logically from the basic
principle of justice: that people are to be treated differently only if they differ in some morally relevant way. If we are
going to apply this fundamental principle to the distribution of income, however, we must first assume that society literally
engages in an act of distributing income. This assumption is plainly false. In a market economy, incomes are determined by
the choices of millions of individuals—consumers, investors, entrepreneurs, and workers. These choices are coordinated
by the laws of supply and demand, and it is no accident that a successful entrepreneur, say, earns much more than a day laborer.
But this is not the result of any conscious intention on the part of society. In 2007, the most highly paid entertainer in
the United States was Oprah Winfrey, who earned some $260 million. This was not because "society" decided she was worth that
much, but because millions of fans decided that her show was worth watching. Even in a socialist economy, as we now know,
economic outcomes are not under the control of government planners. Even here there is a spontaneous order, albeit a corrupt
one, in which outcomes are determined by bureaucratic infighting, black markets, and so forth.
Despite the absence of any literal act of distribution, egalitarians often argue that society is responsible for ensuring
that the statistical distribution of income meets certain standards of fairness. Why? Because the production of wealth is
a cooperative, social process. More wealth is created in a society characterized by trade and the division of labor than in
a society of self-sufficient producers. The division of labor means that many people contribute to the final product; and
trade means that an even wider circle of people share responsibility for the wealth that is obtained by the producers. Production
is so transformed by these relationships, say the egalitarians, that the group as a whole must be considered the real unit
of production and the real source of wealth. At least it is the source of the difference in wealth that exists between a cooperative
and a non-cooperative society. Therefore society must ensure that the fruits of cooperation are fairly distributed among all
But this argument is valid only if we regard economic wealth as an anonymous social product in which it is impossible
to isolate individual contributions. Only in that case will it be necessary to devise after-the-fact principles of distributive
justice for allocating shares of the product. But this assumption, once again, is plainly wrong. The so-called social product
is actually a vast array of individual goods and services available on the market. It is certainly possible to know which
good or service any individual has helped to produce. And when the product is produced by a group of individuals, as in a
firm, it is possible to identify who did what. After all, an employer does not hire workers by whim. A worker is hired because
of the anticipated difference his efforts will make to the final product. This fact is acknowledged by the egalitarians themselves
when they allow that inequalities are acceptable if they are an incentive for the more productive to increase the total wealth
of a society. To ensure that the incentives are going to the right people, as Robert Nozick has observed, even the egalitarian
must assume that we can identify the role of individual contributions. In short, there is no basis for applying the concept
of justice to the statistical distributions of income or wealth across an entire economy. We must abandon the picture of a
large pie that is being divided up by a benevolent parent who wishes to be fair to all the children at the table.
Once we abandon this picture, what becomes of the principle espoused by Tawney, Rawls, and others: the principle that
inequalities are acceptable only if they serve the interests of all? If this cannot be grounded in justice, then it must be
regarded as a matter of the obligations we bear to each other as individuals. When we consider it in this light, we can see
that it is the same principle we identified at the basis of welfare rights. The principle is that the productive may enjoy
the fruits of their efforts only on condition that their efforts benefit others as well. There is no obligation to produce,
to create, to earn an income. But if you do, the needs of others arise as a constraint on your actions. Your ability, your
initiative, your intelligence, your dedication to your goals, and all the other qualities that make success possible, are
personal assets that put you under an obligation to those with less ability, initiative, intelligence, or dedication.
In other words, every form of social justice rests on the assumption that individual ability is a social asset. The assumption
is not merely that the individual may not use his talents to trample on the rights of the less able. Nor does the assumption
say merely that kindness or generosity are virtues. It says that the individual must regard himself, in part at least, as
a means to the good of others. And here we come to the crux of the matter. In respecting the rights of other people, I recognize
that they are ends in themselves, that I may not treat them merely as means to my satisfaction, in the way that I treat inanimate
objects. Why then is it not equally moral to regard myself as an end? Why should I not refuse, out of respect for my own dignity
as a moral being, to regard myself as a means in the service of others?
Toward an individualist ethics
’s case for capitalism rests on an individualist ethics that
recognizes the moral right to pursue one's self-interest and rejects altruism at the root.
Altruists argue that life presents us with a basic choice: we must either sacrifice others to ourselves, or sacrifice
ourselves to others. The latter is the altruist course of action, and the assumption is that the only alternative is life
as a predator. But this is a false alternative, according to Rand. Life does not require sacrifices in either direction. The
interests of rational people do not conflict, and the pursuit of our genuine self-interest requires that we deal with others
by means of peaceful, voluntary exchange.
To see why, let us ask how we decide what is in our self-interest. An interest is a value that we seek to obtain: wealth,
pleasure, security, love, self-esteem, or some other good. Rand's ethical philosophy is based on the insight that the fundamental
value, the summum bonum, is life. It is the existence of living organisms, their need to maintain themselves through
constant action to satisfy their needs, that gives rise to the entire phenomenon of values. A world without life would
be a world of facts but not values, a world in which no state could be said to be better or worse than any other. Thus the
fundamental standard of value, by reference to which a person must judge what is in his interest, is his life: not mere survival
from one moment to another, but the full satisfaction of his needs through the ongoing exercise of his faculties.
Man's primary faculty, his primary means of survival, is his capacity for reason. It is reason that allows us to live
by production, and thus to rise above the precarious level of hunting and gathering. Reason is the basis of language, which
makes it possible for us to cooperate and transmit knowledge. Reason is the basis of social institutions governed by abstract
rules. The purpose of ethics is to provide standards for living in accordance with reason, in the service of our lives.
To live by reason we must accept independence as a virtue. Reason is a faculty of the individual. No matter how much
we learn from others, the act of thought takes place in the individual mind. It must be initiated by each of us by our own
choice and directed by our own mental effort. Rationality therefore requires that we accept responsibility for directing and
sustaining our own lives.
To live by reason, we must also accept productiveness as a virtue. Production is the act of creating value. Human beings
cannot live secure and fulfilling lives by finding what they need in nature, as other animals do. Nor can they live as parasites
on others. "If some men attempt to survive by means of brute force or fraud," argues Rand, "by looting, robbing, cheating
or enslaving the men who produce, it still remains true that their survival is made possible only by their victims, only by
the men who choose to think and to produce the goods which they, the looters, are seizing. Such looters are parasites incapable
of survival, who exist by destroying those who are capable, those who are pursuing a course of action proper to man."
The egoist is usually pictured as someone who will do anything to get what he wants—someone who will lie, steal,
and seek to dominate others in order to satisfy his desires. Like most people, Rand would regard this mode of life as immoral.
But her reason is not that it harms others. Her reason is that it harms the self. Subjective desire is not the test for whether
something is in our interest, and deceit, theft, and power are not the means for achieving happiness or a successful life.
The virtues I've mentioned are objective standards. They are rooted in man's nature, and thus apply to all human beings. But
their purpose is to enable each person to "achieve, maintain, fulfill, and enjoy that ultimate value, that end in itself,
which is his own life." Thus the purpose of ethics is to tell us how to achieve our real interests, not how to sacrifice them.
The trader principle
How then should we deal with others? Rand's social ethics rests on two basic principles: a principle of rights and a
principle of justice. The principle of rights says that we must deal with others peaceably, by voluntary exchange, without
initiating the use of force against them. It is only in this way that we can live independently, on the basis of our own productive
efforts; the person who attempts to live by controlling others is a parasite. Within an organized society, moreover, we must
respect the rights of others if we wish our own rights to be respected. And it is only in this way that we can obtain the
many benefits that come from social interaction: the benefits of economic and intellectual exchange, as well as the values
of more intimate personal relationships. The source of these benefits is the rationality, the productiveness, the individuality
of the other person, and these things require freedom to flourish. If I live by force, I attack the root of the values I seek.
The principle of justice is what Rand calls the trader principle: living by trade, offering value for value, neither
seeking nor granting the unearned. An honorable person does not offer his needs as a claim on others; he offers value as the
basis of any relationship. Nor does he accept an unchosen obligation to serve the needs of others. No one who values his own
life can accept an open-ended responsibility to be his brother's keeper. Nor would an independent person wish to be kept—not
by a master, and not by the Department of Health and Human Services. The principle of trade, Rand observes, is the only basis
on which humans can deal with each other as independent equals.
The Objectivist ethics, in short, treats the individual as an end in himself in the full meaning of that term. The implication
is that capitalism is the only just and moral system. A capitalist society is based on the recognition and protection of individual
rights. In a capitalist society, men are free to pursue their own ends, by the exercise of their own minds. As in any society,
men are constrained by the laws of nature. Food, shelter, clothing, books, and medicine do not grow on trees; they must be
produced. And as in any society, men also are constrained by the limitations of their own nature, the extent of their individual
ability. But the only social constraint that capitalism imposes is the requirement that those who wish the services of others
must offer value in return. No one may use the state to expropriate what others have produced.
Economic outcomes in the market—the distribution of income and wealth—depend on the voluntary actions and
interactions of all the participants. The concept of justice applies not to the outcome but to the process of economic activity.
A person's income is just if it is won through voluntary exchange, as a reward for value offered, as judged by those to whom
it is offered. Economists have long known that there is no such thing as a just price for a good, apart from the judgments
of market participants about the value of the good to them. The same is true for the price of human productive services. This
is not to say that I must measure my worth by my income, but only that if I wish to live by trade with others, I cannot demand
that they accept my terms at the sacrifice of their own self-interest.
Benevolence as a chosen value
What about someone who is poor, disabled, or otherwise unable to support himself? This is a valid question to ask, as
long as it is not the first question we ask about a social system. It is a legacy of altruism to think that the primary standard
by which to evaluate a society is the way it treats its least productive members. "Blessed are the poor in spirit," said Jesus;
"blessed are the meek." But there is no ground in justice for holding the poor or the meek in any special esteem, or regarding
their needs as primary. If we had to choose between a collectivist society in which no one is free but no one is hungry, and
an individualist society in which everyone is free but a few people starve, I would argue that the second society, the free
one, is the moral choice. No one can claim a right to make others serve him involuntarily, even if his own life depends on
But this is not the choice we face. In fact, the poor are much better off under capitalism than under socialism, or even
the welfare state. As a matter of historical fact, the societies in which no one is free, like the former Soviet Union, are
societies in which large numbers of people go hungry.
Those who are capable of working at all have a vital interest in economic and technological growth, which occur most
rapidly in a market order. The investment of capital and the use of machinery make it possible to employ people who otherwise
could not produce enough to support themselves. Computers and communications equipment, for example, have now made it possible
for severely disabled people to work from their homes.
As for those who simply cannot work, free societies have always provided numerous forms of private aid and philanthropy
outside the market: charitable organizations, benevolent societies, and the like. In this regard, let us be clear that there
is no contradiction between egoism and charity. In light of the many benefits we receive from dealing with others, it is natural
to regard our fellow humans in a spirit of general benevolence, to sympathize with their misfortunes, and to give aid when
it does not require a sacrifice of our own interests. But there are major differences between an egoist and an altruist conception
For an altruist, generosity to others is an ethical primary, and it should be carried to the point of sacrifice, on the
principle: give until it hurts. It is a moral duty to give, regardless of any other values one has, and the recipient has
a right to it. For an egoist, generosity is one among many means of pursuing our values, including the value that we place
on the well-being of others. It should be done in the context of one's other values, on the principle: give when it helps.
It is not a duty, nor do the recipients have a right to it. An altruist tends to regard generosity as an expiation of guilt,
on the assumption that there is something sinful or suspicious about being able, successful, productive, wealthy. An egoist
regards those same traits as virtues and sees generosity as an expression of pride in them.
The fourth revolution
I said at the outset that capitalism was the result of three revolutions, each of them a radical break with the past.
The political revolution established the primacy of individual rights and the principle that government is man's servant,
not his master. The economic revolution brought an understanding of markets. The Industrial Revolution radically expanded
the application of intelligence to the process of production. But mankind never broke with its ethical past. The ethical principle
that individual ability is a social asset is incompatible with a free society. If freedom is to survive and flourish, we need
a fourth revolution, a moral revolution, that establishes the moral right of the individual to live for himself.
The Need for a New Individualism
Created 09/15/2010 - 15:36
The Need for a New Individualism
January/February 2005 -- America has been the land of the individual, and most Americans have thought of themselves as
individualists. We still speak favorably of individual rights, individual initiative, individual responsibility, individual
opportunity, and individual achievement.
But America's individualism is disappearing and with it our political freedom and the moral foundations of our society.
This is because the economic and political manifestations of individualism—freedom and capitalism—cannot stand
on their own; they require sound moral ideas of rational self-interest that are manifest in sound moral character. Those moral
ideas justify this freedom, and that moral character requires the support of the culture and of institutions based on those
Today paternalist economic and political policies treat adults like infants who can't care for themselves without government
help. Those policies, and the morality on which they are based, seduce too many independent achievers, turning them into to
weak, sniveling, servile dependents of pandering ruling elites.
If our future is to be a bright one appropriate for human beings, proud Americans will need a consistent, explicit, and
unapologetic new individualism that will restore political freedom and create a culture worth preserving.
America's Individualist Tradition
America is the quintessential individualist country. For our Founders, the purpose of government was to protect the life,
liberty, and property of each individual and to otherwise leave us alone. For the first century and a half of our history
the federal government remained relatively small and state and local governments provided only basic services, principally
police protection and law courts.
The story of America has been one of millions of immigrants coming to these shores. What attracted them? Immigrants sought
to escape the poverty and tyranny of their home countries, to improve their own economic conditions, to raise their own families,
to start their own businesses, to farm their own land, to live according to their own religion or other beliefs, to enjoy
their own lives.
Immigrants coming to America manifested the moral characteristics of all true individualists. Our ancestors wanted the
best for themselves. They took the initiative needed to achieve their goals. They realized that nothing in life is guaranteed
and that to achieve those goals they would need to take risks in a new country. Immigrants understood the need to think, to
use their minds and their famed Yankee ingenuity. Alexis de Tocqueville in the 1830s understood the independent thinking of
Americans; he found "that in most of the operations of the mind each American appeals only to the individual effort of his
own understanding." In other words, we think for ourselves.
Tocqueville described individual Americans in the new free country as "intoxicated with their new power. They entertain
a presumptuous confidence in their own strength." These rugged individualists looked first to self but were hardly misanthropes,
associating with others of their own choosing. Again from Tocqueville: "Individualism...disposes each member of the community
to sever himself from the mass of his fellows and to draw apart with his family and his friends, so that after he has thus
formed a little circle of his own, he willingly leaves society at large to itself." Even when helping their neighbors, Americans
"are fond of explaining almost all actions of their lives by the principle of self-interest rightly understood; they show
with complacency how an enlightened regard for themselves constantly prompts them to assist one another."
That spirit of individualism allowed Americans to be pioneers in fields such as science and technology—Benjamin Franklin
and Thomas Jefferson were scientists and inventors—industry, entertainment, and every other field that contributes to
life and prosperity. America's national enterprise was really an enterprise of million of individuals living their own lives
and pursuing their own goals. What is great and glorious about America comes from the freedom and dignity accorded to each
That's not the America that we live in today. America in the early twenty-first century is a very politically and morally
confusing place. The Republican Party, which traditionally stands for limited government, has been in the ascendancy since
Ronald Reagan and under President George W. Bush has controlled both houses of Congress. Yet the size and burden of government
have not been reduced; indeed, in many areas it has expanded. While President Reagan spoke of eliminating the federal Department
of Education, President Bush has used it aggressively to impose policies on local schools. A look at non-defense spending
in the first three years of each administration since Lyndon Johnson's shows a cumulative increase under Bush of 23.4 percent,
second only to Johnson's 24.8 percent increase and comparing unfavorably with a decrease under Reagan.
Many commentators see the polarization of the country into Republican "red" states and Democratic "blue" states arising
from underlying value differences. In the red states voters worry that freedom is threatened when a society loses the moral
compass traditionally supplied by religion and long-standing customs, and drifts into moral relativism. They see such relativism
as responsible for social pathologies like crime, youth violence, broken families, and the spread of sexually transmitted
diseases, which in turn give rise to more government-assistance programs with accompanying tax hikes. They often favor policies
of censorship or the regulation of morality on the strange-sounding premise that freedom must be limited in order to be preserved.
Often, perhaps out of frustration at a lack of control over the forces they see undermining public order, these citizens
invest much emotion and effort in symbolic battles over values. They want to keep "under God" in the pledge of allegiance
even though there is no evidence that kids' reciting those words each day make schools less violent or kids more likely to
learn. They favor a display of the Ten Commandments in a courthouse lobby even though there is no evidence that this makes
judges and lawyers more likely to respect the principles of the Constitution that they often ignore.
Voters in the blue states fear that traditional morality and religious dogma indeed will lead to intolerance and repression.
They see social pathologies arising from material disadvantages and inequalities. An individual's economic status, they believe,
determines his morals and behavior. Those with this view favor government-imposed economic regulations, welfare programs,
and transfer payments. Yet this approach in the past has failed and in fact contributed to those pathologies by rewarding
moral irresponsibility. Further, by its nature this approach limits the liberty of the entrepreneurs who create wealth to
begin with, and it takes rather than protects the property of the citizens.
Today's political and moral confusion, which limits liberty, is in part the result of the disappearance from the public
dialogue and consciousness—and thus from too many individual minds—of the concept of individualism.
The erosion of liberty and its underlying moral foundation is in large part the result of the ideas in the twentieth century
that challenged the prevailing individualism, especially during times of social stress and transformation. Further, until
well into the twentieth century America's individualism was not philosophically defended. Indeed, Tocqueville's observation
about the 1830s was applicable nearly into the 1930s: "In no country in the civilized world is less attention paid to philosophy
than in the United States. The Americans have no philosophical school of their own, and they care but little for all the schools
into which Europe is divided."
The twentieth century saw challenges to the individualism from fascism, which placed the race, ethnic group, or state ahead
of the individual, and communism, which placed economic class first and advocated the supremacy of the proletariat or "working"
class. These systems were necessarily dictatorial; they sacrificed and enslaved millions of individuals. In the end, it was
easy for most Americans to reject these challenges, and it is difficult for many young people today to appreciate that such
challenges were ever taken seriously.
But the twentieth century also saw less harsh and thus more seductive challenges to individualism coming from socialist
and the welfare state paternalism based on the moral premise that we are each our brother's keeper. In America, the Progressive
Era, New Deal, and Great Society assigned to government the job of correcting the perceived failures of the free market and
free institutions, and of actually caring for the material needs of individuals—for food, housing, education, jobs,
medical care, retirement income, and the like—in the name of a better society but also in the name of a different, more
In reaction to this challenge, thinkers like Ludwig von Mises and F.A. Hayek demonstrated that government economic planning
must necessarily fail. The Public Choice school associated with James Buchanan and Gordon Tullock showed that government philosopher
kings could not be impartial and above institutional interests as they devised and administered alleged solutions to social
problems. Yet these defenses, as we shall see, ignored the moral arguments for individualism that were, in fact, provided
by Ayn Rand , beginning most notably with her 1943 novel The Fountainhead . But this crucial defense was ignored until recent decades.
Today's political and social landscape is largely defined by the paternalist or "collectivist lite" challenge to individualism.
The Current Political Landscape
In post-World War II America the political Right retained the vocabulary of individualism. Barry Goldwater's 1960 book,
The Conscience of a Conservative, served as the manifesto that propelled him to the 1964 Republican nomination for
president. Concerning conservatives, Goldwater maintained that "the first thing he has learned about man is that each member
of the species is a unique creature. Man's most sacred possession is his individual soul." Secondly, "the economic and spiritual
aspects of man's nature are inextricably intertwined. He cannot be economically free...if he is enslaved politically; conversely,
man's political freedom is illusory if he is dependent for his economic needs on the state." And finally, "man's development,
in both its material and spiritual aspects, is not something that can be directed by outside forces. Every man, for his individual
good and for the good of society, is responsible for his own development. The choices that govern his life are choices
that he must make; they cannot be made by any other human being, or by a collectivity of human beings."
That philosophy informed much of the modern conservative movement, which included the man who launched his own political
career with his powerful speech in support of Goldwater's nomination: Ronald Reagan used similar rhetoric in his successful
quest for the presidency.
In the years since Reagan, the collapse of Soviet communism has vindicated economic thinkers like Mises and Hayek. But
ironically, in America and elsewhere the reality of individualism has faded in part because the economic and political cases
for freedom were not based on a solid moral foundation. A survey of the political landscape today shows the status of individualism.
Libertarians. Libertarians for the most part are consistent advocates of individual liberty in the economic and
political realms and the true heirs to America's individualist political tradition. Think tanks like the Cato Institute and
Reason Foundation produce cutting-edge critiques of the failures of government programs that limit liberty, especially in
the economic area, and the weakening of the rule of law by arbitrary government power.
While many libertarians come from the natural-law and natural-rights tradition of America's Founders, others come from
a limited, usually economic, utilitarian perspective. Their view of the free-market system, for example, in the words of Mises,
"presupposes that people prefer life to death, health to sickness, nourishment to starvation, abundance to poverty. It teaches
man how to act in accordance with these valuations." While this might be a good generalization, it does not take account of
the real fact that many people would not make such choices. Islamists prefer strapping explosives to themselves or their children
in order to kill other children. Less dramatic examples are individuals who would accept less abundance in the name of a "social
justice" based on envy. Winston Churchill said, "socialism is the equal sharing of misery," and he was right that many opponents
of freedom are not simply confused about the economic consequences of their policies—rather, they want to pull down
the well-to-do more than to raise up those in need.
Thus, while libertarians tend to be consistent defenders of economic individualism and limited government, they often ignore
the moral justification of such freedom. Further, while their impact on policy is growing, it is still less than that of traditional
conservatives and neo-conservatives.
Traditional conservatives. While traditional conservatives do tend to acknowledge the importance of the individual—often
from a religious understanding of the unique value of each person—they also fear power and the unrestrained ego. They
see the abuses of a Hitler and Stalin and the murderous mobs in the streets during the French revolution as manifestations
of the same evil. Such conservatives see the importance of religion, customs, and traditions, and private institutions such
as families, fraternal organizations, and churches, in restraining the ego and providing a nurturing environment in which
individuals can develop their virtues and live productive lives. Conservatives thus favor limited, constitutional governments
with checks and balances.
But too often conservatives use government to support beliefs and institutions that they see as essential to restrain the
ego. Further, they often treat these institutions as ends in themselves, sacrificing the individual and freedom for the good
of society. These institutions and the attitudes, if not the laws, that support them can stifle individual creativity.
Further, many conservatives, often as a function of their religious perspective, are uncomfortable taking rational, individual
self-interest too far. They feel they need to invoke some collective good to justify individual liberty. Thus, they might
argue that tax cuts that their critics contend help the rich also help create job opportunities and lower prices for the poor.
While this is true, the principal justification of economic freedom is that it is the individual's right, not some collective
Finally, justifying individual liberty based on religious beliefs or mere tradition will not convince those who do not
share one's religion and for whom traditions hold little sway.
Compassionate and neo-conservatives. Neo-conservatives often are ex-leftists who have become aware of both the economic
problems and the social pathologies created by traditional leftist policies. They tend to favor many elements of the social
and political vision of traditional conservatives. But unlike traditional conservatives they do not have a general fear of
big government. Irving Kristol, the godfather of the movement, says of neo-cons: "They are impatient with the Hayekian notion
that we are on 'the road to serfdom.' Neocons do not feel that kind of alarm or anxiety about the growth of the state in the
past century, seeing it as natural, indeed, inevitable.... People have always preferred strong government to weak.... Neocons
feel at home in today's America to a degree that more traditional conservatives do not." This is why in the neo-con pantheon
of political heroes men like "Barry Goldwater are politely overlooked."
Neo-conservatives, in fact, are social engineers on the Right. While particular policies that they favor might be more
pro-individual than those of the Left, the neo-con view of government is fundamentally anti-individualistic.
What Is Individualism?
Given the problems and limitations of those on the Right who defend freedom in one form or another, it is necessary to
define more exactly the nature of individualism. In particular it is necessary to understand the facts and ideas that necessitate
and morally justify economic and political liberty for individuals.
Ayn Rand offered the most consistent and integrated understanding of individualism.
She began with the fact that the fundamental alternative for living creatures is life or death. But human beings are unique
creatures. We have free will and a rational capacity. Indeed, the phenomenon of making value choices is only possible for
beings who can understand that alternatives and choices are possible, i.e., living human beings. The standard of all values
thus is human life, and the goal of survival is obtained through the exercise of reason, the discovery of what will be in
our self-interest. But because we are humans with extraordinary and wonderful capacities, mere physical survival is not our
goal; rather, it is a happy, joyous, and flourishing life.
Further, we each exist fundamentally as individuals. We survive physically as individuals even as others might die, and
we die as individuals even as others might continue to live. Our bodies are healthy or sick as individuals. And, most importantly,
we think and we will as individuals. We must be free to use the judgment of our own minds or else our survival is precarious
and dependent on others.
From this understanding we can identify the basic elements of true individualism.
First, true individualists will understand and feel that their own lives are their highest value, that to be alive is to
be blessed with the potential for happiness, that they should treat their own lives with respect, and that they should strive
with joy for the best within them. It would be odd if a person who believed in the importance and dignity of each individual
also believed that he or she personally was simply an agent who should serve others, with little concern for his or her own
life, dreams, and happiness.
Second, true individualists will understand that to strive for the best within them, they must hold reason as their highest
value because it is that capacity that allows them to reflect upon themselves, on their moral nature, and to discover the
means for their survival and flourishing. It was no accident that out of the Enlightenment and the Age of Reason came John
Locke, Thomas Jefferson, Benjamin Franklin, and many other giants in the battle for liberty.
Each individual's survival and well-being requires self-directed action toward those goals. That rules out the false subjectivist
form of individualism that says, "Do what feels good," with the assumption that thinking is not necessary. True individualism
also rules out the Nietzschean will to engage some master passion, usually the quest for power, as an end in itself. That
path leads one away from achieving the greatest fulfillment possible in one's life and more often than not leads to misery.
True, rational individualists are not slaves to their appetites; they check the whim of the moment and subject it to
Consider the extreme example of mind-altering drugs. While libertarians can rightly oppose the drug war as both ineffective
and a limitation on freedom, one must recognize that addiction to such drugs—or many other things—is destructive
of the unique and defining attributes of individuals: the rational mind and the free will. Would rational individuals with
the deepest sense of self-worth and dignity put poison in their brains? Would a drug addict be considered a true individualist?
But "reason" does not mean superficial judgments or arrogant rationalizations. Here conservatives can point to an all-too-real
danger that negates a true life guided by thought. Hayek rightly denounced the false individualism of those who believed they
could apply reason to build a prosperous and peaceful society through socialist planning the way engineers apply reason to
Reason means exercising the virtue of honesty, of always asking one's self, "Am I trying to understand the facts of reality,
am I being truthful, am I willing to focus my mind and not evade?"
Third, true individualists understand that they are responsible for their own lives, actions, prosperity, and happiness.
Rand said, "As man is a being of self-made wealth, so he is a being of self-made soul." It is not simply our genetic makeup,
economic class, environment, or other accidental factors that determine our character or beliefs. We each, as individuals,
do so. Even in the most adverse circumstances individuals can take charge of their own souls; in his book, Man's Search
for Meaning, Viktor Frankl describes how he discovered personal freedom in a concentration camp—a freedom of will
and thought that even the Nazi torturers could not take away. While individualists will recognize that they certainly can
benefit from good parents, friends, and teachers, we each must understand that ultimately we are responsible for our own character
Further, unlike lower animals, we must create the material means of our survival and flourishing. We must discover how
to produce food, shelter, clothing, medicines, printing presses, electric power, automobiles, airplanes, spaceships, computers,
and all those things that make survival and flourishing possible. The true individualist is a creator.
Fourth, true individualists take pride in their achievements. Such individuals welcome responsibility for their own lives
because, as adults, responsibility is the opportunity and path to the joy of achievement. Achievements are manifestations
of their virtues and right actions. It might involve inventing a new scientific device or making a new scientific discovery;
designing a house or laying the bricks for a house; writing a poem or a business plan; making a statue or a satellite; nurturing
a new business to profitability or a new child to adulthood. While we as individuals might appreciate the assistance of others,
it is only what we create ourselves that can give us pride. If we win a lottery we might be happy but we cannot be proud,
because chance, not our own conscious and guided actions, was responsible for our windfall. Similarly, while we might provide
some guidance and assistance to loved ones, individualists will understand that others will gain the greatest sense of self-worth
and self-actualization only if they take responsibility for themselves. After all, the goal of parents is to guide their children
to become independent adults, not to keep them infantile.
True pride, which Aristotle called "the crown of all the virtues," is not boastful and does not first seek approval of
others. It is first and foremost self-knowledge. And proud individuals will refuse to accept moral censure or guilt for their
virtues and moral knowledge.
Fifth, in society true individualists will assert the right to their own lives. They need not answer to a king, government,
their neighbors, or society. They can pursue their dreams as they see fit. They will recognize that their lives are not means
to the ends of others. This means that we must each be free to live by our own independent judgment about what is in our best
interest. After all, our individual autonomy is defined by our minds, and if we are not allowed to use our own judgment, our
autonomy is destroyed.
Sixth, true individualists will respect the equal rights of others. If in our souls we have a strong, burning sense of
justice, we would never wish the unearned for ourselves. The morality of true individualists precludes taking by force or
fraud either material goods or responsibility for actions or achievements that are not one's own. That would undermine our
pride in ourselves. Further, if we value reason, productivity, honesty, and the like, we will value and appreciate those virtues
in others and will not wish to be the destroyer of these virtues. That is why we will not wish to initiate the use of force
or fraud against others, because we would be harming ourselves and destroying those values that we love. In other words, all
of our relationships with others should be based on mutual consent.
Seventh, all true individualists will want a government that limits itself to protecting the life, liberty, and property
of all individuals—not trying to run our lives and treating us in a paternalistic manner. They will see the government
not as an agent to relieve them of responsibility for their lives and their neighbors of their wealth and liberty but as an
agent to protect them from the initiation of force and to establish the general rules to facilitate relationships with others
based on mutual consent.
Eighth, true individualists will want to live in a society of other individualists. They will benefit from trading goods
and services with others. They will be educated, entertained, enlightened, and inspired by the achievements of others—by
plays, movies, music, scientific discoveries, engineering feats, and every form of human achievement, which the true individualist
In The Fountainhead , one of Ayn Rand 's characters muses, "Don't work for my happiness, my brothers—show
me your achievements—and the knowledge will give me the courage for mine." This expresses the thoughts and sentiments
of true individualists. They will love such a society because of the individuals who make it up and will fight to preserve
it from any threat in the same way they would fight to preserve specific attacks on their personal liberty.
Ninthly, true individualists will exercise the virtue of benevolence. They will understand that through their actions,
example, and treatment of others, they can foster a society that gives them the means of material well-being and spiritual
This review of the elements of individualism shows that political freedom is not a starting point but, rather, an end point
based on the nature of the individual and what is in the rational self-interest of each of us. This review also suggests that
our need for freedom arises from our nature and the nature of moral principles, and that those principles must be manifest
in the character of individuals if, in a society, citizens are to respect one another's rights and demand political freedom.
This review also suggests that where these ideas are absent from the minds of individuals and these moral principles absent
from their souls and characters, freedom in societies will erode. The elements of individualism, unfortunately, today tend
to be weak or missing from most of the political ideologies that are considered defenders of freedom, and that is why political
liberty is weakened.
The Paternalist Threat
This understanding suggests that perhaps the greatest threat to individualism today comes from what can be described as
political and moral paternalism, principally from the political Left but aided by moderates and "good government" politicians
of all parties. Paternalists are would-be ruling elites who would treat adults as if they were children who are unable to
run their own lives for themselves; these elites maintain that they want to care for such dependents, provide for their material
and other needs, and regulate their lives for their—the dependents'—own good.
Past collectivist challenges to individualism—communism, fascism—were paternalist as well but also extremely
brutal and thus easy for anyone with a semblance of reason and moral principles to reject. The welfare state and socialism
might be thought of as the kinder, gentler forms that are thus more subtle and seductive, less obvious enemies; that are in
some ways more dangerous because they are not seen as great threats. But their danger goes much deeper than limiting economic
On the surface it seems that paternalists simply wish to help others deal with problems such as unemployment, access to
education and training, medical and retirement costs, and the like. In fact most paternalist elites also seek prestige—really,
a false sense of self-worth—power, and income, and these require the existence of groups in need. To this end, they
must curtail the liberty of individuals, eliminate the economic independence of individuals, and undermine the ethos of individualism.
The problem for the paternalist is that in a free society, individuals who wish to prosper can work hard, improve their knowledge
and skills, and advance their station in life, as our immigrant ancestors and so many Americans each day so dramatically demonstrate.
But the economic method of paternalism ensures economic dependence by ensuring that the economy will not function at its
best. The immediate victims of redistribution and regulation will be those who have their money taken and their freedom curtailed.
But the ripple effects of these policies will rob others of opportunities. For example, minimum-wage hikes often mean that
businesses will cut work hours and employment for marginal workers. The adverse effects of these policies will create the
illusion of "market failures," a pool of dependents, and thus a perceived requirement for more government intervention. Many
individuals, viewing this system in action but not understanding that it is of the paternalists' own making, will come away
with the mistaken belief that in the economic realm they cannot take responsibility for their own lives.
The paternalists can also expand the dependent class by offering programs, initially to help the "poorest of the poor"—free
school lunches for kids, social security, college loans—but then extend those programs to higher-income individuals
as a means to secure political support.
In other words, the paternalist is like a quack doctor who breaks a patient's leg in order to have patients, doesn't fix
the leg, and charges a hefty price for aspirin to reduce the pain.
Undermining Individualist Ideas and Character
But the maintenance of a dependent class requires more than the weakening of economic independence. Paternalists must also
corrupt moral ideas and moral character, that is, must undermine the elements of individualism that support political and
The paternalist, for example, feels—and wants his dependents to feel—that somehow it is "unjust" for some individuals
to prosper—even through their own efforts—while others do not—even if it is through their own flaws or errors.
Thus, they posit a right of all individuals to certain goods—medical care, retirement income, job training—and
to certain economic outcomes—a distribution of wealth that does not leave too many rich or poor individuals. In other
words, they want individuals to believe that need equals entitlement. This false idea undermines the individualist belief
that in society we each have a right to our own life. It is the corrupted belief that tells us, "Yes, you have certain rights
but you also have obligations to others—other than to respect their equal right to freedom." Individuals who accept
this corrupted belief will find it difficult to argue against encroachments on their liberty. This moral confusion will mean
that they feel guilty about acting fully in accordance with rational self-interest and often will not have the will or emotional
commitment to fight such encroachments.
Essential to the maintenance of a paternalist system is an undermining of the morality of the mind - an essential aspect
of the individualist morality. Paternalists wish individuals to approach moral and economic issues not with thought but, rather,
with emotions not subject to rational evaluation. Demagogues have been with us since the first democracies in Greece. The
particular appeals offered by paternalists today include a sense of entitlement, envy, and indignation, which are meant to
stop the thinking process and warp the moral sense.
The sense of entitlement in the context of a paternalist system is the emotion of a child. A child feels—not thinks,
but feels—that "I have desires, and someone must fulfill them." Mature adults graduate to an individualist understanding
that they are the principal agents responsible for satisfying their desires and questioning whether those desires are in their
true self-interest to begin with.
Envy usually denotes the feeling that someone owns something that the envier wants, often accompanied by the feeling that
somehow the owner does not deserve it. Envy thus often entails more of a desire to pull others down rather than to raise one's
self or others up. In its most virulent form, envy is the emotion and moral choice of those who know, implicitly or explicitly,
that their problems are of their own making and that the prosperity and happiness of others is of theirs. The envious individual
desires to destroy that which is a reproach and reminder to them of their own failings. As Ayn Rand explained, envy is "hatred of the good for being the good."
The paternalist must foster envy. To the extent that dependents accept the paternalist's immoral premises and thus manifest
the emotion of envy, they will react with moral indignation at those who hesitate not only to acknowledge their right to taxpayer
dollars but also their status as victims and thus their moral superiority. Watch a demonstration of screaming, chanting poverty
activists who feel they are slighted and that their handouts are too small. Their emotions are required to short-circuit their
thought processes. (This was the function of the "Two Minutes Hate" in George Orwell's 1984.)
Further, the paternalist must foster in the individuals who are envied a sense of guilt, which will prevent them from rejecting
envious individuals' emotions in favor of a reasoned approach to moral principles.
Most middle-class Americans are in fact hardworking, conscientious, good to their families, and the like; in these things
they are members of the productive, responsible class of individualists who live for the most part by their own efforts—not
the extreme haters of achievement. To keep control, paternalists need to control these individuals as well. They do so by
feeding them small benefits that can build up over time. They might offer their kids free lunches in school. They might offer
the company for which they work government subsidies, trade protection, or other such assistance. If these individuals lose
their jobs, paternalists will give them government unemployment benefits, and when they retire, paternalists will offer them
social security and Medicare—paid for by making it difficult for these individuals to afford these things for themselves.
Such Americans might feel that they paid for these benefits out of deductions from their paychecks. But more and more add-ons
such as the new prescription drug benefit show these to be welfare programs.
Such individuals find themselves in a state of ethical insecurity and without the ideas and understanding to counter their
situation. They do not want to think of themselves as parasites and victims, for they still take some pride in their personal
efficacy, at least in some realms of their lives. Perhaps they look with scorn on blatant cases of irresponsible individuals
who manifest the worst of the parasites—for example, fat welfare mothers with a dozen kids by a dozen different fathers,
using their welfare money to purchase liquor and lottery tickets.
But these individuals might become indignant when discussing their need for government help with their medical bills or
with tuition for their kids at college. They don't want to consider whether those bills are so high because of government
programs and policies. In any case, what can they do to change things? They are simply victims of the system. In this case
we see how paternalism has undermined the ethos of individualism.
The restoration of individual freedom and overthrow of the paternalist regime and ethos will require battles in several
arenas. The intellectual battle for political and economic freedom has been won. The collapse of Soviet-style communism proved
economists like Mises and Hayek to be correct. Theories purporting to show how political elites can successfully manage economies—for
example, those of the Keynesian school—have been discredited. Scholarship and experience demonstrate the adverse effects
of regulations of many industries and sectors, as well as the flexibility and vibrancy of market institutions. While there
is still a need to get this information into more schools and universities and into the minds of politicians, journalists,
community and opinion leaders, and the like, the intellectual case is beyond serious dispute.
The political battle has been tough going. One reason is that vested interest groups—paternalist patrons and their
clients—resist giving up their special privileges. But the battle for freedom will also require that the moral ideas
at the basis of individualism be clearly articulated and used to counter the assumptions of paternalism. These ideas will
encounter the moral sense and emotions in individuals that run counter to individualist principles. Creative ways of arguing
and appeals to what remains of sound moral principles in individuals' minds and habits in their souls will be necessary. Further,
it will be necessary to address the paternalist assumptions as they are manifest in the culture and to counter them with individualist
visions of what a culture can and should be.
Supporting Self-Interest. At the philosophical level, but with arguments that can be brought to bear on the political
and social controversies of the day, it is necessary to reinforce the notion that we each as individuals have an unequivocal
right to our own lives and thus can act in our rational self-interest without guilt. Most Americans are comfortable with self-interest
in economics. We seek the highest salaries possible in professions we choose. We seek the lowest prices for goods and services
of the quality we desire. Adam Smith expressed the maxim of economic self-interest when he wrote: "It is not from the benevolence
of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address
ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."
This must not simply be the view in economic aspects of the lives of individuals but in every aspect.
Key to countering paternalism is to deal with the ideas and feelings that individuals usually have about their obligations
to others. Even when individuals do not feel guilty for living their own lives as they see fit, and even when they understand
that many individuals find themselves in need through flaws in their own moral code, character or actions, they feel - perhaps
grudgingly - that they have a duty to help them out of their situation.
Obviously with family members or friends that we value, such help might be a good investment, since we would be saving
a loved one that we value. But an individualist would understand not only that each individual ultimately must take responsibility
for their own lives but also that paternalists have created the culture and ethos that make it harder for individuals to appreciate
the need to pull themselves together and straighten out their lives. After all, paternalists need a dependent class.
It is also useful to emphasize that in a society of true individualists we would have far fewer social pathologies - individual
failings, really -- since individuals would have such respect for themselves that they would live to their highest potential
and not allow themselves to fall into such situations. Such a society would be one truly worth living in and would be in our
true self-interest, since we would be educated, entertained, inspired, and enlightened by the achievements of our fellows.
Pride versus Paternalist Pandering. Another way to counter the paternalist pandering of the present system is to
identify clearly its moral premises—a view of adults as children - and counter them with an appeal to pride. Most politicians
appeal to voters and supporters with never-ending laundry lists of promised benefits and handouts. "If elected, I will make
certain that every American has..." fill in the blank with any kind of material good or program. There is no end game for
the paternalist since there is no end to the lists of desires that pandering politicians might dream up.
Since many citizens are very much mixed in their morality, appeals to shame and pride can be important weapons against
the paternalist strategy. We might point out how citizens are being treated like infants. The paternalist says: "There, there
little boys and girls. We know you're not up to the burden of raising your own children, earning enough money to educate them,
insuring yourselves against illness or unemployment, saving for your retirement, tying your own shoes, or wiping your own
noses without our help. Don't worry, we'll give you all you need." Proud individualists would find such paternalism a personal
Paternalism is particularly dangerous because government benefits have been doled out gradually and built up, dragging
individuals further down into the depths of dependency. Many Americans concede liberty but console themselves by pleading
for the return of some of their money in the form of government benefits. As responsible individuals we should feel anger
and resentment at the politicians who created and perpetuated this system, who are turning us into beggars. When such politicians
offer us more handouts, we should react as we would if they offered us heroin. We should see politicians as pushers who addict
us to government. They destroy our economic autonomy like heavy drug users destroying their autonomous minds. How many citizens
want to think of themselves as pathetic, morally cripples created to serve the needs of paternalists?
Cultural Battles. Another battleground for reestablishing support for individual liberty is the culture. For individuals
who are not professional philosophers or thinkers, values are usually communicated and reinforced in their moral habits through
culture. and thus, this is a field to which the friends of freedom must pay increased attention. So we must attend to what
values are celebrated in art, movies, TV shows and to what individuals are praised for, what achievements, in the media, in
church sermons, by colleagues, friends, and family.
Of course, culture is not an arena in which one can fight battles the way one might do over a public policy before a legislative
body. But consider just a small example of how that battle might be fought. Statues are meant to represent heroes, those whom
we should honor for great achievements. Usually statues are of politicians or military leaders. Sometimes they are of artists,
composers, or great authors: Michelangelo, Beethoven, Shakespeare. We need more statues of business leaders and entrepreneurs
who communicate important values concerning man the creator. For example, currently the pharmaceutical industry is under attack
for problems with some products. But this is an industry that more than nearly any other, has saved lives, eased suffering,
and improved the quality of life. Citizens wishing to fight for an individualist culture might raise money to erect statues
to individual men and women who have made great discoveries in the field of medicine.
The best example of cultural as well as intellectual promotion of individualism is found in the novels of Ayn Rand . Presenting her themes in stories made the individualist morality
more real than expositions in philosophical textbooks. We see in motion pictures today some of these individualist themes
being taken up the notion of excellence in The Incredibles and love for one's work in The Aviator. For individualists,
the arts are a cultural battleground they must move into.
A New Individualism
Individualism has political, ethical, and cultural meanings. Politically, it stands for individual liberty, the notion
that each of us should be free to live our own lives as we see fit, as long as we respect the equal rights of others. Ethically,
it means valuing ourselves; taking responsibility for our own happiness; striving for the best within us; taking pride in
our achievement; and never accepting guilt for our virtues. Culturally, it means fostering, reinforcing, and celebrating the
elements of individualism.
Today, libertarians make valid economic and political arguments for freedom but often ignore that case. Conservatives understand
the need for a moral foundation but often favor religion and tradition, which are often unconvincing to many if not just plain
wrong. A new individualism would provide that moral basis to buttress freedom and a society of proud achievers who would never
tolerate limits on their legitimate liberty.
Political freedom cannot be maintained without individualist ideas and morality in the hearts and minds of enough people
in a society. Thus, as we fight for freedom in this country, we must fight for a new individualism that will serve as the
foundation for that freedom.
Completing the American Revolution
Created 04/08/2011 - 15:50
Completing the American Revolution
"When forced to assume [self-government], we were novices in its science. Its principles and forms had entered
little into our former education. We established, however, some, although not all its important principles."
--Thomas Jefferson to John Cartwright, 1824.
It was in honor of the 50th anniversary of the American Revolution that Thomas Jefferson wrote, in his last
public letter: “May it be to the world, what I believe it will be, (to some parts sooner, to others later, but finally
to all,) the signal of arousing men to burst the chains under which monkish ignorance and superstition had persuaded them
to bind themselves, and to assume the blessings and security of self-government. . . . . All eyes are opened, or opening,
to the rights of man.”
It is noteworthy that Jefferson qualified his pronouncement: “All eyes are opened, or opening, to the
rights of man.” Notwithstanding his characteristic optimism, Jefferson shared with his fellow Americans of the founding
generation a realization that the Revolution they began in 1776 was still incomplete a half-century later. During his presidency
and retirement years, he continued to believe that America had a mission to prove to the world “the degree of freedom
and self-government in which a society may venture to leave its individual members.” Indeed, as author of the Declaration
of Independence, he was perhaps even more aware of how imperfectly the ideals of that founding document had been realized
in American legal and political institutions. And he certainly was aware of the need for future constitutional change –
of the need for laws and institutions to advance “with the progress of the human mind.”
clearly shared with Jefferson and other Founders the hope that America
would serve as a model for the rest of the world. She began the conclusion to her March 6, 1974 address to the cadets at the
U.S. Military Academy at West Point by saying, “The United States of America is the greatest, the noblest and, in its
original founding principles, the only
moral country in the history of the world.” Although her magnificent
novel, Atlas Shrugged
, depicts the United States in decline, at various places throughout
the book Rand reminds her readers of the nobility of America’s founding ideals. One of the novel’s principal heroes,
Francisco d’Anconia, describes this country as one “built on the supremacy of reason – and for one magnificent
century, it redeemed the world.”
Through the uniquely effective mode of communication afforded by fiction-writing, particularly in the form of a novel,
Rand presents her readers with a vision of America as it is today as well as a vision of what it could—and should—be.
It is a utopian novel, in a sense; but unlike other classic works in that genre, it is not merely a radical critique of the
. Here it may be helpful to note the relevance of the symbolism of the Atlantis myth—a lost land
populated by heroes—which Rand employs as a key theme throughout the novel. Atlas Shrugged
itself is Atlantis: its critique of modern America is presented
in terms of the degree to which the nation has fallen short of its founders' vision, which is also Rand's. In this sense,
the novel is at once radical and conservative—much like the American Revolution itself, as discussed below. Perhaps
this feature of the novel explains both the breadth and the depth of its appeal, at least to American readers: Americans who
read Atlas Shrugged
sense that the radically different philosophical vision Rand
offers in the book is not entirely new but is rather the fulfillment of the Founders' vision, one that somehow had become
lost by the last half of the twentieth century.
Rand was also aware that the American Revolution had been incomplete, and this awareness was part of her purpose for
writing Atlas Shrugged
. As she stated in her essay “For the New Intellectual,”
just a few years after the novel’s publication:
The world crisis of today is a moral crisis--and nothing less than a moral revolution can resolve it: a moral revolution
to sanction and complete the political achievement of the American Revolution.
In so identifying the “moral crisis” of today and the “moral revolution” needed to resolve it,
Rand was echoing the statements made by two of the principal heroes of Atlas Shrugged
, John Galt and Francisco d’Anconia. Indeed, the heroes
of the novel may be seen, essentially, as the Patriot leaders of a second American Revolution, to complete the first. Atlas Shrugged
is a significant book in many respects; one of its most significant
aspects is the way Rand uses the novel to show us not only that the American Revolution was incomplete but also we must do
to complete the Revolution—that is, to complete the unfinished work of 1776 and the hope that it represents to the world.
This article discusses the historical background necessary to a full understanding of how the novel accomplishes this purpose.
Part One discusses the truly radical nature of the Revolution: the philosophy of government of America's Founders,
who put the rights of the individual first and then attempted to design a system of government that would safeguard rather
than destroy those rights. This revolution in the philosophy of government was neither sudden nor rapid. It did not happen
on July 4, 1776, with the adoption of the Declaration of Independence, for that was the culmination of a series of events
traceable back to the founding of the English colonies in America. Nor was the revolution fully accomplished with the mere
declaration of American independence: it required not only the successful waging of the Revolutionary War, but also the successful
establishment and maintenance of new constitutions to help safeguard the Founders' vision of limited government.
That vision, however, was quite imperfect; and the Founders' revolution in the philosophy of government was incomplete,
as the dramatic growth in the size and pervasiveness of governmental power (at all levels, and particularly the national government)
in the twentieth century so vividly has illustrated. The American Revolution was incomplete – and the Founders' carefully
devised constitutions failed – because the Founders' generation had no consensus about where exactly to draw
the line between individual liberty and the coercive power of law, especially in the realm of economics. They failed, in short,
to have a coherent theory of individual rights. This failure can be explained by two "gaps" in American thought, one in ethics
and the other in politics.
Part Two discusses the first aspect in which the American Revolution was incomplete: the non-existent
moral revolution. America's Founders compromised the premises on which their individualistic political philosophy rested by
continuing to adhere to a profoundly anti-individualistic moral code, rooted in Judeo-Christian religion. Because that anti-individualistic
moral code remained not only dominant but also virtually unchallenged in early American culture and intellectual thought,
Americans continued to regard capitalism, money, and the profit motive as base, immoral, and even downright evil.
explores the second aspect in which the American Revolution was incomplete: the incomplete
revolution in political thought and the law. Notwithstanding the Founders’ efforts to “Americanize” their
political and legal systems, many ideas and institutions inherited from England—from a feudal, paternalistic society
that by the eighteenth century had only partially shifted to a capitalist, individualistic society—persisted in early
American politics and law. This section focuses on two important illustrations of the persistence of Old World, paternalistic,
anti-capitalist or anti-individualist, notions in American politics and the law: the concepts of the so-called "public interest"
and of "monopoly." These two concepts lie at the heart of government regulation of businesses "affected with the public interest"
and the antitrust laws—the regulations and laws which today continue to severely limit the freedom of American businessmen
and which formed the real-world inspiration for the horror stories Rand presents in Atlas Shrugged.
Part Three also briefly discusses the failure of American constitutional law to safeguard individual rights against the
rise of the twentieth century regulatory and welfare state. The so-called “New Deal revolution” on the U.S. Supreme
Court in the late 1930s marked the modern Court’s failure to enforce the Constitution’s limits on the powers of
government and its protection of economic liberty and property rights.
Finally, Part Four
briefly discusses what must be done to complete the American Revolution, and the
relevance of Atlas Shrugged
and of the Objectivist philosophy it presents, to accomplish
I. RADICALISM OF THE AMERICAN REVOLUTION
The American Revolution was unlike
any other great revolution in human history. Some scholars have characterized it as conservative, for—apart from the
long, bloody war for independence from Great Britain—it lacked the cataclysmic social upheaval that characterized the
later French and Russian revolutions. Yet the changes it brought to American society, governmental institutions, and philosophical
thought were profound. Despite its apparent conservatism, the American Revolution was truly radical, in the literal sense
of the term. Radical derives from the Latin word radix, meaning "root, base, foundation"; to be radical
is to get to the root of the matter. The Revolutionaries of 1776, although influenced by a variety of classical political
writings going as far back as Aristotle, managed to transcend much of the dogma of traditional western political thought and
to profoundly rethink the origins, purpose, and limitations of government.
America's Founders established—for the first time in the history of the world—a society whose government
was founded on recognition of the inherent, natural, and inalienable rights of the individual. They asserted the "self-evident"
truths that Thomas Jefferson had stated in the Declaration of Independence: that "all men are created equal” and are
endowed with “inherent and inalienable rights" of "life, liberty, & the pursuit of happiness"; that "to secure these
rights, governments are instituted among men, deriving their just powers from the consent of the governed"; and that "whenever
any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it."
A good society, the Founders believed, would have few laws.
The Founders institutionalized these principles by establishing written constitutions, founded on "the consent of the
governed," and containing various institutional checks on the power of government designed to prevent it from being abused,
for the Founders understood that, paradoxically, it was government—which was created to protect, or "secure," individual
rights—that poses the greatest danger to them. The reason was the unique nature of political power: that government,
alone of all institutions in society, may legitimately use force to achieve its ends. A good society, the
Founders believed, would have few laws—laws that were clear to, and respected by, the people. Accordingly,
they sought to create a "new science of politics" that not only checked the power of government, through constitutions, but
also minimized the role of government (at all levels, but especially the national government) to a few, essential and legitimate
These truly revolutionary changes did not all suddenly happen in 1776, however. The Declaration of Independence was the
culmination of a series of events which may be traced back to the founding of the English colonies in North America. "What
do we mean by the American Revolution?" John Adams rhetorically asked one of his correspondents, late in life. "The Revolution
was in the minds and hearts of the people; a change in their religious sentiments, of their duties and obligations. . . .
This radical change in the principles, opinions, sentiments, and affections of the people was the real American Revolution."
Although they considered themselves loyal subjects of the British king, colonial Americans were separated from their
Old World countrymen by more than geography. The English colonies in North America each had its own unique history, but all
had certain basic features in common. They were settled by people who, for one reason or another, were leaving Europe to find
a new life in the wild lands across the Atlantic Ocean; to the settlers, it was quite literally a "New World." Some of the
settlers were dissenters from England's established church—both Catholics and radical Protestant nonconformists—and
thus came to America for religious freedom, or at least a greater degree of religious freedom than the laws of England permitted.
Other settlers came to America seeking wealth: to them, the wilderness across the seas—as to later generations of Americans,
the wilderness across the mountains, in the trans-Appalachian West—represented economic opportunity. Like the religious
dissenters, those who came to America for economic reasons also sought a greater degree of freedom than was permitted under
the stifling paternalism of English law. Whatever their reasons for emigrating to America, the English settlers generally
might be regarded as a kind of distillate of people who somehow did not fit – or did not want to fit – in English
Significantly, the early colonization of North America coincided with one of the most turbulent time periods in English
history: the seventeenth century, a century of revolution, which included not only the English Revolution, or Civil War, in
mid-century but also the so-called Glorious Revolution of 1688-89, as well as the unstable years of the early eighteenth century
following the Hanoverian succession. Most dramatically, this era witnessed the trial and execution of King Charles I and,
for the eleven years of the Commonwealth (1649-60), England transformed from a monarchy to a republican form of government.
Accompanying the political unrest of the times was a remarkably rich ferment of ideas. Writers such as Thomas Hobbes, Algernon
Sidney, and John Locke questioned basic assumptions about the origin, purpose, and structure of government: Why have government
at all? Which form of government is best, and why?
The settlers were a people who somehow did not fit-or did not want to fit-in English society.
Some, like Sidney, who was executed for treason in 1683, even lost their lives for their boldness in challenging orthodoxy.
Political stability returned with the post-1689 settlement, which established the modern English constitutional system, with
powers of the monarch greatly circumscribed and subordinated to those of Parliament. Radical dissent, once started, was not
easily stopped, however; and in the 18th century new generations of dissenters from mainstream politics – the second
and third generations of the "Commonwealthmen," or English radical Whigs, whom historian Caroline Robbins and other scholars
have described – found a ready audience for their ideas in a small minority of their fellow Englishmen and in far greater
numbers of their countrymen across the Atlantic.
The founding of the English colonies in North America and their evolution into mature political societies also corresponded
in time with perhaps the most significant philosophical movement of the modern era, the Enlightenment. The American colonists
were also profoundly influenced by the writings of Enlightenment rationalists, whose texts were cited along with those of
the English radical Whigs, particularly when Americans argued for the legal recognition of their natural rights. The thinkers
of the eighteenth century Scottish Enlightenment—Adam Ferguson, David Hume, Adam Smith, and other lesser writers—also
influenced American understanding of the social order and limited government.
The Declaration of Independence itself directly reflected the influence of Enlightenment ideas on the leaders of American
Revolution. In drafting the Declaration, Jefferson employed the language of eighteenth century logic and rhetoric to present
the argument for American independence; indeed, the overall argument of the Declaration is in the form of a syllogism—with
a major premise, minor premise, and conclusion. Moreover, ideas expressed in the Declaration were given added persuasive power
by their adherence to the best contemporary standards of mathematical and scientific demonstration; for example, in calling
the key propositions of the major premise "self-evident truths," Jefferson used a term with a precise, technical meaning,
which told his audience that they were like the axioms of Newtonian science. The grievances against George III in the main
body of the Declaration were not only tyrannical acts which would justify rebellion against a monarch, under established principles
of English constitutionalism, but also complaints that the King, in conspiracy with "others" (namely, his ministers and Parliament)
had deprived Americans of their natural rights, including economic freedom.
The American Revolution was not quite radical enough.
As historian Gordon Wood has shown, the American Revolution was far more radical than commonly believed. Wood considers
the Revolution to be "as radical as any revolution in history" as well as "the most radical and most far-reaching event in
American history," altering not only the form of government—by eliminating monarchy and creating republics—but
also Americans' view of governmental power. "Most important," he adds, "it made the interests and prosperity of ordinary people
– their pursuits of happiness – the goal of society and government."
By rejecting the British monarchical system, America’s founders also rejected the paternalism through which the
British system operated in the realms of law and politics. The rejection of paternalism was manifest in many developments
in Revolutionary-era society, among them the rise of contracts and even the growing popularity of laissez-faire economics,
perhaps best illustrated by the Philadelphia merchants' opposition to price controls in 1777-78. Moreover, Wood adds, "[t]he
Revolution did not merely create a political and legal environment conducive to economic expansion; it also released powerful
popular entrepreneurial and commercial energies that few realized existed and transformed the economic landscape of the country."
The far-reaching social changes that came into being with the American Revolution also were accompanied by correspondingly
significant changes in law and constitutionalism. With independence, the American legal system—and particularly the
constitutional system—was free to depart dramatically from its English roots. "We have it in our power to begin the
world over again," wrote Thomas Paine, succinctly describing the unprecedented opportunity Americans had after 1776 to frame
new forms of government with written constitutions.
The first American constitutions were framed largely by a process of trial and error, as their framers experimented with
a variety of devices to check governmental power, both to prevent it from being abused and to safeguard the rights of individuals.
As previously noted, the Founders understood the essential paradox of government: that the very institution created to secure
individual rights itself posed the greatest danger to them. Influenced by the English radical Whig political tradition, they
understood that government, by its very nature – given its monopoly on the legitimate use of force in society—inherently
threatened liberty and would abuse its power unless constrained by institutional checks.
Accordingly, they incorporated into the early American constitutions various devices for limiting power and safeguarding
against its abuse. These included federalism (the division of powers between the national government and the states), the
principle of separation of powers (at each level of government, separating its powers among three distinct and independent
functional branches, legislative, executive, and judicial), frequent elections and "rotation in office" (what we call "term
limits"), explicit rights guarantees in bills of rights, and the power of the people both to ratify and to amend the constitution.
The framers of the federal Constitution of 1787 benefited from the experience of Congress’s governance under our
first national constitution, the Articles of Confederation, as well as the experience of the majority of the states, which
had framed state constitutions during the period between 1776 and 1787. Hence, the Constitution of the United States utilized
more of these devices for limiting power or safeguarding rights than did the early state constitutions, which were framed
at a time when Americans were, in Jefferson’s words, “novices in the science of government.” State constitutions,
for example, generally failed to enumerate legislative powers, vesting state legislatures with the broad, loosely-defined
regulatory power known as the “police power.” Although most did follow the principle of separation of powers,
they generally did not supplement it with checks and balances, as the federal Constitution did. Only in one respect was the
federal Constitution lacking—the document as adopted by the Constitutional Convention failed to include a separate bill
of rights—but that omission was quickly remedied by the addition of the first ten amendments to the Constitution.
Even with their new constitutions, however, Americans of the early national period struggled to fully implement in politics
and law the radical changes resulting from American independence. During the 1790s, the first decade of national government
under the new Constitution of the United States, the two-party American political system emerged from Americans’ competing
visions about how to “secure” the Revolution. When the opposition party led by Thomas Jefferson and James Madison—their
self-described “republican” party—defeated the previously-dominant Federalist Party in the elections of
1800, Jefferson called their victory “the revolution of 1800.” He saw it as a vindication of the American Revolution,
“as real a revolution in the principles of our government as that of 1776 was in its form.”
The Federalists had failed to fully grasp the radical promise of the American Revolution, or to fully reject the English
paternalistic view of government; their principles, rooted in what Jefferson called the “doctrines of Europe,”
emphasized use of the coercive power of government to order society. The Jeffersonian Republicans, in contrast, distrusted
political power (even when they wielded it) and emphasized instead the ability of people to govern themselves and of a free-market
society to order itself. The Republicans’ political ascendancy after 1801—the Federalists became a permanent minority
party at the national level and disappeared altogether by the 1820s, the “era of good feelings”—signaled
to Jefferson a magnificent opportunity for America. Its mission, as he frequently noted in his writings during the first two
and half decades of the nineteenth century, was to prove to the world “what is the degree of freedom and self-government
in which a society may venture to leave it’s [sic] individual members.”
When the young French aristocrat Alexis de Tocqueville visited the United States in 1831-32, he was so struck by the
profound differences between America and Europe that he wrote a book, his famous Democracy in America, to warn his
countrymen of the tremendous changes that the American Revolution had wrought. He began the book by noting that among those
differences "nothing struck me more forcibly than the general equality of condition among the people." He described the people
in America as free, independent individuals who not only held equal rights under the law but also related to one another as
social equals—in vivid contrast to his native society, where notwithstanding the egalitarian impulses of the French
Revolution, people still thought in terms of rigid social classes. Indeed, he coined the term individualism to describe
Americans’ attitude about themselves: “They owe nothing to any man, they expect nothing from any man; they acquire
the habit of always considering themselves as standing alone, and they are apt to imagine that their whole destiny is in their
America’s Founders indeed had radically transformed traditional ideas about the individual, society, and the role
of government; their new nation offered proof to the world that it was possible for people to create, in Jefferson’s
words, something “new under the sun.” Notwithstanding the profound changes they had made in politics and law—particularly
with the novelty of written constitutions, with various devices for limiting governmental power and keeping it accountable
to the people—the Founders’ revolution was not complete. In many important ways, they failed to fully transcend
the Old World from which they had rebelled. Not only in law and politics, but in other important fields, the American Revolution
was not quite radical enough. The result was that the principles of 1776, as stated in the Declaration of Independence, were
quite imperfectly realized in American politics and law. Government, which was supposed to be instituted in order to “secure”
the natural rights of the individual, continued to pose the greatest threat to those rights, especially in the sphere of economics.
As the Industrial Revolution swept over the United States during the late nineteenth century, the rights of all Americans—including
the businessmen who were bringing about the industrialization of America—were only marginally more secure here than
they were in Europe. The mixed ideology in American political thought of the Founding period and the nineteenth century made
possible the so-called "mixed economy" of the twentieth century.
II. THE NON-EXISTENT MORAL REVOLUTION
Unfortunately, the American political
revolution was not accompanied by a revolution in moral philosophy. Many of the Founders adhered to traditional Judeo-Christian
ethics based on altruism. Others, as "free-thinking" students of the Scottish Enlightenment—men such as Thomas Jefferson—instead
naively believed that humans had an instinctive "moral sense" that vaguely inculcated one's moral "duties" to others. Under
either the traditional or the "enlightened" ethics, it was regarded as "immoral" for an individual to pursue his own self-interest,
even if he did so in such a way as not to harm others or even to interfere with the equal freedom of others to do the same.
To be "moral," it was assumed, one must sacrifice one's self-interest to the "needs" of others.
To be "moral," was it was assumed, one must sacrifice one's self-interest to the "needs" of
Such a moral philosophy—rooted in older visions of a homogeneous communitarian society—was hardly compatible
with the reality of American capitalism: the free, robust society of energetic, enterprising individuals, mutually profiting
from each others' pursuit of their self-interests—the society described in Tocqueville’s Democracy in America.
Indeed, just as Tocqueville had to coin the term individualism to describe the unique way he observed Americans relating
to one another in society, he also invented a concept that he called “the principle of interest rightly understood”
to describe Americans’ moral code. As Tocqueville understood it, this principle moderated or tempered American individualism;
it produced “no great acts of self-sacrifice” but prompted “daily small acts of self-denial.”
The persistent and pervasive influence of the Judeo-Christian altruistic moral code in American society should not be
surprising, given the strong hold that Christian religion had on most Americans, particularly after the Second Great Awakening
and other religious revivals in the nineteenth century. These revival movements were followed by the so-called “social
gospel” movement, which sought to give Christianity a greater “social relevance” by preaching the ethics
of Jesus, the values of altruism and self-sacrifice. Preachers of the social gospel were among the leading proponents of the
regulatory/welfare state—and the leading critics of individualism.
When the great American classical liberal philosopher, William Graham Sumner, defended American capitalism in the late
nineteenth century—including not only the free-market system but also specifically the rights of capitalists to keep
the wealth they had earned—he conceded that it was difficult for Americans to overcome what he called “the old
ecclesiastical prejudice in favor of the poor against the rich.” Without directly challenging the traditional Christian
altruistic moral code, Sumner nevertheless suggested that in ethics as well as in public policy, American society needed a
new code, based on his vision of the Golden Rule: “Laissez-faire,” or translated “into blunt English,”
as he put it, “Mind your own business”—the “doctrine of liberty” and personal responsibility.
III. THE INCOMPLETE LEGAL AND POLITICAL REVOLUTION
To paraphrase a late-eighteenth century English radical Whig: America's Founding Fathers were provident, but not provident
enough. They created written constitutions with various devices designed to check the abuse of power and to safeguard individual
rights; but their handiwork was imperfect in many ways. As noted in Part I, the Founders were, in Jefferson's words, "novices
in the science of government"; the early American constitutions—including the United States Constitution of 1789, as
amended by the Bill of Rights in 1791—were often more the product of experimentation, of trial and error, or even of
political compromise than of deliberate design. Even after Jefferson's so-called "revolution of 1800" and the reinvigoration
of first principles he believed it represented, there were many unresolved fundamental problems and inconsistencies in American
government and law.
Economic liberty and property rights were imperfectly protected by American constitutions, both state
Among the most important of these were the various ways in which economic liberty and property rights were imperfectly
protected by American constitutions, both state and federal. Notwithstanding explicit protections of liberty and property
rights, generally—most notably, under the Fifth Amendment due process clause of the federal constitution and its equivalent
provision in most state constitutions—American constitutional law in the nineteenth century permitted both state and
federal governments to regulate business in various ways reminiscent of the old English paternalistic system. As the United
States became more industrialized by the late nineteenth century, government regulation of business expanded in scope, both
quantitatively and qualitatively, under two general rationales: government regulation of businesses "affected with the public
interest" and government prohibition of “monopolies” through the antitrust laws.
A. Civic Republicanism and the Chimera of "Public Interest"
In American political thought, coexistent with the dominant radical Whig, or libertarian, political tradition—with
its emphasis on individual rights—there was an older, competing tradition. This tradition, which scholars have called
the "civic republican" tradition, traceable back to ancient Rome, preached civic "virtue" as consisting in the subordination
of self-interest to the "public interest," or "common good." This notion was central to sixteenth and seventeenth century
paternalistic theories of government. An interesting example in English law is the 1606 decision by the Exchequer Court in
Bate's Case, upholding the power of King James I, without consent of Parliament, to impose a tax on imported goods,
under the rationale that the king had virtually unlimited discretionary power when he was acting for the “general benefit
of the people.”
The "public welfare" is an elastic concept which justified virtually limitless expansion of the
The concept of the “public interest” or “common good” being paramount to private interests, unfortunately,
persisted in American political thought and in American law. One consequence was a hostile attitude toward commerce and commercial
activities that long has been part of American culture but which, too, was incompatible with a capitalist, "free enterprise"
economy. Another consequence was an ambiguity inherent in the definition of the “police power,” the general regulatory
power vested in state legislatures to pass laws limiting individual freedom and property rights. Traditionally, the police
power was exercised to protect public health, safety, and morals. Courts and legal commentators in the nineteenth century
justified the exercise of the power in terms of the old common-law principle of nuisance, which limited uses of one’s
property that were harmful to other persons or the general public. The scope of the police power, however, “proved incapable
of precise delineation,” in the words of a modern legal scholar. Not only were the traditional categories of public
health, safety, and morals ill-defined, but the courts added new categories—including, by the early twentieth century,
the category of “public welfare,” the elastic concept which justified virtually limitless expansion of the police
The rise of industrial capitalism in the late nineteenth century, during the several decades following the end of the
Civil War, was accompanied by a growth in government regulation of business, at both the state and federal levels, under expansive
definitions of the states' "police power" and Congress's power to regulate interstate commerce. Not surprisingly, the railroad
industry was the first major industry in the United States subjected to regulation by government commissions, first at the
state level and then at the federal level with the passage of the Interstate Commerce Act in 1887.
The Supreme Court, in a series of decisions beginning in the 1870s, sanctioned this expanded role of government by applying
the old, seventeenth century English concept of "public interest"—particularly, "business affected with a public interest"—to
undercut the constitutional safeguards given property and economic liberty through the due process clauses of the Fifth and
Fourteenth Amendments. For example, in the early landmark case of Munn v. Illinois, the Court uphold an Illinois
law, passed at the behest of the farmers’ association known as the Grange, which set maximum rates that grain elevators
could charge in Chicago. Citing seventeenth century English precedents, the majority of the justices held that the law was
a legitimate exercise of the police power, under the rationale that the storage of grain (in elevators owned by railroad companies)
was a “business affected with a public interest.” Although the Court in a series of decisions during the first
three decades of the twentieth century tried to delineate the scope of this concept, by the mid-1930s the majority of the
justices concluded that there was “no closed class or category of businesses affected with a public interest,”
thus opening the floodgates to all sorts of government regulation, including the licensing of a wide variety of occupations.
B. Antitrust vs. Capitalism
The rise of "trusts"—business combinations, such as holding companies, designed to enhance efficiency—was
a response by businesses to the intense competition that characterized most major American industries in the late 19th century.
Populists and other proponents of bigger government during the so-called "Progressive" era often exploited the public's fear
of big business in making the case for their political programs. Responding to American public opinion—which was profoundly
distrustful, indeed paranoid, about "big" business—as well as political pressure from various special interest groups,
Congress passed the Sherman Antitrust Act in 1890, allegedly to "protect" competition from the supposed threats of the trusts.
Unfortunately, when it passed the Sherman Act, Congress deliberately used vague terms such as monopoly and restraint
of trade, the meaning of which were undergoing substantial changes in popular and legal culture at the time. Thus Congress
left for the courts the crucial task of interpreting the provisions of the law and so determining precisely what sort of business
practices it made criminal.
Antirust law subjected American businessmen to vague legal standards.
Antitrust law, together with the law of unfair trade practices, subjected American businessmen in the twentieth century
to vague legal standards, under which entrepreneurs may be penalized for being too effective, or too good, as competitors.
Consider, for example, the problem of pricing one's goods or services. Ayn Rand
only slightly exaggerated the dilemma that the antitrust laws created
when she described it this way:
If [a businessman] charges prices which some bureaucrats judge as too high, he can be prosecuted for monopoly, or, rather,
for a successful “intent to monopolize"; if he charges prices lower than those of his competitors, he can be prosecuted
for “unfair competition” or “restraint of trade”; and if he charges the same prices as his competitors,
he can be prosecuted for “collusion” or “conspiracy."
Rand also aptly described the precarious position in which the law leaves American businessmen:
This means that a businessman has no way of knowing in advance whether the action he takes is legal or illegal, whether
he is guilty or innocent. It means that a businessman has to live under the threat of a sudden, unpredictable disaster, taking
the risk of losing everything he owns or being sentenced to jail, with his career, his reputation, his property, his fortune,
the achievement of his whole lifetime left at the mercy of any ambitious young bureaucrat who, for any reason, public or private,
may choose to start proceedings against him.
Essentially the same criticism has been made by modern economists critical of the antitrust laws.
A notorious example of the injustice of antitrust law from the turn of the last century involved the man who probably
was the real-life model for Nathaniel Taggart: James J. Hill, founder of the Great Northern Railroad Company, the only major
transcontinental line built entirely by private capital, without federal land grants or other government subsidies. When Hill
created the Northern Securities Company, a holding company combining his and his partners' railroads into a larger company
in order to avert a takeover attempt by the Harriman interests who controlled the Union Pacific, the Company was immediately
targeted by President Teddy Roosevelt's "trust-busting" campaign. The Justice Department brought suit under the Sherman Act;
and the Supreme Court, in a 5-4 opinion written by Justice Harlan, found the Company in violation of the Act as a "restraint
of trade," even though the creation of the Company in fact had enhanced competition.
Another oft-cited example is that of ALCOA, found guilty of antitrust violations in the 1945 case, United States
v. Aluminum Company of America, because, in the words of Judge Learned Hand in his opinion for the court, the company
produced more of its product to meet the public demand:
It [ALCOA] insists that it never excluded competitors; but we can think of no more effective exclusion than progressively
to embrace each new opportunity as it opened, and to face every newcomer with new capacity already geared into a great organization,
having the advantage of experience, trade connections, and the elite of personnel.
Thus has antitrust law been used in the twentieth century to penalize, for their ability, men of magnificent productive
achievement: whether James J. Hill at the beginning of the century, or men such as Bill Gates today.
Application of the antitrust laws to Gates’ company, Microsoft, in recent years has prompted many commentators
to question particularly the application of antitrust laws to high-technology industries. The Microsoft case, moreover, has
prompted not just academics, but also “mainstream media” commentators to question the wisdom of the antitrust
was a good student of American business history. The world she portrayed
in Atlas Shrugged
, of course, exaggerated this fatal flaw in the law –
but only slightly. As she said in her 1964 lecture "Is Atlas Shrugging?", "the principles of every edict and every directive
presented in Atlas Shrugged—
such as `The Equalization of Opportunity Bill' or `Directive 10-289'—can
be found, and in cruder forms, in our antitrust
C. The Failure of the Constitution
The rise of the twentieth century regulatory/welfare state also can be explained in terms of the failure of the Constitution,
as interpreted by the U.S. Supreme Court, to curb the power of government, particularly the federal government, and to safeguard
individual rights, particularly property rights and economic liberty. Although the Court’s sanctioning of broad federal
regulatory power over business can be traced to a series of cases in the late nineteenth century and the early decades (the
so-called “Progressive era”) of the twentieth century, the significant shift in the Court’s interpretation
of key constitutional provisions occurred in the so-called “New Deal revolution” of the late 1930s. Prior to a
series of landmark decisions in 1937, the Court had protected economic liberty and property rights as part of the “liberty
of contract” it had recognized as a fundamental right safeguarded by the due process clauses of the Fifth and Fourteenth
Amendment, against federal and state regulatory laws that went beyond the traditional confines of the police power. The Court
also had applied the Tenth Amendment—which reserves powers not granted to the federal government to either the states
or to “the people”—to limit the reach of Congress’s powers to regulate interstate commerce and to
spend the money it collected through federal taxes. After 1937, the Court ceased to protect liberty of contract as a fundamental
right; it also allowed Congress to exercise broad, virtually unlimited, powers to regulate commerce and to spend money—upholding,
among other things, federal labor laws and the Social Security Act.
After 1937, the Court ceased to protect liberty of contract as a fundamental right.
The Supreme Court’s post-1937 “liberal” constitutionalism generally has meant not only that Congress
has virtually unlimited powers to regulate business but that a double standard exists in the Court’s protection of individual
rights. Those “preferred freedoms,” which is to say those rights that left-liberal judges value most—First
Amendment freedom of speech and the press, certain rights of accused persons under the Fifth and Sixth Amendments, the Eighth
Amendment’s prohibition of “cruel and unusual” punishments, and the unenumerated “right to privacy”—have
been broadly protected, as fundamental rights, against laws that lack a “compelling” governmental interest to
justify limiting individual freedom. On the other hand, those rights not favored by left-liberal judges—including economic
liberty and property rights—have been given minimal, if any, constitutional protection; these rights can be restricted
by any laws meeting the modern Court’s minimal “rational basis” test—that is, any government regulation
deemed “reasonable in relation to its subject” and “adopted in the interests of the community.” Under
this broad standard, virtually all kinds of government regulation of business have been upheld by the courts against constitutional
The Court’s failure to protect economic liberty and property rights against expanding governmental powers can be
explained in various ways: for example, as a result of changes in personnel on the Court, or as a result of the justices’
historical tendency to give little regard for individual rights, generally. In a 1973 essay, Ayn Rand
offered an especially insightful explanation of the Court’s
failure to protect individual rights, when she found that the justices generally were guilty of “context-dropping”—that
is, of failing to appreciate the importance of context—in interpreting the Constitution. One could say that it is not
just justices on the Supreme Court but also other judges, lawyers, legal scholars and commentators—indeed, virtually
all players in the modern debate over constitutional interpretation—who have failed to take a contextual view of the
Constitution and its essential function, to protect individual rights.
IV. CONLCUSION: COMPLETING THE AMERICAN REVOLUTION
To be sure, Atlas Shrugged
portrays America in decline, as the inevitable consequence
of its “mixed economy.” But the significance of the novel goes far beyond its critique of the modern regulatory/welfare
state. Rand herself noted that the story of Atlas Shrugged
"demonstrates that the basic conflict of our age is not
merely political or economic, but moral and philosophical," the conflict between "two opposite schools of philosophy, or two
opposite attitudes toward life": what she called the "reason-individualism-capitalism axis" and the "mysticism-altruism-collectivism
axis." That conflict is at the heart of the basic contradictions in American law and constitutionalism discussed in the previous
To resolve the conflict, and to place the Founders' "new science of politics" upon a firm philosophical footing—and
thus to complete the work of the American Revolution—we need not only to reaffirm the Founders' commitment to individual
rights but to ground that commitment in a coherent theory of rights. Constitutional protections of life, liberty, and property
have been proven insufficient to guard individuals from the tyranny of the so-called "common good" or the "public interest";
we must realize, as clearly and as fully as Rand did, that there is no such thing, that it is an undefined and an indefinable
concept, and that this "tribal notion" indeed "has served as the moral justification of most social systems—and of all
By presenting a new code of ethics—the morality of rational self-interest—Rand’s novel helps to provide
what the Founders failed to grasp, the missing element of the American Revolution: the moral justification of capitalism,
and with it, of the rights of all persons—including the American businessman. Although Atlas Shrugged
outlines the essential principles of Objectivism
as a philosophical system, the format of a novel—even one as
philosophical as Atlas
– has inherent limitations. As David Kelley, founder of The Atlas Society, has observed,
the complete development of a new philosophy, particularly one based on reason as Objectivism
is, requires much work by many thinkers. Like the American Revolution,
is incomplete: among the many areas where gaps or inconsistencies
appear in Rand’s presentation of the philosophy, not only in Atlas Shrugged
but in her subsequent non-fiction works, are many of the areas
most relevant to the completion of the American Revolution: political philosophy and philosophy of law. Among other things,
a comprehensive theory of rights (particularly of constitutional rights, or rights against the government) and a contextualist
theory of constitutional interpretation need to be developed. The Constitution of the United States needs to be rediscovered,
not just as it was meant to be understood by its framers but also as the text of the document calls for, as a limitation on
the powers of government and a safeguard of individual rights. To fully protect property rights and all aspects of the basic
right to liberty, including economic liberty, it might even be necessary to add such provisions to the text as the amendment
suggested by Judge Narragansett, in the concluding section of Atlas Shrugged:
“Congress shall make no law abridging the freedom of production
To complete the American Revolution, much work has yet to be done. Thanks to Ayn Rand
’s magnificent novel, however, we can identify the path along
which we must travel to reach that destination. As John Galt states in the closing lines of the novel, “The road is
David N. Mayer is professor of law and history at Capital University Law School.
He teaches courses in constitutional history, copyright law, law and american history, legal history, unfair trade practice,
and a seminar in libertarianism and the law. Mayer is the author of The Constitutional Thought of Thomas Jefferson and Liberty of Contract: Rediscovering a Lost Constitutional Right.
This article was published in the Spring 2009
print edition of
The New Individualist magazine, a publication of The Atlas Society. This essay
expands upon the paper that the author presented at
The Atlas Society’s celebration of the 50th anniversary
of the publication of Ayn Rand’s
Atlas Shrugged, held in Washington, D.C. on October 6, 2007. The essay first
appeared in the Spring 2008 edition of the
Journal of Ayn Rand Studies. Copyright © 2008 David N. Mayer.