There is a wide variety of people who fall under the libertarian label. Those who concentrate on economic issues and consider any intervention by government in the economy to be an immoral example of initiation of unjust force are having a tough time during this economic crisis. Many libertarians claim the problem was too much government regulation and the government should do nothing, but they are having a tough time selling this message. David Weigel, an editor at Reason, writes in The Guardian that some libertarians are no longer as dogmatic as in the days when Albert Jay Nock opposed the New Deal, writing that Roosevelt, Hitler, and Stalin were practicing “only local variants of the common doctrine.”
But modern libertarian thinkers and economists are not so dogmatic, or so reflexively anti-intervention, as Nock was. Amity Shales, an economic writer and historian who last year published a blockbuster, anti-New Deal history of the Great Depression, The Forgotten Man, has endorsed the idea of bail-out money for Wall Street, as long as it does not require management from Washington. (The current bail-out plan is a bit of a hash of both ideas.)
Megan McArdle, a libertarian editor at the Atlantic Monthly, was more conflicted. The dogmatic libertarian position on the bail-out – the one that, as it happened, Republicans in the House of Representatives held, as they shot down the first attempt at a bail-out in late September – was to oppose it. But McArdle chastised them for doing so. “I find it hard to believe that they’re voting their conscience; they’re voting their electoral interest in November. I hope their constituencies enjoy the bank panic
If some libertarians are now willing to consider government intervention in the economy it might be time to rewrite some libertarian classics. Jeremiah Tucker has rewritten Atlas Shrugged to account for the changing economic times (along with making it much shorter than the original). This satiric revision begins with Dagney Taggert and Hank Rearden talking, as Rearden gives a clue as to where the economy has gone wrong compared to an idealized Ayn Rand capitalistic society. The revision does maintain some aspects of Rand’s ideas on sex, but fortunately they actually get to it with much shorter speeches than in the original:
“I heard the thugs in Washington were trying to take your Rearden metal at the point of a gun,” she said. “Don’t let them, Hank. With your advanced alloy and my high-tech railroad, we’ll revitalize our country’s failing infrastructure and make big, virtuous profits.”
“Oh, no, I got out of that suckers’ game. I now run my own hedge-fund firm, Rearden Capital Management.”
“What?”
He stood and adjusted his suit jacket so that his body didn’t betray his shameful weakness. He walked toward her and sat informally on the edge of her desk. “Why make a product when you can make dollars? Right this second, I’m earning millions in interest off money I don’t even have.”
He gestured to his floor-to-ceiling windows, a symbol of his productive ability and goodness.
“There’s a whole world out there of byzantine financial products just waiting to be invented, Dagny. Let the leeches run my factories into the ground! I hope they do! I’ve taken out more insurance on a single Rearden Steel bond than the entire company is even worth! When my old company finally tanks, I’ll make a cool $877 million.”
Their eyes locked with an intensity she was only beginning to understand. Yes, Hank … claim me … If we’re to win the battle against the leeches, we must get it on … right now … Don’t let them torture us for our happiness … or our billions.
He tore his eyes away.
“I can’t. Sex is base and vile!”
“No, it’s an expression of our highest values and our admiration for each other’s minds.”
“Your mind gives me the biggest boner, Dagny Taggart.”
He fell upon her like a savage, wielding his mouth like a machete, and in the pleasure she took from him her body became an extension of her quarterly earnings report—proof of her worthiness as a lover. His hard-on was sanction enough.
“Scream your secret passions, Hank Rearden!”
“Derivatives!”
“Yes!”
“Credit-default swaps!”
“Oh, yes! Yes!”
“Collateralized debt obligation.”
“YES! YES! YES!”
Utterly ridiculous, and completely contrary to Rand. It is beyond me how someone capable of forming a sentence is so completely incapable of what they read, that they could write its opposite as if it was representative. Men have a choice, to think or not to think. It astounds me how few choose the former.
Richard,
Spoken like a true Ayn Rand cultist.
I know this will probably be way over your head, but this is what is known as satire. It is not supposed to be strictly representative. It provides a message by going beyond the limited one-dimensional thought which Objectivists are limited to.
The reason it appears to Ayn Rand cultists that so few choose to think is that many people are thinking in manners which are beyond their comprehension. Thoughts beyond the understanding of Objectivists are generally dismissed since most Objectivists are so convinced of the superiority of their thought that they are unable to expand their minds to any other ideas or ways of looking at issues.
A lot of people go a bit crazy during crises and say and write things that seem really stupid a few years later. For example, there are a lot of pretty juicy quotes from liberals after 9/11 expressing an unfortunate interest in suppressing contrary speech, etc. The same thing happened to some libertarians during the last couple of months of economic trauma.
At best, the actions of the Bush administration, with what will follow in the Obama administration, will trade a few years of intense ugliness for decades of a lower American standard of living. It is not clear to me that this is a good tradeoff.
Two major things I regret in how this is unfolding:
1. This is being perceived as a failure in the free market, even though the bad mortgages at the heart of the crisis were the deliberate result of government policy. I doubt that the reforms that will go through next year will remove the government incentives to “get Americans into their first house” and all that.
2. The American taxpayer is going to be on the hook for decades to shore up the money stream to the Chinese government investors who bought the crappy derivatives because American government bonds weren’t paying enough interest.
I suspect the mortgage crackup would’ve worked out differently had the original recipients of the mortgages had the ability to approve or reject selling theirs as an investment to unknowing 3rd parties…
As for the Ayn Rand bit: what gets at the truth is that the ones identifying so much with John Galt these days are actually closer to Rearden. The political involvement in so much of the big finance bubble just makes such warped interpretations that much more stale.
That said, the defense of the wall street bailouts is rendered more ridiculous by the second. Even if one believes that a beneficial intervention is possible (I do not, since by its nature intervention will be for the wealthy and connected & hurt everyone else), one look at who is in control of all that money should at least discredit this one. I’m not surprised that Megan supports it at all, people like her have always thought that corporatism was no big deal.
I’m not sure where you’re getting this. I don’t know of any Libertarians who support any of these absurd measures.
As to your claim that it is very difficult to sell the “government is to blame” explanation for the crisis, that is true, but not because the explanation is false. Wasn’t it (libertarian) economist Carl Menger who explained why central banks artificially lowering interest rates leads to booms and busts over 100 years ago? And wasn’t it (libertarian) economist F.A. Hayek who won a Nobel Prize in 1974 for his work on the same topic? Wasn’t it (libertarian) economist Peter Schiff who predicted all of this? And wasn’t it (libertarian) Republican Presidential candidate Ron Paul who voiced much the same thing back in January ’08?
I love a good satire. Kudos to Mr. Tucker. His revised version of Atlas Shrugged is hilarious.