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Rand Recognition

February 21, 2012

As much as I view Ayn Rand as mostly obtuse and deficient in her descriptive/analytical prowess of the political landscape (at least in the last thirty-plus years; though maybe her arguments had more lucidity in the late 1940s and early 1950s–though how you could continue to deny Keynesianism in the wake of World War II is beyond me), there are times when one must pause and wonder if she hadn’t hit a nerve.

For example, when one hears of proposed legislation to create a “Reasonable Profits Board” that would levy taxes on “excess” profits received by oil companies, one almost inevitably hears the echoes of Rand’s villains. Surely only Randian “moochers” could have cooked up a bill that would apply a windfall tax on the sale of oil and gas to the tune of 50 to 100 percent on all surplus earnings exceeding “a reasonable profit,” right? From the bill itself,

(4) REASONABLE PROFIT.—The term ‘reasonable profit’ means the amount determined by the Reasonable Profits Board to be a reasonable profit on the sale.

If this isn’t explicitly phrased to impose state-control on a specific market (and the corresponding abolition of a free market), I’m not sure what is. I can only imagine the Hayekian screams of horror (“Won’t somebody please think of the price signals?!”). Yet there are those Democrats who are so pro-redistribution that they provide straw men for voters predisposed to patriotic capitalism.

And at the same time, I can imagine that some Randians rejoiced at Paul Krugman’s supposed counterpunch in his recent column entitled “Moochers Against Welfare.” The column pointed out the hypocrisy of those who vote against their own direct, actual interests that come in the form of government handouts.

Now, there’s no mystery about red-state reliance on government programs. These states are relatively poor, which means both that people have fewer sources of income other than safety-net programs and that more of them qualify for “means-tested” programs such as Medicaid.

The thing is, like America’s broad support of decreasing taxation of even the extremely wealthy, Americans tend to have the staunch ideologically-driven political stances, even when they do little to advance one’s own financial interests (see also American foreign policy post-Cold War). The reason these opinions take root in ideology is that theory is the only forum where a monolithic corporation or an eccentric (m-/b-)illionaire can garner sympathy from the median households making $50,000 per year. So that’s where the battle over entitlements is being waged: in ideological spheres where characters actually might behave according to the rules described by failed screenwriters (e.g., Rand).

Finally, Cornell University’s Suzanne Mettler points out that many beneficiaries of government programs seem confused about their own place in the system. She tells us that 44 percent of Social Security recipients, 43 percent of those receiving unemployment benefits, and 40 percent of those on Medicare say that they “have not used a government program.”

Presumably, then, voters imagine that pledges to slash government spending mean cutting programs for the idle poor, not things they themselves count on. And this is a confusion politicians deliberately encourage. For example, when Mr. Romney responded to the new Obama budget, he condemned Mr. Obama for not taking on entitlement spending — and, in the very next breath, attacked him for cutting Medicare.

So in order to stoke the partisan flames, politicians must introduce or sustain cognitive dissonance as much as possible. But even apart from that, those who rely on the goodwill of people who base political decisions on ideology rather than personal benefit now face the problem that Americans have detected a distinct refusal to play by the basic rules that Rand’s protagonists valorize in 60-page speeches built into the American economy. These days, much of America’s redistributive ire is aimed at the financial institutions and banks that were the distillation of a hypothetically Randian system (as implemented by the now recalcitrant Alan Greenspan). And when the banks, financial institutions, or whatever other industry is powerful enough can rewrite the laws or hamstring the regulators to their liking, both parties of legislators seem fine with the looting, as long as they get their cut.

Of course, a politics based in law and ideology, rather than political-economic realpolitik, is what the Framers sold to the public as the supposed difference between a republic and a democracy. In America, they said, we will promise not to unfairly “mooch” off the wealthy by establishing a system by which “all men* are equal in the eyes of the law,” and we’ll subject that law to the multiple layers of ideological and experiential refinement that compose federalist, representative democracy. The problem that remains is simply the problem of politics: it can be both a sword and a shield to those who are unafraid to use it, but if you’re unafraid to use it, everyone would probably prefer if you didn’t.

*Not valid for blacks, women, American Indians, and men who do not own land. I.e., no 99%ers.

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