Money is the barometer of society’s virtue.  When you see that trading is done, not by consent, but by compulsion- when you see that in order to produce, you need to obtain permission from men who produce nothing- when you see that men get richer from graft and by pull than by work, and your laws don’t protect you against them, but protect them against you- when you see corruption being rewarded and honesty becoming a self sacrifice- you may know that your society is doomed.  Money is so noble a medium that it does not compete with guns and it does not make terms with brutality.  It will not permit a country to survive as half-property, half-loot.

Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence.  Destroyers seize gold and leave to its owners a counterfeit pile of paper.  This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values.  Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it.

From Atlas Shrugged by Ayn Rand.  This passage is from a long monologue from Franciso d’Anconia in response to a character who contended that money is the root of all evil.

HKO comment:

Capitalism is the function of economic self interest. Regulation and restriction of free enterprise substitutes political self interest for economic self interest. Individual liberty usually suffers as a result.  Note for example how many of the special interest groups who pushed for the Obama health insurance plan now seek and receive exemptions from the same government who is forcing it on everyone else.  Wealth is being less generated by competition in the market place and more generated by success in obtaining political power.

Money will not purchase happiness for the man who has no concept of what he wants: money will not give him a code of values, if he’s evaded the knowledge of what to value, and it will not provide him with a purpose, if he’s evaded the choice of what to seek.  Money will not buy intelligence for the fool, or admiration for the coward, or respect for the incompetent.  The man who attempts to purchase the brains of his superiors to serve him, with his money replacing his judgment, ends up by becoming the victim of his inferiors.  The men of intelligence desert him, but the cheats and frauds come flocking to him…

Only the man who does not need it, is fit to inherit wealth- the man who would make his own fortune no matter where he started.  If an heir is equal to his money, it serves him; if not it destroys him.  But you look on and you cry that money corrupted him. Did it? Or did he corrupt his money?  Do not envy a worthless heir; his wealth is not yours and you would have done no better with it.  Do not think that it should have been distributed among you; loading the world with fifty parasites instead of one, would not bring back the dead virtue that was the fortune.

From Atlas Shrugged by Ayn Rand.  This passage is from a long monologue from Franciso d’Anconia in response to a character who contended that money is the root of all evil.

HKO comments

Atlas Shrugged is controversial on many levels. At times the book is tedious and pretentious and the characters are often two dimensional.  But the continued popularity of the book is because of its unapologetic philosophy of the virtue of using human intellect to generate real wealth and the morally corrupt who condemn wealth and discount the virtues that created it.

At a time when our political discourse is more about distribution than creation of wealth Atlas Shrugged is enjoying a resurgence.

1.      blaming economic crises on “greed” is like blaming plane crashes on gravity.- Thomas Sowell

2.      “crony capitalism” is to capitalism what National Socialism (Nazism) is to socialism- hko

3.      ‘Those who hammer their guns into plows will plow for those who do not.’

4.      Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly, and applying the wrong remedies.  Groucho Marx

5.      The urge to save humanity is almost always only a false-face for the urge to rule it.- Mencken

6.      the government is no more capable of creating wealth than a hall of mirrors is capable of creating people- Peter Schiff

7.      We always rediscover basic principles after we learn the cost of ignoring them

8.      I never hear the word “community” to justify fiscal responsibility; only to rationalize the opposite.- HKO

9.      What truly breeds discontent is the illusion that Government can solve all of our problems.- R. Samuelson

10.  The problem is that most of those claiming to have the right answer don’t even know the right question.- HKO

11.  “A nation of sheep will beget a government of wolves.” Edward R. Murrow

12.  the biggest threat to business in America is liberal democrats and populist republicans

13.  Not every short term crisis requires a long term solution.

14.  18 of the last thirty medical Nobel Prize winners were American- yet our health care system is broken?

15.  “Every snowflake pleads innocent, but it’s still an avalanche.”

16.  Arrogance and ignorance is a dangerous combination

17.  “There is no difference in the ultimate fate of all chained economies, regardless of any alleged justifications for the chains.” Ayn Rand

18.  It is comforting in times of stress to go back to the fairy tales we heard as children, but it doesn’t make them less false.  John Cochrane

19.  Skepticism is the price knowledge pays for truth

20.  You do not win with an exit plan; you exit with a victory plan.-  HKO

21.  “I see as much misery from them that seek to justify themselves as from them that seek to do harm.” from HBO’s Deadwood.

Adam Summers from the Reason Foundation writes in the Wall Street Journal, “Ayn Rand and the Economic Crisis”.  Read the entire article here.

Adam shares Rand’s thoughts on the economic crisis of 1962. She cast suspicion on both the motives and effectiveness of the government attempting to stimulate the economy.

Rand referred to the history of Louis XIV. His “national goal” involved expensive foreign wars and vain attempts to overcome the ensuing fiscal crisis with government meddling. Attempting to use government to increase wealth by stimulating industry, he imposed controls and regulations.  His chief adviser Colbert asked a group of manufacturers what he could do for them, and the reply from one manufacturer was “Laissez-nous faire!” (“Let us alone”)

Thus the term ‘laissez-faire’ originally referred to an economy free from government HELP.

Louis XIV knew that he needed wealth that he was unable to create in order to fulfill his national ambitions, but the king, like our current administration thought he could ’stimulate’ the wealth creation in the private sector with government meddling.

Much of the philosophy of our founding fathers was a reaction to the miserable failures of Europe.  They understood that democracy would end in mob rule and thus created a republic. They understood the misery created by the foreign adventures of European royalty and thus severely restricted the Government’s ability to field an army.  And they understood the inability of the government to control the economy so they promoted free markets.  They knew that government help was as disastrous as government persecution.

Rand writes, “Regardless of the purpose for which one intends to use it, wealth must first be produced. As far as economics is concerned, there is no difference between the motives of Colbert and of President Johnson. Both wanted to achieve national prosperity. Whether the wealth extorted by taxation is drained for the unearned benefit of Louis XIV or for the unearned benefit of the “underprivileged” makes no difference to the economic productivity of a nation. Whether one is chained for a “noble” purpose or an ignoble one, for the benefit of the poor or the rich, for the sake of somebody’s “need” or somebody’s “greed”-when one is chained, one cannot produce.

There is no difference in the ultimate fate of all chained economies, regardless of any alleged justifications for the chains.

(The above excerpts are taken from Rand’s essay “Let Us Alone!” based on a column in the Los Angeles Times, August 1962, and included in her book “Capitalism: The Unknown Ideal.”)