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.”)