Britannia Radio

Friday, 9th January 2009

Britain, by Ayn Rand

FRASER NELSON 10:40am

Even though it's deemed America's second most influential book, there are plenty in Britain who haven't heard of Atlas Shrugged - or Ayn Rand, its Russian-born author who had such a profound impact on American conservatism. Now is a very good time to read it, because - as Stephen Moore argues in the Journal today - the reader would find plenty of chilling analogies for the current economic collapse.

It's a story of an American recession, during which the state starts to nationalise various industries - which in turn collapse under bureaucratic control - and keeps on going until there's nothing left. The heroes are those with an entrepreneurial spirit: from the homeless to the steel magnate. The villains are those Rand calls the "looters" - who feed off other people's earnings - gold-digging spouses, lazy rich kids and, of course, political power brokers. Rather than banks, it has railroads as being a the economic frontline. It beautifully describes a well-run company, the passion of those who care for it, and gives the anatomy of collapse when companies start to be run to bureaucratic priorities rather than the profit motive.

Rand's point is that the profit motive is the sole guarantor of virtuous outcomes, that greed exists in state-run enterprises and does far more harm than in private. Profit, she said, should be celebrated rather than disdained. The fun of the book is that she takes everything to extremes, but Rand means it. It makes a point which is crucial to the last few months, but hardly ever teased out: that when the paymaster switches from being profit-seeking shareholders to popularity-seeking politicians (or arse-covering bureaucracies), the behaviour of a business will fundamentally change.

A few years ago, when Bolivia sent the army to nationalise the oil and gas fields, I thought of Atlas Shrugged - they realised they didnt know how to run them, and wanted to force their victims to show them. But now I'm getting flashbacks when watching the British news. It's the smaller, more nuanced aspects to this recession that recall the journey to Rand's dystopia. The language used by politicians when nationalising the banks; the way Barclays has been bullied to accept state bailouts as if it was somehow letting down banking if it didn't; the way the social priorities are being foisted on banks rather than the commercial ones that they need to stay alive.

In real life, Ayn Rand had a group of devoted followers, including the young Alan Greenspan who used to come to her house and drool over her every Saturday. American conservatism, of course, rejects plenty of Rand's theories - but has certainly been shaped by them. That's the other great power of this book: in disagreeing with it, it forces you to rethink and sharpen your opinions. William Buckley wrote a novel about the splash Rand makes in the conservatism fish pond. So for those CoffeeHousers who haven't read Atlas Shrugged, now may be a good time (Pete claims to have finished it in a week). And for those who don't have the time, here's an interview where Rand summarises her "objectivist" philosophy for - who else? - Playboy magazine.