Ayn Rand about Economic Education

Excerpts from a letter of Ayn Rand to Leonard Read, the founder of the Foundation for Economic Education, February 28, 1946 -- "The Free Market", 2001 No. 1

You imply that the cause of the world’s troubles lies solely in the people’s ignorance of economics and that the way to cure the world is to teach it the proper economic knowledge. This is not true – therefore your program will not work. You cannot hope to effect a cure by starting with a wrong diagnosis.

The root of the whole modern disaster is philosophical and moral. People are not embracing collectivism because they have accepted bad economics. They are accepting bad economics because they have embraced collectivism. You cannot reverse cause and effect. And you cannot destroy the cause by fighting the effect. That is as futile as trying to eliminate the symptoms of a disease without attacking its germs.

Marxist (collectivist) economics have been blasted, refuted and discredited quite thoroughly. Capitalist (or individualist) economics have never been refuted. Yet people go right on accepting Marxism. If you look into the matter closely, you will see that most people know in a vague, uneasy way, that Marxist economics are screwy. Yet this does not stop them from advocating the same Marxist economics. Why?

The reason is that economics have the same place in relation to the whole of a society’s life as economics problems have in the life of a single individual. A man does not exist merely in order to earn a living; he earns a living in order to exist. His economic activities are the means to an end; the kind of the life he wants to lead, the kind of purpose he wants to achieve with the money he earns determines what work he chooses to do and whether he chooses to work at all. A man completely devoid of purpose (whether it be ambition, career, family or anything) stops functioning in the economic sense. That is when he turns into a bum in the gutter. Economic activity per se has never been anybody’s end or motive power. And don’t think any kind of law of self-preservation would work here – that a man would want to produce merely in order to eat. He won’t. For self-preservation to assert itself, there must be some reason for the self to wish to be preserved. Whatever a man has accepted, consciously or unconsciously, through routine or through choice as the purpose of his life – that will determine his economic activity.

And the same holds true of society and of men’s convictions about a proper economics of society. That which society accepts as its purpose and ideal (or to be exact, that which men think society should accept as its purpose and ideal) determines the kind of economics men will advocate and attempt to practice; since economics are only the means to an end.

When the social goal chosen is by its very nature impossible and unworkable (such as collectivism), it is useless to point out to people that the means they’ve chosen to achieve it are unworkable. Such means go with such a goal; there are no others. You cannot make men abandon the means until you have persuaded them to abandon the goal.

Now the choice of a personal purpose or of a social ideal is a matter of philosophy and moral theory. That is why, if one wishes to cure a dying world, one has to start with moral and philosophical principles. Nothing less will do.

This is the moral premise accepted by most people today, of all classes, all stages of education and all political parties.

How are you going to sell capitalist economics to go with that? How are you going to get them to accept as moral, proper and desirable such conceptions as personal ambition, economic competition, the profit motive and private property?

It can’t be done. Their moral ideal has defined these conceptions as evil and immoral. So modern men are consistent about it. Our “common gooder conservatives” are not. It’s one or the other.

Here is the dilemma in which the public finds itself when listening to our conservatives: the public is told, in net effect that, collectivism is a noble, desirable ideal, but collectivist economics are impractical. In order to have a practical economy, that of capitalism, we must resign ourselves to an immoral society, that of individualism. This amounts to saying: you have a choice, you can be moral or can be practical, but you can’t be both. Given such a choice, men will always choose the moral, because it is preposterous to expect them to choose that which, by the speaker’s own assertion, is evil. Men may be mistaken about what they think is good (and how mistaken they’ve been! And what lying they indulge in to deceive themselves about it!), but they will not accept evil with full, conscious intent and by definition.

Nor will men accept the idea that a moral ideal is impossible, that it cannot be achieved in practice. (And they are right about that, too – it’s a thoroughly unnatural proposition.) Therefore it is absolutely useless to tell them that Marxist economics are impractical, so long as you’re also telling them in the same breath that Marxism is noble. They will merely say: “Well, if that’s the ideal, and it cannot be achieved through the economics of capitalism, to hell with the economics of capitalism! If Marxist economics do not work, we’ll find something that works. We must find it. So we’ll go on experimenting. At least Marxism tries in the right direction, while capitalism doesn’t even try achieve the collectivist ideal. Capitalist economics do not even try to offer us a solution”. How often have you heard this last one?

Now the most futile and ludicrous of all stands to take on this question is the one attempted at present by most of our conservatives. It may be called the “mixed philosophy.” It’s a parallel to the theory of a “mixed economy,” just as untenable, silly and disastrous. It’s the idea that capitalism can be morally justified on a collectivist premise and defended on the grounds of the “common good.” It goes like this: “Dear pinks, our objective, like yours, is the welfare of the poor, more general wealth, and a higher standard of living for everybody – so please let us capitalists function, because the capitalist system will achieve all these objectives for you. It is in fact the only system that can achieve them.”

This last statement is true and has been proved and demonstrated in history, and yet it has not and will not win converts to the capitalist system. Because the above argument is self-contradictory. It is not the purpose of the capitalist system to cater to the welfare of the poor; it is not the purpose of a capitalist enterpriser to spread social benefits; an industrialist does not operate a factory for the purpose of providing jobs for his workers. A capitalist system could not function on such a premise.

The economic benefits which the whole society, including the poor, does receive from capitalism come about strictly as secondary consequences, (which is the only way any social result can come about), not as primary goals. The primary goal which makes the system work is the personal, private, individual profit motive. When that motive is declared to be immoral, the whole system becomes immoral, and the motor of the system stops dead.

It’s useless to lie about the capitalist’s real and proper motive. The awful smell of hypocrisy that accompanies such a “mixed philosophy” is so obvious and so strong that it has done more to destroy capitalism than any Marxist theory ever could. It has killed all respect for capitalism. It has, without any further analysis, simply at first glance and first whiff, made capitalism appear thoroughly and totally phony.

The effect is precisely the same as that produced by Willkie, Dewey and all the rest of the “me too,” “I’ll-get-it-for-you-wholesale” Republicans. Do not underestimate the common sense of the “common man” and do not blame him for ignorance. He could not, perhaps, analyze what was wrong with Willkie or Dewey – but he knew they were phonies. He cannot untangle the philosophical contradiction of defending capitalism through the “common good” – but he knows it’s a phony.

Is there anything more offensive and preposterous than to tell an unemployed worker that the millionaire who is throwing a champagne party on his yacht is doing so only for his, the worker’s benefit, and for the common good of society? Can you really blame the worker if he then goes out and demands that the yacht be confiscated? Is it economic ignorance that makes him do so?

The more propaganda our conservatives spread for capitalist economics while at the same time preaching collectivism morally and philosophically, the more nails they’ll drive into capitalism’s coffin.

That is why I do not believe that an economic education alone is of any value. That is also why you will find it difficult to arouse people’s interest in the subject. I believe you are conscious of this difficulty; your prospectus shows anxiety on the scope of “creating a greater desire for economic understanding.” You will not be able to create it.

The great mistake here is in assuming that economics is a science which can be isolated from moral, philosophical and political principles, and considered as a subject in itself, without relation to them. It can’t be done.

The best example of that is Von Mises’ Omnipotent Government. That is precisely what he attempted to do, in a very objective, conscientious, scholarly way. And he failed dismally, even though his economic facts and conclusions were for the most part unimpeachable. He failed to present a convincing case because at the crucial points, where his economics came to touch upon moral issues (as all economics must), he went into thin air, into contradictions, into nonsense. He did prove, all right, that collectivist economics don’t work. And he failed to convert a single collectivist.

Reprinted from “Letters of Ayn Rand” by Ayn Rand and Michael S. Berliner, 1997.

The best example of that is Von Mises’ Omnipotent Government. That is precisely what he attempted to do, in a very objective, conscientious, scholarly way. And he failed dismally...”

Well, then.

I actually haven’t read Omnipotent Government. Maybe it is in fact in that work that Mises doesn’t address moral, philosophical and political principles.

But he does in Human Action. It seems a bit disingenuous for Rand not to note that. Most likely, Mises didn’t intend Omnipotent Government to be his Summa.

(Of course, this shows one of the problems on our side of the ledger. Everyone has to always one up everyone else, and put others down. Rand basically says that Mises is an idiot here. Which sort of means that Rand is the only one with any answers.

And that differs her from Nietzsche just exactly how?).

The moral and social ideal preached by everybody today (and by the conservatives louder than all) is the ideal of collectivism. Men are told that man exists only in order to serve others; that the “common good” is man’s only proper aim in life and his sole justification for existence; that man is his brother’s keeper; that everybody owes everybody a living; that everybody is responsible for everybody’s welfare; and that the poor are the primary concern of society, its holy shrine, the god whom all must serve.
This is the moral premise accepted by most people today, of all classes, all stages of education and all political parties.
How are you going to sell capitalist economics to go with that? How are you going to get them to accept as moral, proper and desirable such conceptions as personal ambition, economic competition, the profit motive and private property?

It can’t be done. Their moral ideal has defined these conceptions as evil and immoral. So modern men are consistent about it. Our “common gooder conservatives” are not. It’s one or the other.

She is so right is so very many ways. But in the above quote, she is wrong. There IS a way to associate capitalistic self-interest with the spiritual command to help one another. And that solution is:

PRIVATELY.

Because if there is one thing human history has proven to humans over and over and over and over again, much to their misery and drenched in oceans of blood, is that GOVERNMENT IS NOT THE RIGHT TOOL FOR SOCIAL AID.

Government, in its essence, is nothing more than the power to DESTROY. The ONLY definition of a "good" government, therefore, is one that destroys the right things, at the right time, in the right way – and leaves absolutely EVERYTHING ELSE alone.

THAT is freedom. THAT is the enablement of prosperity and the massive voluntary social aid that results. THAT is the terrific success of the American Revolution, that collectivist have fought to destroy from within and without for 230+ years, literally from the moment of its birth.

And now, in the age of psychotropic prescription drugs, massively psyoped media, globally networked computers, near-total surveillance, nuclear and scalar weapons, spacecraft, and God knows what other things under black ops, the human race has reached its final test. Because under the present technological circumstances, if collectivism wins, the human race cannot survive those powers in the hands of the totalitarian lunatics who will control them.

And the totalitarian lunatics will not survive their concept of "winning," either, because their dreams of a global prison will not be sustainable into the future, because THEY are not sustainable, and WILL use their weapons on each other. After all, not having any boundaries is their creed. Why believe that creed would be abandoned once they "win"? They still will have each other to deal with... and they all get along SO well.

Jesus said for us to love each other as He loved us. I don't recall him becoming the CEO of a MultiCorpGov in the Middle East to express His love. But I do recall that he gave His instruction as a command.

Commands are not optional.

I find most Libertarians state ALL the time that “social” issues aren’t important-—just the economics, stupid!

Libertarians seem to think that you can divorce the “social” issues from economics. You simply can’t. All economics are based on human interactions which are always social.

That is why the Founders stated-—Without Virtue, you can not have Freedom. I will expand on that thought-—without virtue, there is no trust and without trust you can’t have a vibrant economic system. Like my Nigerian professor told me—in his country, which was pathetic—you had to bribe everyone for everything, etc. There was no virtue. Why? They had no moral absolutes like America (Christianity) is based on....they had arbitrary laws which were always unjust and favored friends, relatives, etc. They had no true concept of “Justice” which goes back to Plato and Cicero put into Roman Law. His idea became America’s idea—which stated that there is a higher law—God’s Law—where the standard of Justice is set.

Without Rule of Law, you can’t have Justice and a vibrant economic system. All human behavior determines what a society is like. Christian Ethics have proven the best for a vibrant economy. Perfect? No. But only because the Christians failed at acting like true Christians. It worked as perfect as any system with human beings could work.

Note, this was what Rand said in the above letter: “...where his economics came to touch upon moral issues (as all economics must)....” If you take out morality/amorality/immorality-—you take out humans. Only humans can create economic systems. That was Rand’s point-—that Libertarians tend to think you can have an economics system in a vacuum. It is another utopian idea.

Ayn Rand’s letters were as lengthy as her books! I have read Atlas Shrugged three times since college in the 60’s and it usually takes me 2-3 months to get through it, reading part time before bed each night. It is a long slog but one of the best books I’ve ever read. I didn’t understand it much in college, not having much in the way of real life experiences yet. But the second time I read it in the Air Force, it solidified my conservative views. The last time I read it was at the beginning of Obama’s reign of terror in 2009. It read almost like a news report of what Obama was doing to the country. I am thinking of tackling the book again soon. It is so insightful about what we are going through in the country right now. This lady was 50 years ahead of her time in her thinking. Everyone who has not read the book, should put it on their bucket list to read before they die.

"Like my Nigerian professor told me—in his country, which was pathetic—you had to bribe everyone for everything, etc. There was no virtue. Why? They had no moral absolutes like America (Christianity) is based on....they had arbitrary laws which were always unjust and favored friends, relatives, etc. They had no true concept of “Justice” which goes back to Plato and Cicero put into Roman Law. His idea became America’s idea—which stated that there is a higher law—God’s Law—where the standard of Justice is set."

Forget Nigeria, how do you account for the superior levels of trust in non-Christian societies such as those of Singapore and Japan, and their significantly lower levels of crime, when compared with what you call 'Christian' nations? Can the values that gave rise to these two societies be extracted and made to thrive independent of the dogma which supposedly gave rise to them? If so, wouldn't the dogma itself be rendered meaningless?

Can the values that gave rise to these two societies be extracted and made to thrive independent of the dogma which supposedly gave rise to them? If so, wouldn't the dogma itself be rendered meaningless?

LOL, well that would depend on what the meaning of "dogma," is.

One person's values is another person's dogma, eh?

You've got what someone should do on one hand, and you've got why someone should do it on the other hand. So how can you take one of those away and leave the other one intact? Aren't they two sides of the same coin? Change one, you change the other - they're interdependent. Remove one... then upon what does the other stand?

savagesusie and others believe that the Christian doctrine is equivalent to the true belief in God that is necessary to uphold American principles. But the Founders also drew heavily upon the ancient Greeks and Romans. And plenty of Christians in Europe never got the freedom memo - to this day. As well, why not therefore make Christianity part of the American government, rather than the (at the time) outrageously liberal 1st Amendment?

As you point out, morality is strong in Singapore and Japan. Well, so too is it all over the world. For example, in India, both philosophically and in reality, morality is the very essence of religious thought. Much of India's problems come from communist economics, massive population and Muslim infiltration. But it was Hindus who would admit to even capital crimes when simply questioned by the British in the 1800s, even when they knew it would mean execution. The British marvelled at such an intense morality.

That's just an example, but the point is that morality is not a solely Christian doctrine or practice on this planet, and to claim such is insulting - in the extreme - to billions of non-Christian human beings. Nor, of course, do Christians or Catholics agree to be held en masse to the failings - even major ones - of morally fallen members or past actions of their own religions (while between themselves they hold the others as "not Christian" enough). So it works both ways.

I believe the root "need" is something most people - all around the world - would consider too simplistic. Nevertheless, I think it's missing almost everywhere, no matter what people claim to be. The Bible refers to God as "terrible" in certain places, and it always used to bother me. Now, not so much. Because I believe it is referring to what happens when a human being finally realizes that there really is a God beyond the reach of all the mental and emotional games and denial, who cannot be ignored any longer. That soul-recognition is "terrible" to the ego, because it is permanent. From then on, it cannot be escaped, not matter what religion one is.

And if it is lacking, no religion on earth will keep one moral, which is why there are frauds in every religion.

From that alone comes the idea that there is a way of life that must be lived that is truly moral - because at that point, one can truly hear the guidance of God, because one becomes desperate not to screw up. That's why murderous "religions" are false, because there is no humility in them. And humility is the direct result of realizing that there is no escape, for anyone, from God's law.

Which, (oh yeah, that's where I started), also includes economics - as well as everything else.

Exactly-—no morality and you have to have a totalitarian government lockdown. No one is safe—no property or life is safe with no morals. All profits would be used just to guard your assets and life and police everyone-—it would be a police state with corrupt police. It is Might makes Right in these lawless societies—No Justice-—like the Wild, Wild West.

Ayn Rand at least accepted “The Laws of Nature”-—which has moral laws. Objectivism was based on “common sense” (rationality) which comes from the “Laws of Nature”. She condemned homosexual acts because of her belief system.

Marx throws out The Laws of Nature-—so he makes up his own Right and Wrong—just arbitrary laws—no Rule of Law-—Rule of Man. He destroys the family—so that kids just have the State to get their worldview from. It is devoid of all humanity. Brave New World shows how “fun” his world is-—no traditions, no Truth, no mother or father or sisters or brothers—no relatives-—all radical egalitarianism with no hope, no love, just government creating and doing everything for you.

Christianity is the most “rational” religion. That is my only point—not that it is the “true” religion—as you said I “claimed”. I am not claiming that-—I am saying that Christianity—because of St. Thomas Aquinas who aligned it to Natural Law Theory -—it is the perfect fit for a Constitution based on Natural Laws which is the foundation of American law.

Common Law was distinctly Christian and is the basis of our jurisprudence. Common Law and likewise—the Christian Magna Carta were very influential in the formation of the US—and the US was the most free, just and successful for the middle class—country by far. Never have human beings had such freedom is such a large sphere of life which lasted so long.

I respect the Jewish Orthodox religion as much as the Christian one, but it has never been as inclusive as Christianity has been, IMHO. Dinesh D’Souza who understood Hinduism—wrote in his book, “What’s so Great about Christianity?” that Christianity is the most “rational”....because of its history. Knowing only that the Hindu’s used to burn the wives of dead husbands and revered cows or something, I really can’t comment with authority on Hinduism, but rational???????—I really have to believe what Dinesh Di’Souza said in his book about the various religions. He justified all his claims.

You can never have “Just Laws” based on anything but Natural Law (Cicero).

You are right-—St. Thomas adopted Aristotle’s Ethics and added the Theological Virtues of Hope, Faith, and Charity—to make the Greek philosophy as perfect as it possibly can get. Stoicism was adopted by the Christians also—but they improved that also—not abrogating all passion—there is a proper place for passions.

Christianity is referred to as “paganism” because St. Augustine and many of the Fathers of the Church appreciated Platonic philosophy and eventually Aristotle also. They improved their philosophy. It is why the Western Civilization is so awesome-—new generations built on the genius of the previous generations. Unlike the nihilism of the Postmodernists who want to destroy Civilization by destroying God, particularly Christianity and who threw out the Laws of Nature—reason and logic.

It is why Ayn Rand referred to Marx, Hegel, Nietzsche as “irrational”. They were.

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