Esoteric Dissertations from a One-Track Mind

June 2, 2007

Motives Of Production

Filed under: books, capitalism — codesmithy @ 7:53 am

I’m finishing up “Atlas Shrugged” by Ayn Rand.  To say that she is guilty of conflation of terms is a tad understatement.  I’ll probably write a post about her apparent attitudes towards sex which strikes me a perfect example of cognitive dissonance between typical Western shame and sexual freedom through rational means.  Although, in her championing of her brand of capitalism (at least from the first 1000 pages), I get the sense of a woman who is trying to fake an orgasm.  She is doing all she can to demonstrate her unquestioned excitement, enthusiasm and devotion, but something about the whole production doesn’t ring true.  I’m not saying that she is faking everything, just that it is an exaggeration, and she, in reality, probably didn’t have the clarity of vision that she attempts to portray in her novel.  I couldn’t point to any concrete example and ruthlessly defend it, but rather the consistent over-the-top drum beating just makes me think that it might be because she has something to hide.  It is not completely unprecedented (scroll down to the sex scandal) that those with apparently the most impassioned convictions actually hold lingering doubts.   Just an observation that sometimes leaders have more reservations than their followers.

Now that I have accused the poor woman of hypocrisy.  I will now do her the greater disservice of agreeing with her.  “Atlas Shrugged” is fundamentally a story of economic motives.  In that respect, there are three main economic motives: coercion, free exchange, and social pooling.  Coercion is what Rand frequently calls looting.  It is the taking of goods and services by means of force or threat of force.  Free exchange is what we would get under libertarian or Rand’s ideals of individual rational self-interest.  Social pooling is a union structure where individuals pool effort so that everyone shares the benefit of the pool.

Free exchange can be considered the modus operandi of a capital economy as social pooling is for socialism or communism.  Rand doesn’t make a clear distinction between coercion and social pooling, in that sense she considers them equivalent according to moral principles.  A central aspect of her philosophy is that she considers morality and economic motives inseparable.  A similar meme is present in Milton Friedman’s “Capitalism and Freedom.”  She appears to think that social pooling requires coercion.  However, I feel lumping them into the same heading or saying that they are equivalent is disingenuous.

Social pooling works well in the context of the “revolutionary spirit” of communism.  Unfortunately, much like the prisoner’s dilemma, everyone has an incentive to cheat.  In many cases, it is simply a matter of trust.  People have to do the “right” thing according to the rational of what is best for the group, not what is best for the individual.  This seems to come easily in the honey-moon phase of a socialist revolution, but once the euphoria is gone, problems quickly develop.  It is important to note, all the individuals are better off, but cheating is a constant temptation.  Free exchange ends up in suboptimal states for all individuals but removes the incentives for cheating from the group.

In this view, capitalism is not better than socialism or communism at producing favorable economic outcomes.  In fact, it is worse.  It is that free exchange/capitalism is the stable solution.  It forces individuals into suboptimal solutions by ensuring they won’t be victimized by cheaters.  Note, this view is the polar opposite of how Rand presents the issue in her book.  Now, whether or not either of these systems can stop the rise of a purely coercive economy (slavery, serfdom, etc.) is still a battle that is being played out in history.

However, it is interesting to note that the optimal strategy for the prisoner’s dilemma is tit-for-tat.  That is cooperate with those that cooperate with you, and punish those that cheat.  However, it requires a memory of those who cooperated and were uncooperative, but it does lead along the avenue that maybe we shouldn’t be presenting the two systems in a completely either/or fashion.

Regardless, it is tough to deny the hold that Native American culture of communism had on those that were exposed to it.  Communism did work on small scales.  However, it is difficult to imagine it working on industrial scales.

What is frustrating is that it is a matter of individual choice, so it seems like with the proper conditioning large scale communism or socialism could work.  But, given that the economy is an essential piece to people’s well being, I would suggest that it would be appropriate to try if one could form a country in which 1) no abortions took place with free access or 2) no illicit drugs were taken with free access.  For communism to work, people have to be trusted to do the right thing in the vast majority of cases.  If a society could demonstrate  and sustain one of these properties where the motives to cheat are so innate, it would give sufficient hope that communism or socialism would also work.

I have no hope of this happening in American society in my lifetime, so I would rather stick with capitalism for the majority of cases, some socialism where it makes sense, and stave off a purely coercive economy in the meantime.

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