In 1917, Bolsheviks under Lenin seized control of Russia in the famous October revolution, ending a short-lived experiment with constitutional democracy and replacing it with a one-Party socialist state. As the revolution swirled through the streets of St. Petersberg, a girl of 12 watched many of the events from the balcony of her family’s house. That girl was Alyssa Rosenbaum, who ultimately left Russia for America and became the writer we know as Ayn Rand .
In 1957, she published her final and greatest novel, Atlas Shrugged , the book we celebrate today on its 50th anniversary.
Atlas Shrugged is a revolutionary work, but the revolution it represents is diametrically opposed to the one she lived through as a youth. In the eight years before she left the Soviet Union in 1925, Rand lived through the economic chaos and desperate poverty it caused, as the communists nationalized businesses and expropriated private wealth. Her father was a pharmacist, and Rand was in the shop when soldiers arrived to close the business and seize the property, depriving the family of work, property, and income. In the years before she left, she lived through the tyranny of statism, as the communists used every means to expand their power—including secret police, terror tactics, and executing enemies or shipping them to Siberia. Under the new communist regime, more and more of private life was politicized, including speech, ideas, and education.
Rand was appalled by this system. She was appalled not merely by its visible effects on herself and the people she knew. She was appalled by the underlying ideology of communism, especially the ideas of moral collectivism that made communism possible and were used to justify it as a noble ideal. Even as a child, she knew there was something horribly wrong in the idea of sacrificing the individual to the collective, breaking eggs to make an omelet.
Her first published novel, We the Living, offers a portrait of Russia in those years and of the crushing effects of communism on people of ability, ambition, and independent spirit. But Atlas is her fullest and deepest portrayal of the issues involved. It goes far beyond the specifics of any particular type of system—communist, fascist, communitarian, whatever—to deal with the essence of collectivism.
And, more importantly, to present the essence of individualism, including the capitalism system of economic freedom. What she meant by capitalism is not the mixed economy characteristic of all the industrialized countries, in which the government consumes a third or more of all production, and heavily regulates the rest. She meant laissez-faire, “with a separation of state and economics, in the same way and for the same reasons as the separation of state and church." The function of government is solely to protect individual rights, including property rights. When it redistributes wealth, nationalizes industries, or regulates voluntary transactions among consenting adults, it commits the moral fallacy of socialism, the fallacy of treating the individual as a means to the collective good.
Rand's great achievement was to offer a vision of capitalism as a moral ideal. Her characters illustrate the virtues of rationality, production, and trade—and the vices of parasitism and power. The narrative dramatizes the struggle of producers against parasites and predators, and traces the consequences of that struggle across a whole society. And the meaning of these events is put into words, in speeches by various characters that lay out a new philosophy and moral code of individualism. In its characters, its plot and its philosophical themes, Atlas is about a new revolution, a capitalist revolution. It is truly The Capitalist Manifesto.
What I’d like to do this evening is explain a little more fully what I mean by the novel’s revolutionary character. I’ll begin with the narrative, which tells the story of a kind of revolution, and then turn to the core ideas of the book. The story
As a novel, Atlas has the form of a mystery story. We follow two major characters, Dagny Taggart and Hank Rearden, as they try to find answers to the puzzles of their world. Dagny is the Vice-President of Operations of Taggart Transcontinental, the largest railroad in the United States. Rearden is the head of a steel-manufacturing company that he started from scratch and built into the best-run, most profitable company in the industry. As the story opens, Rearden has just started producing a new alloy he invented, called Rearden Metal; and Dagny is his first customer. She wants to have rails of the metal to replace a branch line in Colorado, where many new factories have located and need better transportation for their products.
Dagny and Rearden are surrounded by people who put obstacles in their way. Dagny’s brother James is the president of the railroad; he is afraid to rely on his own business judgment, and he fears and resents those who do; he is more of a political type, spending most of his time on public relations, and scheming how to use political connections to get government subsidies, or government regulations that harm competing railroads. Orren Boyle, head of a steel company competing with Rearden, is a crony of James Taggart and operates the same way. He never delivers steel on time or makes a profit, but he has great press and political connections.
There’s also Wesley Mouch, Rearden’s “man in Washington,” who sells Rearden out at a key moment by going along with a kind of antitrust law aimed at Rearden. And there’s the State Science Institute, whose Machiavellian, power-hungry director attacks Rearden Metal, without evidence, as a possible danger to the public.
Over and above the obstacles that villains like these place in the way of Dagny, Rearden, and other genuine producers, there is something palpably wrong with the world. The society seems to be in some sort of decline. Buildings and machinery are in disrepair, things break and don’t get fixed, businesses close or cut back, competent people are hard to find. Economically it seems like a recession, but there’s a recession of the spirit, too, a mood of despair, futility, and resignation captured in what has become a popular expression: “Who is John Galt?” An odd thing about this state of affairs is that a number of highly talented people seem to be disappearing, including some prominent achievers at the peak of their success.
Working against seemingly impossible odds, Dagny succeeds in completing the Colorado branch line, which she has named the John Galt Line in defiance of the general mood of despair. Rearden works closely with her—it’s the first showcase of his metal—and they soon become lovers. Rand’s description of the first run of the John Galt Line is one of the most vivid and powerful things she ever wrote: vivid in describing the train’s motion as it hurtled through the mountainous terrain; powerful in the inner reflections Dagny has about the personal meaning of the experience, as a celebration of her achievement.
Unfortunately, the triumph is short-lived. The government’s control over the economy has been growing. The public resents the business boom in Colorado and is clamoring for a special tax on the state, and for equal train service in all states. Now that the worth of Rearden Metal has been proven and demand for it is has sky-rocketed, the government begins regulating how much he can sell, and to whom. The only bright spot in the increasingly grim situation is that Dagny and Rearden find a motor in an abandoned factory, a motor that appears to have been a technological breakthrough. But what is it doing in a junk heap? And what happened to the genius who invented it?
As Dagny tries to solve that mystery by searching for the inventor, she is increasingly convinced that the disappearances of so many productive people must be some kind of organized plot. Eventually Dagny discovers…
… But wait. Atlas is a mystery novel. If you have not read it but would like to, I don’t want to spoil the suspense and pleasure of how these mysteries are solved. So be warned: spoilers ahead! I’ll waive the normal standards of courtesy if you want to read the papers, or put in your MP3 headphones, for the next few sentences….
Eventually Dagny discovers that indeed there is such a plot. Led by the man who invented the motor, the best producers are engaged in a strike: to withdraw their talent, work, and ability to create wealth from a society that dishonors their work even as it expropriates what they have produced. And they have set a condition for their return: The recognition of their right to produce and trade freely, without state interference. In effect, they are demanding a capitalist revolution. Their leader, John Galt, has issued the call: Capitalists of the world, unite! You have nothing to lose but your chains.
The moral philosophy embodied in the strike can be broken down into three broad themes. Atlas Shrugged actually conveys a multitude of ideas that are dramatized by the events and explained in a long speech—a radio address—in which Galt tells the world what the strike has been about. But these three are the deepest, most essential ones, the ones that really make the novel an intellectual revolution as well as an exciting story. If you get these, you get the book.
At the beginning of Atlas Shrugged , Eddie Willers recalls a childhood conversation with Dagny Taggart.
By the end of the novel, Eddie knows the answer to that question, and so do we. Atlas Shrugged is a novel about producers, specifically business producers, and it celebrates them as heroes. Rand’s first theme is that production is good. It is good not only because the things we produce support our lives, and provide comfort and security; it is good because the activity of production is an activity of creative achievement, adding value to our world through the exercise of intelligence and effort. Rand sees production in moral as well as economic terms, as an expression of the best within us.
Hank Rearden is the character who provides the full template for the virtues of the producers. He is truly the Atlas of the novel’s title, the giant who supports the world by creating wealth.
He came from utter poverty. He began working in the Minnesota iron ore mines at age 14. He worked, learned, and saved, until he bought the mines, then an abandoned steel plant, and then coal mines, from which he built the most successful steel company in the business. And then he spent 10 years of research and experiment to invent a new metal alloy much better than steel.
His character as a producer is shown in countless ways throughout the novel. Rearden is …
a) A man of purpose and vision, with the self-generated will to pursue the vision in reality. When the first heat of Rearden Metal is poured, he thinks back to what kept him going through the exhausting process of trial and error.
b) Rearden is a man who takes responsibility for his decisions and actions, not just in business but in every area of life. He was his own harshest judge and task-master.
c) At the root of his character, infusing all his other traits, was an absolute commitment to objectivity, to accepting facts as facts without evasion or wishful thinking. He not only had a brilliant, creative mind in the sense of intelligence and knowledge. He was committed to using his mind to the fullest, to understanding the world as it is, to finding truth—and speaking it honestly. In other words, he not only had a highly developed capacity for reason, he possessed the moral virtue of rationality.
d) Finally, Rearden was a man of pride, in himself and his accomplishments. In one of the first efforts of the looters to expropriate Rearden Metal, the State Science Institute attempts to buy the rights to Rearden Metal and take it off the market. Rearden refuses. When a Dr. Potter from the Institute asks why he wants to make his gains over years, squeezing out a profit margin penny by penny, rather than accept a government check now, Rearden says “Because it’s mine. Do you understand the word?” In the final lines of the scene, Potter again asks Rearden why he is refusing. “…it’s because Rearden Metal is good.” 174
One of the things that Rand conveys about production—over and over again, in many different forms—is that the source of material achievements and wealth lies in the spirit of the producers. Early in the novel, we hear Dagny reflecting:
And what do those engines rest on? Riding in the locomotive on the first run of the John Galt Line, Dagny walks into the engine room:
Rand is of course speaking metaphorically here, but the metaphor is a powerful one that resonates throughout the novel, and stands for a truth that is not a metaphor: Material production has a spiritual core.
Conversely, when the spirit is gone, machines, buildings, roads—all the products of industrial production—reduce to inert matter. And, quickly enough, they rust, decay, break down, fall apart, and revert to natural elements. In Aristotle’s sense of soul as the animating principle of a living thing, human intelligence is the soul of the machine. In portraying a society in decline, Atlas has many scenes that illustrate the point. For example, when Dagny and Rearden find the abandoned factory, the countryside they pass through is in deep industrial decline. People are in fact living in pre-industrial conditions: no electricity, few paved roads, no travel to next town, plowing fields by hand. The inhabitants are using the relics and debris of industry for the accidental purposes permitted by their physical shapes: telegraph wire to hang laundry, engine cylinders as flower pots, etc. This is the image of what happens when the mental/spiritual source of industry—the motive power—is gone.
In dramatizing the spiritual core of production, Rand challenged the ancient prejudice that material production is a mundane, mechanical, purely materialistic affair. Some of the world’s major religions teach that there is a dichotomy within human nature between a higher and a lower self; and a built-in conflict between desires for materialistic, worldly good such as wealth and physical pleasure, and aspirations for things of the spirit—knowledge, virtue, love, art, and the like. Among the Greek philosophers, Plato held to that view. And even Aristotle, who had a more worldly outlook and a more integrated, organic view of human nature, still held that man’s highest and noblest activity is the exercise of reason detached from the use of reason to create things in the world.
Since the Industrial Revolution and the birth of capitalism two centuries ago, the power of reason to improve human life through production has become astoundingly obvious. Yet the attitude persists even to our day. Matthew Arnold, an English writer and educator in the 19th century, expressed the attitude this way: "Which is more admirable, the England that produced coal and railroads, or the England that produced Shakespeare and Jonson?" [Culture and Anarchy].
Arnold intended this as a rhetorical question: all right-thinking people would say Shakespeare and Jonson represent a more admirable achievement than the producers of coal and railroads. Rand emphatically rejects this invidious comparison as a false dichotomy. Both kinds of activity, artistic production and material producers, are forms of the human exercise of intelligence and imagination. They both take courage, integrity, and discipline. And they both add value to our world.
Now I have been referring to material production as the creation of wealth. I want to clarify that Rand is not primarily concerned with wealth in the sense of money, cash on hand or in the bank. Rand understood her economics. Money is a measure and store of value, but the value lies in the real goods and services that have been produced. Money is also a medium of exchange, but only among those with something to trade. Money has no meaning or value if it is detached from underlying values, the real goods and services and from the creative activities that produce them. This is what Rand means when she speaks of creating wealth, and monetary wealth that is earned through production is something to be proud of. But she is not concerned with the size of a person’s bank account per se. James Taggart was a very rich man, but he acquired that money through illicit, nonproductive, political manipulation—and it does him no good when his policies have destroyed the economy.
The first key to Rand’s defense of capitalism, then, is that productive achievement is the essence of the human ideal, of human beings as they can be and ought to be. She is not making the economic point that capitalism excels in enabling the production of material wealth, although that is important. She is making the ethical point that capitalism protects and rewards those human and heroic qualities that make creation of any type possible. It protects and rewards the best within us.
In the market system of capitalism, individuals pursue their self-interest. That is the basis of economic theory, but it has always posed a moral problem for defenders of capitalism because of the moral tradition of altruism.
Virtually every code of morality in history has said that helping others is a core principle of ethics, that self-sacrifice is the noblest thing a person can do, that we should all try to put service above self. If you start from that moral premise, it affects how you see the economic activities driven by self-interest: making a living, buying a house, investing in stocks, starting a company, and the like. These will seem at best amoral, but easily crossing the line into greed and avarice. Even if the overall results are beneficial, as Adam Smith showed, that fact does not change how people tend to see the individual activities. As one of Smith’s predecessors, Bernard Mandeville, put it, there’s a paradox in the fact that “private vice produces public benefits.” So capitalism has widely been regarded as being conceived in sin. As a result, advocates of the free market tend to focus on the economic efficiency of the market, and the general benefits to society.
At the same time, the critics of capitalism have always attacked it as founded on selfishness. Long before he wrote Das Kapital, Karl Marx was writing essays that denounced capitalism as immoral, and not just capitalists but the entire classical liberal philosophy of individual rights.
Later in the 19th century, Beatrice Webb, a prominent member of the Fabian socialists, who pushed England to embrace the welfare state, described socialism as an attempt "to transfer the 'impulse of self-subordinating service' from God to man." [My Apprenticeship, 158] It is undoubtedly this “impulse” that explains why socialism was such a popular cause. What galvanized people and made them feel socialism was an idealistic cause was not Marx’s goofy economic theories. It was the idea that socialism is the moral ideal because it is founded on sharing, brotherhood, giving to each on the basis of need.
Today, the same altruist moral premises lie behind the frequent attacks on business and the profit motive as greedy. And also the in the tendency of highly successful businesses and businessmen to feel that they must engage in philanthropy to justify the wealth they have acquired.
Rand’s defense of self-interest and her criticism of the altruist morality are the most radical features of Atlas, illustrated in many scenes. At a crucial point in the novel, for example, Rearden is on trial for violating an arbitrary economic regulation. Instead of apologizing for his pursuit of profit or seeking mercy on the basis of philanthropy, he says, “I work for nothing but my own profit—which I make by selling a product they need to men who are willing and able to buy it. I do not produce it for their benefit at the expense of mine, and they do not buy it for my benefit at the expense of theirs; I do not sacrifice my interests to them nor do they sacrifice theirs to me; we deal as equals by mutual consent to mutual advantage—and I am proud of every penny that I have earned in this manner. . . .”
Rand held that every person is an autonomous individual, with the moral right to pursue his own happiness. She admired those who embrace the wonderful fact of their own existence and live their lives to the fullest, without guilt or apology. As she put it in the title of a later work, she believed in “the virtue of selfishness.” But her conception of self-interest and egoism is radically different from the conventional picture of selfishness. It is not the kind of grasping, exploitative, attempt to satisfy urges of the moment, or seeking money, sex, and power at any cost. The villain businessmen in Atlas are the ones who fit that picture. Her heroes define their self-interest by achievement, rationality, pride, and justice. In that respect, the moral philosophy of Atlas could just as well be described as the selfishness of virtue.
Rand took seriously the literal meaning of altruism. "The basic principle of altruism is that man has no right to exist for his own sake, that service to others is the only justification of his existence, and that self-sacrifice is his highest moral duty, virtue, and value." ["Faith and Force"]
And she shows throughout the novel that sacrifice is not a moral but a highly destructive injunction. Among many other points, sacrifice as a moral imperative is the chief philosophical basis for collectivism, always invoked by the power-seekers to rationalize expropriation. And that indeed is what the strike of the producers is all about. They refuse the role of sacrificial victims. They refuse to be treated as means to the ends of others.
At the same time, the novel draws a sharp distinction between altruism and benevolence. By contrast with altruism, the spirit of benevolence leads one to help others as a choice, not a duty. It can involve giving to others in response to a temporary crisis that you can help them through, or investing in someone’s potential. But it does not mean writing a blank check on one’s resources to sacrifice for the endless needs of other people at large. And such benevolence does not take precedence over the virtues involved in productive achievement. It is a secondary element in morality.
There are many scenes of genuine benevolence in Atlas. I want to mention one in particular, because it illustrates both benevolence and altruism. Dagny is working in her private rail car on a Taggart train when she sees the conductor about to throw a bum off the train. Something about him makes Dagny think he’s a good man down on his luck; she stops the conductor and ends up having a long conversation with him. Extending herself in that way is an example of Dagny’s benevolent spirit. The bum tells her about a factory where he used to work, the very factory in which Dagny and Rearden had found the motor. Here’s where we get to the contrast with altruism: When the founder of the company died, his three children took over and turned the place into a workers’ cooperative to be run on the altruist principle “from each according to his ability….” The account of what happened is a brilliant analysis of what that Marxist slogan means in practice.
This is what the principle of altruism comes to, finally. It is not kindness; it is not benevolence; it is not brotherly love and solidarity. The forced dependence of everyone on everyone else means a war of all against all, in which power rules, and personal freedom, responsibility, pride, and good will are extinguished.
I will turn now to the third major theme in Atlas Shrugged : the justice of trade.
In all of its many forms, trade is a voluntary interaction among people to mutual benefit. Both of those features are essential: Whether I am buying milk in the grocery store, hiring an employee, forming a corporation with a group of other people, buying a house, whatever, a trade is voluntary. It’s something I choose to do and something that can happen only if the other party or parties also choose. And the reason we all choose it to engage in trade, of course, is that each of us expects to gain. We value what we’re getting more than what we are giving in exchange, whether it’s money, time, or anything else.
As a story about business, Atlas Shrugged highlights trade as a major type of human activity. But Rand also extends the concept beyond the realm of economic exchange, of buying and selling goods and services. Indeed, the story shows how trade in a broader sense applies to all human interactions. It applies, for example, to the exchange of ideas and information, to the marketplace of ideas, as we often say. In the realm of ideas and information, there may not be any literal transfer of possession. When I tell you something I know, I don’t lose the knowledge I gave you. But it is still a voluntary interaction from which we both gain. The concept of trade even applies to personal relationships, where we give each other and receive emotional benefits. As Rand put the point in a later essay,
Rand’s principle is that trade is the proper, ethical way for people to relate. It is the principle of justice. Because it is voluntary, trade respects each individual’s autonomy and freedom to act on his judgment. Forcing people to interact against their will is as hateful in the economic realm as it would be in the realm of friendship and love. The are many examples in Atlas of the government using economic coercion against the producers, regulating what they can do, depriving them of their property and of everything they had built in the expectation of being able to use it, tearing away their freedom. Rearden in particular is saddled with edicts that wreck the carefully constructed production system that enabled him to make the best steel at the best price. These economic controls are of a piece with what totalitarian states do to artists and intellectuals by suppressing their creativity.
So the first thing that makes trade the principle of justice is that it’s voluntary. The second essential feature of trade is that both parties gain. Because the benefit is mutual, individuals do not sacrifice themselves or demand sacrifices from others. Trade is just because it treats others as autonomous equals and recognizes that the values they have to offer are products of their autonomous minds. The business heroes in Atlas are fierce competitors, hard bargainers, demanding bosses. It’s obvious how those attitudes reflect their pursuit of their interests. But Rand also shows how the attitudes express a deep respect for the people they are dealing with as competent to pursue their own goals and make their own decisions, without any need for pity or charity.
In speaking of equality in connection with trade, I am referring to the basic equality of people as persons, as independent, autonomous agents. I am referring to the equal dignity they deserve—or can earn—as moral beings regardless of their ability or place in life. But of course people are not equal in ability, circumstances, success, etc. And as a writer in the Romantic tradition, Rand made her heroes people of exceptional, larger-than-life talents and achievements. In this respect, there’s a very important addition she makes to the principle that trade involves mutual benefit. Marx held that capitalists are exploiters because their profits are taken from revenue that would otherwise go to the workers. Many people who do not go that far are nevertheless suspicious about inequalities that occur in a free market, or feel that trade is fair only when the parties are more or less equal in bargaining position.
Rand disagrees. A key point that is explained and dramatized in Atlas is what she calls “the pyramid of ability.” When wealth is acquired by creative achievement in a free society, those at the top of the scale in wealth provide much more value to others than they receive back; it’s the people at the bottom of the scale who receive the most as return on their efforts, because their efforts are leveraged by the technology, investments, risk-taking, and management skills that went into creating the jobs they hold.
As John Galt explains,
The antithesis of trade, and the only alternative as a way to interact with people, is power. Power is the effort to get something by bringing another’s mind and effort under one’s control, regardless of that person’s choice or benefit. Power is inherently coercive, not voluntary. It is based on the threatening the person with loss instead of offering him some gain. It is therefore a negative sum relationship, rather than positive sum. And where trade is a relationship between people as equals, power is a relationship of domination.
Every society has some mix of trade and power as operative principles of interaction. One of the things that makes Atlas a very long book is Rand’s ambition to show what happens, across an entire economy—an entire society, really—as freedom to trade is replaced by the exercise of power, up to the point of collapse from a purely power-based system. The result, in my view, is a tour de force. It could serve as a textbook in the economics of a free market and of government intervention. Indeed, I know economists who assign the book in intro courses for that very reason.
In the course of the narrative, we see how government actions produce unintended consequences. Price controls in one industry give rise to shortages that cascade through other industries. Regulations on who can buy Rearden Metal give rise to black markets. By the end, government has taken total control, with appointed bureaucrats making all economic decisions. With the complete abandonment of markets, we see that no rational allocation of resources is possible. In one amazing scene, Taggart freight trains are sent to Louisiana to serve some bureaucrat’s pet project, so they are not available to ship a record grain harvest in Minnesota, and the wheat rots by the tracks.
Along with these economic effects, Atlas dramatizes the political ones. As power grows by degree, it changes its nature. It becomes increasingly arbitrary: laws are replaced by edicts, the rule of law by the whim of those in power. The pursuit of power becomes increasingly overt; the justifying fictions of serving the public interest become increasingly desperate, dishonest, and cynical. Success in business increasingly goes to political entrepreneurs—businessmen who seek wealth through political connections and manipulation—rather than real entrepreneurs who gain wealth through production. People flee from positions of responsibility in reaction to a social environment that penalizes both success and failure in unpredictable ways. To shore up its fragile, unworkable economic planning, the government becomes increasingly desperate to boost public morale by censoring critics and imposing harsh penalties for “economic crimes.”
This entire story about the decline of the economy, the growth of power, and the disastrous results is a brilliant time-lapse portrayal of what happened in Soviet Russia over the course of 70 years. And many of the individual episodes read as if they were taken from yesterday’s headlines. But despite the realism of her narrative, Rand’s goal in Atlas is not primarily to make an economic or political point. Her concern is ethical: to dramatize the principle of trade as the essence of justice among people.
In telling her story about the strike of the producers and the capitalist revolution they bring about, Rand was also introducing a revolutionary moral perspective. The three core elements of that perspective, to summarize, are
Every social system must have some moral foundation, something to justify its political and economic prescriptions and to inspire adherents to crusade for it. In the case of socialism, the moral foundation was collectivist: the brotherhood of men, with individuals willing to sacrifice their personal interests in the service of a collective good. The moral vision of Atlas is the diametrical opposite in all the ways I have discussed. Rand’s achievement was to present an idealistic moral case for capitalism, a case that is consistent with the actual benefits that capitalism has showered on mankind.
 Comte: "[The religion of Humanity] sets forth social feeling as the first principle of morality....To live for others it holds to be our highest happiness. To become incorporate with humanity..., this is what it puts before us as the constant aim of life. ...In the positive state..., the idea of Right will disappear. Everyone has duties, duties toward all, but Rights in the ordinary sense can be claimed by none." from A General View of Positivism, 374, 384
AUDIO OF SPEECH: The above article was originally delivered as a speech by David Kelley, upon multiple occasions in 2007, to celebrate the 50th anniversary of the publication of Atlas Shrugged . Click on the audio player below to hear David deliver this speech:
David Kelley is the founder of The Atlas Society. A professional philosopher, teacher, and best-selling author, he has been a leading proponent of Objectivism for more than 25 years.