In Book 2, Chapter 6 of Atlas Shrugged, on May 15, Dr. Lloyd Ferris, head of the State Science Institute, extorts from Henry Rearden the patented process for making Rearden Metal, and Ayn Rand brings the storyline for Rearden Metal to a close. The chain of events leading up to Rearden's signing away his life’s work is intricate and involved, and you’ll need to read Atlas Shrugged if you want to follow it all – or at least check out our new Pocket Guide to Atlas Shrugged – but the chapter gives a good overview, and is worth a review.
The chapter begins in a conference room filled with bureaucrats (chief among them Wesley Mouch, Clem Weatherby, and Head of State Mr. Thompson – a man so nondescript Rand doesn’t bother to give him a first name), crony capitalists (James Taggart and Orren Boyle), a former banker (Eugene Lawson), a union leader (Fred Kinnan), and one government scientist (Dr. Ferris). These men, after years of government regulation, rent seeking, and labor strikes, have finally succeeded in grinding the economy of the United States to a halt, and they are meeting to discuss what to do next.
Not that they meant to shut the country down. Their planned economy, so many years in the making, was supposed to work. Still, the year-over-year losses are devastating; Mr. Weatherby is circumspect: “Fact is, . . . in the twelve-month period ending on the first of this year, the rate of business failures has doubled, as compared with the preceding twelve-month period. Since the first of this year, it has trebled.” Wesley Mouch is exasperated: “I can’t help it! I can’t help it if people refuse to cooperate. I’m tied. I need wider powers.” Eugene Lawson is vengeful: “But it is their own fault,” he scolds. “It’s their lack of social spirit. They refuse to recognize that production is not a private choice, but a public duty. They have no right to fail, no matter what conditions happen to come up. They’ve got to go on producing. . . . That’s what we’ve got to force them to learn.”
The men decide that force is the only option, and they sign, by fiat, Directive Number 10-289, effectively nationalizing the dwindling number of businesses still in operation.
It is a great scene. Rand nails the smug banality of the men as they sacrifice an entire nation: Their evasion, their cruelty, and the self-pitying way in which they express their disappointment that the citizens of the United States have failed to validate their theories.
Directive Number 10-289 contains eight points. Point One makes it illegal to quit your job. Point Two makes it illegal to go out of business. Point Three eliminates intellectual property rights. Point Four makes it illegal to invent anything new. Point Five mandates production quotas. Point Six mandates consumer spending quotas. Point Seven freezes wages, prices, salaries, and capital gains. Point Eight makes the Unification Board the sole authority to arbitrate any disputes about Points One through Seven.
Point Three is what Dr. Ferris uses to confiscate the patent for Rearden Metal. Point Three reads as follows:
All patents and copyrights, pertaining to any devices, inventions, formulas, processes and works of any nature whatsoever, shall be turned over to the nation as a patriotic emergency gift by means of Gift Certificates to be signed voluntarily by the owners of all such patents and copyrights. The Unification Board shall then license the use of such patents and copyrights to all applicants, equally and without discrimination, for the purpose of eliminating monopolistic practices, discarding obsolete products and making the best available to the whole nation. No trademarks, brand names or copyrighted titles shall be used. Every formerly patented product shall be known by a new name and sold by all manufacturers under the same name, such name to be selected by the Unification Board. All private trademarks and brand names are hereby abolished.
Here is where Rand starts to direct the fate of Rearden Metal to its inevitable conclusion. In spite of the audacity of their power-grab, the men don’t actually have the legal right to any of the patents and copyrights. They must rely on the owners of the patents and copyrights to give them away, and to accomplish that, Dr. Ferris devises a scheme in which the owners will sign a Gift Certificate that gives their intellectual property to the “people.”
Even as fiction the idea at first seems preposterous, and yet Rand makes it work. And she makes it work in such a way that when it happens you realize you saw it coming all along.
Hank Rearden, the inventor of Rearden Metal and the holder of the patent, is unwittingly the linchpin on which the confiscation rests. Rearden is having an extramarital affair with Dagny Taggart, the female protagonist and, like Rearden, a business leader. He is in fact deeply in love with her, but he has yet to acknowledge that love to himself, or to her. Rather, he has made every effort to appease his wife Lillian – a woman he despises and who despises him. He has supported Lillian financially without complaint. He has given her the unqualified respectability and social status of being his wife, he has propped up her vanity as a socialite, and worst of all, he has allowed their marriage, and not Rearden Metal, to be the basis of his social reputation.
Ferris finds out about the affair (read Atlas Shrugged to find out how) and blackmails Rearden, threatening to publicize the affair unless Rearden signs the Gift Certificate. On the one hand, Ferris patronizes Rearden, telling him not to worry. News of the affair will actually enhance his reputation, lend him sexual cachet among the philandering men and eager women of his social set. It is Dagny Taggart’s reputation that Ferris wants the revelation to destroy:
It will give you an aura of romantic glamor among the women and, among the men, it will give you a certain kind of prestige, in the nature of envy for an unusual conquest. But what it will do to Miss Taggart – with her spotless name, her reputation for being above scandal. Her peculiar position of a woman in a strictly masculine business – what it will do to her, what she will see in the eyes of everyone she meets, what she will hear from every man she deals with – I will leave that up to your own mind to imagine. And to consider.
Rearden sees the trap. He has been buying into a moral code that hated the good for being good. In accepting Lillian’s moral standards, he treated his success not as a value earned but rather something he had to pay for. In remaining married to Lillian, he treated his love not as a value earned, but a debt he owed. The extortion scheme of Ferris is no different than the standards Rearden had already accepted. He can keep the patent as long as he is willing to betray and humiliate Dagny. He can protect Dagny as long as he renders his invention worthless to him. Extortion is what he has put up with all of his adult life. One way or another, something of value must be destroyed. “What they want to do to [Dagny] now, I did it first. I made it possible,” he realizes.
I did it – in the name of pity for the most contemptible woman [Lillian] I know. That, too, was their code, and I accepted it. I believed that one person owes a duty to another with no payment for it in return. I believed that love is some static gift which, once granted, need no longer be deserved – just as they believe that wealth is a static possession which can be seized and held without further effort. I believed that love is a gratuity, not a reward to be earned – just as they believe it is their right to demand an unearned wealth. And just as they believe that their need is a claim on my energy, so I believed that her unhappiness was a claim on my life. For the sake of pity, not justice, I endured ten years of self-torture. I placed pity above my own conscience, and this is the core of my guilt. My crime was committed when I said to her, “By every standard of mine, to maintain our marriage will be a vicious fraud. But my standards are not yours. I do not understand yours, I never have, but I will accept them.”
Rand is constantly reviled as one-dimensional and unfeeling, yet this scene – the entire chapter – is remarkable for its pathos. Rearden’s situation is Greek in its intensity, and only a first-rate novelist could have written his catharsis.
Rearden signs the Gift Certificate. He pushes the signed document contemptuously across his desk, and the chapter ends. Another writer might have left him there, broken. But Ayn Rand didn’t write tragedy. She rewrote it. In her book, Babel gets built, Phaëthon completes his round, Arachne takes home a trophy, and Icarus floats to the ground. Ayn Rand loved the good, and in Atlas Shrugged as in all her novels, the good triumphs. Hank Rearden is a wiser man and changed for the better. From this low point, Rand will elevate him to new heights.