Economic Inequality: Three Takes


In June 1963, when Nathaniel Branden published a piece on “Inherited Wealth” in The Objectivist Newsletter, he was still the beloved disciple of Ayn Rand, who reprinted his piece in her 1966 collection Capitalism: The Unknown Ideal, and continued to include it in subsequent editions despite her break with Branden in 1968. As Rand famously did not allow opinions deviating even in the slightest from her own to appear in journals or books that she edited, we can assume Branden speaks for Rand when he writes:

A free, competitive economy is a constant process of improvement, innovation, progress; it does not tolerate stagnation. If an heir who lacks ability acquires a fortune and a great industrial establishment from his successful father, he will not be able to maintain it for long; he will not be equal to the competition. In a free economy, where bureaucrats and legislators would not have the power to sell or grant economic favors, all of the heir’s money would not be able to buy him protection for his incompetence; he would have to be good at his work or lose his customers to companies run by men of superior ability. There is nothing as vulnerable as a large, mismanaged company that competes with small, efficient ones. …

It is a mixed economy – such as the semi-socialist or semi-fascist variety we have today – that protects the nonproductive rich by freezing a society on a given level of development, by freezing people into classes and castes and making it increasingly more difficult for men to rise or fall or move from one caste to another; so that whoever inherited a fortune before the freeze, can keep it with little fear of competition, like an heir in a feudal society.

Here Branden, and by presumption Rand, are endorsing a crucial part of the left-libertarian idea of competition as a levelling force. The quotation makes an interesting pairing with a remark of Murray Rothbard’s in a 1966 letter:

For some time I have come to the conclusion that the grave deficiency in the current output and thinking of our libertarians and “classical liberals” is an enormous blind spot when it comes to big business. There is a tendency to worship Big Business per se … and a corollary tendency to fail to realize that while big business would indeed merit praise if they won that bigness on the purely free market, that in the contemporary world of total neo-mercantilism and what is essentially a neo-fascist “corporate state,” bigness is a priori highly suspect, because Big Business most likely got that way through an intricate and decisive network of subsidies, privileges, and direct and indirect grants of monopoly protection.

Yet if Rand, Branden, and Rothbard all accepted this crucial aspect of left-libertarian analysis, then a) where did Rothbard depart from Rand and Branden, and b) where did all three depart from left-libertarianism as we understand it today? (On the specific issue of economic inequality, I mean – not getting into the various other areas of disagreement.)


A crucial difference dividing Rothbard from Rand and Branden is that Rand and Branden do not seem to fully recognise the implication of their insight that under present circumstances the “unproductive rich” can maintain their position “with little fear of competition.” If they did, they’d have to agree with Rothbard that “bigness is a priori highly suspect” in the present-day economy, given the likelihood that it is the product of “subsidies, privileges, and direct and indirect grants of monopoly protection.” Rand, by contrast, famously declared big business a “persecuted minority,” a formulation ridiculed by Rothbard. While endorsing the premise that government controls insulate the rich from competition and make it difficult for newcomers to rise up, Rand fails to draw the logical conclusion that any firms that do manage to become enormously wealthy in the present-day economy are in most cases likely to have achieved their status at least in large part via government favoritism, and so are proper objects of suspicion, not celebration and defense.

Thus Rothbard is more consistent on this point than Rand and Branden, and so is closer to left-libertarianism. This is presumably in part because he had read and embraced the New Left historical discoveries, by thinkers like Gabriel Kolko, James Weinstein, and William Appleman Williams, of the actual historical role of big business in American history, showing that the Gilded Age magnates that Rand idolised were indeed mostly state-supported parasites too – discoveries that Rand never showed much interest in. (Later Randians eventually got around to discovering Kolko, and responded by going on the attack; see, e.g., here and here. A left-libertarian response to the contemporary Randian critique of Kolko is forthcoming in the Molinari Review.)


Where Rothbard parts company with left-libertarianism is that his suspicion of bigness is limited; while “in the contemporary world” vast concentrations of wealth are suspect, he writes that “big business would indeed merit praise if they won that bigness on the purely free market” – which seems to imply that he thinks enormous, systematic, pervasive, and longterm economic inequalities would indeed be possible in a free market – whereas left-libertarianism denies this, since it would be difficult to sustain such inequalities if producers were free to imitate what others were doing to become rich.

Of course there are differences in talent, as in Nozick’s “Wilt Chamberlain example,” that would serve as a bar to perfect imitation. But a glance at the wealthiest firms and individuals – in popular parlance, the “one percent,” a term actually coined by left-libertarian Karl Hess – shows the persistent role of government privilege in maintaining their status; they did not get there or stay there by talent alone.

In Man, Economy, and State, Rothbard does recognise that a single large firm dominating the entire economy would be impossible in a free market, owing to its insulation from market feedback:

In order to calculate the profits and losses of each branch, a firm must be able to refer its internal operations to external markets for each of the various factors and intermediate products. When any of these external markets disappears, because all are absorbed within the province of a single firm, calculability disappears, and there is no way for the firm rationally to allocate factors to that specific area. The more these limits are encroached upon, the greater and greater will be the sphere of irrationality, and the more difficult it will be to avoid losses. One big cartel would not be able rationally to allocate producers’ goods at all and hence could not avoid severe losses.

But Rothbard does not take the further step of recognising that insulation from market feedback is a matter of degree, so that in a free market diseconomies of scale would begin to kick in well before a single firm dominated the entire market. That is why left-libertarians expect a much flatter free-market landscape than the ones envisioned by Rand, Branden, and even Rothbard.

56 thoughts on “Economic Inequality: Three Takes

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  3. Thank you for an interesting article. My comment is about government and the economy more generally, not your specific content.

    Both Ayn Rand and Murray Rothbard advocated the separation of economics and politics, or the state and the free market. How much separate is not real clear to me, arguably less clear in Rand’s case. After all, she was against the use of force and fraud, and much of fraud happens in the economy. So any laws or regulations about fraud are necessarily economic intervention.

    I also believe that we need to consider government’s role in the economy from different perspectives — regulator, consumer, and employer. Much has been written criticizing the first, including by Rand, Rothbard, Mises, etc. So I will limit further comment to the last two.

    When the military buys guns, ammo, airplanes, ships, and so forth, it does so qua consumer. When it buys or leases cars, buildings, computers, and office supplies, it does so qua consumer. It may provide specifications for what it wants to buy or lease, but that is not regulation in its usual meaning. It “favors” specific suppliers when it buys or leases, but that is not regulation in its usual meaning. Also, government qua consumer can contribute to the growth of large businesses. When Marconi invented wireless communication, his biggest customer early on was the British military. When transistors were invented, the biggest customer early on was the military, transistors being a highly important component for missiles and radar.

    Government can’t run without employing people. So obviously government must compete in the labor market along with all private sector businesses that comprise the free market. This may lead to collusion between the government and private sector businesses. On the other hand, regulators who are ignorant about the businesses they try to regulate are a big problem, too.


    • Randians actually accuse Rothbard of NOT separating economy and state, since he wanted traditional state functions (well, some of them) to be provided by the market.

      But of course Rothbard’s response would have been: “I want to ABOLISH the state; how much more separation can you get?”


  4. I’m a little torn about how to respond to this, because on the one hand, granting the basic assumptions you make, I think your point is well taken, but on the other hand, I question the very first move.

    Here is the first line of the Branden passage, which I take to express Rand’s view as well:

    A free, competitive economy is a constant process of improvement, innovation, progress; it does not tolerate stagnation.

    Doesn’t this statement imply that a free, competitive economy is incompatible with any conception of happiness that suggests that we can enjoy tranquility in our professional or productive lives? Replace the word “stagnation” with “tranquility,” and that’s the conclusion you get. Branden describes life under capitalism as though it were a hectic, feverish form of pleonexia: you have to outdo one competitor, and then the next, and then the next….faster and faster, without stopping for breath for fear of being outdone by them, or else being stagnant and unproductive. But unless there is a clear, principled way of distinguishing between “stagnation” and “tranquility,” that seems neurotic. It’s as though, unless you’re constantly outdoing the next guy, you’re doing something wrong. Pride and productiveness demand constant motion. Hold still for one minute and you’re evil.

    That “action above all” attitude pervades Rand’s writings from her conception of mind, to her ethics, to her political economy, to her aesthetics. Consciousness is an active process. Life is a process of self-generated action. Stillness is the antithesis of death. Stagnation is anti-productive. Art must make active demands of the consumer, or is no good. Foggy landscapes, quaint villages, and quiet Sunday picnics are evil because they represent human stagnation.

    There just seems something insane about this entire line of thought, but it’s inescapable throughout Rand’s writings. The crux of it, as I read her, is her insistence that consciousness is active through and through; if a mental state is passive, it is not conscious. Hence the odd conception of pain as a passive “sensation,” and of sensations as not-quite-conscious states, by comparison with percepts and concepts, which are the products of active conscious processes. (And even percepts are hard to conceptualize as active in the relevance sense. The more you try to pin Rand down on the metaphysics of conscious states, the more tangled things get.)

    Rand’s ontology of mind affects her ethics as well: though it’s not her official view, Rand often seems to write as though virtue were consciousness-maximization. It’s as though virtue were conceived as a form of perpetual, restless insomnia. There doesn’t seem to be conceptual space for a conception of tranquility or leisure.

    No matter what she says in criticism of the Attilas of philosophy, on this issue, Rand’s views differ very little from Hobbes’s:

    ‘Continual success’ in obtaining those things which a man from time to time desireth, that is to say continual prospering, is that men call ‘felicity’—I mean the felicity of this life. For there is no such thing as perpetual tranquility of mind while we live here, because life itself is but motion, and can never be without desire, nor without fear, no more than without sense. What kind of felicity God hath ordained to them that devoutly honour Him a man shall no sooner know than enjoy, being joys that now are as incomprehensible as the word of schoolmen ‘beatifical vision’ is unintelligible. (Leviathan I.6, near the end)

    But precisely because Hobbes self-consciously sees himself as rejecting the views of Aristotle and Aquinas (et al), his readers see the conflict between what he’s saying and what they say. The problem I have with Rand/Branden as well as Rothbard et al is that the same conflict is there, but given their advocacy of Aristotelianism, easier to miss.

    On a separate (though possibly related) note, I guess I don’t see bigness (in the sense of economies of scale) as “a priori highly suspect” any more than I see smallness as either a priori admirable or a priori indicative of failure. There are just different cases across the board, some deserving suspicion, some not. Abstracting from the particularities of a particular, well-described case, I don’t see how an a priori attitude of any kind could be justified.


    • “Branden describes life under capitalism as though it were a hectic, feverish form of pleonexia: you have to outdo one competitor, and then the next, and then the next….faster and faster, without stopping for breath for fear of being outdone by them, or else being stagnant and unproductive.”

      Some critics of capitalism would say that’s basically right, and that that’s part of the problem (I recall MacIntyre somewhere describing capitalism as treating pleonexia as a virtue). I suppose the non-trivial version of the question “but is that really a feature of capitalism?” (the trivial version ending up being simply a matter of people using the word ‘capitalism’ in different ways) would be: is Branden right that capitalism as he otherwise conceives it would have this hectic, pleonectic character? Or would the minarchist, strictly laissez-faire system not likely turn out like that? I take it that Roderick is plainly right that Branden “represents competition as more frenetic than it needs to be,” but does he represent it as more frenetic than it is likely to be under the political and economic conditions he promotes? I can see that it’s not inconceivable that he does, and so that it would not be unattractively frenetic, but I’m not one to infer empirical probability from conceivability.


      • Yeah, I suspect that there’s a MacIntyrean element to my comment, but I think I was predisposed to having the view in question anyway. But it was really Jeffrey Friedman (editor of Critical Review) who (through a series of articles in the 1990s) drew attention to the schizophrenic character of a lot of libertarian discourse: on the one hand, neo-Aristotelian ethics as the justification for a rights-based politics; on the other hand, free market economics as an explanatory device. But if the latter presupposes that pleonexia is a virtue, then we either have to revise our neo-Aristotelian ethic to admit it as a virtue, or we have a clash between our ethics and our social-scientific explanatory framework.

        I think many Objectivists are absolutely content to say that pleonexia is a virtue–indeed, see pleonexia as constitutive of what they call “the virtue of productivity,” and are stunned and baffled at the idea that anyone might see a rights-respecting form of pleonexia as anything other than good, clean capitalist industriousness. I mean, if you’re pleonectic but not violating anyone’s rights, what’s the problem? Pleonexia is a feature, not a bug. But though Rand herself never squarely faced the issue (unless you regard The Fountainhead as “facing it”), she’s careful to refer to productiveness, not productivity. I think it’s Greg Salmieri who makes this point somewhere, but “productiveness” lacks the maximizing connotations or implications of “productivity,” and Rand doesn’t intend for her virtues to serve a maximizing conception. (Doesn’t intend. What ultimately ends up happening is another matter.)

        But no matter what word you use, the problem remains: how to reconcile the virtue of productiveness with an Aristotelian ethics and make the whole thing coherent with a defense of the free market. Objectivists have never (so to speak) produced a plausible account of productiveness. Even basic questions have gone unanswered, “Is childbirth a productive act?” “Is parenting an instance of productiveness, so that a stay-at-home parent is as productive a member of the household as the ‘breadwinner’?” “Can an act be productive if it makes no money?” “Does justice require stay-at-home parents to be remunerated for their caregiving efforts?”

        And so on (that’s just one theme). Details, I know. But without a credible account of productiveness, you can’t get started on the project that Objectivists think Rand completed 50 years ago.


        • A verbal point: pleonexia ordinarily does not mean wanting ever more and more; it ordinarily means wanting more than one’s just share. In Randian terms, then, pleonexia would be the mindset of a looter, which suggests it’s the wrong term for what she advocates. Maybe a better term would be philokerdeia, love of profit or love of gain, which doesn’t necessarily imply injustice although it can have that connotation. (In the Hipparchus — — a dialogue traditionally attributed to Plato but one whose authorship is now disputed [though on no very impressive grounds IMHO], philokerdeia is first defined as seeking to profit unjustly, but under Socratic examination turns out to mean seeking profit period, and then under still further Socratic examination turns out to apply more broadly than monetary profit and so to be an inherent feature of human action, since anyone who acts is trying to exchange a less desirable for a more desirable state of affairs, making the just person the most philokerdes of all.)

          Aristotle does at one point come close to using pleonexia in a way that doesn’t imply injustice, but that’s in a context where he’s actually advocating it; he says that virtuous people should be “exceptionally zealous in noble actions,” that it would be good “if all men vied with each other in moral nobility and strove to perform the noblest deeds,” that a good person “is ready to forgo money if by that means his friends may gain more money; for thus, though his friend gets money, he himself achieves nobility, and so he assigns the greater good to his own share. … Therefore in all spheres of praiseworthy conduct it is manifest that the good man takes the larger share [pleon] of moral nobility for himself.” (Here Aristotle is in line with Plato’s rehabilitation of philokerdeia and his own rehabilitation of philautia, self-love.) Aristotle thus, in this passage, endorses a kind of intensely competitive acquisitiveness, albeit in the ethical rather than the material sphere. So if there’s a tension between the frenetic and the tranquil, it may be there in Aristotle already.

          At any rate, it looks like Rand’s main disconnect with Aristotle here is less about wanting ever more and more than about the basic fact that Aristotle undervalues productive labour as such; that’s why he’s reluctant to extend political rights to merchants and craftsmen generally. Aristotle would be as hostile to the Shire as to Wall Street. I think Rand does a good job of showing (but in her fiction more than in her nonfiction) that the way Aristotle thought about practical reason can and should also be extended, contrary to his wishes, to productive reason.

          As to whether Rand has to condemn the Shire in favour of Wall Street, that’s hard to say. Galt’s Gulch of course seems more like the Shire than like Wall Street; but it’s also meant to be temporary. On the other hand, while intensity is part of Roark’s lifestyle, intense competition as such doesn’t seem to be.

          I take Rand’s answer to whether a stay-at-home parent is productive to be yes, based on the scene in Atlas featuring the mother in Galt’s Gulch (who admittedly also ran a bakery, but that doesn’t seem crucial to what she says) who described raising her children as follows: “They represent my particular career … They’re the profession I’ve chosen to practice …. I came here, not merely for the sake of my husband’s profession, but for the sake of my own.”

          I suspect she’d think merely giving birth wasn’t productive unless it was part of a plan.

          On the question whether an act can be productive if it makes no money, I think we need a somewhat different question. Surely she would think that Robinson Crusoe building a house to shelter himself or making a net to catch food would be productive. Also if Friday arrives and Crusoe trades one of his extra nets for one of Friday’s extra spears — barter, not money. In either case Crusoe’s work goes into sustaining his life. So what you’re really asking is whether an act can be productive if it doesn’t sustain the producer’s life (understood as survival?). And that can be split into cases where the act is intended to make such a contribution but fails (say, Rand writes a novel but can’t find a buyer) and cases where the act is solely for the producer’s own enjoyment.

          Going by her fiction, the latter two cases are surely still productive. When Roark helps Keating design buildings, his only payment is to help bring about a better building than would have existed otherwise. That’s a contribution to his life only if we take it as broader than mere survival. And when Roark tells Cameron he’ll be happy to follow in his path even if his buildings don’t get built, that suggests that the mere attempt counts as productive too.

          Of course there’s the problem of how to see “one’s buildings getting built = sufficient payment” as a productive contribution to one’s life once one anchors this to survival, an idea that first become explicit in Galt’s speech and then in her subsequent nonfiction. But this is just the familiar survival vs. flourishing problem again.


          • On the verbal point, ‘pleonexia’ is ambiguous (if that’s the right word; maybe ‘polysemous’ or ‘multivocal’ is better, depending on your taste) between wanting more than one’s fair share, wanting more than others whether it’s fair or not, and wanting more than others even when it’s fair or at least not unfair, and just wanting more than one has. It (and its verbal form) can also refer to getting more (with any of the further qualifications, I think), not simply wanting it. So I don’t think Irfan’s use of it is inappropriate. I take it that what Irfan has in mind is constantly striving for more and more than some others. Perhaps he also has in mind constantly striving for more and more in a context of zero-sum competition (hence quite different from the ‘more’ Aristotle has in mind in NE IX). Aristotle’s usage of the terminology isn’t the only usage, but there are debates about how to understand his usage in any case, particularly over whether or in what way fairness or unfairness enter into the description of the objects of pleonectic desire under which the pleonectic person desires them. Minimally I think we could say that in Aristotle pleonexia is at least liable to be unconstrained by considerations of justice.

            So perhaps one way to refine the question would be: under conditions of capitalism as Branden understands capitalism (laissez-faire minarchism, whatever exactly that involves — part of the question is, I take it, what exactly that involves, or doesn’t), would people be likely to strive (strongly incentivized to strive?) constantly to gain more than others with minimal constraints from considerations of justice? If a negative answer takes the form of “no, they’d be likely to constantly strive to gain more than others but constrained by considerations of justice,” I’m not sure if that would really meet Irfan’s objection, since it seems in part to be an objection to the need to constantly strive for more and more on pain of losing out, and not, or not only, to having to do so unconstrained by considerations of justice. If considerations of justice are entirely irrelevant to his objection, then I’d agree that pleonexia is at least not the best term to articulate it.

            For what it’s worth, my own inclination on the question is just a skeptical one. I don’t take it that it’s obvious that laissez-faire minarchism (or anarchism) would strongly encourage pleonexia, either by inciting it or simply by leaving fewer obstacles for it. But I think it’s entirely plausible, and I don’t think we answer the question by showing that we can without contradiction conceive of a laissez-faire economic system that doesn’t strongly encourage pleonexia. That would tell us something, but not much. Most of the defenses of laissez-faire minarchism or anarchism that I’m familiar with (vastly less than you are familiar with!) strike me as mere a priori thought experiments that establish nothing more than conceivability. But as I say, I’m merely skeptical on the question, not a dogmatic partisan of one or another answer to it.


            • Thus spake Riesbeck:

              So I don’t think Irfan’s use of it is inappropriate. I take it that what Irfan has in mind is constantly striving for more and more than some others. Perhaps he also has in mind constantly striving for more and more in a context of zero-sum competition (hence quite different from the ‘more’ Aristotle has in mind in NE IX).

              First sentence: correct.

              Second sentence: correct.

              Third sentence minus the parentethical: incorrect.

              Re the parenthetical of the third sentence: I find Aristotle’s account of virtuous competitiveness a little strained and implausible. I seem to remember Francis Sparshott’s making fun of it in his commentary on NE, Taking Life Seriously, and I basically agree with the jokes Sparshott makes at its expense. I don’t think makes much sense to describe virtue as a competition, even of the positive sum sort described in NE IX. So I agree with Roderick’s insight that the tension between frenetic and tranquil is there in NE, at least before NE X’s attempt to resolve it, and prefer Roark’s intense non-competitiveness to whatever Aristotle is recommending at the end of NE IX.8.


          • I think the difference between Roderick’s reading of Rand and mine turns on how charitably we’re willing to read her. Roderick reads her more charitably than I do.

            I can only leave this as a one-liner, but I think Rand really does condemn the Shire in favor of Wall Street. She gives a telling answer to a question about the significance of Galt’s Gulch in the Q&A volume (p. 75). The question is about anarchism, but I take her answer to imply that Galt’s Gulch is a mere fictional device, not intended as a social or normative ideal (just the reverse). There are other passing references in The Romantic Manifesto and elsewhere that add up to the same view.

            On productiveness, I think Rand’s views are all over the place. I don’t dispute your reading of the examples you give; I just dispute how far they go toward capturing the range of views she expresses on productiveness.

            On the one hand, she has a view of production so broad that anything counts as productive as long as it’s life-promoting (whatever “life-promoting” ends up being). On this view, productive activity is just co-extensive with virtuous activity.

            She also has a narrow sense of productive work that suggests that activity is productive as long as it’s part of a self-consciously worked-out “career” (or maybe: such a career in a capitalist economy). This sense implies that you are not doing productive work if the work you’re doing is rote work, or not part of some larger plan. It also seems to imply that primitive or nomadic people never engage in productive work at all (Arabs, Africans, Native Americans, Eskimos), and for that reason have no rights worth taking seriously. (The tacit assumption is either that the work they do is purely imitative, hence rote, hence sub-productive, or it’s not part of a rational plan, hence not productive. Or maybe both.)

            Peikoff adds that productive work requires the production of a material product (OPAR 293). No material product, no work has been done. The solution of Fermat’s Last Theorem doesn’t become productive work until it’s written down. Doesn’t matter how long you slaved over it, or how good your inferences were. If you don’t show your work, it wasn’t work.

            So the oddity is while the stay at home mom is productive in Atlas Shrugged, she wouldn’t have been if she was a Sioux mother at Wounded Knee.

            Robinson Crusoe is productive, but not his Palestinian, bedouin, or Navaho counterpart.

            Roark’s helping Cameron for free is productive, but then, so is Roark’s laughing and standing naked at the edge of a cliff.

            Read charitably, Rand has a plausible enough view, except that one can’t account for the less plausible things she says. Read uncharitably, she says lots of things, including some pretty crazy ones, that don’t cohere into a single defensible view.

            Granted, I’m reading Rand very uncharitably here. But I think an uncharitable reading captures the “breadth” of her views on the subject better than a charitable reading.


            • I wonder how narrowly Peikoff is understanding “material product.” Consider Homer (or whatever person or group of persons composed the Iliad and Odyssey). He (or they) composes these big-ass poems that seem to be pretty impressive, but doesn’t write them down (or at least I believe that’s still the dominant view); instead they get passed down orally from one generation to the next, and get written down only much later. So from Homer there’s no “material product,” unless an ephemeral pattern of soundwaves counts. (But if that counts, why not a pattern of neurons in one’s own brain?) Yet it seems, well, odd to say that Homer wasn’t productive.


                • Somewhat bizarrely, Tara Smith claims that psychotherapy is not productive work (Ayn Rand’s Normative Ethics, p. 200), on the grounds that therapists don’t produce a material product. Therapists do talk, so you’d think maybe that the talk amounted to a material product, but I guess not. Clearly, just listening to the client doesn’t cut it as productive work. Neither does the expression of empathy for the client. Does this imply that the more that the client talks, the lower the fee should be? Another question to direct to Mt Olympus.

                  “That ain’t working, that’s the way you do it: you go out and get your counseling degree…”


                • Okay, I watched the Peikoff video and it was actually pretty enjoyable, even if his tastes in artistic decoration aren’t quite mine.

                  The dog gets to be on the bed while a severed cat’s head hangs on the wall; I fear Rand would never approve.

                  It’s odd that he doesn’t know why the Frank Lloyd Wright design for Rand’s house wasn’t built, since the reason is given in one of the biographies — namely, the price that Wright finally quoted was way higher than she could afford,


              • So by Smith’s standards, it seems teachers aren’t productive either? Well, except when they produce handouts, write grades on papers, prepare quizzes, and the like. But actually giving lectures and/or leading discussions does not generate a material product. Perhaps she should return whatever portion of her professorial salary is based on such non-productive activities?

                Haven’t yet worked up the enthusiasm to watch the Peikoff video.


                • Haven’t yet worked up the enthusiasm to watch the Peikoff video.

                  I think it’s punishment enough to start around 11:50 and discover why the woman’s being on top in lovemaking is not at all an instance of feminism, but just the reverse. Really all you need.

                  In spectator sports, I take it that the plays themselves are the “material products” in question, so I don’t think that presents a real problem for Peikoff. Likewise, in teaching, utterances might count as material product. (Think of how Rand thinks of the relationship between words and concepts in her epistemology.) So a lecture might qualify as “material product” even if it wasn’t written down. More so if it was videotaped, I guess.

                  That leaves what teaching has in common with therapy: listening. But recall that Peikoff has no use for classroom discussion. He describes rational pedagogy as “presenting the material to [the student] in a calculated, conceptually proper order, with the necessary context, and with the proof that validates each stage” (“The American School: Why Johnny Can’t Think,” Voice of Reason, p. 212, my emphasis). Rationally productive teachers do not lead airy-fairy “discussions” sans material product. They “know what they are talking about, then talk about it” (p. 228).

                  Ready for the video?


            • “Peikoff adds that productive work requires the production of a material product (OPAR 293).”
              He drifts from that very quickly. “[T]he purpose of the knowledge is to make possible an existential value, such as a new type of machine, a new method of transportation, or a new method of living.”

              I wonder how this applies to a professional basketball player. Simply playing the game doesn’t produce a material product. Or does it? The player gets paid and can hence buy food, a house, a car, clothes, etc.


      • Well, what are “the political and economic conditions he promotes”? Is it just laissez-fare? In that case the left-libertarian is going to argue that the hectic character is driven by artificial scarcity and so would be unlikely under laissez-faire. Is it laissez-faire minarchism? Then most left-libertarians are going to argue that minarchism is unstable, and so that laissez-faire under minarchism is unstable.


  5. So here’s a simple example to illustrate the point I was making in my previous comment. I happen to live near a shopping mall that has one grocery store, King’s, and one pharmacy, Rite Aid. Both are examples of Big Business. Rite Aid is a national chain, and King’s is a large high-end regional chain in New Jersey, New York, and Connecticut. I’ve noticed that the King’s in our mall sells very few of the products available in Rite Aid, and vice versa: you can buy toothpaste or Band Aids at Rite Aid, but not at King’s; you can buy cat food at King’s but not at Rite Aid. Etc. This despite the fact that there are grocery stores that sell dental and medical products, and pharmacies that sell pet food.

    The plot thickens. There is a bagel place in between King’s and Rite Aid–Bagel Junction. They sell bagels, but neither King’s nor Rite Aid does. (Cue conspiratorial music.) (That said, Starbucks sells bagels, but I mean, come on. Inedible.)

    I don’t know this for sure (and I doubt anyone would admit to it), but given the systematicity involved, I suspect that the two (or three) stores have worked out a non-competition arrangement of some kind. Instead of subjecting one another to constant price wars, they’ve decided to agree on a non-competitive division of labor and division of goods. One possible (indeed, likely) result is that the prices of all those goods are higher than they would have been had the two stores been competing; unquestionably, those higher costs get passed on to consumers. But consumers around here are relatively wealthy, and the amounts involved are (relative to average incomes around here) relatively trivial. With the possible exception of my wife, no one really cares whether Arm & Hammer toothpaste is $2.33 a bottle or $1.78 a bottle. Another result is that there’s less employee turnover, and (possibly) better, more stable wages. More to the point, both sets of managers and employees enjoy the peace of mind that arises from not having to engage in constant competition. Branden might call that “stagnation,” but they’d call it sanity.

    Do both stores enjoy some measure of government support? I’m sure they do. Local government is always eager to attract business, and to do so, it has to give those businesses various incentives. With one exception, I don’t think those incentives explain very much about the non-competition arrangement at issue here. The exception is general restrictions on commercial development: if King’s and Rite Aid are lobbying local government against commercial development in order to maintain their non-competitive posture, I agree that that’s morally problematic. But it’s not clear to me that they are lobbying local government: people around here are so anti-development as it is that King’s and Rite Aid need not lift a finger to lobby for anti-development legislation to get passed. Given public attitudes, the legislation’ll get passed whether Big Business lobbies for it or not.

    It may be that King’s and Rite-Aid are the passive beneficiaries of this anti-development legislation–i.e., that their anti-competitive arrangement might not be possible if more development were allowed, but that isn’t obvious to me, either. It may also be that two stores are dispositionally committed to lobbying for anti-development legislation: they would lobby if the legislation lacked support. It’s unfortunate if it’s true, but again, it doesn’t strike me as obviously true. The larger point is that such an arrangement seems possible whether government is involved or not. The viability of the arrangement may be vulnerable to competition from new businesses moving into the area, but that’s a highly contingent matter.

    Setting aside the case in which government involvement is causally essential to the existence of the arrangement, is the would-be King’s/Rite Aid non-competition arrangement immoral? I don’t think so. There is no ethical imperative to maximize competition in all business contexts regardless of all other considerations, or to engage in frenetic price cutting just because it will drive prices down a bit. Nor is there an ethical imperative to drive yourself crazy in commercial contexts on the grounds that if you’re not driving yourself crazy, you’re “stagnating.” To conceive of business in this way is to subordinate every internal good involved in running a business to the imperatives of one external good: profit maximization/price-cutting/competition.

    But I don’t see the justification for doing that. There’s a lot more to commerce than competition. What Rand, Branden, Rothbard, and (potentially) left-libertarianism all seem to have have in common is a reductionist conception of commerce according to which the imperatives of competition supersede any commitment to the internal goods that might be subverted by economic competition. Few academics (or doctors, or lawyers, or therapists…) think that constant, unrelenting competition makes one a better teacher or researcher (or doctor, lawyer, therapist…). It’s not clear to me that it makes you a better store manager, either.


    • Well, what the left-libertarian has in mind is cases where any attempts to exploit a dominant market position by jacking up prices and/or lower quality will be punished by competition. Left-libertarians generally don’t have in mind competition as an endless race of one-upmanship. I agree that the Branden quote represents competition as more frenetic than it needs to be.

      That said, I do think there’s a difference between tranquility and stagnation. It’s one that Hobbes couldn’t see because he thought of all activity as motivated by dissatisfaction with the way things are, and so by a need to change them. (Hence Hobbes’s incomprehension at Aristotle’s definition of happiness as a life of rational activity; if you’re active, then for Hobbes you’re ipso facto not happy.) But what Hobbes could have learned in Vienna is that action is motivated by dissatisfaction with the way things would be if you didn’t act, which may or may not involve dissatisfaction with the way things are now. One can act to keep things the way they are, not to change them. (Life as a process of self-sustaining activity.) And keeping things the way they are needn’t be frenetic.

      At the same time, I do think advance is necessary too. But advance needn’t be frenetic either.

      Liked by 1 person

  6. Between this discussion on tranquility and the previous one on Stoicism, I’m sorely tempted to re-post my “Transcript of Ayn Rand’s Long Lost Seminar on Happiness.” Yes, that’s a threat. The last time I posted it, in 2013, a bunch of people cut ties with me, and even those who didn’t were left baffled and alarmed. Sciabarra, who’s gone so far as to publish Zizek, was too scandalized to publish it in JARS, but even he had to admit that it was funny.


        • From the comments section, perhaps it was because you wrote something but didn’t tell people how to interpret it.

          “But your writing is a little misleading, if you want my honest opinion. It misleads people into thinking you’re a less subtle thinker than you really are.”

          I haven’t been able to convince myself that this is true. To be sure, if the comparison is to what ordinary hostile critics of Rand think she said, then it’s right. My assessment is based primarily on reading you, Roderick, and a few others on Rand, and then trying several times over the years to read Rand but failing to convince myself that it was worth the effort when there’s so much other stuff to do in my finite lifetime. Then again, I use up some of that limited resource writing blog comments and reading Khawajan satire of Rand, so maybe it wouldn’t be such a bad investment.

          That bit about Lolita is really good, though I think I disagree with the part about the ending (but it’s been I think 16 years since I read the book). I don’t see it as particularly redemptive. But the rest, especially the connection to NE IX, is fantastic.

          So are the Rand jokes, but hey…

          Liked by 1 person

          • In reading Rand, two questions constantly arise:

            (1) Am I over-reading the text, or are the subtleties I’m “finding” actually in it?
            (2) Even if the subtleties are there in the text, is the exercise of reading Rand this closely worth the effort it requires, all things considered?

            About 12 or 13 years ago, my answer to (2) became “no” more often than it was “yes.” Given that, the answer to (1) mattered less and less. I’ve gotten to the point where my standing answer to (2) is a prima facie “no,” so that I find it hard to care at all about (1).

            I think Rand is a much subtler thinker than she’s widely given credit for, but it takes so much effort to harvest whatever is worth learning in her that I often wonder whether I would have been better off never having heard of her, or never having taken her seriously. I always find it telling that I didn’t take Rand seriously until I met someone who did–David Kelley. I met Kelley in the summer between getting my undergrad degree and going to grad school, at the very moment when I found myself “outgrowing” her. He was the one who argued me back into Objectivism, not Rand per se.

            There are things to learn by reading Introduction to Objectivist Epistemology, The Virtue of Selfishness, and the first few chapters of The Romantic Manifesto, but I would not suggest that anyone drop what they were otherwise doing and read any of it. Nor would I suggest that anyone who’d tried to read Rand and gotten bored or discouraged with her try and try again to get into her stuff. Not that I expect this ever to happen at Felician (it never has), but I certainly wouldn’t get very enthusiastic about some undergraduate showing up during office hours, eager to pull me into her voyage of discovery through the Randian Corpus. I don’t know if I’d have the heart to discourage it, but I certainly wouldn’t volunteer for the pro bono one-on-one Rand Tutorial, either. (Actually, I don’t think this has ever really happened in my career. The students most apt to do it were the ones at The College of New Jersey, and they went to Allan Gotthelf’s office hours, not mine. Allan, as you might guess, was very enthusiastic about their showing up.)

            So don’t beat yourself up over not reading Rand. Not that you sound like you are.


            • “I always find it telling that I didn’t take Rand seriously until I met someone who did.”

              That describes my experience — well, if ‘meeting’ includes interacting via blogs. Perhaps in my case one difference is that I was reading sympathetic critics like you and Roderick.

              In any case, no, I’m not going to beat myself up. But I appreciate your encouragement.


  7. A question for Roderick, back on inequality: I wonder whether you think it would make sense for left-libertarians to vote for Elizabeth Warren in the 2020 presidential election? Sanders aside, she’s the candidate typically described as most serious about economic inequality, and most intent on making structural changes to capitalism. The changes she has in mind are all aimed at curbing the power of Big Business.

    Of course, the downside is that she wants to curb Big Business by relying on (and augmenting the power of) Big Government. But I think non-libertarian leftists would say that you can’t take on Big Business any other way: the defeat of Big X requires reliance on its antagonist, Big Y. To refuse that reliance is to will the end (equality), but forswear the means (laws that tame capitalism).

    That question occurred to me while reading this article. It’s pretty long (at least I thought it was, reading it on a phone), but the first few pages give the gist:

    That picture, though. I feel like she’s pissed off at the sheer frivolity of our discussion, and wants us to stop with all this philosophical mumbo jumbo and come up with a fucking plan already. She’s got 20 plans. We haven’t come up with crap.


    • For a left-libertarian, that’s like asking whether firefighters should vote for a candidate who is really serious about fighting fires, but whose approach has the “downside” that she favours fighting fires by spraying kerosene on them.

      Yes, non-libertarian leftists will say “you can’t take on Big Business any other way,” and have been spraying kerosene on the fire for over a century. The results are not impressive.


      • Well, whether one agrees or disagrees with them on grounds of policy or ethics, I think it’s hard to deny that the go-to tactics of the left–environmental law, labor law, antitrust law, land use regulation, taxation, and (in its time) unionization–have done an impressive job at cutting Big Business down to size. I mean that strictly as a matter of causal efficacy, not moral justification. Moral scruples to one side, I can’t think of anything that’s been comparably effective.

        The one anti-big-business movement that I follow closely, BDS, has foundered precisely because it lacks access to state power (or access comparable to its adversaries). You’d think it should be easy to boycott or divest from firms that support the Israeli occupation, at least once you identify the firms in question–ReMax, Air Bnb, Caterpillar, Hewlett Packard, and so on. But if the other side has access to state power, even that effort is foredoomed to failure. BDS doesn’t so much want access to state power per se as access sufficient to acquire the power to deny access to the other side. But even that minimal goal requires some engagement with the state: you can’t get a mere boycott off the ground unless you lobby against anti-boycott legislation. And boycotts are weak tea. How likely is it that BDS can do anything to hurt Caterpillar through a boycott?

        My point isn’t that we should vote for Elizabeth Warren. It’s that the Elizabeth Warrens of the world are the only ones with a workable agenda for cutting Big Business down to size.

        I know, I know I haven’t read enough about agorism to speak so hastily.


    • That is admittedly one of the most amazing Completely Serious facial expressions I have ever witnessed. You can’t see what her hands are doing in this photo, but I feel confident that that is exactly the facial expression our future Professor President adopts as she slams a paperback copy of THE AFFLUENT SOCIETY down on the table in front of her and proclaims “THIS IS WHAT WE BELIEVE.”


  8. So here’s a thought on what divides Rand/Branden from Rothbard. You (Roderick) say:

    …Rand fails to draw the logical conclusion that any firms that do manage to become enormously wealthy in the present-day economy are in most cases likely to have achieved their status at least in large part via government favoritism, and so are proper objects of suspicion, not celebration and defense.

    I think Rand’s response to this is fairly predictable. It involves two steps.

    Step 1: Rand will say that while it’s true that some business is on the receiving end of state-sponsored favors and privileges, it’s also true that all business is burdened by regulation, taxation, and a business-hostile cultural climate. The popularity of many of the Democratic presidential candidates, like Warren and Sanders, as well as the populism of Republican politicians like Trump is a reflection of the latter hostility. If we “do the math,” Rand/Branden would say (not that I have any idea how this math would go), the pro-business and anti-business dimensions of the contemporary state cancel one another out, leaving us in a position to infer, on a case by case basis, that de facto economic success often reflects entrepreneurial or commercial merit. No need for a priori suspicion.

    Step 2: With Step 1 in place, Rand will invoke her famous “pyramid of ability” principle from Galt’s Speech: “When you live in a rational society, where men are free to trade, you receive an incalculable bonus: the material value of your work is determined not only by your effort, but by the effort of the best productive minds who exist in the world around you.” Suppose ex hypothesi that our society is rational enough and free enough for this principle to apply. In that case, if we assume Step 1, she’ll say that inequality is justified by way of the pyramid of ability that shines through the rubble of the mixed state. Indeed, we should be grateful for it, as inequality benefits everyone. Without it, the less productive would “starve in their hopeless ineptitude.”

    Given Steps 1 and 2, she doesn’t draw the Rothbardian conclusion because (she’d insist) it’s not the right inference to draw. If the privileges and burdens of state interference cancel each other out, and the pyramid of ability explains and justifies inequality on the free market (or in a market where the privileges and burdens of state interference cancel each other out), inequality is justified.

    My own view: I’m agnostic on Step 1. But I do think it has to be factored into the equation.

    Re Step 2: If you grant the truth of the pyramid of ability principle, it does a lot of work for Rand, but despite a certain surface plausibilty, I think the principle leads to serious incoherence in Rand’s views (or to incoherence and a reductio, depending on how you look at it). Here’s the problem.

    Suppose that I am (of course) at the top of the pyramid, and you two–Roderick and David–are (naturally) way down below me. I invent something, X, which I sell to some company for a million dollars; that company then employs the two of you at a wage of $10 an hour, where the existence of your jobs is causally dependent on the invention of X. (Yes, $10 an hour; you’re that far down on the pyramid of ability.)

    So far, so good, right? Wrong. On Rand’s view, “In proportion to the mental energy he spent, the man who creates a new invention receives but a small percentage of his value in terms of material payment, no matter what fortune he makes, no matter what millions he earns.” So my million is far less than I deserve, and your $10/hour is far more than you deserve.

    Isn’t that a problem? Rand writes as though we can expect selfish producers like me to show a kind of Aristotelian magnanimity or liberality for workers like you, accepting our miserable million dollars for the Super Colossal achievements we’ve produced, then passively sitting by as parasites like you make $10 an hour, cashing in on the beneficence we’ve made possible. But neither magnanimity nor liberality are Objectivist virtues. From a Randian perspective, they sound a lot like altruism. So why should We, the Producers, accept that? Meaning: why should we accept receiving but a small percentage of our value? An incalculable percentage of a lot of money should be a big percentage, not a small one. Frankly, even that won’t be enough, but it’s a start.

    The relevant Objectivist principle is neither magnanimity nor liberality but the trader principle: we all ought to be trading value for value. Whatever “value for value” means, it can’t mean “accepting a magnanimously small percentage of the value you’ve created while other undeserving people make away with it.” Alas, I just have a lot more to trade than you. So if I made X possible, it shouldn’t be sufficient for me to get the contract price of X, a mere million dollars. I mean, what I’m owed is “incalculable,” remember? So capitalist price mechanisms are miserably beside the point here. What I should really be getting (at a bare minimum) is the contract price for the sale of X plus a cut of every wage paid that is causally dependent on X. At a bare minimum, Roderick and David owe me a cut of their wages. Frankly, so does the whole working class. I know that sounds crazy. But we’re talking Objectivism here. Crazy is the new normal.

    One problem here is that as stated, the pyramid of ability principle contradicts the trader principle. A social system built on the former systematically violates the latter.

    A second problem is that the only remedy for the preceding problem is to permit upward redistribution (meaning from the poor to the rich). If the workers are getting an unearned “bonus,” it makes good moral sense to take it away from them and give it to those who really earned it. In my example, that would be me. This seems both like an incoherence (it violates Rand’s ban on redistribution) and a reductio (which I won’t bother to explain). But no matter how you describe it, it’s a problem.

    In a strange way, I think Rand has re-invented a problem that David discusses in his book on Aristotle’s Politics. A potential problem in Aristotle’s Politics is that Aristotle’s conception of kingship turns the king into a person of superhuman virtue, owed allegiance by a lesser race of mere mortals whose participation in the polis is rendered merely nominal by the king’s mind-boggling awesomeness. (It’s a potential problem; I’m not passing judgment on whether or not David resolves it in the book.) What Rand has done is to re-create the same problematic, not with kings but with inventors and entrepreneurs. Having turned them into gods, she invokes their superhuman status to justify economic inequality in a capitalist market–except that doing so creates more problems for her than it solves.

    I guess that puts my view of things in between Rand’s view and Rothbard’s. I can’t share Rand’s valorization or defense of Big Business, but don’t see the need for Rothbard’s suspicion, either. I’m just a concrete-bound empiricist through and through.


    • Well, the a priori suspicion is a starting point, not an ending point. It’s not as though left-libertarian critiques of existing economic inequalities rest solely on the a priori suspicion; they follow it up with lots of a posteriori work detailing the specific ways in which large, succcessful firms are benefiting from state privilege.

      Yeah, the value-for-value thing is a puzzle. I mean, if I trade you five dollars for a hamburger, obviously I value the hamburger more than five dollars, and you value five dollars more than the hamburger, so how is an exchange of equal values even possible? Rand sounds oddly like anti-profit socialists here.

      Nice point about the comparison with Tottles on kingship.

      Liked by 1 person

      • Yeah, the value-for-value thing is a puzzle.

        Peikoff handles this by saying that the trader principle demands “appropriate” payment under conditions of mutual consent (OPAR 286), so that “a man deserves from others only that which he earns” (OPAR 287). Later, he writes: “The market price of a product is determined by the conjunction of two evaluations, i.e., by the voluntary agreement of sellers and buyers…The market price is…at once the highest price sellers can command and the lowest price buyers can find” (OPAR 396).

        That goes some of the way toward resolving the problem. On Peikoff’s view, trade doesn’t require literal equivalence in value, but an agent-relative judgment of appropriateness under conditions of consent. If it is rational for you to value a hamburger at $5, and rational for me to value the making/selling of one to you for that, then once we consent to the exchange, I owe you a (good?) hamburger, and you owe me $5, which we deserve from one another and have earned.

        But Peikoff forgets that the trader principle doesn’t just require mutual consent but the mutual consent of equals. (Rand’s version of the trader principle makes explicit reference to equality; Peikoff’s does not.) Rand doesn’t clarify what equality is supposed to mean here, or what work it does, but asymmetries of bargaining power are an obvious problem. It’s not clear what a seller’s “commands” and a buyer’s passive acceptance has to do with moral desert under conditions of asymmetric bargaining power. If you and I stand in an asymmetric power relationship, and the explanation for the asymmetry is luck, why would the result of our voluntary bargaining track moral desert? It doesn’t take much ingenuity to imagine situations in which it obviously wouldn’t. Taken at face value, Peikoff’s formulation seems to imply that Roark deserved to be treated like shit–deserved everything he got–for half of The Fountainhead.

        But even if Peikoff somehow solved the trader principle part of the problem, the pyramid of ability presents a separate problem. If a man “deserves from others only what he earns,” then given the pyramid of ability, justice is never, ever done: it’s not just that the criteria for “appropriate payment” are unclear, but that there cannot in principle be any such thing as appropriate payment at all. Given the nature of the pyramid of ability, the people highest up on the pyramid always get less than what they deserve; the rest of society gets more from them than they deserve. So the market price is always wrong (meaning: fails to track moral desert) even on Peikoff’s conception of what the market price is supposed to be.

        The pyramid of ability entails an inverted form of Marxist exploitation–either as plausible or as implausible as Marx’s, I’m not sure which. Not that it matters.

        Postscript: Contrary to what I said above, Peikoff’s account of the trader principle does discuss equality, but as something of an afterthought to the main discussion (OPAR 288). It isn’t part of his account of the trader principle (286-87).


      • “And [megalopsuchoi] want their successes to be noticed, and make them the subject of their talk, hoping in this way to win respect” (NE IV.3).

        Honest truth? I only skimmed that section. The book was due back at the library, so I had to return it. Hence the hedging. You wouldn’t want me to have been late returning it, would you, Mr Megalopsuchos?


  9. From the title of the root composition for this thread, I was surprised to see that it concerned business firms. I thought concerns about inequality of wealth would be mainly about inherited family wealth. Anyway, on that latter issue, I’ve a very inviting 2018 book from Oxford on my shelf titled THE INHERITANCE OF WEALTH – JUSTICE, EQUALITY, & THE RIGHT TO BEQUEATH. No telling how many years before I could get to it, due to other projects, but it surely looks worthwhile. Especially for me, as by the time I stopped doing political philosophy, in the late ’80’s, I’d come to see important parts of what Locke, Rand, Rothbard, and others in the libertarian line put forth on property as blind to substantive elements in applauded property rights that is in fact conventional and traditional, blinded by lots of (inappropriate) ‘natures’ talk.


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