Posted on 02/07/2009 11:11:19 AM PST by Publius
Synopsis
Dagny fails to get a straight answer from the president of the United Locomotive Works as to when she will get her diesel engines and what is the source of the delay. There is even a hint she is being impolite by asking these questions.
Upon returning to the office, Eddie Willers tells her that McNamara of Cleveland has gone out of business and disappeared.
Dagny walks home through the streets of New York, and along the way she encounters signs of the times. First, there is a shop where a radio speaker is broadcasting a classical music concert with a piece that is both atonal and pointless. Then a book store advertises a novel as “the penetrating study of a businessman’s greed.” A theater shows a movie that is trivial. A couple leaves a nightclub drunk and staggering.
Arriving at her midtown apartment, Dagny puts on a recording of Richard Halley’s Fourth Concerto, which leads to a flashback on the life and career of the composer who had disappeared eight years earlier after the triumph of his opera “Phaeton”. Reading the newspaper, she stumbles upon a picture of Francisco d’Anconia, in town at his suite at the Wayne-Falkland Hotel for the purpose of dating a hat check girl and eating at a famous deli. Dagny drops the newspaper and silently sobs.
Jim Taggart awakens past noon to the sound of Betty Pope cleaning up in the bathroom after a night of meaningless sex. He brags to Betty that at this afternoon’s board meeting he will put Dagny in her place. He is interrupted by a hysterical phone call from Mexico. The People’s State of Mexico has not only nationalized Francisco’s San Sebastian Mines but Taggart Transcontinental’s San Sebastian Line.
Jim puts the best face possible on this development at the board meeting. He takes credit for running substandard service with old equipment so that the Mexican government could not confiscate any useful assets of the railroad. Delegating blame, he asks the board to request the resignations of the consultant who recommended building the line and the railroad’s Mexican agent.
Upon returning to his office, Jim finds Orren Boyle waiting for him. Francisco has lost $15 million in the nationalization, and Jim and Orren want to find out how he plans to recover their investments. Jim asks for a meeting with Francisco only to be told that Francisco does not deign to meet with him because Jim bores him.
The National Alliance of Railroads passes an Anti-Dog-Eat-Dog Rule aimed at curbing “destructive competition”. Railroads defined as newcomers to an area serviced by a senior railroad must shut down within nine months. They can instead build in “blighted areas” where there is no need for rail service because “the prime purpose of a railroad was public service, not profit.” Major railroads, however, were entitled to public support to help survive. Dan Conway of the Phoenix-Durango Railroad, the intended victim of the rule, shuffles out of the meeting chamber demoralized.
Jim brags to Dagny that he has taken Conway out of the game, and Dagny is furious. She goes to Conway and offers to help him against the looters, but he demurs, pointing out that the majority has made its decision and he doesn’t have the right to buck it considering the tenor of the times. “Who is John Galt?” he asks. Conway tells Dagny that she needs to get the Rio Norte Line fixed up because it’s the only lifeline keeping Ellis Wyatt and the businessmen of Colorado going.
Returning to her office, she finds Ellis Wyatt himself barging in on her. He gives Dagny an ultimatum: in nine months time, either the railroad gives him the service he requires or he will take it down with him when its failure destroys him. Dagny tells him, “You will get the transportation you need, Mr. Wyatt.”
Dagny meets with Hank Rearden at his mill, asking him for a nine month delivery schedule for Rearden Metal rather than twelve, and Rearden agrees. He enjoys charging Dagny more for the rail, but Dagny has no problem with that. This is business, and she is not a moocher. The intent was for Colorado to save the railroad, but now the railroad must save Colorado. Hank sees their role as saving the country from its own lunacy, a lunacy that just has to be temporary. They understand each other: “We haven’t any spiritual goals or qualities. All we’re after is material things.” Dagny senses there will be a problem about that.
Railroads, Regulation and Competition
The early years of railroading saw competition that was vicious. It was not just that railroad men fought each other, they sought the aid of government in their battles. As soon as an operator of sufficient size built, operated and stabilized a line, he either acquired trackage rights over the line of a competitor, making him an ally, or acquired the competitor outright. This is how networks were built and America’s major railroads emerged.
In dealing with customers, railroads were predatory. This was standard behavior in the era after the War Between the States, a war in which American industry had defeated American plantation agriculture. Ellis Wyatt exclaims, “You expect to feed off me while you can and to find another carcass to pick dry after you have finished mine.” Wyatt is describing the world of Atlas Shrugged, but he could just as easily have been describing the second half of the 19th Century.
There is a saying in Buddhism known as the Law of Karma: “The good or bad you do in a given lifetime will come back to you in that life or a future one.” Americans prefer the pithier and more Protestant, “What goes around, comes around.” The predatory behavior of America’s railroads led to the Granger Movement which favored nationalization of the railroads. Outrage reached sufficient levels during the Cleveland Administration that Congress created the Interstate Commerce Commission to regulate the railroads.
Once a commission is created to regulate something, it takes about two decades before the regulated gain enough influence to become the regulators. This is a natural process, a revolving door that circulates executives from regulated industries, lawyers, lobbyists, politicians and regulators themselves. On occasion it also involves the passing of cash. Over time the ICC became the tool by which major railroads kept competitors out of the game by building a bureaucratic structure impossible for any but the best legal minds to penetrate. As long as railroads were the key movers of people and goods, this structure provided stability. But it failed as soon as real competition emerged.
By the early 20th Century, the internal combustion engine prompted states and counties to build roads to make space for all the cars pouring out of Henry Ford’s plant. After World War I, this began in earnest and increased exponentially during the Depression when the federal government created make-work jobs building bridges and highways.
The building of roads created space for trucks to compete with trains. At first, America’s highway network was a collection of two-lane roads, and trucks were not able to compete well for long distance hauling. But the Interstate Highway System changed all that. Antiquated work rules, featherbedding and deferred maintenance led to America’s railroads tearing out much of their physical plant in the Sixties. Wall Street believed it might even be in the best interest of investors to shut down the railroads and move everything by truck over the new subsidized freeway network. Railroads not only didn’t earn the cost of their capital, they were losing their shirts.
It was the Penn Central bankruptcy of 1970 that provided the reality check. The Penn Central, created in 1968 by the merger of the Pennsylvania and New York Central railroads, crashed so catastrophically that it took down all the railroads in the northeastern US.
The Penn Central’s (ex-Pennsylvania) Northeast Corridor was the single most important piece of transportation infrastructure in the area – just as important as the New Jersey Turnpike – and it ended up in the hands of the government’s Amtrak, which had been created to preserve nationwide passenger rail service after the railroads had given up on it. Passenger trains had been subsidized by the Post Office via the mail contract, but in 1967 that had been shifted to the airlines. Government ownership was good for the Northeast Corridor but ended up being a major policy mistake.
The rest of the railroad infrastructure in the northeastern US ended up in the hands of the government’s Conrail, which hemorrhaged money until the railroad sold off much of its branch network to short line operators. In 1986, the government sold Conrail back to Wall Street, and a decade later CSX and Norfolk Southern carved up Conrail between them.
The creation of a large number of short line railroads was one of the most important developments in railroading in the second half of the century. The Class I railroads had not been able to make money on these branch lines, but short line operators provided the kind of customer service the major railroads had long since forgotten. With short line operators making these branches profitable, the Class I’s could turn their attention to hook-and-haul operations on major rail trunks.
In 1980, Rep. Harley Staggers (D-WV) wrote a bill that would replace the ICC with the Surface Transportation Board and finally deregulate the railroads. Following its enactment, by the end of 1980 all major railroads were profitable again. This set off a wave of mergers that is still ongoing. Competition is stiff, and each railroad feels a need to chivy its competitors out of every last available scrap of cargo – while the trucking industry continues to eat the railroads’ lunch.
Until recently, America’s railroads had been loath to accept government money to fix up their infrastructure because of a terrible fear of Open Access, which the government might demand as its price. This would require the railroads to dispatch the trains of competitors on their tracks for a fee.
However, Norfolk Southern has accepted government money to crown-mine the tunnels on its Norfolk-to-Chicago route so they can handle double-stack containers, the latest innovation in railroading. NS is also looking at government money to expand the capacity of its I-81 line from Harrisburg to Chattanooga to take trucks off that saturated interstate, and CSX is looking for money to fix up its lines that parallel I-95 and I-85 in the South. (It’s fascinating that the states of the Old Confederacy are far ahead of their brethren in understanding the role of rail in hauling cargo efficiently.)
Today there exists the Association of American Railroads, which lobbies before Congress. It has none of the monolithic power of the National Alliance of Railroads, but there is a sentence in the book that refers to laws enacted by the National Legislature that the alliance appears to be enforcing. Much like the old ICC, its practical goal is to protect current operators against upstarts, but it’s a voluntary association. Dan Conway was a signatory, and he believes that he must, if necessary, sacrifice himself for the greater good.
Some Discussion Topics
The ongoing theme suggests that if you put your name on something, you stand behind it and are accountable. By "nationalizing" the name, you don't have the same passion or drive to keep it thriving. The fact that Dagny questions the owner about his product, shows he does not stand behind the quality. Dagny does stand for Quality and her questioning leaves him defensive, thus his projection back on her "impolite question".
Rand is expert at using metaphors and symbols, something she may have picked up from Edgar Allen Poe. So far, we’ve seen a rotted out tree, a bar on the upper floor of a skyscraper that is decked out like a cellar, and now a precision machine rusting away on the property of the United Locomotive Works. Of what significance is this symbol? How does it relate to its predecessors?
The world is topsy turvy and without a core value. There are a few that understand that the value of providing goods and services does benefit the masses. The opposite is happening with those "rulers" who altruism truly hides their greed and lust for power. But it is those "rulers" who have no soul or value.
Dagny’s walk through Manhattan to her apartment reads like a tour of one of the circles of Dante’s hell. It opens a window onto the society of America’s greatest city and its influence over the rest of the country. Let’s take those four images apart and see what makes them tick.
The radio playing the concert, "They were a long screech without shape, as of cloth and flesh being torn at random This one stuck out to me as again a soulless melody reflecting upon a society that will accept anything in the culture. Much like today's movies, music etc.
We are developing a body count. Richard Halley disappeared eight years ago. Owen Kellogg left the railroad to vanish in Chapter 1. Now McNamara, the Cleveland rail contractor, has gone out of business and disappeared. Let’s build a list and watch it grow.
Each new disappearance leaves a vacuum to those that want power.
Woody Allen once said, “Sex without love is a meaningless experience – but as meaningless experiences go, it’s one of the best.” Why can’t Jim Taggart enjoy his meaningless experience?
There is no soul, thus, even the mechanics of sex cannot be satisfying.
The threat of the railroad’s Mexican property being nationalized was foremost in Dagny’s mind, which is why she left the railroad’s worst assets available for the looters to confiscate. Orren Boyle insisted it would never happen and Jim bought those excuses. When nationalization occurred, Jim took credit for Dagny’s quick thinking, then delegated the blame for his own failures to two fall guys who were summarily fired. Is this any different from what happens today in the offices of America’s largest corporations? What does this say about the current state of American business?
The people that run the best companies take responsibility for every decision, as with Dagny. Companies and in turn, Government that shirk that responsibility to others continue into a spiral blame game that never solves anything. The credit crunch we are in right now has a start and an exact blame. Has the Government taken that responsibility? Who do they blame? Also, who do the companies that were affected, who do they blame? Again we are in a spiral, with only pointing fingers with no solution. Only more of exactly the same thing that will continue the spiral.
Dan Conway echoes Jim Taggart’s statement that it’s not right to buck the will of the majority. In his case, however, Conway is the victim of that will. Examine the holes in Conway’s logic when he gives in. Later we will hear the expression “the sanction of the victim”, but it doesn’t hurt to introduce the concept now. Dan Conway is the sixth person to say, “Who is John Galt?” Contrast his use of the expression to his five predecessors.
To go along with the majority means never having to take a stand for right or wrong. He is the victim because he gave up the will to prove right or wrong. With each other utterance of "Who is John Galt?", I felt as if they knew something that would get Dagny on the right track. With Dan Conway, I felt defeat.
We’ve seen Dagny interact with Owen Kellogg, Eddie Willers and Jim Taggart. But her interaction with Dan Conway is different; we see her emotions on display. Her interaction with Hank Rearden is of a different order of magnitude entirely; they are of like mind and joust not just as competitors, but as friends. What do we learn about Dagny? ”All that lunacy is temporary. It can’t last. It’s demented, so it has to defeat itself.” Hank believes that he, Dagny and other like minded people will save the country from itself. But just how long can such lunacy last? What is the fatal flaw in their argument?
They believe they are not alone and there are many who are working and toiling like they are...so far, there has not been that type of person displayed in this cast of characters. I loved the line Dagny said to Hank, "Certainly. I'm not a fool. I don't think you're in business for my convenience." Would the world be a different place if every worker understood that line?
I’m at a loss to know what the heck you are talking about. Where in my statement did I indicate that I thought such laziness was OK. I am simply trying to say that I have run across such behavior(as you did in your post) and then linking that to the rusted engine in the book. I’m sorry that I didn’t make that clear.
I love Free Republic. I am learning so much and discovering so much wonderful insight from this discussion. I keep adding to books I now need to explore. Thanks for your comments.
I think that the point of these (Atlas Shrugged) threads is precisely about the symbolism.
Is that "straight" enough?
Let's not dismiss Ellis Wyatt so quickly. He fits the Dagny-Hank molde and plays an important role later.
Great, does that mean I shouldn’t participate anymore? Are you now the ruler of the universe that decides who can take part? Go back to your crayon box.
Curiously, one of the Subjects that came up was the work of a particular writer, one Eugene Ionesco. Curious because the man wrote in French, and I was in an English Program.
In that particular Class, I learned for the very first time that writers do not always mean what they seem to be saying. That is sort of what opened my eyes to an entire world of literature that before I had not even imagined existed.
I offended you? You want to lash out at me? Get in line.
By the way, regarding the crayon box. I got kicked out of Kindergarten because I couldn't scribble.
Somewhere along the way since I got my crayons taken from me, I learned a bit about how to figure out that it is not the Dime that Eddie Willers dispensed to the the bum on page one that made it worth noting.
There is no shortage of bums.
We might get to dwell on page two tomorrow.
True enough about Nietzsche and Aristotle. I find it ironic that she railed so loud and long against Plato and yet at the heart of her philosophy is a blatant, latent Platonism. Her unremitting defense of a pure form of her philosophy gives rise to this assertion. As Thomas Sowell indicated as much in his book Conflict of Visions.
I finished reading the book in record time because I’d read a spoiler and knew where the story was leading, and I wanted to get to that point. But, although I find Rand’s writing style beautiful in some ways, it’s torturous in others. ;-)
But, this book is so relevant to our times. All the real-life characters of today are present, in one form or another, in this story, such as inefficient workers, as you pointed out. Things get worse as the story continues.
You may have noticed my essays on railroad history and other issues with each chapter. As we meet other characters, I'll be drawing parallels with real life people. In other situations where there is sufficient ambiguity, I'll be posing this as a discussion topic asking the readers to draw their own parallels.
True, our society today is much more child-centered than in the past. This book was written in the ‘50’s, which may have been the beginning of our child-centered times, but Rand herself grew up in an earlier time.
I didn’t expect soft cuddliness nor even tenderness in this story. What surprised me was the lack of expectation of children. But, I’ll wait for the next chapter to comment further because that’s where I begin to differ with some of what Rand puts forth. Next Saturday!
I just stumbled on your book club thread. I tried to buy Atlas Shrugged at the book store, last week and they were sold out, the lady in line in front of me was buying Fountain Head and a book of Rand essays. I guess that article in the WSJ spurred a renewed interest in Rand.
People instinctively understand that we're living through it. That was why I decided to start the book club.
Your post reminds me of you telling of the railroads and the featherbedding, I remember the news that that made. Doesn’t seem any different than today’s “job bank” for the autoworkers.
Our library’s e-book copies of AS and Fountainhead have a waiting list...for electronic downloads!! Idon’t know what the print copy situation is.
Maybe there is still hope, if enough people start reading and thinking about the consequences of what the government is doing.
I’m sure that the delay in passing the stimulus package, and the reduction in the total reflects increasing communication to Senators and Representatives, ala the defeat of Hillarycare in the ‘90’s.
Obama may not walk on water, after all.
Kirk
I’ve seen them several times in Barnes & Noble. Not large numbers of them, but they were on the shelves. I bought my copy of AS through Amazon (and a copy of Anthem at B&N).
I was going to order the book from Amazon, but they said it could take up to two weeks, or more. I was sure that the book store would have it in by now. They said that it was on order.
The mention of lack of children made me think about something else. Is there any mention of any type of recreational activity throughout any of the book? Any ‘bread and circuses’?
Even when Dagny discovers a truth, even there, the only joy is in working - with the exception of listening to music. There just seems to be a overlay of dreariness throughout the entire book.
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