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FReeper Book Club

Atlas Shrugged

Part I: Non-Contradiction

Chapter X: Wyatt’s Torch

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Please, no spoilers, folks!

Eugene Lawson reminds me of Anthony Mozillo, the CEO of Countrywide Financial. He made it a point to figure out how to make home mortgage loans to those who were unworthy. He never seemed to realize that making loans to those who could never hope to repay them was only setting the poor into bankruptcy.

Howdy, Pub’!

So we’ve made Chapter 10, Wyatt’s Torch, one of the most significant chapters in Atlas Shrugged. Chapter 10 is a quest chapter, a series of episodes describing Dagny’s search for the engineer who created the mysterious motor that Dagny and Hank found in the wreckage of the Twentieth Century Motor Company. Each step along the way helps us fill in the picture of what happened there to cause the company’s downfall, the abandonment of the motor, and the crippling poverty now gripping the surrounding countryside.

Our first stop is the decaying community of Rome, Wisconsin, (the Rome of AD 476, perhaps, that has not fallen but is in the hands of the barbarians) wherein one Mayor Bascom presents an argument that is critical to the understanding of the economic and philosophical underpinnings of socialism.

Within a long and frightening list of characters and events chronicled in the next few chapters is Rand’s own Bernie Madoff, a fraudulent financier named Mark Yonts:

“He wasn’t the kind who ever operates anything. He didn’t want to make money, only to get it.”

That didn’t, of course, prevent the Mayor from helping Yonts’s plunder:

“There’s plenty of laws that’s sort of made of rubber, and a mayor’s in a position to stretch them a bit for a friend. Well, what the hell? That’s the only way anybody ever gets rich in this world” – he glanced at the luxurious black car – “as you ought to know.”

“Property is theft” said Pierre-Joseph Proudhon, the proto-anarchist. (He also stated that “Anarchy is Order” in Confessions of a Revolutionary. A bit of trivia there – I capitalized both nouns in the second sentence to highlight the origin of the “circle-A” logo that anarchist kiddies like to spray-paint on vertical surfaces, raging against the capitalist machine with weapons purchased on special from Costco at $1.39 a pop). Interesting fellow, Proudhon. Before his breakup with Marx he was quite the thing in post-revolutionary France, at one point attempting to institute a curious scheme for the redistribution of wealth - a bank that obtained its money from the evil capitalists through an income tax and lending it to the workers at what amounted to sub-prime rates of interest. It failed, of course. Surely nobody would be stupid enough to try that in the United States? All that we learned from it is that folly renamed and taken to a national scale is still folly.

This fundamental article of faith, of received truth underlying socialism is that wealth is theft; that any movement from the “natural” even distribution of wealth is illegitimate, that the wealthy are ipso facto criminal, and that as such it is not a criminal act, but one of “social justice” to steal it back on behalf of the people (and take a prime cut off the top for being clever enough to figure the whole thing out). I’ve never run into a thief yet who didn’t consider himself cleverer than his victims. Clearly the Mayor feels he has the whole thing figured out, and Hank has to restrain his hands from the Mayor’s throat.

A crooked financier, and next a failed bank. The reader is to be forgiven for suspecting that Rand owned a crystal ball.

“Some say it was this motor factory that broke the bank, but others say it was only the last drop in a leaking bucket, because the Community National had bum investments all over three or four states. Eugene Lawson was the head of it. The banker with a heart, they called him.”

This is the same Eugene Lawson who is now working with Wesley Mouch at the Bureau of Economic Planning and National Resources. The “banker with a heart,” meaning he made loans on a basis of something other than the likelihood of repayment. Banks that do that tend to fail, as we are learning so bitterly of late, having compounded one banker’s foolishness to all the banks by governmental mandate. Incredibly, Rand anticipated that as well.

One of Dagny’s stops involves a fellow named Hunsacker, who was attempting to raise the capital necessary to come into possession of the old Starnes/Twentieth Century factory. A hard-hearted, classic, and very successful banker Midas Mulligan, who disappeared under mysterious circumstances seven years ago, turned him down as incompetent to make enough money for repayment. As if that were the primary criterion, instead of ”Need, not greed,” as Eugene Lawson puts it later. And so what does Hunsacker do? Why, he sues, of course:

“…the state of Illinois had a very humane, very progressive law under which I could sue him…I had a very smart, liberal lawyer who saw a way for us to do it. It was an economic emergency law which said that people were forbidden to discriminate for any reason whatever against any person…[Judge Narragansett threw it out]…but we appealed to a higher court – and the higher court reversed the verdict and ordered Mulligan to give us the loan on our terms.”

We’re living this part of the chapter, and notwithstanding what Marx said about it, the first fictional occurrence of this history was the farce and the second, real one, the tragedy – a government forcing banks to lend money at an unacceptable risk for criteria other than ability to repay, and an ensuing default when the borrower proves incapable of generating wealth sufficient to meet his obligations. It took half a century for this to grow from a fictional tadpole to a real-world Godzilla, but grow it did. This was not prophecy, it was a necessary consequence of the sort of corruption she was positing and that the United States came later to embrace.

Mulligan paid off all of his creditors and got the heck out. We’ll meet him later. But lest anyone think it outlandish that a bank could be punished for not making loans at unacceptable risks I offer that individual This Story. Once again, reality has caught up with fiction.

Dagny next tracks down the Starnes siblings, offspring of the entrepreneur Starnes who founded the Twentieth Century Motor Company. They ruined it within a few short months following a set of precepts that make an observer of 20th-century history shudder with recognition. After Starne’s death his children actually tried to manage the firm on the Marxian basis of “From each according to his ability to each according to his need.” Literally. The factory was run by workers’ councils – the Russians call these “soviets” – who adjudicated salary on the basis of the employees’ abilities to state their need. Naturally where need was rewarded and achievement punished the achievers departed very rapidly and the needy remained to divide the pie, dwindling because those capable of replenishing it were gone.

Lenin actually tried something like this between 1918 and 1921. His industries went broke nearly as quickly as Rand’s fictional one, and the upshot was a new, “realistic” approach named the New Economic Policy. But along with this was a subtle difference that Trotsky pointed out in The Revolution Betrayed that “to each according to his need” was shown not to be a feasible principle during this “stage” of historical progress toward communism. It became “to each according to his work,” and naturally that work included a premium on the activities of the ruling class, to their enrichment. Stalin followed this with full collectivization and central direction, after which the workers’ soviets went the way of the workers’ councils at the Twentieth Century Motor Company. Some of their inhabitants were stood against a wall and shot, blinking, never understanding why their socialist fantasyland had such a grim ending.

In the event, however, one of the Starnes heirs did manage to leave with some of her fortune intact and all of her self-righteousness. Djilas’s “New Class” always does. Dagny manages to keep her jaw from dropping at this cold recitation of ruin.

Dagny heard a cold, implacable voice saying somewhere within her: remember it well – it is not often that one can see pure evil…

The result of this ethical and economic catastrophe was the broken bits of a revolutionary motor residing in the rubble of the abandoned factory. They’d run out of things to steal, but what they ran out of first was the vision necessary to recognize the motor for what it was. Those capable of that left early on, disgusted. One of these was named William Hastings, the supervisor and defender of the young engineer who invented the motor. Dagny tracks down his widow, who gives her two interesting pieces of information in addition to verifying the connection with the inventor. First, that her late husband disappeared for one month each year, in the summertime, to where she does not know. And second, that she has seen the inventor himself in the company of a white-haired gentleman on a railway platform. Can this inventor be his mysterious third student, the friend of both Ragnar Dannerskjold and Francisco d’Anconia?

Dagny is given a lead to the older man (with rather improbable precision) by Mrs. Hastings, and she tracks him down to a diner in which the quality of the food, and everything else, is high enough for her to offer the cook a job. He declines. She ups the offer and still he declines, but she finds out that he is, in truth, the philosopher Hugh Akston. She is close to her quarry now, very close. But what on earth is Akston doing as a fry cook in the middle of Wyoming?

“What are you doing out here?”

“Making a living.”

“This doesn’t make sense!”

“Are you sure? …By the essence and nature of existence, contradictions cannot exist. If you find it inconceivable that an invention of genius should be abandoned among ruins, and that a philosopher should wish to work as a cook in a diner – check your premises. You will find that one of them is wrong.”

“Check your premises.” It is Aristotle’s iron law and the war cry of Objectivism. It is the answer to an individual who presents you with a logical conclusion that flies in the face of observed fact. Check your premises.

She started: she remembered that she had heard this before and that it was Francisco who had said it.

Akston’s other student. But Akston will not help her find the inventor. Dagny remains determined.

“I will find him.”

“Not until the day he chooses to find you – as he will.”

Dagny abandons her search out of a sense of honor, at least for the time being. Nothing she can do honestly will take her any closer to the elusive inventor of the motor. She returns to the frantic world of politics and industry to find a distraught Eddie Willers, who has been holding Taggart Transcontinental together with his bare hands, describing what to him is simply unbelievable:

“Dagny, you’re going to think I’m insane, but I think they’re planning to kill Colorado.”

He is correct. Eddie understands what the looters do not, that wealth is the product of achievement, not theft, and that when the achievement ceases or is deliberately prevented, wealth is no longer created. Eventually the theft ceases as well, because as we have seen at the Starnes company, there is nothing left to steal.

But to the looters – we may openly call them socialists by now, I hope - wealth is a pile of material goods that someone has amassed immorally, to be confiscated and divided by those who have established political control over it. They are killing Colorado because they cannot control it, and because it represents a threat to the piles of material goods they do control. And, on a deeper level, they are killing Colorado so that the achievers, who appear to them only as particularly skilled thieves (although not so skilled as themselves) will have nowhere else to go.

That is, parenthetically, the reason that communism – its own proponents state this – can only succeed if it is established on a worldwide basis. There must be no escape. That strikes me as a particularly revealing admission. If communism is, as Marx insists, the acme of human actualization, then why would anyone wish to escape from it? And yet every communist state ever established became a prison camp in pursuit of some mythical, never realized benefit to the prisoners. To the communist the inhabitants wish to escape because they are not yet perfect enough for the system. In no sense must the system be perfect enough for them. It is the collective, after all, that is supreme, not the individuals making it up. But in fact this is the death of the human spirit, not its transcendence, and that is the point Rand is attempting to convey in Atlas Shrugged.

And so the Bureau of Economic Planning and National Resources makes its move, and if this too sounds disturbingly familiar it ought to:

“The laws shouldn’t be passed that way, so quickly.”

“They’re not laws, they’re directives...there’s no time to palaver when it’s a national emergency.”

We have to remind ourselves here that it is a fictional character speaking this and not Rahm Emanuel, for whom such an emergency is not to be wasted. It is a complete enough package, to be sure. The railroads on which Colorado depends are to be limited in performance, the mills limited in output, existing firms prohibited from moving there, and the interest on the bonds they purchased in order to stay alive is placed under a moratorium for five years. And in addition the cost for all of this is to be covered by a special tax on the very people at whom it is aimed.

And, in reply, Ellis Wyatt makes his own move:

[Dagny recalled] two pictures: Ellis Wyatt’s implacable figure…saying, “It is now in your power to destroy me; I may have to go; but if I go, I’ll make sure that I take all the rest of you along with me” – and the circling violence of Ellis Wyatt’s body when he flung a glass to shatter against the wall.

“Ellis, don’t! Don’t! Don’t”

…In a break between mountains, lighting the sky…the hill of Wyatt Oil was a solid sheet of flame…later, she looked at his handwriting on the board… “I am leaving it as I found it. Take over. It’s yours.”

And so Rand strips us of the romantic hope that persons of achievement must always prevail over the obstacles presented to them by lesser men. It isn’t so. And a society corrupted to the point where it isn’t so, is committing suicide. Gone now is the hope for an industrial renaissance in Colorado, for the presumptive progressive ascension. It turns out that progress can also descend. And here, at the end of the first section of Atlas Shrugged, we realize which direction progress will be progressing.

Have a great week, Publius!

Publius,

My wife and I finally caught up with the group! Woo hoo! She read to her kids and family so much out loud growing up that I decided to read it out loud to catch up, since the logistics of trading a single copy of the book didn’t work for me. What I’ve found is that it helps me to concentrate and not lapse off during some of the less interesting passages and I often get editorial commentary from her while reading. So that’s working out well. And she enjoys kicking back and listening, so it’s a win-win.

I had some commentary on some of last week’s topics. Is the proper etiquette to put those back in last week’s thread or has everyone moved on from there and we’re putting all comments into this week?

I’ll get back to the current topics in another post.

Great idea and great job you’re doing with this!

Ted

Can you add me to this ping list? Thanks! ...magritte