Posted on 05/02/2009 7:46:31 AM PDT by Publius
Synopsis
Head of State Thompson meets with his economic brain trust: Wesley Mouch, Eugene Lawson, Jim Taggart, Dr. Floyd Ferris, Orren Boyle, Clem Weatherby, and Fred Kinnan, who is head of Amalgamated Labor of America. They are discussing Directive 10-289.
Wesley Mouch is upset that people are not sufficiently motivated to cooperate; he needs more power. Weatherby points out that the economic climate is deteriorating rapidly. Lawson says the people lack the proper social spirit, they don’t understand that production is a duty and that there is no such thing as a personal life. Thompson, the realist, says to make sure the Mainstream Media is on board. Ferris brings out an old George Washington quote about wise and honest men and disparages it as out of date.
Fred Kinnan says this is about jobs; he suggests forcing employers to increase their payrolls by one-third. Jim screams that he wouldn’t have any use for the extra men. Kinnan says it’s not about use, it’s about need, and need trumps profit. Jim is insulted by the word profit, but he thinks there might be room for agreement if the railroad can increase its rates. Orren Boyle says he can’t afford it, and Jim says that public need trumps Boyle’s profits. Boyle says no one can accuse him of ever making a profit! Boyle can absorb a rate increase if the government increases his subsidy, but Weatherby accuses Boyle of running a black hole for government money. Thompson says to go ahead with the directive, and he’ll widen the state of emergency. He leaves the meeting.
Mouch sums up. Deterioration of the economy is so great that the best solution is to freeze everything in place and hold the line. Freedom has been given a chance and has failed; stringent controls are necessary. He reads Directive 10-289.
There is agreement that this will provide security, although Jim gets a bit hysterical. Lawson says to hell with the little people; man’s mind is the source of all the problems in the world. Ferris says that genius is superstition, there is no such thing as the intellect, and man’s brain is a social product. A genius hoards ideas that rightfully belong to the society from which he stole them. Thought is theft.
Fred Kinnan brings them all down to earth. If the Unification Board isn’t owned by organized labor, the whole deal is off. Boyle says that Kinnan is trying to get a stranglehold on every industry in the country; Kinnan smiles and agrees. If Wesley Mouch agrees to let Mouch and Kinnan control the board, Kinnan can get the union membership to swallow the rest. Jim thinks the country won’t stand for it. Kinnan laughs and says that if there aren’t rules any longer, then it’s about who robs whom. Kinnan controls the votes of his membership. He knows he’s delivering his people into slavery and they know it too, but they also know Fred Kinnan will throw them a crumb once in a while. If they’re going to be under a whip, they would prefer that Kinnan wield it. He knows he’s a racketeer and his people know it, but they know he can deliver the goods. Mouch gives in.
Everyone agrees to shut down the nation’s research labs, but the State Science Institute is to remain, Dr. Ferris insists. Out of work scientists can work for Dr. Ferris – if they toe the party line. The unfortunate ones will starve.
Jim, still hysterical, says that they will create stability and security for the first time since the Industrial Revolution. Kinnan, ever the wit, says this is the Anti-Industrial Revolution; Mouch says that statement should not leave the room. Ferris says a planned economy maximizes productive efficiency; Boyle says that centralization destroys the blight of monopoly and leads to the democratization of industry. Ferris wants to apply the death penalty to industrialists that desert their posts, but Kinnan vetoes that.
The copyright issue will cause problems with intellectuals, Lawson points out. Mouch says that publishers will have to print as many books as they did in the Yardstick Year, and with no new books, they will have to reprint old ones. Kinnan points out that intellectuals are cowards; they were the first to sell out European nations to committees of goons like those in this room. A longshoreman may someday remember he is a man and take action. But intellectuals? Ferris agrees; just put a few intellectuals on the government payroll and buy them off.
But Ferris is worried about the whole issue of Gift Certificates; they have to look voluntary. They worry that Hank Rearden could blow their whole plan apart; they must create guilt. Jim drops a bombshell when he says he can deliver Rearden. This heartens Mouch enough to give him his rate increase, much to Boyle’s discomfort.
Kinnan asks how can the national emergency end when they are making everything stand still. Mouch tells him not to sweat the details. Will taxes be frozen, Kinnan asks; Mouch says no.
All leave the room with a window view of the Washington Monument.
Dagny unintentionally sleeps over at her office, then starts work, all the while wondering why her staff has not approached her this morning. She reads a report from her chief engineer: repairs to Colorado track have been shelved in favor of repairs to the Miami line due to a three hour delay created by a derailment that caused government bureaucrat Tinky Holloway to be late. Although the rail on the Miami line is in better shape than Colorado, there is a social need for the Miami line repairs to have a higher priority. Dagny slashes her remarks on the margins.
Francisco calls and tells Dagny to check the newspaper. Eddie Willers brings her the paper and tells Dagny that no one wanted to tell her about this. Upon reading Directive 10-289, Dagny’s reaction is more than shock; she feels she is having an out-of-body experience. Only her anger grounds her. Dagny walks into Jim’s office and resigns; she returns to her office and breaks the news to her staff. She is going to her cabin in the Berkshire Mountains. She tells Eddie not to communicate with her any information about the railroad and to tell only Hank where she is. She calls Hank and delivers the news; when she ready to return, Hank will come for her. Dagny leaves the building with a sense of repose.
Hank Rearden’s rolling mill foreman quits. Even the Wet Nurse is on Hank’s side, telling him to pour as much Rearden Metal as he wishes, and he’ll juggle the books; for once in his life, he wants to do something moral. He tells Hank not to sign the Gift Certificate. More and more of Hank’s men disappear, but the personnel office isn’t notified. Instead, new men using the names of the former employees take their places at the mill. Unnumbered industrialists vanish, but the Mainstream Media won’t report it.
Dr. Floyd Ferris arrives to obtain Hank’s signature on the Gift Certificate; he wants to get the signature in time for the nightly news. Hank looks ironically at the Gift Certificate with the Statue of Liberty on it and the name “Rearden Metal” replaced by “Miracle Metal”. Ferris’ lever is the evidence of Hank’s adultery with Dagny Taggart; he points out to Hank that with experts in the art of smearing like Bertram Scudder called to the task, Dagny’s reputation will be ruined. Remembering how he met Dagny and fell in love with her, Hank signs.
The Never Ending State of Emergency
In 1933, as one of his first acts as president, Franklin Roosevelt placed the country under a state of emergency via executive order and navigated his way around the Constitution. Successive presidents signed one executive order after another, declaring overlapping states of emergency.
Following Watergate, Congress decided to examine presidential misuse of states of emergency and executive orders, repealing many of them, but not all. Congress understood that if it removed all states of emergency and restored genuine constitutional government, Congress would lose much of its power and reduce the overall power of the federal government. The result would be Congress meeting for three months every year and then going home; this was considered unacceptable.
As Paul Begala said during the Clinton years, “Stroke of the pen, law of the land, kinda cool.”
Wage and Price Controls
Upon entering World War II, Franklin Roosevelt imposed wage and price controls upon the country. This was only a small part of the conversion of America from a depression economy to a wartime economy. Full socialist industrial planning turned consumer product factories into war materiel factories.
War is about credit. To keep money flowing into war bonds, more than wall-to-wall advertising was utilized. (“It’s bonds or bondage!”) Rationing was established to prioritize certain resources for the military, and people’s money had nowhere to go except war bonds. One good thing that developed from this was that war bond money moved into the economy in a controlled pace for 25 years after the war, setting of an economic joyride. It was not until 1970 that the country finally had to face the travails of a postwar economy.
Truman removed wage and price controls in 1946. That set off a short spike in inflation and a huge wave of labor unrest, which led to the Taft-Hartley Act in 1947, reducing organized labor’s power.
In August 1971, Richard Nixon closed the gold window to foreign payments and imposed wage and price controls. Unlike the World War II experience, this time there was no rationing, and that led to shortages. Because price controls confused the usual seasonal refinery switches from gasoline to heating oil and back, the summer of 1972 saw occasional gasoline shortages and talk of rationing. Upon the removal of controls in 1974, a wave of labor unrest swept the country as workers tried to keep pace with inflation.
In Rand’s world, the government is about to repeat the mistakes of the Seventies, with catastrophic consequences.
Upton Sinclair and the 1934 California Gubernatorial Campaign
Need, use, profit. Rock, paper, scissors. In the book, it’s a rhetorical game where people claim that one trumps the other to seek economic advantage. In 1934 it became serious enough to force California’s Democratic and Republican parties to climb surreptitiously into bed to stop muckraking author Upton Sinclair.
"The American People will take Socialism, but they won't take the label.” – Upton Sinclair, 1951
In 1934 Sinclair left the Socialist Party to run for governor of California as a Democrat under the slogan, “End Poverty in California”, otherwise known as EPIC, or “Share the wealth”. It featured the concept of “production for use” as opposed to production for profit. Sinclair proposed to repeal the laws of economics and human psychology to end the Depression in California, in effect creating a New Socialist Man. His victory in the Democratic primary galvanized the party’s New Deal wing but caused much of the institutional party to team discreetly with Republican Frank Merriam behind the scenes.
This was California’s first modern media campaign. The Merriam forces received full support from Hollywood, in particular Louis B. Mayer of MGM and Harry Cohn of Columbia. Cohn’s studio produced a short subject starring Andy Clyde, late of Mack Sennett’s Keystone Kops, as a Sinclair supporter who works enthusiastically for the Share the Wealth campaign – until he receives a telegram informing him he has inherited a fortune. Merriam’s people even recruited theocratic evangelist Aimee Semple McPherson to speak on his behalf, thus making it a religious issue. No expense was spared, and Merriam won comfortably.
Missing from Sinclair’s campaign was the enthusiastic support of President Franklin Roosevelt – who knew better.
Discussion Topics
Ping! The thread is up.
Earlier threads:
FReeper Book Club: Introduction to Atlas Shrugged
Part I, Chapter I: The Theme
Part I, Chapter II: The Chain
Part I, Chapter III: The Top and the Bottom
Part I, Chapter IV: The Immovable Movers
Part I, Chapter V: The Climax of the d’Anconias
Part I, Chapter VI: The Non-Commercial
Part I, Chapter VII: The Exploiters and the Exploited
Part I, Chapter VIII: The John Galt Line
Part I, Chapter IX: The Sacred and the Profane
Part I, Chapter X: Wyatt’s Torch
Part II, Chapter I: The Man Who Belonged on Earth
Part II, Chapter II: The Aristocracy of Pull
Part II, Chapter III: White Blackmail
Part II, Chapter IV: The Sanction of the Victim
Part II, Chapter V: Account Overdrawn
Thanks once again.
Well done summary. Thanks for posting.
Thanks
Kinnan is my favorite bastard. And today he would certainly add our corporate executives to his list of cowards. As I make my rounds of my compatriots and small businessmen and shop workers I can tell you all that these men remember they are men and Americans. All they need is a national voice.
Like I said on another AS thread, Going Galt is already starting. But it is beginning at the bottom. I had a man tell me yesterday about what is going on in Washington, "I don't want those pricks running my life". It ain't "Give me Liberty or give me Death", but it makes the same point.
I admire a man with eloquence.
This chapter was the first one to seem too far fetched for my taste, but perhaps it’s because I hadn’t known that so many real presidents had instituted wage and price controls.
I have to agree, and you stated it so eloquently! :)
Kinnan is a capitalist, he has investments in the form of productive workers that he uses to produce wealth for himself.
He understands that his capital is about to be looted and is trying to make the best deal. Truly an example of 'capitalism without conscience'. A computer would have derived the same strategy if the only goal to be calculated was short term personal profit.
“Stroke of the pen, law of the land, kinda cool.”
Chilling. And this is the first time ever that I have used the word.
Thanks for the education on the Merriam election.
You know, 'thunkit, I'm still thinking about your great line a few AS threads ago about doing the "limbo with Fico".....ie: "How low can you go" !!
It appeals to the anarchist in me....but the conservative keeps saying "don't go so far".....but then who knows how far these bums in DC and NY will go before that strategy will appear mainstream!
It sounded to me like he was making the point that there isn’t an adequate one.
It becomes clearer that way.
But it's also about power. All these men have power and seek more of it. For Kinnan, it's the power of the whip, with the willing acquiesence of his people.
This chapter always makes me think of “Anthem”. When you read “Anthem”, it is easy to say “this is too far... we could never get to this point.”
The “Miracle Metal” chapter shows how it could start.
With the way things are going in DC, I wonder if there is an Atlas Shrugged bookclub on the liberal side... except they are using it as a “how to”.
Glenn Beck.
It appeals to the anarchist in me...
Anarchy is absolutely not the destination, as totalitarianism is not the destination of _most_ liberals. From my study of history I know that neither is a system that one is likely to survive. (an interesting observation- a cerebral person is at an advantage in the former system and at a disadvantage in the latter)
The FICO is based on averages and as "a rising tide lifts all boats" also implied is that the lowering of the FICO tide will not sink all ships. I intend the 'FICO Limbo' to be more of a release from the school of fish reaction that many people exhibit when threatened with the possibility of incurring a 'bad credit rating'.
In the discussion points, I’m trying to get people to compare what is going on now with the book, and find the parallels. Once hyperinflation breaks out in two years, this chapter will seem prophetic.
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