Political philosopher David Schweickart has allowed me to publish the following, which he wrote after this debate with the Executive Director of the Ayn Rand Institute, Dr. Yaron Brook.
As I noted
in my earlier reflection, I’d never been in a debate like this before. I’ve been on many academic panels, where
there have been serious disagreements, but the panelists try to be careful
about the facts. (Presented papers are
invariably footnoted.) I’d never before
debated someone who, with great rhetorical flourish, simply disregards the
data. I’d thought, mistakenly as it
turns out, that an “Objectivist,” with his commitment to “reason,” would strive
to make his claims conform to reality. (I guess I haven’t watched enough Fox
News.)
In my
earlier reflection I cited Brook’s most egregious example of flamboyant
falsehood: “1998 was the warmest year on
record,” he said (to us and in many of his other presentations, also
available on YouTube). Now, I knew this
wasn’t right, but I didn’t have the facts on hand, so I didn’t challenge
him. But a quick Google search the next
morning brought up the NASA website data: “2012 was the ninth warmest year
since 1800. With the exception of 1998
the nine warmest years in the 132 year record have occurred since 2000 with
2010 and 2005 ranking as the highest on record.”
Here’s
more data, just recently published:
Confirming
"unprecedented" global warming, the new study published in the latest
issue of the journal Science
shows that the earth's temperatures catapulted in just the last century at a
rate that had previously taken 4,000 years.
"In
100 years, we've gone from the cold end of the spectrum to the warm end of the
spectrum," said climatologist Shaun Marcott, lead author of the study.
"We've never seen something this rapid. Even in the ice age the global
temperature never changed this quickly."
"The
climate changes to come are going to be larger than anything that human
civilization and agriculture has seen in its entire existence," says Gavin
Schmidt, a climate researcher at NASA's Goddard Institute for Space Studies.
"And that is quite a sobering thought."
You might
wonder why Brook would just lie about this matter. (This has to be a lie, not
just a mistake, since reports of record temperatures have been coming in
regularly throughout the last decade.) The answer, I think, is obvious. If we are facing a serious climate problem,
it cannot be solved by Brook’s beloved laissez-faire
“true” capitalism. It’s an article of
faith among the Objectivists that all problems,
apart from protecting property from force or fraud, can be resolved by the free
market. Brook alluded to this dogma in his
rather quick response to my opening charge that unregulated capitalism cannot
deal with “externalities, i.e., third-party effects of private
transactions. He said that externalities
would be dealt with by privatizing everything—roads, water, beaches. Private owners
would take care of things better than inefficient government. (Nice thought, huh. The Chicago lakefront would be sold
off to private developers, who would keep the beaches clean.)
And to
solve global warming? Well, think about
it. Since the problem is emitting
greenhouse gases into the air, we’d
have to privatize the air. Of course he didn’t say that. You’re not going to score debate points by
saying that out loud. But that’s what an Objectivist would have to
say—which is why it’s far better just to deny that we’re facing global
warming—or at least to pretend to be agnostic, make up data, and get a laugh by
telling us how all those people now warning about global warming were warning
us before about global cooling. (It’s a
distracting move, and also—fact check
again—patently false. It’s true that
there is one prominent figure—Paul
Erlich—who shifted from warning about global cooling to warming about global
warming. But no one else, so far as I
can tell. Very few climatologists
supported the global cooling hypothesis.
Virtually all say that we are experiencing global warming.)
The “1998
as the hottest year on record” was the most blatant falsehood, but here are
some others. All asserted with great
confidence:
“The Soviet
Union was the most unequal
country ever!” No—not according to a very careful study by
Abram Bergson, one of the leading experts on the Soviet economy, in an article
published in The Journal of Economic
Literature on “Income Inequality under Soviet Socialism,” (September 1984).
It’s true that in the mid-seventies,
Soviet inequality surpassed that of Great Britain. It was by no means an egalitarian society. But, according to Bergson, it was significantly more equal than the United States—and it should be
remembered that both Great Britain and the United States in the 1970s, before
the Thatcher/Reagan revolutions, were vastly more egalitarian than they are
today. (Let’s be clear. I am not a defender of the Soviet economic or
political system, but I do care about facts.)
“France has had double-digit unemployment for decades.” Fact check: No—France had eight years of
double digit unemployment in the 1990s—perhaps the last time Brooks bothered to
check-- and one year since then. During the 34 years between 1978 and 2012, it
had eight years of double-digit unemployment, not “decades.”
“Sweden, with business and government so intertwined, is far more
corrupt than U.S.” No, not according to
Transparency International, the most prominent organization to keep track of
such things. In 2012 three countries (of
176 surveyed) were tied for the top position, “least corrupt”: Denmark, Finland and New Zealand. Sweden was next in line. The United States? Nineteenth.
“Wages have not been flat since the 1970s;
they’ve been rising.” According to the Census
Bureau, the average hourly earnings, adjusted for inflation, was $16.20 in 1979. By 2013 it had risen to--$16.40. (Okay, technically Brook was right; wages did
go up—by 20 cents over a 34 year period.)
It’s true that household income has gone up, but that’s because far more
married women are in the labor force now than they were back then. As Paul Krugman (Nobel laureate in economics)
has pointed out, “For men ages 35-44—men who would, a generation ago, been
supporting stay-at-home wives—we find that inflation-adjusted wages were 12
percent higher in 1973 than they are
now.”
“We understand
the mechanisms by which technology creates ever more jobs.” This was asserted with great vehemence in
response to my claim that there is no “invisible hand” mechanism one can point
to that guarantees the technology always creates more jobs than it
destroys. Of course he didn’t tell us
what that mechanism was. Because he
can’t. No (serious) economist thinks s/he
can.
“Taxing the rich is economic suicide” Variations on this claim
were made repeatedly during the debate, to the delight of much of the audience,
including, no doubt, the “donors” present—who also clapped and cheered as Brook
proclaimed over and over how happy he is when he sees someone “really, really
rich.” (No doubt he is. The Ayn Rand
Institute, which pays his salary, relies on private funding by those “really
rich.” More on this below.)
But
consider that graduated income tax he finds so loathsome. In the post-war period until the
mid-seventies, American capitalism’s “Golden Age”--when growth was high, wages
were rising, and nearly everyone noted how much better off they were than their
parents had been, and how much better off than they themselves their children
would surely be--what were the tax rates? During this period the marginal tax rate for
those making the most money was 92% in
1953 coming down to 70% by the 70s. Since then, as the top rate came down to 35%
(brought down in steps by Reagan and Bush), growth has slowed, income
inequality has surged and economic insecurity has risen. Given the state of the current economy
(alarming to Brook and me both), one might say that not taxing the rich is economic suicide. (I know, I know—remember what happened in Atlas Shrugged. But shouldn’t we base
our policy prescriptions on data rather than a novel.)
So much
for facts. Let me say just a few words
about some of Brook’s more bizarre claims:
The closest we’ve come to pure capitalism is the
late 19th century. Actually, this claim
isn’t false. What’s bizarre is Brook’s celebration of this period. It was indeed a period when there was
virtually no governmental regulation of industry and no welfare, unemployment
insurance or other safety nets.
Government was small, and local governments did little but protect
property rights.
But what
was it like back then? As it happens, I’ve
just finished teaching a segment in one of my courses on Chicago during the last thirty
years of the 19th century—the period following the great Chicago fire of 1871--so I’ve
been looking at the data: At that time 10,000
were rendered homeless by the fire, and there were no safety nets. Moreover, the privately-collected donations were
badly mismanaged by the businessmen charged by the mayor with distributing them,
resulting in massive protests, which resulted in the police herding
demonstrator into the tunnel that ran under the Chicago river, then beating
many and killing a few. Then followed
the “Panic of 1873-79,” which swept the
whole country, the worst depression ever to hit the United States up until that time, leading
to massive unemployment, homelessness, many starving in the cities. Workers began to organize, staging the “Great
Railroad Strike” of 1877. Again, protecting the sacred rights of property,
the police and militia waded in, killing over 100 nationwide, 20-25 in Chicago. Then, after a reprieve of a couple of years,
the Depression of 1883-86 struck, throwing 30,000 out of work in Chicago. The wealthy funneled large sums of money to
the police, just to make sure their interests were well protected. (Here’s the headline from the Chicago
Tribune, January 4, 1992, announcing the these funds had accomplished their
purpose and were no longer needed: “Will Bleed No More—Moneyed Men Tie Their
Purses: Policemen Given $487,000 in Five Years for Wiping Out Reds—the Supply
Cut Off—Financial Reasons.”
It was a good time for the wealthy—a little
scary with all those riled-up workers living so close to their mansions—but
plenty comfortable. That’s “pure” capitalism.
“No, I do not think that capitalists have an
advantage over workers. Workers quit all
the time to accept higher-paying jobs.
I’ve lost employees that way.
It’s that way in every industry.”
We
are in Fantasyland, are we not?
Companies are making record profits these days, getting more work than
ever before out of their workforce without increasing pay, since workers in
almost every industry are terrified about losing their jobs. For they know full well that, given current
unemployment rates, their chance of finding a comparable job, indeed, any job
at all, is slim. Of course Brook will
say, “We don’t have real capitalism
these days. Under “real” capitalism,
there would be no involuntary unemployment.”
(At this point, one should make the sign of the cross and bow one’s
head. An article of solemn faith has
been invoked.)
In my
earlier reflection I commented on “The blood
of everyone who died is on the hands of whoever starts a war,” juxtaposed
with “We should have turned Falluja to
dust.” Brook made both claims, apparently oblivious to the fact that we invaded Iraq, and not vice-versa. He
seems not to have noticed what follows logically from his position: the blood
of all those dead Americans and dead Iraqis—among them the dead of Falluja—is
on our hands (at least on those of us
who did not vigorously oppose the war). Certainly
on the hands of those who urged publicly that Falluja be turned to dust.
Perhaps
strangest of all were Brook’s political pronouncements, made at different times
during the debate. “The U.S, is closer today to fascism than to capitalism!” but—this
was said several times, “We have too
much democracy in this country!”
Hmmm. What would be an Objectivist’s ideal
state? Not fascism (although one might
note that the fascists in Italy and the Nazis in Germany were bankrolled by the
“really rich”-- for these parties were committed to exterminating communists.) Not democracy, at least not “too much.” Presumably not a divine-right monarch, since
Objectivists don’t believe in God.
Perhaps one ruled by a true Objectivist, who will keep government small,
keep the masses in check, and let the rich get as rich as they possibly can—so
long as they don’t violate the property rights of others.
Sounds
like fun.
Concluding
thoughts:
Sixteen
years ago I wrote an article critiquing “libertarian conservatism”—of which
Objectivism is the most extreme version (“Dr. Pangloss Goes to Market,” Critical Review, Spring 1996). “Libertarian
conservatism” holds that existing economic evils in the world cannot be
mitigated by conscious political actions that alter institutions in such a way
as to impede free economic exchange among consenting adults. Any such interference, it is claimed, will always
do more harm than good.
“This,” I
wrote, “is a comforting doctrine, at least if one is in the comfortable
class. It also provides one with an
effective debating strategy. . . . If anyone tries to blame some real-world
economic evil on capitalism, just point to the ways in which the existing
market isn’t wholly free. One need not
concern oneself with empirical data or complicated comparisons.”
This
strategy was on full display in this debate.
To be sure, not all libertarian conservatives play so fast and loose
with the facts as did Yaron Brook, but all make the libertarian-conservative
moves: A problem? Blame the government. Assure us (no evidence required) that things
would be so much better if we just let the free market work its magic.
--David Schweickart
Postscript on ARI funding:
Doing a
little fact-checking about ARI funding, I came across
an article by Pam Martins and Russ Martens, published in Counterpunch (February 28, 2012), entitled, “A Corporate Coup on
Campus: Resurrecting Ayn Rand: Hedge Fund Money Teams Up with Koch and
BB&T.” (BB&T is a banking giant,
based in Winston-Salem, North Carolina.) I’ll attach the whole article, but below are
some relevant excerpts.
I must
say, I was puzzled by Brook’s vociferous defense of hedge fund managers, since it’s
not at all obvious what entrepreneurial feats of Roarking (or Steve Jobs-ian)
heroism these guys-- who only have to pay 15% taxes on their stupendous
earnings, less than the bottom 20% and virtually everyone else--have been
performing lately. They’ve certainly
been making a lot of money during these—for most Americans—hard times. In 2009,
only a year after the financial crash, the top twenty-five hedge managers in
the U.S. had an average income of $1 billion. (New York Times, March
31, 2010).
Now I
understand. This from an article, “A
Corporate Coup on Campus: Resurrecting Ayn Rand,” Counterpunch, (January 2012):
What
happened at the September 15, 2011
gala fundraiser for the Ayn Rand Institute, advertised as “The Atlas Shrugged
Revolution”? The hedgies were fully in control of the event, dominating
the podium and raising a little more than a cool $1 million, besting the prior
year’s take by $600,000.
The
key speakers included Dmitry Balyasny of the hedge fund, Balyasny Asset
Management, as well as Colvin, also from this hedge fund and creator of the New York chapter of the Ayn Rand Institute. Another key
speaker was Scott Schweighauser, partner and chief investment officer of Aurora
Investment Management, L.L.C., a fund of hedge funds managing approximately $10
billion.
The
biggest donors at the event who would allow their names to be published,
included the following:
$50,000:
Balyasny Asset Management
$25,000:
Christopher (Chris) Asness, managing principal and co-founder of hedge fund AQR
Capital Management. Asness is a former managing director at Goldman,
Sachs & Co.
$25,000:
Eric Brooks and Jeff Yass of hedge fund and private equity firm Susquehanna
International Group.
$25,000:
Jim Brown of hedge fund, Brandes Investment Partners.
$25,000:
Scott Schweighauser of fund of hedge funds, Aurora Investment Management,
L.L.C.
Enough said.
