Tuesday, February 7, 2012

Lessons from "Atlas Shrugged".



Our society needs this book's principles NOW, more than ever.

In "Atlas Shrugged", Ayn Rand described a dystopian United States, where the answer to every perceived flaw and inequity in society was government regulation. 

When this regulation created more problems, the answer was ever more government intervention in society.  Eventually, most of the population was either working for the government or responding to government edicts – few were actually producing anything.  These few (represented by Mr Galt), shackled by the many, quit and the world stopped. Sounds familiar?

The current financial crisis has its roots in interventionist government action:
  • laws to promote home ownership for the poor (where the sub-prime loans came from); 
  • on executive pay (leading to bonuses as a loophole); 
  • anti-monopoly laws (preventing failing banks from being taken over by competitors); 
  • the prospect of government bail-outs (discouraging firms from accepting less attractive offers from market sources); 
  • government guarantees (encouraging people to accept the highest deposit rates, regardless of risk);
  • and half the economy existing in the non-productive state sector (tying down the productive sector).

As Ronald Reagan put it, government is not a solution to our problems, government is the problem.  The interventions by governments around the world have achieved nothing but harm and the accumulation of debt by the Governments will shackle economies for years to come.  Moreover, the clarion calls for even further regulation will lead to unintended consequences, exacerbating the harm.

We are suffering from government failure, not market failure.  The world hasn't stopped, but it has been slowed by government. 

It is time the lessons from Atlas Shrugged were heeded and John Galt set free.

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