The Troubled Economics of Ayn Rand

Here is an article I found about Ayn Rand. It's very interesting and I was wondering what you all think about it:

http://www.mskousen.com/Books/Articles/0101aynrand.html

To me, it seems like the author finds a hole in Rand's economic logic in her book "The Fountainhead."

This quote should sum up the hole:

"Ayn Rand's ideal man misconceives the very nature and logic of capitalism--to fulfill the needs of customers and thereby advance the general welfare. As Ludwig von Mises writes in his book, The Anti-Capitalist Mentality, "The profit system makes those men prosper who have succeeded in filling the wants of the people in the best possible and cheapest way. Wealth can be acquired only by serving the consumers." (1972:2) Apparently Howard Roark doesn't believe in consumer sovereignty. As he states in his final court defense, "An architect needs clients, but he dos not subordinate his work to their wishes." (1994:714) Really? "

Yes, based on the Fountainhead, I see no reason to link Rand to capitalism.  Her economics were better in Atlas, but as I recall, still somewhat anti-capitalist, if you look at it, well, objectively.

 Actually, it's funny how much Ayn Rand started sounding like Nietzche in The Fountainhead.  That said, Ayn Rand is certainly a capitalist.  It's not fair to require capitalists to hold particular reasons for believing in capitalism.  Ludwig von Mises was a Utilitarian contractualist, and believed that capitalism was the best form of social organization because it made people generally the best off.  Ayn Rand rejected both Utilitarianism and contractualism.  She was an Aristotelian, arguing that capitalism was the system which best allowed individuals to pursue their own good.  Taking Mises' view as "the capitalist view" is simply to reject Rand's out of hand.  

While I haven't read the book in question, or anything by Rand, I do know a bit about artists.

The basic premise is correct that the artist doesn't have to submit to the demands of the customer to produce their works but taking this from the few to the many, in the case of architects, is a logical fallacy.

There is no guarantee that an artist with this point of view will ever make a single dollar from their creative efforts but history has shown that the truly creative ones are appreciated for their vision. Frank Lloyd Wright or Gaudi were perfect example of this, you either gave them complete creative control over a project or you went somewhere else (presumably since I don't know the exact way they dealt with clients). Someone who wants a generic strip mall designed isn't going to go to an architect of this nature but they had a ready market for their services.

They did in fact serve the needs of the client contrary to what Skousen is claiming because the client desired their artistic creativity along with their competence as an architect.

Destruction of private property is obviously the wrong way to go about a dispute with a client but I guess you have to give some artistic leeway since it was a fictional piece after all.

Criticizing the economics of a novel seems about as productive as dismissing the basic premise of Battlestar Galatica because the Cylons don't have a market to set prices and wouldn't be able to allocate their resources in a way to be able to sustain their pursuit of the Colonials.

Donny with an A:

 Actually, it's funny how much Ayn Rand started sounding like Nietzche in The Fountainhead.  That said, Ayn Rand is certainly a capitalist.  It's not fair to require capitalists to hold particular reasons for believing in capitalism.  Ludwig von Mises was a Utilitarian contractualist, and believed that capitalism was the best form of social organization because it made people generally the best off.  Ayn Rand rejected both Utilitarianism and contractualism.  She was an Aristotelian, arguing that capitalism was the system which best allowed individuals to pursue their own good.  Taking Mises' view as "the capitalist view" is simply to reject Rand's out of hand.  

I wouldn't exactly call Ayn Rand an Aristotelian. She hailed him as her main influence or the greatest philosopher besides herself, but she diverges from Aristotle in some significant respects. I believe Roderick Long wrote a book comparing and contrasting the two, and he sides with Aristotle in every instance that Rand deviates from Aristotle.

I agree with Mises that a free market (I hate the word "capitalism" so I just say "free market") makes society at large better off, but that isn't my primary reason for supporting it. It's only a consequence. My primary reasons for supporting it are ethical (I don't consider utilitarianism to truly be an ethical system at all, but I won't get into why here).

 Is that really Mises' position?  I'm going off his statement in Theory and History:

The ultimate yardstick of justice is conduciveness to the preservation of social cooperation. Conduct suited to preserve social cooperation is just, conduct detrimental to the preservation of society is unjust. There cannot be any question of organizing society according to the postulates of an arbitrary preconceived idea of justice. The problem is to organize society for the best possible realization of those ends which men want to attain by social cooperation. Social utility is the only standard of justice. It is the sole guide of legislation.

I have strong disagreement with the statement that social utility is the only standard of justice. I would support liberty even if it did not lead to utility, survival or happiness. Liberty (the free exercise of the faculties without infringement upon that of others), in my understanding, is a prerequisite for the attainment of survival and flourishing. That is, you must be able to exercise your faculties in order to achieve such things to begin with. However, it does not gaurantee it in the absolute. A free man could still theoretically be unhappy and go through hardships and negative circumstances. Even the starving man could theoretically be free. Liberty does not gaurantee social utility for all and social utility is not my standard of justice. Of course, I find it to be true that a free society will generally have more utility then an unfree society, but this is not the primary justification for liberty in my view. If a situation arose in which social utility could theoretically be increased by violating liberty, I would nonetheless oppose any attempt to do so.

Rand is an Aristotelian, in the same sense as Hoppe is a Kantian, despite divergences from Kant.

Anyhow, I agree with Danny. This is ridiculous, to dismiss Rand as a capitalist because of Mises' emphasis on serving the consumer. Rand saw productivity as one of the highest virtues - it is only natural she'd focus on this aspect of the market order. Both Mises and Rand are in a sense correct. Mises himself constantly emphasized the productive capacity of the entrepreneur, who directed the market (to serve consumer need of course.) Both producer and consumer are the driving forces of the market. Rand grasped one principle very well - without production, there is no economy to speak of.

And yes, I also agree with Donny With An A that just because a thinker has different reasons for supporting something doesn't mean they don't truly support it. Although I do think that it's important to put foreward a proper justification for things. Obviously, all genuine libertarians support the non-aggression principle, so it would be absurd to say that a supporter of the non-aggression principle isn't a libertarian just because they don't use the same method of justifying it. But it is also true that it's worth debating exactly how it is justified and some justifications are much better then others. I agree with Rand that the non-aggression principle should have a sound philosophical justification and that many libertarians have failed to provide one. In either case, yea, I find the contention that Rand wasn't a "capitalist" because her justification differs from Mises to be kind of absurd.

Good; we all agree.  I didn't mean to imply that I thought Mises was right.

An architect needs clients, but he dos not subordinate his work to their wishes.

It was not the contention of Mises, as I understand it, that all producers will be completely subordinate to the wishes of the consumer, only that they will be penalised by the market to the extent that they deviate from the the consumers wishes. Producers may be able to afford to reduce their profits (or abandon them entirely), but that does not mean the consumer no longer soveriegn. Only if producers can deviate from the wishes of the consumer whilst simultaneously increasing their profits is the consumer no longer sovereign (i.e. the case of the monopoly price).

Actually, you mis-interpret Ayn Rand's meaning.  She was referring to Roark's specialty as an architect in that when he worked for a customer he was not going to let the customer be the architect.  His specialty was to build according to his principles of architecture and his considerable skills. He would not let a customer be the architect, nor would he let a committee dictate how a building would be designed or built.  It is an issue of his professional integrigty.  That is not the same thing as letting the free market determine which architect people wanted.  In the story, he realized that many people did not agree with his view of architecture.  He did not want to deal with them; he merely waited for his kind of customer to come along.  This is not a contradiction of Ayn Rand's views on economics.  It is more like a client who tries to tell her lawyer what the law is and how he should proceed in a case.  Or a client who disagrees with a doctor on a diagnosis.  These people, though not always right, generally have more knowledge, skills and experience and a customer that assumes that they are more knowledgeable is merely wrong.

In The Fountainhead, his view is expressed well by Roark in a conversation with the Dean of his school: ""Well, I could say that I must aspire to build for my client the most comfortable, the most logical, the most beautiful house that can be built. I could say that I must try to sell him the best I have and also teach him to know the best. I could say it, but I won't. Because I don't intend to build in order to serve or help anyone. I don't intend to build in order to have clients. I intend to have clients in order to build." "How do you propose to force your ideas on them?" "I don't propose to force or be forced. Those who want me will come to me."

 

 This is all the result of confusing an architect for an artist. Architects are craftsmen, no greater artists than people who make furniture.

The idea that every architect must invent his own art is largely responsible for destroying architecture in the past 50 years. 

Any architect I've ever met would be quite offended by that statement. 

Donny with an A:

Any architect I've ever met would be quite offended by that statement. 

Yah. The few I know personally love The Fountainhead. And one cannot really say seriously that the efficient combination of utility and aesthetic virtue is not artistic. Furthermore, as an amateur furniture maker myself I challenge stranger to a knife duel for his comment.

I think that brings up an important point.  Any craft can become art in the right hands.  And just as easily, any art form can become a craft in the wrong ones.

Um, her hero took payment for designing a building, then blew it up because of how it was going to be used.  Do you think this is an act that would be applauded in a capitalist society?  Does this show respect for property rights?