It's interesting that Naomi Klein's new book [1] about "disaster capitalism" is taking the political world by storm, since it's such a downer. She offers a stark and scary explanation as to why in disasters and wars and crises of all kinds we so often see these even more disasterous "free-market" solutions. From shock therapy in Russia to the CPA in Iraq to the Republican post-Katrina planning committee at the Heritage Foundation, you see similar examples of market fundamentalist approaches to problems of vast scale that one would have until recently assumed would be undertaken by government, democratic or otherwise. Klein makes the case that this is essentially a product of a school of economic thought that has found it can not only benefit by disaster, but it benefits greatly if it actually creates disasters, frightening people into accepting what in the best case can be considered experimental solutions to problems and in the worst case provides the opportunity for greed and graft to operate without restraint.

It's an interesting thesis, but I don't mean to debate its merits in this post. The reason I bring it up at all is that I coincidentally found myself reading Alan Greenspan's autobiography [2]at the same time and was struck by the psychology of selfishness that I found underlying both of these books. There are too many people involved in this behavior to simply explain it as an anomaly. In a country supposedly based upon Judeo-Christian values and Enlightenment philosophy, I wondered why so many wealthy and powerful people are now openly embracing a philosophy of pure self-interest --- and acting on it. And the answer, I think, is Ayn Rand.

When the Greenspan book was published, the NY Times reprinted a letter to the editor from Greenspan defending Rand's magnum opus "Atlas Shrugged" which used some rather startling language: [3]

"'Atlas Shrugged’ is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should.”

It's hard to believe that the man who wrote that fanboy letter was the man who went on to become one of the most powerful economic gurus in history. But then the fans of Ayn Rand are almost always, on some level, stuck in a sort of perpetual adolescence, which seems odd because many of her most ardent admirers are fantastically wealthy masters of the universe who attribute to her the inspiration for their success. And that, I suspect, may be one of the roots of the problem we are seeing with "disaster capitalism" and other frightening modern manifestations of cruel, free market fundamentalism.

Ayn Rand, muse to the millionaire, thought she was imparting philosophy, but her own philosophy of "Objectivism," (which was essentially a personality cult) remains very marginal in society at large. But certain of her ideas seem to have greatly informed the worldview of modern free market thinkers and business leaders in ways that run far more deeply and strongly than works of "philosophy" normally do on these types of people.

Many of these leaders admit that "Atlas Shrugged" was the most important book they ever read. And "Atlas Shrugged" is a very stupid book, a turgid fantasy, tailor made for the scores of 16 year old who still read it every year (mostly because the Ayn Rand institute sends nearly half a million copies a year to Advanced Placement high school courses.) It appeals to the smart, sexually overwhelmed adolescent with its passionate relationships allegedly based purely on "reason" but which experienced adults know to be the complex work of hormones, opportunity and much more mysterious influences than the purely "cerebral." I have little doubt that all those advanced placement geeks find that concept enthralling. (I was once one myself.)

as it happens, Rand's own life shows that her beliefs about rational love were a crock --- she seduced her married protege, half her age, which pretty much negates the "heroic" alpha male model Rand extolled in her novels. Rand, for all her guru status, proclaimed she was not a feminist and that she would never vote for a woman for president: "it is not to a woman's personal interest to rule men. It puts her in a very unhappy position. I do not believe that any good woman would want that position." She worshiped manly heroism and her supposed philosophical novels lean far more heavily on that archetypal narrative than anyone cares to admit. It's bodice-ripping for nerds, a fantasy of the pants far more than a philosophy of the mind.

The young girls absorb this message of fantasy alpha male and the boys see a path to "heroism" purely by virtue of doing exactly what they want to do. What teen-ager wouldn't be thrilled with such a philosophy? (People are rarely as self-absorbed and selfish as they are as adolescents.) Most of us grow out of it, however, when the complexity of the world and our own emotional needs manifest themselves in adulthood.

Not so with the masters of the universe whose inner lives were indelibly stamped with future the heroic model of John Galt, the man who is so spectacularly special that the world simply cannot not function properly unless he is allowed to follow his own self-interest without interference. Rand tells these people that not only is altruism inefficient (as the laissez fair gods Friedman and Hayek do.) She tells them it is immoral. There can be nothing wrong with taking advantage of disasters --- or even creating them --- because moral actors must take advantage of the "parasites" who offer nothing of value to our system.

I don't suggest that these Masters of the Universe literally believe this today --- at least not all of them. But the combination of sexual excitement and fantasy within which these ideas were first presented, psychologically marked more people in this society than we realize. And the people most likely to have internalized this message would be those who had the ambition and drive to achieve financial success already.

So you find comments like this [4]:

Some business leaders might be unsettled by the idea that the only thing members of the leadership class have in common is their success. James M. Kilts, who led turnarounds at Gillette, Nabisco and Kraft, said he encountered “Atlas” at “a time in college life when everybody was a nihilist, anti-establishment, and a collectivist.” He found her writing reassuring because it made success seem rational.

“Rand believed that there is right and wrong,” he said, “that excellence should be your goal.”

Yes, she did. But her notions of right and wrong were a little bit unusual. She famously wrote in he journal, "what is good for me is Good!"

You see this same philosophy in recent stories like this one, in which the tycoons of the new Gilded Age explain why they should be receiving so much more compensation in relation to their workers. They believe they deserve it because they are very, very special people [5]:

[V]ery wealthy men in the new Gilded Age talk of themselves as having a flair for business not unlike Derek Jeter’s “unique talent” for baseball, as Leo J. Hindery Jr. put it. “I think there are people, including myself at certain times in my career,” Mr. Hindery said, “who because of their uniqueness warrant whatever the market will bear.”

[...]

“The income distribution has to stand,” Mr. Griffin said, adding that by trying to alter it with a more progressive income tax, “you end up in problematic circumstances. In the current world, there will be people who will move from one tax area to another. I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard.”

Just like our "principled" hero, John Galt.

I don't suggest that the new tycoons are all Randians or that successful businessmen are all self-centered adolescents. But with 400,000 copies being shipped to the smartest most impressionable kids in the country every year, her turgid romance novel has so infected society that many people have internalized her tales of heroic capitalism through an adolescent haze of sexual awakening which they have never properly sorted out.

How else could allegedly sophisticated leaders think something as silly as this [6]:

The new tycoons describe a history that gives them a heroic role. The American economy, they acknowledge, did grow more rapidly on average in the decades immediately after World War II than it is growing today. Incomes rose faster than inflation for most Americans and the spread between rich and poor was much less. But the United States was far and away the dominant economy, and government played a strong supporting role. In such a world, the new tycoons argue, business leaders needed only to be good managers.

Then, with globalization, with America competing once again for first place as strenuously as it had in the first Gilded Age, the need grew for a different type of business leader — one more entrepreneurial, more daring, more willing to take risks, more like the rough and tumble tycoons of the first Gilded Age. Lew Frankfort, chairman and chief executive of Coach, the manufacturer and retailer of trendy upscale handbags, who was among the nation’s highest paid chief executives last year, recaps the argument.

“The professional class that developed in business in the ’50s and ’60s,” he said, “was able as America grew at very steady rates to become industry leaders and move their organizations forward in most categories: steel, autos, housing, roads.”

That changed with the arrival of “the technological age,” in Mr. Frankfort’s view. Innovation became a requirement, in addition to good management skills — and innovation has played a role in Coach’s marketing success. “To be successful,” Mr. Frankfort said, “you now needed vision, lateral thinking, courage and an ability to see things, not the way they were but how they might be.”

Oooh baby.

As Kevin Drum asked [7] in response to that amazing assertion:

Do they seriously believe that American executives in the 50s and 60s just coasted along on waves of cash while they [the New Tycoons] not only had a world red in tooth and claw to tame, but were responsible for personally taming it without help from any other human being on the planet?

Yes they do. And it is this kind of thinking that leads people to believe that when they are price gouging a whole country --- or a beloved American city --- and consciously using fear to intimidate whole populations to buy into experimental and lucrative schemes (for the tycoons, at least)that leave nothing but more disaster in their wake, they are doing the Right Thing. "What is good for me is Good!" No conscience. No regrets. No worries.

They are John Galt.