Interview
Yaron Brook
Yaron Brook is president and executive director of the Ayn Rand Institute, an organization focussed on spreading Objectivism, the philosophy of Ayn Rand. Dr. Brook lectures on Objectivism, business ethics, and foreign policy at college campuses, community groups, and corporations throughout the world. The Imagineer discussed how Objectivist philosophy applies to economics, the status quo of the American economic system, and the role democracy should play in society with Dr. Brook.
Conducted by Alexander D. Farris & C. James Block
Imagineer: What is an Objectivist’s ideal economic system?
Brook: Economics is really a derivative science. It is not really part of Objectivism. However, Objectivist philosophy implies an attitude toward economics. Objectivist philosophy suggests in politics that the government do one thing and one thing only: protect the individual rights of its citizens. That is, the role of the government is only to protect us from force and fraud and to arbitrate disputes. That is mirrored in the economic context: the only role of government is to protect property rights. That leads one to an economy which is basically trade free of all government regulation and intervention. The government should have no role in the economy whatsoever. That is independent of any economic theory. That is just the conclusion of our understanding of ethics and what is required for human life and prosperity. We believe in a complete separation from economics and politics. In terms of economic theories, I think the theory most compatible with Objectivism is probably that of the Austrian School—the writings of Ludwig von Mises, Carl Menger, and other free-market capitalist thinkers.
Imagineer: According to a 2007 report by the United Nations Human Devolvement program, more than 80 percent of the world’s population lives in a country in which income differentials are widening. According to the United Nations Children’s Fund (UNICEF), twenty-four thousand children die each day due to poverty. This is while the world’s billionaires, just 497 people, possess $3.5 trillion, over 7 percent of world GDP. When applied to a complex social system like economics, do core Objectivist principles supersede a social respect for basic human rights?
Brook: I believe that the only human rights that exist are the rights of life, liberty, and the pursuit of happiness. That is the right to be left alone and to pursue one’s own success. If some individuals are incredibly productive and can create billions of dollars of wealth for themselves, that is fantastic. To the extent that we really care about poor people and children, what we need to do is bring freedom to the world and respect individual rights. It is very interesting that all those people represented by those poverty statistics live in the most unfree places in the world. Where capitalism is allowed to thrive and people can produce freely, keep their wealth, choose what to consume, and choose what to produce is where the disparity of wealth is relatively muted. The relatively extreme disparities are in places like Africa and the unfree parts of Asia. If we really want to help the poor, we ought to be advocating for freedom and property rights, for capitalism.
If we go back to before capitalism, back two hundred and fifty or three hundred years, the entire human population except for a few aristocrats was poor. It is only capitalism that created the middle class. It is capitalism that led to relative prosperity. It is capitalism that led to the relatively poor in the United States being much richer than the aristocrats of a few hundred years ago. If you are really socially responsible and care about the poor, you should be the strongest advocate in the world for capitalism.
Imagineer: From the Objectivist point of view, what is the government’s proper role in preventing monopolies?
Brook: The government has no role. We believe that in a truly free market, monopolies are not a problem because there is always competition. If you go back to the nineteenth century and look at Standard Oil, which at the time controlled over 90 percent of all the oil industry in the United States and got as close as any company has ever reached in the United States to becoming a monopoly, you will see that prices went down every year and quality went up. Check the historical records yourself. Why do we care if there is a monopoly if prices are going down and quality is going up. Why did Rockefeller lower prices and increase quality? He knew that in a free market where the government does not protect you, there would always be competition. If you fail, if prices go up, if you do not increase efficiency, if quality does not improve constantly, someone will invest the capital and compete against you.
In my view, the government has no role in the economy, and all the government does with its antitrust policies is increase costs to consumers and destroy product quality. They are the most arbitrary laws in the books. Ayn Rand once said that every time you go into business in America, you are labeled a criminal. If you hold your prices too low, then you are accused of anticompetitive prices and dumping. If you have your prices too high, you are accused of gouging. If you set your price at the market level, the same as everybody else’s, then you are accused of collusion.
Imagineer: Do monopolies oppose the principles of Objectivism by stifling entrepreneurship?
Brook: No. What stifles entrepreneurship are government monopolies. The United States Postal Service stifles entrepreneurship. The public education system stifles entrepreneurship. The government giving a huge tax-payer benefit to General Motors that its competitors do not get stifles entrepreneurship. If someone has an idea better than a certain company, somebody will fund it, and you can compete. Regulations and laws that restrict the ability to think and create stifle entrepreneurship.
If somebody has a big company, a so-called monopoly, and keeps prices low, that is not decreased entrepreneurship; that is increased efficiency. One of the fallacies about entrepreneurship is that it is only applicable to new companies. There is a lot of entrepreneurship that occurs in big companies. That is how they increase efficiency. That is how they lower their prices.
Objectivism does not say anything about competition or how the free market should function. What Objectivism says is that the government needs to butt out of my life. As long as I am not violating other people’s individual rights, as long as I am not using force or fraud against other people, the government has no role in my life. It does not matter if I am a small business or a medium-sized business; Objectivism tells us that the government invading my life is immoral, unjust, and wrong. In order for me to make the most of my life, I need to be able to pursue what will make my life the best. The best system to allow that is one in which the government has no interference in our lives.
Imagineer: How would an Objectivist analyze the current state of affairs between large companies and government? When these two entities have such close relations, can the system really be called capitalism?
Brook: Absolutely not. We do not have a capitalist economy today in the United States. We surely have not had a capitalist system for the past few decades, and one can argue that we never truly had a capitalist system or laissez-faire capitalism in the history of the United States. What we have today in many parts of the economy is “crony capitalism.” Wall Street gets bailed out. Auto companies get bailed out. The government owns 30 percent of one of the biggest banks in the United States, Citibank. The government owns 8 percent of General Motors. The government owns a big chunk of AIG. This is not capitalism. Companies should be allowed to fail. Government should not be bailing out big business. Big business, though, should not have any say in government policies.
The way to move towards capitalism is to separate government from economics. If congressmen cannot vote on the fate of industry, industry will not lobby congressmen. So if you want to kill lobbying like I do, the way to do that is to eliminate the power of congress and politics over business. If we want to eliminate the political power of Goldman-Sachs, then eliminate the Treasury Department. The U.S. should not have the Treasury Department, or if it should have the Treasury Department, it should be very small and powerless, not the grandmaster of all departments. It is the most powerful department out there, and therefore Goldman Sachs has a lot of influence because the Treasury Department is usually run by an ex-Goldman Sachs guy. So the way to get rid of the influence of corporations on government is to get rid of the influence of government on corporations. It goes both ways.
Imagineer: If non-human corporations have any control over the government, that is an abridgement of true democratic function. How would we be able to separate the economy from the government if we the people do not have control over either the economy or the government?
Brook: Congressmen are not owned by the corporations. They are influenced by them, but ultimately they have to get our votes. If we think that they are not doing the job that we like, we can vote the bastards out. The problem is that we the people want this system. We accept this system. We bought into this system. And the way to get rid of this system is by educating the American public that this is a bad system and that we need to get rid of it. Indeed, one of the things that we need to educate ourselves about is whether we want to be a democracy.
This country was not founded as a democracy. It was founded as a constitutional republic. It was founded with the principles of separation of economics and government, and what has happened over time is that we the people keep violating our constitution. We allow our politicians to continue to violate our constitution, even in the name of democracy. So today my neighbors can decide what I can and cannot do with my house and what I can and cannot do with my land; the right to property is out the window. Your neighbors can decide how much of your property they can steal from you through a tax system. We have become a pure democracy, something that the Founding Fathers very much opposed. That is why we had the Bill of Rights. The Bill of Rights was to say, look, these things, even if 51 percent of the people do not like it, cannot be taken away from us.
So the problem in America today is not corporate influence. The problem in America today is too much democracy. There is too much of 51 percent of the people get to say how to abuse 49 percent of the people, and that is the challenge. How do we convince 51 percent of the people that taxes are way too high when they are the beneficiaries of those taxes? How do we convince them that we need to get government out of the economy when they are being convinced from a very young age by their teachers that big government is the solution to everything and that they owe more responsibility to their neighbor, and government is the way that they can fulfill their moral obligation to their neighbors? So this is an educational process. It is not about corporations. Corporations are not here to blame. They are playing defense. They are abused and attacked and taxed and regulated, and there are antitrust issues against them. What they are trying to do in Washington is defend themselves. In defending themselves, they are doing bad things, but they are not the problem. We the people are the problem. We have socialist ideas.
Next: Amy Goodman
Your Thoughts:
Objectivists seem to be people very concerned about personal liberty. They are very much against tyranny.
As an additional compliment, they, as relatively well exemplified by Dr. Brook here, don't just use ridiculous scare tactics and warp the definitions of words like most people on the modern right do (see the Ted Nugent interview in this issue, for example).
Here's what I want someone to answer for me, though.
Is there really any significant difference between tyranny through an unfree, non-democratic government (for example, a country with a dictator) or tyranny through private corporations?
I don't really think so. Maybe with a private corporation system you have a chance to be one of the people who oppresses others; both are nonetheless tyrannical.
The answer to me is to give everyone in society a voice in that society that is proportional to the way they are affected by society.
A great example is the BP oil spill. Hundreds of thousands of people are being negatively affected by this thing (not to mention millions of sea creatures), and yet we the people are just being lied to by this private tyranny about how bad it is and when they'll be able to fix it and so forth. We the people never had anything to gain from them drilling there (at least nothing directly, and if indirectly, very marginal).
Take this oil spill for instance. The problem isn't that the government not taking enough actions. The problem is that no one owns the waters. The surrounding water should be owned privately just like land is. That way, when BP spills like this, they get tons of lawsuits against them, and the area that needs the money most gets the money from those lawsuits.
And I can guarantee you that this is a much better enforcer of self regulation of BPs part than any arbitrary whim of a bureaucrat who uses any "catastrophe" in order to gain more power. That is the nature a government control over the economy though; you get the worse type of people in the government. Just look at how corrupt the USSR officials were. It is the same thing in the US just to a lesser degree (for now).
It is only a mixed economy that can have businesses influencing the government. Quite frankly, you can't be a large corporation and not have lobbyist because your competitors lobbyist will destroy you. So the question needs to be asked: should the government be able to pick winners and losers? Should government "pull" be in the equation at all? The root problem is with a government that has the power to force people in their private affairs.
The next time someone tells you that Objectivism is a tyrannical or dictatorial philosophy, or that is what it leads to in practice, you now knows they are either lying or ignorant. If the repeat the charge after reading this comment thread you know they are lying.
It is literally impossible for there to be tyranny when individual rights are defined and protected. IMPOSSIBLE BY DEFINITION.
It seems to me that a free market will eventually lead to the destruction of the human race.