Onkar Ghate — VOICES for REASON

In mentioning the parallels between our current economic situation and the story of Atlas Shrugged in Part I, I pointed out that in the face of Nixon’s wage and price controls (and other depressing events in the late 60s and early 70s), Ayn Rand argued that dictatorship could not yet take hold in America. Americans would rebel. But I indicated that the current embrace of “stimulus czars” and “regulatory czars” is a small sign that this distinctively American attitude may be eroding. Let me now develop this last point.

A Czar is a tyrant who ruled over Russia. As monarch or emperor, he is the superior one, possessing the privilege to command; you, his lowly Russian subject, are the ignorant one, whose duty is to unquestionably obey. This captures the unstated premise that is responsible for the Czars now popping up across America.

Consider the economy. A free market is a complex integration of the voluntary decisions and actions of millions of individuals producing and trading services and goods, from a barber cutting a customer’s hair to Apple manufacturing and selling you an iPhone. No government Czar is needed to plan or run any of this: those who “plan” and “run” a free economy are you, me and every other productive individual who makes decisions and takes actions for his own individual life.

The idea that a handful of men sifting through mountains of data could plan a productive and prosperous economy is absurd. Does no one remember the central planners of Soviet Russia? Yet on a lesser scale, a central planner is precisely what the Fed Chairman is supposed to be. By manipulating money, credit and interests rates, he will allegedly coax us to produce. And now, in the midst of our crisis, few intellectuals or commentators will tell Americans that our economic problems were caused not by a free market but by the very idea of a “monetary czar.” Few will explain to Americans how Alan Greenspan’s low interest-rate, inflationary policies practically mandated unproductive actions on the part of the economy’s participants.

And no, Greenspan is not an advocate of capitalism or of Ayn Rand’s philosophy; when he was, or at least when he seemed to be, he wrote in favor of the gold standard and against the very existence of the Federal Reserve. That was in Capitalism: The Unknown Ideal. The recommended bibliography in the book includes the works of the Austrian economist Ludwig von Mises, who painstakingly explains how government Czars’ manipulation of money and credit destroys economic production and leads to uneconomic, unsustainable booms followed by inevitable busts. If you want to understand the fundamental economic forces responsible for our present crisis, tune out the New York Times’s coverage, turn off Fox News, and instead read Human Action, particularly Chapter XXXI.

Of course average citizens can’t be expected to be economic experts. The principal failure of understanding here rests with our intellectuals and commentators. But what is disturbing is how readily Americans seem to accept that the form of a solution, whatever its details, will look like this: concentrate even more unchecked power into the hands of government Czars. Give Bernanke or Paulson or Geithner even wider authoritarian powers to dream up new schemes, and they’ll tell us what to do. People seem unfazed by the palpable look of uncertainty in the faces of these “financial czars”–i.e., by the fact that the Czars don’t have a clue what to do.

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On Monday I was a guest for a 15-minute segment on the Rusty Humphries radio show. We were talking about our government’s imminent $800 billion spending spree and the parallels between the present situation and the story of Atlas Shrugged.  (In Atlas, the government takes over more and more areas of the U.S. economy, culminating in a dictatorship and the disintegration of the nation.)

During the conversation I made a point that, unfortunately, we didn’t have time to explore in the depth that it warrants: one of the disturbing features of the past few months is how the term “czar” has been bandied about in an approving tone.

You’ve of course heard of both the “climate czar” and the “energy czar,” who supposedly know how to “reform” America’s energy industry. States are busy appointing “stimulus czars,” alleged experts in how to spend other people’s money. Many people are eagerly awaiting the appointment of a “car czar.” Obama has already appointed a “regulatory czar” (Cass Sustein).

This authoritarianism is ominous. Ayn Rand repeatedly warned, after Atlas was published in 1957, that America was slowly drifting toward dictatorship (of a fascist kind). But she also argued, in the 70s, that unlike Europe, which had welcomed and been ravaged by various forms of tyranny in the 20th century, America was not yet ripe for dictatorship. The sense of life of Americans would not yet tolerate that level of authoritarianism.

Writing during a similar economic period to our own and a similar response by the government–Nixon’s wage and price controls–she said:

The emotional keynote of most Europeans is the feeling that man belongs to the State, as a property to be used and disposed of, in compliance with his natural, metaphysically determined fate. A typical European may disapprove of a given State and may rebel, seeking to establish what he regards as a better one, like a slave who might seek a better master to serve–but the idea that he is the sovereign and the government is his servant, has no emotional reality in his consciousness. . . . An American is an independent entity. The popular expression of protest against “being pushed around” is emotionally unintelligible to Europeans, who believe that to be pushed around is their natural condition.

And a bit later:

A European is disarmed in the face of a dictatorship: he may hate it, but he feels that he is wrong and, metaphysically, the State is right. An American would rebel to the bottom of his soul. . . . a dictatorship cannot take hold in America today. This country, as yet, cannot be ruled . . . . It cannot be cowed into submission, passivity, malevolence, resignation. It cannot be “pushed around.” Defiance, not obedience, is the American’s answer to overbearing authority. The nation that ran an underground railroad to help human beings escape from slavery, or began drinking on principle in the face of Prohibition, will not say “Yes, sir,” to the enforcers of ration coupons and cereal prices. Not yet. (“Don’t Let It Go” in Philosophy: Who Needs It)

But she also cautioned that the American sense of life was eroding. (The entire article is definitely worth reading.)

Today’s embrace of “czars”–this overt authoritarianism–is a small piece of evidence of the erosion. But to really appreciate this, we need to get clearer on the meaning of “czars,” which I’ll try to do in my concluding post on Tuesday (Feb 17).