Graphic: Thom Stratton
More and more these days you hear of people wishing to "go John Galt". John Galt is a fictional character in Ayn Rand's novel "Atlas Shrugged" who, in response to increased socialistic tendencies in government and society, leads a "strike" of businessmen whereby they abandon their business empires and withdraw their money and talents from society.
Galt--and Rand--have gained new attention in the current economic and political climate. With the new administration promising higher taxes on companies and the rich alike, while defining "rich" down to $250,000, many of the more affluent are beginning to feel a decreased incentive to continue their high-earning ways. Some are threatening to "go John Galt" and purposely decrease their income below the "rich" threshhold rather than see their wealth redistributed agaisnt their will.
The philosophical, moral, and social correctness of this are fodder for much longer discussions than can be had here. Rather, we will question the business sense in "going Galt".
The reality of the situation is this: Going John Galt only works when the government truly has implemented sufficient redistribution policies to provide disincentive for anyone to produce wealth above the median. As long as capitalism is not completely dead there will always be some willing to pursue more than what they have, even if it's not as much as what the current "captains of industry" have. In other words, if they abandon their empires, someone else will step up to absorb their customer base.
As frustrating and worrisome as the current economic and political environment may be, we're not yet living "Atlas Shrugged". There is room to argue whether just how far away from it we may be, but for now it still seems that "Going Galt" is not a good business practice. There is still plenty of incentive for people to get ahead, even if it those incentives are declining. We don't all have to be as rich as Donald Trump or Steven Spielberg to still realize many advantages from wealth.
If anything, now is the time for the business world to step up and prove their worth once again. There's still a good argument for "Going Gates" rather than "Going Galt".
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Comments
Nice article Thom. I think the majority of people take Atlas Shrugged too literally. I think it’s less a call to arms and more an allegory about the nature of government. Although nobody expects the productive of society to go on strike, at least not at this juncture, I think Atlas Shrugged speaks to how incentive to produce will slowly erode over time as the government becomes more pervasive. If people aren’t aware of what’s going on, the government can and will exploit them and will do so in the name of “public good”. It’s the nature of government to expand their power and loot the wealth of its constituents. I think we can draw parallels from the book to what has gone on in our society over the last several years. And it has nothing to do with Republican vs. Democrat. It’s about freedom. And a truly free society is one where the government doesn’t involve itself in all aspects of our lives. The exploitation begins with taxing citizens and redistributing the wealth but it can be a slippery slope that eventually threatens civil liberties. Rand understands this and I feel that is the message she’s trying to convey. Be wary of the Washington elite. As the years go by they grow stronger and government gets larger. And the loss of freedom is not quick. It happens so slowly that you almost don’t notice it. We may not be alive when everything falls apart but we have the chance to stop the rust during our lifetime.
Mr. Stratton:
I agree with you that conditions in this country have not yet reached the severity of those portrayed in Atlas Shrugged at its climax, and that it is still possible to marginally improve ones lot in life by continuing to be as creative and productive as possible. So there does remain some incentive to continue, as you say, to "Go Gates" rather than "Go Galt". But this is only true if you take a very short-range view of current events, and if you further limit yourself to economic issues alone.
However, the real issue facing us today is NOT primarily economic, but a moral one. People who are rallying behind the cry of "Going Galt" are not arguing over the petty distinction of whether they should be taxed at a 15% or 30% rate. Instead, they are protesting the inversion that has occurred in the relationship between the state and its citizens.
When this country was founded, the government was strictly limited by the constitution to protecting our individual rights. So long as a person did not violate the rights of another, they were free to pursue their life as they saw fit, responsible for the achievement of their own level of success and happiness. Today, this relationship has been inverted. The government now acts in any area and in any way it sees fit, completely unconstrained by the limits set forth in the constitution. It now exerts unprecedented control over our lives, down to the smallest details such as dictating our use of seat belts, and what sort of toilet or light bulb we will be allowed. And now Barack Obama has asserted his authority to decide which businesses will fail and which will be allowed to remain; which ones HE decides the country (i.e., you, me and every other taxpayer) will "invest" in; which people HE chooses to lead these companies; what level of compensation HE believes is "fair"; and so on. Let's not mince words here. There is not a shred of Capitalism left in a system of this sort. When the government gets to a position where it exercises this level of authority over the economy, we are no longer free people deciding to voluntarily deal with one another, but puppets of the state who are subject to its every whim, with any remaining "freedom" no longer a matter of right, but one of largess extended by our master.
When people proclaim that they are "Going Galt", they are taking a moral stand against the erosion of their rights in this country, proclaiming that they have had enough of this encroachment of government control into their lives, and that they are getting united, organized and prepared to act to regain their lost liberty. If some people choose to fight this battle by reducing their productive output so as to starve the beast, then you need to understand that they do this as just one part of the much larger battle, with the ultimate goal being that of putting the government back into its constitutional straight jacket where it properly belongs.
We may not yet have reached the climax of Atlas Shrugged, but the entire point of that marvelous book was to show us the ultimate consequences of the policies being enacted today, so that we could identify and understand the warning signs and change course before it was too late. Therefore, for you to dismiss the current crisis as noncritical because "we're not yet living 'Atlas Shrugged'", is tantamount to sticking our heads in the sand so that we do not have to recognize and deal with the reality at hand.
And when you proclaim that "now is the time for the business world to step up and prove their worth once again.", I have to ask why does business need to prove its worth - and to whom? People are involved in business for their own self-interested reasons. The choose to work to make a living and to pursue an activity that they hopefully enjoy and which provides some measure of satisfaction in their lives. The beauty of Capitalism is that it provides and environment where self-interested individuals can peacefully and voluntarily trade with one another in a manner that is mutually beneficial. Capitalism is a system that bars the use of force from these transactions, and that is why it is the only moral political/economic system. And as far as required "proof" is concerned, we have the entire history of the world for that. In every case, without exception, the freest societies, with the least government intervention, have been the most productive and prosperous, raising the living standards of all of its citizens to unprecedented heights. It is not further proof that is required, but simply the need for people to open their eyes to the reality before them and embrace it.
When government interferes in the economy through regulation, it does so through the use of force - demanding that people act in ways that they would not freely do based upon their own independent evaluation. Government regulation replaces the goals and judgments of the individual with those imposed upon them by some central planner, resulting in an perversion of the role of government. Now, rather than protecting society from the initiation of force by others, it steps in and initiates that force itself! Each of us are thereby relegated to one of two roles: either we become a dependent of the State which assumes responsibility for providing for our necessities and desires, or we become a victim, forced to work for the benefit of others.
John Galt was the man who stood up and proclaimed that he was neither a slave nor a ward of the state, and had no intention of being relegated to either position. When you hear others of us proclaim that we are "Going Galt", that is also our message. We have nothing to prove, nor do we need to. We have a constitutionally guaranteed right to our own life, our liberty, our property, and to pursue our happiness in whatever way we judge best. And we refuse to let these rights be trampled. Anyone willing to fight in an uncompromising way for their rights can honestly proclaim:
"I am John Galt!"
And for anyone reading this that wants to stand up and be counted, you can contribute your voice through an Atlas Shrugged Books-to-Politicians Campaign being hosted at the web site: go-galt.org
Regards,
--
C. Jeffery Small
Not time yet? Well if you read this from the money speech, and REALLY think about it, I'd say we're about 1/4 to 1/2 way through the book in a lot of ways already:
quote:
"Do you wish to know whether that day is coming? Watch money. Money is the barometer of a society's virtue. When you see that trading is done, not by consent, but by compulsion--when you see that in order to produce, you need to obtain permission from men who produce nothing--when you see that money is flowing to those who deal, not in goods, but in favors--when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you--when you see corruption being rewarded and honesty becoming a self-sacrifice--you may know that your society is doomed.
---end quote---
Sounds kinda' familiar doesn't it?
Bill Gates has to give away millions and millions of dollars, in order to keep some control of his money. If he didn't the government would do it for him and under Obama that will only increase. Pretty soon even Bill Gates will not be able to chose where his money goes and who will be the beneficiaries.
Either people stand up and get back this country and the government, or people should Go Galt. There is no other way to take away the power that Obama wants to take from the people of the U.S.
On 4/16 Obama's spokesperson said there would be no meeting between Obama and Chavez. On 4/17, Obama and Chavez were photographed shaking hands.
What Obama says on any given day, means nothing. What he does means everything. He has an agenda and will force it on the American people. We cannot wait to see what the last chapter will be when the signs are all over the place right now.
One thing to remember is that Atlas Shrugged was written from the perspective of the business leader, not the average worker. We are looking at the current situation, for the most point, from the average worker perspective. What we see may be very different from what the business leaders see. I agree, from my perspective, we are about halfway through the 'process'. I am concerned about the momentum we are gaining, though.
I, too, am concerned when the government requires a bank to take bailout money to protect the identity of the guilty and then refuse to take back the money so they can continue their control over a solvent bank. I agree with Mr. Small in that now is the time for us to stop this practice being done in our name and with our money. The masses was one thing Ms. Rand completely ignored in the book. They were treated to be sheep. Will we stand idly by and be fleeced?
Thank you all for your comments! I suspected this column would touch a nerve when I wrote it. First of all, two confessions: a) I have not yet read "Atlas Shrugged", though it's on my list for the near future, and b) as I'm the "Business Strategies" examiner I wrote about this strictly from that point of view and not the political--which is cheating to a degree. "Atlas Shrugged" obviously is not a book about business strategies.
That said, I agree wholeheartedly with most of the comments. My viewpoint, albeit somewhat veiled in this article, is that it's NOT too late to take (or is it "push"?) back our government. Going Galt is almost an admissions that "It's broke and there's nothing we can do to fix it," which I feel is somewhat of a cop-out. The battle is not yet lost.
Mr. Small, you are correct in that Capitalism does not need to prove its worth. However, some individual businesses and business-people have been behaving badly lately and giving the rest of them/us a bad name. People who used to look to the markets to solve our problems are now looking to the government, which is emboldening those in power at the moment to seize more power.
What business needs to do is step up and prove that it CAN solve its own problems. Companies need to stop running to the government for bailouts, thus yielding power to the gov't. Businesses need to police themselves better to eliminate the ethical and strategic errors that have caused much of the current turmoil.
I also couldn't agree more with your statement that "...the real issue facing us today is NOT primarily economic, but a moral one. People who are rallying behind the cry of "Going Galt" are not arguing over the petty distinction of whether they should be taxed at a 15% or 30% rate. Instead, they are protesting the inversion that has occurred in the relationship between the state and its citizens."
Perhaps "proving their worth" was bad wording. Perhaps proving their independence from and superiority to government for solving the nation's problems would have been better.
Anyway, thank you all for the thoughtful and thought-provoking comments. This is the sort of discourse I enjoy and encourage. Meanwhile, if you're interested in my political views, go to my Examiner home page and over to the right in the Contact/Follow Thom section, check out Blog: Vox Potpourri. You may find my take on the Tax Day Tea Parties interesting. (I can't post links in comments, unfortunately).
Mr. Stratton:
Thank you for your thoughtful reply as well as for your original article. There is one additional point that I would like to touch upon that I failed to address previously, and which you raise again in your reply.
It is true that we have seen a rash of business leaders acting badly over the past few decades, and this certainly does create the opportunity to tar-and-feather business in general. But there are two point that we, as outside observers, need to keep in mind.
First, there are good people and there are bad people in all walks of life, and this is an inescapable fact. It doesn't matter what sort of economic or political system you enact, the worms of humanity, as well as the merely incompetent, will be with us, and we must do our best to identify and avoid them. One of the benefits of a Capitalistic system over a centrally planned economy (where we are rapidly headed) is that the damage that any individual can do is contained. The risk is born by the investors and customers who choose to deal with any given business entity, and because of that risk, there is a great incentive to pay close attention to the people and policies of the businesses with which one deals. However, when the government gets involved and says that through its regulatory oversight and guarantees that it will relieve us of the responsibility for being vigilant ourselves, then we create a single point of failure in the system. When the government says it has regulatory watchdogs in place (SEC, etc.) and it guarantees us against failure (FDIC, bailouts, etc.), then people become complacent. Now, instead of a large number of individuals and institutions monitoring business practices, we have only the government. And wonder of wonders, that organization is comprised of as many (or possibly more) worms and incompetents as there are in the business world. So it should be no surprise when they fail. Except their failure is now on a catastrophic scale that affects us all, since we, as taxpayers funding these operations, are now on the hook to cover those failures and guarantees.
Secondly, while people like Madoff are simply outright crooks, much of what is being reported as business scandals (for example, the credit default swaps [CDS]) are really a case of gross incompetence rather than attempts to deceive and swindle. What the general public still has not been told is how it was the government's intervention into the markets that is responsible for triggering the chain of events we have seen over the past six months, including the creation of the CDS which were a badly conceived attempt by the financial institutions to protect themselves from holding what they knew were poor assets, namely the sub-prime mortgagees. No sane business lender would have written these mortgagees on their own, but they were enticed to do so because of the creation of a ready market for them through Freddie Mac and Fannie Mae. And these quasi-government institutions were essentially blackmailed by Congress into expanding these programs, despite the fact that they had already contributed to their bankruptcies earlier. If any reader is interested, there is a very good video of a talk by John Allison, the head of BB&T bank, which explains many of these factors. You can find it here:
www.aynrand.org/site/PageServer?pagename=reg_ls_financial_crisis
The point I want to make with all of this is that, like you, I too wish for a crop of admirable business leaders that stand out as great examples of the best that Capitalism has to offer. However, I think it is a mistake to expect individuals to rise to that challenge in todays business climate. I haven't see one stand up to the challenge in either the financial or the automotive industries. Apparently they were driven out long ago. The type of people we seek are those who operate on their own independent judgment, willing to be creative and take risks because they understand and believe in their ability. There is no room for those people at the moment. Whether the dynamic new industries of the future will be biotech, energy, or something else, can you imagine the "Gates" of that industry being the sort of person ready to enter into the type of private/public "partnership" that Barack Obama is proposing? Is the sort of leader that can mold a new industry out of practically nothing also the type of person who is prepared to let Obama make decisions about employee pay or select his CEO? I do not think so. People with that sort of ability and independence will look elsewhere to find satisfaction in their lives. If we want Capitalistic business leaders, then we must adopt Capitalism as our economic system. But there is no use pretending that is what we have. Instead we have a system riddled with massive amounts of government regulation that has grown to be much closer to Socialism than Capitalism - and gets closer each day. Atlas Shrugged depicts all of this with surprising accuracy.
I enjoyed your article on the Tea Parties and think that we are very much in sync on these issues. I hope that I do not come across as overly critical. I just believe that today it is important to make these issues as clear as possible so that more people will understand what is happening to our country.
Regards,
--
C. Jeffery Small
If you haven't read "Atlas Shrugged," you really have no idea what you are talking about. And "Going Galt" makes perfect business sense. I would suggest you actually read the book before commenting on it.
It would be called journalistic honesty, my, what a wonderful idea! The subject is covered in the book, by the way.
I am "Going Galt" by increasing my pay and bonuses to my employees (none of whom make over $250,000 per year) until our overall profit to our business is very low. That way I can still keep my business healthy, but be subject to the least amount of these ridiculous taxes. Fact is, I would rather see my employees get the money than the government.
Jean, I was reporting on a new social/business trend called "Going Galt". One cannot write on the trend without providing the context of the phrase. But, to provide that context one does not have to have read the book. To use your logic, for you to criticize my journalistic honesty you would have to be a journalist yourself. Are you?
Besides, you wouldn't know I hadn't read it if I hadn't told you. Seems to me I'm being honest.
At any rate, you're picking a mighty small nit.
As for the business sense of Going Galt, I stand by what I said. If there comes a time when business-persons decide to "un-Go Galt" they will find it hard to undo what they've done. Your case is the first I've heard about with that specific approach, but there may even be problems in your case. How will you return to normal? Are you going to cut your employees salaries? Perhaps they'll be fine with that, and perhaps not.
It just seems to me that Going John Galt is a one-way solution. You can go, but there may not be any coming back. At least it won't be easy.
Good point, Frank. Atlas Shrugged is not on par with the Bible nor was Ayn Rand a 'prophet'. It is not a prophesy. Good perspective to remember.
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