I have been intensely analyzing the relation, if any, between ethics and the capitalist drive. Adam Smith, the crowned “founder” of modern liberal bourgeois economics, was also an ethical philosopher, and explored this question at length. While his Wealth of Nations is flooded with ethical considerations, the idea that resonated with people who really put his ideas into practice was the idea of the “Invisible Hand” implicit in the idea of division of labor. People, as Milton Friedman said, would not be slaves to each other, but would be ruled by the impersonal price system. To Ayn Rand, the most important thing in a society is that individuals be able to create whatever they want without any sort of resistance from external coercion. While I have not read Atlas Shrugged, the impression I get is that Ayn Rand believes unfettered free market capitalism to be the best possible system in which to realize her ethical philosophy of the individual. However, Ericka Beckman theorizes that the distortion of Smith’s ideas by late 19th century philosophers (and their creativity and labor) literally constituted a new world. Whatever that power is, it constituted a new economic epoch. My theory is that the consideration of the ethical question of an economy and the epoch it is situated in must recognize and grapple with the non-individualist nature of this creative power, which operates through singular people and through networks of singular people.
According to Ericka Beckman, liberal thinkers in the late 19thcentury, following Adam Smith, believed that they had extraordinary power as “men of letters” to make the ideas at the root of Smith’s foundational text of bourgeois economic thought, The Wealth of Nations, operative in reality. She calls the process, realized through the interaction of human creativity, desire and labor with the “natural wealth” in the earth just waiting to be dug up, by which an idea that is so powerful as to have the potential force of law “export reverie.” Export reverie is a form of discourse that “reverberated across the [European] continent in newspaper essays, commercial manuals, exposition catalogues, inaugural speeches, and advertisements.” Being inspired by Smith’s notions of wealth, and having observed the tremendous growth of the European markets, due in part to the implementation of Smith’s principle of the “division of labor” both in more traditional forms of economy and in the nascence of the industrial revolution, these thinkers saw great potential for wealth in lands that were far less technologically developed. The world, and specifically in Beckman’s case, Latin America, became a soft wax for these thinkers, offered, through the power of discourse reverie, to be molded into whatever shape most adhered both to their common desire and to the new scientific principles of political economy. To put it simply, Beckman sees desire, creativity, and discourse as being prime movers in creating new worlds. It is essential to keep this view in mind when looking at the economic principles that result from the interplay of these forces.
Beckman discusses at length the phenomenon of ideological project-pronouncement preceding its material reality. This principle holds both for a project such as “globalization,” concerning which Paul Smith says, as Beckman points out, only materialized after it was formulated and pronounced as an idea, and for things within the space opened up by such a pronouncement. She sees such a pronouncement as being located in the late 19th century, which included both political and economic forms of thought, She writes,
“Late nineteenth-century liberalism did not involve simply adherence to a set of political beliefs or economic policies. Instead, liberalism created a political imaginary that itself served as a conduit for expansive and radically transformative desire. For real economic transformation to occur, it had to be preceded as if in a dream. Alternately, we might say that the “spirit” of capitalist transformation ran across the region before its material body appeared.”
This movement creates a “world” with economic principles that it creates itself. The project of globalization was only able to occur due to a belief in the global division of labor, which was seen as something that would benefit all countries, including the Latin Americas. In reality, this system simply led to assymetrical growth, in favor of Europe at the expense of the Latin Americas. Whereas at the beginning of the project “to reject Latin American countries’ “mission” within the global division of labor was tantamount to a rejection of civilization itself.”
My main point is that it is not a question of whether or not an individual decided to implement an idea or not at the end of the 19th century which led to the global economic project. Rather, through “transformative desire” that does not rely on one individual, a world was created in which it is very difficult to talk about individual autonomy and choice, which has always been seen as the basics of ethics. If the root of the global economic system is a reading of Smith’s Invisible Hand, at what point does it become a ruthless, invisible dictator rather than a gentle push that individuals feel which allows them to act of their own free initiative without being ruled by another person? The global capitalist world, created by the implementation of a reading of the invisible hand, division of labor, and comparative advantage, creates a world where even individual autonomy and freedom is in doubt.
Adam Smith, in the section of his Wealth of Nations titled “Education of Youth”, discusses the potential consequences of the principle of division of labor being implemented without government intervention. The question of government intervention ends up becoming an entirely ethical question. While the division of labor is very effective in creating an abundance of resources for a nation’s population, the result can be devastating to the workers. Smith writes,
“The man whose whole life is spent in performing a few simple operations, of which the effects too are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become.”
On the flipside, there are some people who are in the exact opposite situation, namely the people who are not forced into performing a repetitive job that makes them a “stupid and ignorant creature.” Concerning these people, Smith writes that they
“who, being attached to no particular occupation themselves, have leisure and inclination to examine the occupations of other people… their great abilities, though honorable to themselves, may contribute very little to the good government or happiness of their society.”
Interestingly, though these people are almost infinitely more capable intellectually than the workers, they have no way of having any sort of positive effect on the society that they’re in.
There is an interesting dynamic here, when we think about having the invisible hand, division of labor idea taken to the nth degree. Within the group of people in the division of labor, there is a lack of imagination and what Adam Smith might call the higher human virtues. The situation of one of these workers not only “corrupts the courage of his mind”, but “corrupts even the activity of his body, and renders him incapable of exerting his strength with vigour and perseverance, in any other employment than that to which he has been bred.” Their world becomes extremely limited, and it is hard to imagine any other state of things besides feeling some deep, unclear anxiety about what they are doing. But then, alternatively, there is a class of people that is able to use their imagination to a very large extent. They can observe all of the various trades and intellectually understand what is going on. Further, they can perfect themselves in ways they seem fit. But, most importantly, they can imagine new worlds, or rather, if I may use a more modern idea, they have that capability to create newmodes of being-in-the-world, which is the mark of a free man.
In my view, it is this sort of “power” that is so important to Ayn Rand in her book The Fountainhead. The problem seems to be that this “power” only has two forms of expression for Rand: it can either be used to purely manipulate people into losing their individuality (Toohey) or be used to create something that could only arise from an individual (Roark). Of course, it makes sense to look at the context that the book was written in. As we discussed in class, Rand grew up in the Soviet Bloc, and seeing the lack of individual freedom there made capitalist America seem that much more appealing to her. One could either be trapped in a totality that allowed no individual expression, or could be in a country that from the start valued individual freedom over anything else.
As I said, there are two “masters” in The Fountainhead (excluding Dominique), which is similar to Smith’s man of leisure. On the one hand, we have Toohey, who uses his “power” to manipulate men. He is a ruler of men. On the other hand, we have Roark, who uses his “essential creative power” to serve only himself.
In an absolutely terrifying scene, Toohey and Peter have a meeting where Toohey reveals the true intentions behind his “selflessness” philosophy. It is not about empowering individuals, but is rather about having power over individuals and taking away their souls and unique freedom. As Toohey tells Peter,
“I shall rule…You. The world. It’s only a matter of discovering the lever. If you learn how to learn one single man’s soul, you can get the rest of mankind. It’s the soul, Peter, the soul. Not whips or swords or fire or guns. That’s why the Caesars, the Attilas, the Napoleons were fools and did not last. We will. The soul, Peter, is that which can’t be ruled. It must be broken.”
This is up there with the most terrifying passages I’ve ever read. I think it hits so close to home because I believe that it is a fundamental philosophical issue: human freedom.
Of course, she contrasts Toohey to Roark. In his self-defense at his trial after burning down a building he designed, he says,
“No creator was prompted by a desire to serve his brothers, for his brothers rejected the gift he offered and that gift destroyed the slothful routine of their lives. His truth was his only motive. His own truth, and his own work to achieve it in his own way. A symphony, a book, an engine, a philosophy, an airplane or a building-that was his goal and his life…the creation which gave form to his truth. He held his truth above all things and against all men.”
Now, what interests me most (and this is a very provisional theory with not much evidence) is the possibility and the great irony of American capitalism post-Ayn Rand: that people that Rand influenced, from Greenspan to Friedman (and while the economic system may have worked out for awhile) created an economic system in which everyone is required to be as intense as Howard Roark in their production, but nobody gets to create anything new that is completely determined by their desires and nature. Capitalism became this attempt to create a timeless system that would be able to include any sort of change within time. The irony is that those people influenced by Rand, in my view, were “second-handers”, and as a result of their excitement and belief that they were somehow the next generation of Roarks, there is absolutely no way we can believe in whatever “the individual” is. In the process of creating a system that would allow every individual to exercise his creative faculties to the greatest degree as is fitting to him, there is no room for anything like a true individual anymore. The followers of Rand, in their quest to be the true Roarks of the world and create a system that would allow Roarks to thrive, killed the conception of human subjectivity being rational, coherent, and unified. When Toohey describes totalitarian regimes, saying “There’s equality in stagnation. All subjugated to the will of all. Universal slavery-without even the dignity of a master. Slavery to slavery. A great circle-and a total equality. The world of the future”, it sounds like where capitalism is at now. In the end, Rand, as a genius, gave the gift of knowledge of the self’s infinite capacity to create, but, in my view, got betrayed by her followers for creating a system that would not allow anyone to create anything actually new.
This brings me back, finally, to Beckman’s book Capital Fictions. The men at the end of the 19th century who used the discourse of export reverie, through desire, created a world that ensnared a significant amount of people and had harmful consequences that went entirely against the feeling of optimism that they had at the time of that world’s inception. Then we have Rand’s followers, who designed this new global capitalist system. These are both continuations and repetitions of the same thing. There is this human desire to create a new world order that always turns into something destructive, because the people designing that world think that they have found the answer, and have found the system that will solve the problem of history and human suffering. But that does not exist. If there is any conclusion I have to this essay, it’s that humans, with Roark, do have that power to be that self-resolute. But we are not pure, isolated individuals, and there are different ways of being-in-the-world that do not involve pure creation and imposition of the individual over all, which can have severe consequences.
 Beckman, Ericka. Capital Fictions: The Literature of Latin America’s Export Age. Minneapolis: University of Minnesota Press, 2012. Pg. 5
 EB, 5.
 EB, 5.
 EB, 8.
 EB, 15.
 Smith, Adam. The Wealth of Nations. New York: Modern Library. 200. Pg. 840.
 Smith, Pg. 841
 Smith, 840.
 Rand, Ayn. The Fountainhead. New York: Signet. 1952. Pg. 635
 Rand. Pg. 678.
 Rand, 639.
- Featured image taken from libertarianism.org
William Lennon is the editor of CRB.