[quote=davelj]I was a pseudo-socialist in college then became an ardent libertarian (helped along by Ayn Rand and others) and I’ve slowly moved toward the center over the last decade. I think Ayn Rand made some brilliant, counter-intuitive observations, but over time I found two major flaws in her philosophy.
One, her philosophy discounts the influence of sheer luck. The heroes of her stories reach the heights of success by sheer force of will. While this is inspirational, it’s also not particularly realistic. Luck – or good fortune or whatever you want to call it – plays an enormous role in determining various human outcomes. Nassim Taleb does an excellent job discussing this issue in “Fooled by Randomness.” Don’t get me wrong, I still believe in Ronald Reagan’s observation that “The harder I worked, the luckier I got,” but when you observe the careers of the super successful, there were an awful lot of lucky breaks (that is, “helpful randomness”) along the way.
Two, Rand’s philosophy doesn’t take into account what I call the “Revolution Factor.” In a purely capitalistic system, wealth is going to get enormously concentrated at the top (yeah, even more than we see now because our taxes are somewhat progressive). This income inequality, at some point, is going to cause social strife that will bring on revolution. I just don’t see how it’s avoidable. And that brings the whole system down such that the “uber capitalists” lose everything they have. And what’s the point in that? So, in my view, progressive taxes and other socialistic institutions that we see here in the U.S. – to use one example – are just the price the more successful and lucky among us pay in order to keep the peace, so to speak, with the less successful and less fortunate. I’d rather pay high income taxes and benefit from a system that allows me to compound wealth (albeit at a lower rate due to the taxes) than live in poverty resulting from anarchy.
I’m sure Rand’s writings have other flaws, but those are two of the most glaring. But I still think her books are full of many spot-on observations that many folks don’t like to think about.
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Excellent observations davelj.
Regarding sheer luck, it reminds me of Ronald Dworkin’s Theory of Equality, or equality of resources. Since all the freshman beer wiped out my recollection, I’ll just quote WIKI here:
“human beings are responsible for the life choices they make. The second is that natural endowments of intelligence and talent are morally arbitrary and ought not to affect the distribution of resources in society. Like the rest of Dworkin’s work, his theory of equality is underpinned by the core principle that every person is entitled to equal concern and respect in the design of the structure of society. Dworkin’s theory of equality is one variety of so-called luck egalitarianism.” http://en.wikipedia.org/wiki/Ronald_Dworkin
My Chicago boys (I really miss shoveling the alley) forgot an important element in their utopia – extreme law and order, practiced by Pinochet, and more subtlety by Singapore and China. Pinochet was respected by a surprising many people in Chile because economy improved under the regime, with a little help from the Chicago boys. Singapore also prospered with this mix. From “The Elephant and the Dragon: The Rise of India and China”, the reader will find that China studied the Singapore model in early 80’s and now they too have prospered.
