The New Relevance of Atlas Shrugged

Copies of Atlas Shrugged are flying off the shelves. In January its average sales were three times those of a year earlier, and the 52-year-old novel was outselling Obama's latest autobiography. As you can see in this graph, spikes in sales of the book coincide with specific events in the news.

I've been rereading it myself, and keeping a mental list of the points of similarity between the novel and our world, which I'm writing out here. (As more similarities pop up in the news, I will return to add them to the list.)

• Most obviously, government power is growing enormously, while the economic situation grows worse.
• The government is extracting wealth at an accelerating rate, allegedly because it is good for the economy "as a whole," though the biggest beneficiaries seem to be well-placed economic insiders (represented in the novel by the officers of Taggart Transcontinental and Associated Steel).
• Ailing companies deemed too big to fail are propped up at the expense of healthier enterprises.
• Business people who don't knuckle under to the government's plans are intimidated (apparently) with extortionate threats.
  
• After a century of relative security, pirates once again roam the high seas at will.
• Congress passes what in effect are bills of attainder, punishing specific individuals for actions that aren't crimes when done by others (in the book: the Colorado business community for being unfairly prosperous, in our world: the execs at AIG who kept their retention bonuses after the feds had bailed the company out).
• In the book, the feds wreck the resurgent economy of Colorado by declaring a moratorium on the corporate bonds that Colorado business people bought in order to loan money to a troubled railroad. In our world, the president advocated violating in a similar way the rights of bondholders who loaned money to a troubled auto manufacturer.
  
• In the novel, the Community National Bank of Madison makes loans on the basis of need with relatively little concern for ability to pay. When it fails, it takes down the people it was trying to help (pp. 281-2). Similar things happened in our world, except that the problem was nation-wide.
• I also see, in our world, a little bit of the panic that sets in at the end of the novel, as government officials become alarmed about business people leaving their posts. Those AIG bonuses were retention packages, not rewards for past performance. They were given because officers were concerned that these people would leave the company -- and that no doubt is why Geithner approved them. It was a rather desperate measure, it now seems. (Added later: After I wrote this paragraph, this was published. Many in the blogosphere have commented on the obvious similarity to events in Atlas.)
  
• Timothy Geithner, come to think of it, bears a disturbing resemblance to Wesley Mouch, the nebbishy character who eventually becomes economic dictator in the novel. Like Mouch, Geithner is callng for "wider powers" to deal with the economy. To me, he even looks like him.

Of course, there are some huge differences between the situation in the novel and the current one in our world. Our collapse, in my humble opinion, was the result of a previous artificial boom based on credit expansion (which was triggered, indeed deliberately supported, by the government - which now continues to force debt on us when we are already buried under it). In the bust that follows such a boom, many business decisions that were made under the misleading conditions of the boom are now revealed to have been mistakes (AIG's overindulgence in credit default swaps, eg.). Some of the schemes exposed by the bust were downright ciminal (obvious example: Madoff). For this reason, the private sector looks more responsible for the collapse than was the case in the novel, making the government's power-grab look more legitimate.

Clearly, the greatest relevance to events today is in terms of fundamental principles and concepts. Government is viewed as a giant extraction device, in which wealth is taken from those who produce it and given to those who do not. Since the system rests on the backs of people it is sacrificing, it can only exist as long as its victims support it. Perhaps, one fine day, they will have had enough.