One of the biggest mistakes we can make, Saxo Bank's CEO warns [9], is to assume that rationality will prevail, that just through superior economic performance, freedom will capture enough peoples' hearts in a democracy to win the day. In the last of his three-part series (part 1 [10] and part 2 [11]), Lars Seier Christensen [9] focuses on the broader relevance of Ayn Rand in society today, noting that she remains among the few that recognised with crystal clarity, that we will not win the battle through just proving that freedom and capitalism works. This, he warns, creates a major problem for those of us that like to argue rationally, rather than emotionally.
Excerpted from Saxo Bank CEO, Lars Seier Christensen's blog, [9]
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[The current irrational world] creates a major opportunity for politicians that intuitively know that in a rational world, there would be little demand for their services. Only in an irrational, emotional universe, where opportunists can gain access to media and visibility to express “feelings” and try to take the moral high ground, no matter how unfounded in reality it is — only in such an environment can you survive without having to produce practical, productive results, and instead prosper and benefit from empty talk and third-rate acting performances.
This tendency, unfortunately, has only strengthened during the recent crisis. There is often a complete disconnect between the reality and the words used to describe it, the actions pretending to deal with it. In particular, this is very noticeable in the Eurozone these days.
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Ayn Rand has gained renewed relevance and attention, because her predictions have been fulfilled in many different areas.
First, the politicians assign ever greater powers to themselves, as they manage to convince the citizens of the need for even more interference, although the problems are created by interference in the first place.
There are endless examples of this in both the US and the Eurozone, where one mistake invariably leads to call for even more powers, leading to new mistakes.
Second, freedom and capitalism, the only real answer to the current crisis, gets ever more restricted and prevented from working efficiently, meaning that the underlying strength of human ingenuity and creativity is stopped from working and becomes increasingly powerless to pull us out of the morass we are in.
Another of Rand's predictions of business people using government favours in return for giving up their independence, has sadly been confirmed better than anywhere else in my own industry. It is embarrassing to see the extent the banking industry has relied on support from governments, and how ruthlessly it is currently exploiting the offers of cheap money available from the central banks.
Very little of the bailouts filter down to the real economy...
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Pick-a-winner, corporate social responsibility, employment rules, affirmative action, the creation of fictional jobs and plain political popularity and obedience will then rule who prospers and survives in all industries, not just banking. Beware of this development, it is poison to capitalism, growth and to prosperity for all of you.
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In fact, the undemocratic, power-grabbing, emotional, populistic Washington that takes over in Atlas Shrugged is today most closely resembled by the EU and the Eurozone in the real world.
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In France, we now have a President that by his own admission, hates the rich. So much so that he is trying to circumvent his own constitution to introduce punitive taxes on them, although illegal.
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Well, it seems that the rich also hate their president, judging by the number of them leaving — famously spearheaded by Gerard Depardieu — for places like Belgium, that amazingly actually acts as a tax haven for the French in spite of all the EU rhetoric, or Switzerland, where inflows of new immigration requests are, according to my sources, at record highs, particularly from Scandinavia, UK and France. Depardieu, of course, chose Russia, which speaks volumes as to the deep trouble Western Europe is in.
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This leads to a very interesting question, a question full of hope. Is there indeed also a solution to the problem, such as the one Ayn Rand foresaw with the flight to Galts Gulch? It will be difficult to find a place entirely outside of the reach of aggressive governments eager for tax dollars, as Switzerland has learned to its misfortune.
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So nowhere seems safe from populism and irrationality any longer. It is difficult to see the necessary reforms forthcoming, and sadly, we may have to go through a much more severe economic collapse before change will be forced upon us. Unfortunately, that change may also be totalitarian in nature, of course. In fact, that is the more likely outcome in the short run.
I don't believe the battle will be won by economic rationality. This goes out the door, once more than 51 percent of the voters live off the government — and probably even long before.
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If we don’t succeed in changing the values and direction of at least the next generation, I fear the full prediction of Atlas Shrugged will become reality and while that may hold some promise for the distant future, it is not something that I think people of my age feel like going through if we can avoid it.
Read Christensen's full Ayn Rand discussion here (Part 1 [10], Part 2 [11], and Part 3 [9])