Ayn Rand’s Argument For Capitalism – Part I — Laissez FaireLaissez Faire

Ayn Rand is known and often criticized for her defense of selfishness and capitalism. “Doesn’t she have any concern for the poor?” her interlocutors ask. In “Arthur Brooks and Ayn Rand on the Moral Case for Free Enterprise,” blogger Will Wilkinson raises a novel criticism. Rand, he suggests, was concerned for the poor, or at least recognized the rhetorical value of appealing capitalism’s positive effects on the poor, and this, he claims, was a concession to altruism.

The criticism comes as part of a lengthy and sometimes hard to follow post that covers a lot of ground. I’ll comment on the rest of it later, but here I want to focus just on this single point.

Wilkinson argues that “Rand, despite the vehemence of her rhetoric, seems to go out of her way to communicate that under capitalism” the poor do well. He offers into evidence this passage from Rand’s essay “What Is Capitalism?”:

The moral justification of capitalism does not lie in the altruist claim that it represents the best way to achieve “the common good.” It is true that capitalism does—if that catch-phrase has any meaning—but this is merely a secondary consequence. The moral justification of capitalism lies in the fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is: justice. [Emphasis added by WW.]

Wilkinson characterizes the passage this way:

Capitalism achieves the common good, by the way. But it’s real justification is that capitalism is just, which Rand understands to mean, more or less, it gives people what they deserve. It’s telling, though, that the rhetorically fearless Rand in this instance gave into the rhetorical pressure to note that capitalism is justified on “altruist” common-good grounds.

I think Wilkinson misunderstands Rand’s point. Rand is not saying that capitalism is good on altruistic grounds. On the contrary, she stresses again and again in her writing that if you accept altruism—the theory that man’s moral duty is to sacrifice himself for others, to put their well-being ahead of his own—then you cannot consistently defend capitalism. (Indeed, that was precisely the criticism Yaron and I made of Arthur Brooks in an article Wilkinson links to.)

Rand’s defense of capitalism is entirely egoistic. It is rooted in her conviction that each individual is an end in himself, not a means to the ends of others. Morally, she argues, the individual should support his own life by exercising his faculty of reason. A proper social system, therefore, is one that protects the individual’s ability to live by guarding his ability to be rational. Capitalism, she concludes, is the only moral system because only it bars the initiation of physical force from human relationships—and physical force is the only way others can stop us from being rational. (This is obviously a brief summary. For the entire progression of Rand’s argument, see “What Is Capitalism?”)

You don’t get more egoistic than that. Rand’s entire focus is on what’s required for the individual—any­ individual—to flourish in society.

What, then, should we make of the sentence Wilkinson draws our attention to: “It is true that capitalism does [achieve the “common good”]—if that catch-phrase has any meaning—but this is merely a secondary consequence”? That becomes clear after we read ahead a few paragraphs in the essay Wilkinson quotes. According to Rand:

“The common good” is a meaningless concept, unless taken literally, in which case its only possible meaning is: the sum of the good of all the individual men involved. But in that case, the concept is meaningless as a moral criterion: it leaves open the question of what is the good of individual men and how does one determine it?

What Rand is saying here is that all good is individual good, and only a principle that identifies what’s good for the individual can serve as a moral criterion. Applying that criterion, one can know what’s good for a group of individuals—but the process doesn’t work in reverse, because the “common good” is empty as a moral criterion.

Capitalism is good for all men—for each and every man—not for some collective apart from and superior to the individual. Capitalism is good for Bob, it’s good for Gus, it’s good for Tammy—and so capitalism represents “the common good” of Bob, Gus, and Tammy.

But, Rand is stressing, such “common good” is “merely a secondary consequence” because it’s caused in the first place by acting on an individualist moral criterion, embodied in the principle that capitalism is good for man as an individual rational being. Capitalism is a system that is geared toward each person’s survival—not just that of the productive genius but of any person willing to think and produce. That’s what makes capitalism a moral system.

This is one reason why, as Wilkinson points out elsewhere in his post, Rand will sometimes point specifically to the beneficent effects of capitalism on the poor. The fact that even people of limited means can prosper under capitalism testifies to the fact that it is not a system where “the strong exploit the weak” but where each individual can flourish to the extent he exercises his mind.

But there is another reason I think Rand points out the effects of capitalism on poor people: a rationally selfish individual, on her view, cares about other people’s well-being and wants to see poor people get richer. That’s not altruism—it’s not a matter of self-sacrifice. As I have discussed elsewhere, other people’s well-being is a value to the rationally selfish individual. All else being equal, it’s good for me when good people flourish. The richer and happier the world I live in, the better it is for me—both materially and spiritually.

For Rand, the fact that capitalism allows poor people to make themselves richer is something we should celebrate. That doesn’t mean “the poor” ought to be one’s primary concern, which is why in all the quotes Wilkinson points to, Rand treats it as an aside. But it is an error to conflate concern for others with altruism.

Bottom line: Wilkinson is wrong if he thinks that a persuasive moral argument for capitalism can and should include appeals to altruism. Ayn Rand’s entire body of work compels the opposite conclusion.

What Wilkinson’s post reveals, I think, is an all-too-common failure to take the time to comprehend what Rand is arguing—which leads to treating her, not as a deep and careful thinker, but as someone who can be understood at a glance.

It simply ain’t so.