What’s at stake in the Obamacare litigation? Much more, we are being told, than the viability of the Patient Protection and Affordable Care Act itself. What hangs in the balance, conservatives proclaim, is nothing less than the future of constitutionally limited government in America.

Back in January, Judge Roger Vinson held that Congress exceeded its constitutional authority by forcing almost everyone in America to buy health insurance (the so-called individual mandate). Now the U.S. Court of Appeals in Atlanta has upheld that aspect of Judge Vinson’s decision, while rejecting his conclusion that the entire statute is invalid.

According to a Wall Street Journal editorial, Vinson’s decision was a “constitutional moment” that may signal “a return to the government of limited and enumerated powers that the framers envisioned.” And columnist George Will says this case could rescue “Madison’s constitutional architecture for limited government.”

Really? Let’s suppose that when the case finally reaches the Supreme Court, the mandate is struck down, and the statute along with it. What larger meaning would such an outcome have, beyond the obvious importance of deciding Obamacare’s fate? Unfortunately, very little impact can be expected from the kind of desperate, last-gasp strategy that spawned the main issue in this litigation.

The Supreme Court will almost certainly be deciding whether the Commerce Clause — which allows Congress to “regulate commerce . . . among the several states” — authorized enactment of the individual mandate. Obamacare’s defenders can point to a line of Supreme Court decisions stretching back more than a century, construing that clause to grant Congress a blank check on power, authorizing control of literally every aspect of the economy, from agricultural equipment to zirconium jewelry.

This orthodoxy has been instrumental in allowing health insurance to become one of America’s most government-dominated industries, replete with tax-funded schemes to insure the elderly and poor (Medicare and Medicaid), “coverage mandates” requiring exotic benefits like acupuncture and in vitro fertilization, price controls on insurance premiums, tax laws that channel health insurance through one’s employer, and hundreds of similar controls.

What about the “government of limited and enumerated powers that the framers envisioned”? Regrettably, it’s nowhere in sight. Our Founding Fathers held that government has but one purpose: to protect individual rights to life, liberty, property, and the pursuit of happiness. In that context, they designed the Commerce Clause as a powerful check on states’ ability to interfere with free trade, using the term “regulate” to mean: make uniform or regular. If, say, New York were tempted to erect a tariff barrier on imports from New Jersey, the federal government’s exclusive power over interstate commerce would soon squelch the scheme.

The Commerce Clause was never intended to grant Congress carte blanche to rule the economy. Under the Founders’ Constitution, a person’s decision whether to buy health insurance would be treated as an entirely private matter in which government has no say (except to redress breach of contract or fraud). Indeed, the entire Rube Goldberg apparatus of laws, regulations, and entitlements by which Uncle Sam and his state-level minions control American health care would be thrown out as unconstitutional violations of property rights and liberty of contract.

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute

House Budget Committee Chairman Paul Ryan’s budget has come under severe attack for daring to curtail some elements of the entitlement state. Although we are certainly not defenders of the plan’s details — it doesn’t even cut spending — what’s striking is how easily its supporters have been put on the moral defensive, and to how devastating an effect.

In a column typical of the attacks on the Ryan budget, New York Times columnist Paul Krugman called the plan “cruel,” “heartless” and “mean-spirited.” Ryan “has talked a good game about taking care of those in need,” but that can’t be reconciled with cutting the welfare state.

It was nothing new: Every attempt to cut entitlements has been denounced as unethical and immoral. But this time there was a new twist. The real motive behind the plan, critics say, is a philosophic opposition to entitlements — an opposition fueled by the ideas of the controversial philosopher Ayn Rand.

Rand of course was both an uncompromising critic of the entitlement state and a preeminent champion of laissez-faire. But whatever influence Rand might have had on Ryan’s goal — he credits her with inspiring him to go into politics — one thing is for sure: Her arguments have been conspicuously absent in the budget debate.

Frankly, that’s like going to war without a weapon. Rand’s ideas are indispensable in the struggle to limit government: they provide the key to answering the moral argument for the entitlement state.

That argument, Rand argued, rests on an ethical precept we’ve been taught since childhood: your neighbor’s need is a claim on your wealth and property. You are, in short, your brother’s keeper.

Well, if so, then you must keep your brother by providing him with a guaranteed retirement (Social Security), an endless supply of medical care (Medicare, Medicaid, S-CHIP), a roof over his head (public housing), and an education for his kids (public schooling). If self-sacrifice for the needs of others is a moral imperative, then so is the entitlement state.

When Ryan’s critics call his budget immoral, they are counting on a simple train of logic: Since the entitlement state is a moral imperative, anyone who wants to cut it back is at war with morality.

If you are your brother’s keeper, the case is unanswerable. But are you? Rand argued no. While the Founding Fathers recognized a man’s political right to live and work for his own sake, Rand completed the case for limited government by defending the individual’s moral right to live and work for his own sake.

A character in Rand’s novel Atlas Shrugged summarizes this outlook: “I refuse to accept as guilt the fact of my own existence and the fact that I must work in order to support it. I refuse to accept as guilt the fact that I am able to do it and do it well. I refuse to accept as guilt the fact that I am able to do it better than most people. . . . I do not seek the good of others as a sanction for my right to exist, nor do I recognize the good of others as a justification for their seizure of my property or their destruction of my life.”

The moral justification for ending the entitlement state, Rand held, is a man’s absolute right to seek his own good and keep the rewards of his work.

Behind all their fiery bluster, Rand observed, the defenders of the entitlement state have a weapon: the tacit premise that a man who demands to be left free to live only for his own sake and his own profit is the equivalent of a criminal who tramples, robs, beats, and sacrifices others. Cut Social Security? That’s no different than stealing food out of the mouths of old people.

This is what Rand challenges. In morality, she argued, a man who truly lives and works for his own sake neither sacrifices himself to others nor others to himself — he produces the values his life requires. In politics, a limited government that protects an individual’s right to the product of his own effort does not sacrifice “the needy” — it refrains from sacrificing anyone by protecting the freedom of everyone. Cut Social Security? To do so is, in reality, to stop depriving men of the wealth they’ve produced.

In Rand’s words, “Since material goods are produced by the mind and effort of individual men, and are needed to sustain their lives, if the producer does not own the result of his effort, he does not own his life. . . . Whoever claims the ‘right’ to ‘redistribute’ the wealth produced by others is claiming the ‘right’ to treat human beings as chattel.”

That is the moral perspective that is needed to take on entitlements. If Ryan and others are actually going to scale back the entitlement state, they will find Rand’s intellectual ammunition indispensable.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Ayn Rand is everywhere and her political opponents are growing nervous.

Rand of course is a champion of individual rights, including property rights, and an advocate of laissez-faire capitalism. Walk through any Tea Party gathering and you’ll see signs such as “Who is John Galt?,” “Rand was right” and “Read Atlas Shrugged.” Paul Ryan says of her, accurately in my view, that “Ayn Rand more than anyone else did a fantastic job of explaining the morality of capitalism, the morality of individualism.”

On this shift in the political landscape, Paul Krugman comments in “A Tale of Two Moralities” that gone are the days when policy disputes were about pragmatic differences in accomplishing the same goal. Today we see a difference in moral principle: one side considers the modern welfare state morally superior to capitalism and the other side considers capitalism morally superior to the welfare state.

What Krugman doesn’t say, however, is that to the extent there actually is a side today that thinks capitalism is morally superior to the welfare state, it’s thanks to “Atlas Shrugged,” “Capitalism: The Unknown Ideal” and Rand’s other works.

But whether Krugman knows this or not, many other people do. What worries advocates of the welfare state is that they have never before faced any moral opposition.

Whatever the rhetoric of Republicans and Democrats in the past, they agreed on the basic goal: more and more government controls are necessary to rein in businessmen, “manage” the economy, and minister to those in need.

No matter which party was in power, therefore, we got things like Sarbanes-Oxley, bailouts of GM and Citibank, a huge prescription drug “benefit” and ObamaCare. Politics was a squabble about the efficacy of any proposed controls, not a dispute about the morality or immorality of imposing controls in the first place. As Krugman observes, in years past everyone “accepted the legitimacy of the welfare state.”

But now its advocates sense that this is no longer true, that some Americans are beginning to question the moral legitimacy of the welfare state. To strangle this questioning in the crib, supporters of government controls are trying to persuade their opponents to abandon Rand.

The current tactic is to tell Tea Partiers and “conservatives” that if you take religion seriously, you can’t be a fan of the atheist Ayn Rand. The American Values Network (AVN) has produced a short video containing snippets of Rand’s rejection of religion, which they hope to e-mail to more than a million people in Ryan’s home state of Wisconsin, asking citizens how they can support both Jesus and Rand.

Leaving aside AVN’s distressing attempt to blur the separation of church and state by basing politics on faith, this much is true. Rand’s moral teachings are fundamentally different from Jesus’ teachings.

A rational morality, Rand argued, teaches us the crucial values that make up a successful and happy life. Above all else, it instructs us to uphold reason as an absolute in our lives, as our only source of knowledge and only judge of values, and to achieve self-esteem in our souls. True self-esteem is the knowledge that by your own choices you’ve created a rational mind “competent to think” and a personal character “worthy of happiness.”

In terms of virtues, Rand’s is a moral code that upholds rationality not emotionalism or faith; intellectual independence not authority or obedience; earned pride not humility or the belief in man’s inherent sinfulness.

In Rand’s argument, morality is not about subordination or service to others or to some “higher power”; it is not about self-sacrifice. Hers is a morality that upholds egoism and individualism: it seeks to teach you the difficult task of pursuing the values that achieve your own individual self-interest and happiness.

Only an explicit or implicit individualist and egoist, Rand held, will understand and demand the rights listed in the Declaration of Independence: his inalienable rights to his own life, his own liberty, and the pursuit of his own happiness. He will demand his political freedom and reject all government controls designed to restrict his liberty and make him sacrifice for the “public interest.” He will oppose the welfare state.

Given her positive teachings, Rand must reject what is usually taken to be the core of Jesus’ moral teachings, the Sermon on the Mount. But before you dismiss this as unthinkable, ask yourself the following question. Did Jefferson and the other Founding Fathers not reject the Sermon’s advice in creating America?

As I’ve written before: “When the British struck America’s right cheek, did Jefferson in the Declaration tell America to turn to offer them the left? Did Jefferson love his enemy—or did he go to war with him? Did Jefferson, who had a gallery of worthies in his home, portraits of men like Isaac Newton and John Locke, think that the blessed are the poor in spirit—or that the only people worthy of admiration are those who choose to make something of their spirit? Did Jefferson and the other Founding Fathers think that the meek shall inherit the earth—or that, in Locke’s words, the rational and the industrious shall? Did Jefferson give up riches—or did he seek them?”

Today we face similarly stark choices. If we are to reject the welfare state as immoral and thereby restore the American dream of individualism, don’t we need a rational morality that challenges the centuries-old creed of self-sacrifice and instead argues for the individual’s moral right to his own life and happiness?

In other words, don’t we need Ayn Rand?

About The Author

Onkar Ghate

Chief Philosophy Officer and Senior Fellow, Ayn Rand Institute

Metaphors, to use an overused metaphor, are a double-edged sword: sometimes they clarify, sometimes they confuse. One metaphor responsible for a great deal of confusion is that of wealth as a pie — a metaphor that shows up again and again in debates over income inequality.

“No matter how you slice it, when it comes to income and wealth in America the rich get most of the pie and the rest get the leftovers,” writes a critic of income inequality. “[T]he people who are in the top 1 percent today earn a larger share of the income pie than the people who were in the top 1 percent 25 years ago,” notes economist Russ Roberts, a non-critic.

One implication of the pie metaphor is that wealth is a zero-sum game: there is a fixed amount of houses, cars, medicines, etc., to go around, and the more Steve Jobs gets the less is left for the rest of us. That may have had some plausibility 250 years ago when most wealth was in the form of land. But today, when an iPhone 3G verges on outdated technology, it’s impossible to miss the fact that wealth grows. Roberts puts the point this way: “[T]he pie is not constant. So your well-being can grow even when your share of the pie falls if the pie is getting sufficiently larger.”

Wealth grows. True. But the pie metaphor carries with it another implication, which Roberts doesn’t challenge. It treats wealth as owned by society. We happen to find ourselves in possession of a pie. How did it get here? That’s never made too clear, but it’s here, and now we have to decide how to divide it up fairly.

In accepting the pie metaphor, we concede a moral point that should not be conceded. Wealth does not arise from an amorphous social process; “society” owns no pie.

Wealth is created by and morally belongs to the individual creator. As Rand observes, since “man has to sustain his life by his own effort, the man who has no right to the product of his effort has no means to sustain his life. The man who produces while others dispose of his product, is a slave.”

Let’s break that down a little. Suppose Robinson Crusoe is tired of trying to scoop up fish with his hands and figures out how to turn a tree branch into a spear, increasing his daily catch tenfold. Can Friday, who never thought to make a spear, properly complain that Crusoe has received an “unfair distribution” of fish?

Whatever the complications and intricacies involved, the basic issue is the same whether we’re talking about a remote island or a complex division of labor economy like America’s: a man uses his mind and his existing property (i.e., previously created wealth) to bring new wealth into existence. He doesn’t gobble down an already-baked pie — he produces.

Richard Branson, for instance, got his start selling record albums out of the back of his car. The albums? They were his property. The money he made by selling them? His property. Branson used that money to implement his ideas for making records cheaper, phones more user-friendly, air travel less annoying. He didn’t grab a bigger piece of some socially produced pie any more than Crusoe did: he brought new wealth into existence. (The fact that he worked with other people to create his products doesn’t change the essential issue: each Virgin employee brought wealth into existence as an individual — and was paid accordingly.)

That’s a rather inconvenient truth for critics of income inequality. If, as New York Times columnist Bob Herbert puts it, the “already very wealthy” mysteriously and nefariously “amass an ever increasing share of the nation’s economic benefits,” then spreading the wealth around might seem fair. But what if there is no pie? What if the “economic benefits” Herbert intends to spread around were created, not by “the nation,” but by the “already very wealthy” themselves? Is it any fairer to make them surrender their wealth to us than to make Crusoe surrender his wealth to Friday?

The Bob Herberts of the world, no doubt, would still maintain “yes.” And, to be sure, there is much more to be said about income inequality. But that debate will get nowhere so long as our thinking is obscured by pastry metaphors.

About The Authors

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

If you were to judge by the rhetoric, you might think that Paul Ryan’s plan for reducing the federal deficit slashed the government’s budget by 90 percent, and funded the killing of kittens to boot. E. J. Dionne, for instance, calls it “radical,” “irresponsible,” and “extreme,” and asks, is this “the end of progressive government?” The truth is that Ryan actually proposes increasing government spending in the coming years — just at a lower rate than current projections. So why are Ryan’s critics so up in arms?

Because Ryan’s plan dares to touch (albeit, merely to scratch) the untouchable entitlement state. Ryan’s plan would, among other things, trim and reorganize Medicare and Medicaid and reduce federal support for education. To the plan’s critics, this amounts to “reverse-Robin Hood redistribution,” as former vice chairman of the Federal Reserve Alan Blinder put it. “[A]bout two-thirds of Mr. Ryan’s so-called courageous budget cuts would come from programs serving low- and moderate-income Americans, while the rich would gain from copious tax cuts.”

The “reverse-Robin Hood” line suggests that Ryan’s plan robs from “the poor” and gives to “the rich.” But cutting entitlements is not robbery — and cutting taxes isn’t a gift.

Entitlements are essentially government handouts: the government takes money from some people in order to finance other people’s retirements, doctor’s visits, and whatever else the government deems worthy. They are unearned benefits. It is shameful that in a civilized society we have to say this, but getting less loot is not the same thing as being robbed.

A tax cut, meanwhile, is not a government handout — it is a reduction of how much of your income the government takes. Whether you’re a millionaire, billionaire, or an ambitious stock boy, a tax cut means you get to keep more of what you earn.

In this context, consider President Obama’s recent budget speech, in which he criticized Ryan’s plan for implying that “even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.” When Obama speaks of what “we” can afford, he is obviously smuggling in the premise that all wealth rightfully belongs to society and that the government — as society’s representative — will dole out that wealth as it sees fit.

We reject that premise. On our view, you earned your wealth and it belongs to you, and no politician has any business talking about how much of your money he can “afford” to let you keep. What is true is that government is running deficits. It is spending (and has promised to spend) much more than it is taking in through taxes. Much of that spending, Obama admitted, is going toward entitlements.

What, then, did Obama propose as his solution to this spending binge? According to the president, the solution can’t be to stop doling out entitlement checks. That would be “abandon[ing] the fundamental commitment this country has kept for generations.” Instead, we must raise taxes on productive American citizens. (What about the Founders’ view that America’s “fundamental commitment” was to protect every individual’s inalienable rights, including his right to the fruits of his own labor? Obama didn’t say.)

The message was plain: It is necessary and perhaps noble to deprive a person of what he has earned, but it would be morally monstrous to deprive a person of the unearned. You created wealth? Big deal. You have a need you can’t fulfill? You have a right that nothing on earth can supersede.

It is fitting that those pushing this doctrine should invoke Robin Hood. When people hail the man who “robbed from the rich and gave to the poor,” it is normally on the grounds that the need of Robin Hood’s beneficiaries justified the looting of his victims. Stealing is wrong — if you’re serving your own “greed.” But if you’re serving others’ need? Anything goes.

It is also fitting that at the same time the debate over entitlements was going on, Ayn Rand’s 1957 novel Atlas Shrugged was jetting to the top of the Amazon best-seller list. In Rand’s novel, the mysterious Ragnar Danneskjöld declares, “I’m after a man whom I want to destroy. He died many centuries ago, but until the last trace of him is wiped out of men’s minds, we will not have a decent world to live in. . . . Robin Hood.”

According to Danneskjöld, Robin Hood “is held to be the first man who assumed a halo of virtue by practicing charity with wealth which he did not own . . . . He is the man who became the symbol of the idea that need, not achievement, is the source of rights, that we don’t have to produce, only to want, that the earned does not belong to us, but the unearned does.”

This is why, contrary to the rhetoric, the “cuts” proposed by Republicans have been puny to non-existent: the Republicans share the Robin Hood morality. However much they decry taxes, however much they recognize that entitlements are leading us toward bankruptcy à la Greece, they agree that need does entitle people to others’ wealth. And so Paul Ryan and all the other Republicans hasten to assure the world that they would never be so cruel as to cut entitlement redistribution schemes: their only goal is to save them. Their message is: Obama’s goals are noble; only his means are open to criticism.

Instead of ducking charges of “reverse-Robin Hood,” defenders of limited government should follow Danneskjöld’s example — they should fight with full moral confidence against any scheme to take earnings from some in order to lavish others with the unearned.

Robin Hood, rest in peace.

About The Authors

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Atlas Shrugged has finally reached the big screen and, especially among tea partiers, Ayn Rand is being hailed a prophet. How could she have anticipated, more than 50 years ago, a United States spinning out of financial control, plagued by soaring spending and crippling regulations? How could she have painted villains who seem ripped from today’s headlines?

There’s Wesley Mouch, who in the face of failed government programs screams like Rep. Barney Frank (D) of Massachusetts for wider powers. There’s Eugene Lawson, “the banker with a heart,” who like former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke is ever ready with a bailout. There’s Mr. Thompson, who like President Obama seeks to rally the country behind pious platitudes. There’s Orren Boyle, who like President Bush says that we must abandon free-market principles to save the free market.

Time to “Go Galt”?

And in the face of this onslaught, what can you do? Should you, like Rand’s heroes, “go Galt,” stop working, retreat to a secluded valley, and try to rebuild only when the country has collapsed?

Rand was asked these very questions in her own lifetime. Her answers might surprise you. In the 1970s, America was in a deep financial crisis (a new word, stagflation, had to be coined), urban violence was rampant, and power-seeking politicians like President Nixon instituted wage and price controls that led to, among other things, gas stations with no gas. How, people wondered, could Rand have foreseen all this? Was she a prophet? No, she answered. She had simply identified the basic cause of why the country was veering from crisis to new crisis.

Was the solution to “go Galt” and quit society? No, Rand again answered. The solution was simultaneously much easier and much harder. “So long as we have not yet reached the state of censorship of ideas,” she once said, “one does not have to leave a society in the way the characters did in Atlas Shrugged…. But you know what one does have to do? One has to break relationships with the culture…. [D]iscard all the ideas – the entire cultural philosophy which is dominant today.”

Now, if you’ve only seen the movie, the fact that Atlas Shrugged is not a political novel might surprise you. But the book’s point is that our plight is caused not by corrupt politicians (who are only a symptom) or some alleged flaw in human nature. It’s caused by the philosophic ideas and moral ideals most of us embrace.

“You have cried that man’s sins are destroying the world and you have cursed human nature for its unwillingness to practice the virtues you demanded,” novel hero John Galt declares to a country in crisis. “Since virtue, to you, consists of sacrifice, you have demanded more sacrifices at every successive disaster.”

He elaborates: “You have sacrificed justice to mercy.” (For example, calls to make homeownership “accessible” to those who could not afford it and then bailouts and foreclosure freezes to spare them when they couldn’t pay.)

“You have sacrificed reason to faith.” (For example, attempts to prevent stem cell research on Biblical grounds or blind faith that Mr. Obama’s deliberately empty rhetoric about hope and change will magically produce prosperity.)

“You have sacrificed wealth to need.” (For example, Bush’s prescription drug benefit and Obamacare, both enacted because people needed “free” health care.)

“You have sacrificed self-esteem to self-denial.” (For example, attacks on Bill Gates for making a fortune; applause when he gives that fortune away.)

“You have sacrificed happiness to duty.” (For example, every president’s Kennedyesque exhortations to “Ask not what your country can do for you – ask what you can do for your country.”)

The result? “Why … do you shrink in horror from the sight of the world around you? That world is not the product of your sins, it is the product and the image of your virtues. It is your moral ideal brought into reality….”

Must question our ideals

This is what Atlas Shrugged is asking us to question: our ideals. Rethink our convictions and philosophy of life from the ground up. Without doing so, it argues, we won’t escape further crises.

Strike, the book urges us, but intellectually, since to strike means to reject the fundamental terms of your opponents and assert your own.

This kind of thinking is difficult, Rand held, but necessary to enter the Atlantis depicted toward the end of Atlas Shrugged – “at least psychologically,” she wrote, “which is a precondition of the possibility ever to enter it existentially.”

About The Author

Onkar Ghate

Chief Philosophy Officer and Senior Fellow, Ayn Rand Institute

If you’ve seen the new Atlas Shrugged movie but haven’t yet read the book, you may be wondering what the novel itself has to offer.

For most people, reading Atlas Shrugged is an unforgettable experience. The story is gripping, involving numerous mysteries and unexpected but logical plot twists. The characters are unique — what other book features a philosopher turned pirate? And the writing is that rarest of combinations: at once clear and deep. But for many readers, Atlas is even more: it’s life-changing.

How can a novel exert this powerful an effect? Because in its pages Ayn Rand forces you to look at the world anew.

To give a taste of its radicalness, consider that today it’s taken for granted that the man of virtue is Mother Teresa-like; he selflessly lives to serve others and demands that you do the same. The man of vice is selfish; he pursues his own interests and demands that his actions bring him a profit. Whenever a television show or movie needs a stock villain, one whose evil motivation will require no setup, you can be sure a businessman erecting an office building on treed land or a corporation testing an experimental drug will be written in. Simply to point out that they are pursuing profit is sufficient to damn them. Judging from my experience, more murders on television are committed by businessmen than by mobsters.

It is this entire viewpoint, entrenched for centuries by religious and secular thinkers alike, that Atlas Shrugged challenges. What emerges from its pages is that the moral man is in fact truly selfish: he chooses to embrace his own life by choosing to purposefully, systematically, and unwaveringly do the thinking and take the actions necessary for his own happiness.

On this approach, ruthless rationality and the ever-increasing production of life-serving values — the core of what it takes to be successful in business — become the essence of the moral life.

There is a scene early in the novel (omitted from the movie) that perfectly captures the novel’s new portrait of moral greatness. In the scene, the industrialist Hank Rearden looks back over his creation of a metal superior to steel and remembers “. . . the nights spent at scorching ovens in the research laboratory of the mills . . . the meals, interrupted and abandoned at the sudden flash of a new thought, a thought to be pursued at once, to be tried, to be tested, to be worked on for months, and to be discarded as another failure . . .the one thought held immovably across a span of ten years . . . the thought of a metal alloy that would do more than steel had ever done . . . the acts of . . . driving himself through the wringing torture of: ‘. . . still not good enough . . .’ and going on with no motor save the conviction that it could be done — then the day when it was done and its result was called Rearden Metal.”

Before Atlas Shrugged, no one had ever thought of men like Aristotle, Newton, Darwin, Pasteur, Edison, and Vanderbilt as moral exemplars. But this — the man alone in his lab or office, who chooses to exert the effort necessary to think and to create his values — is the novel’s image of a moral hero.

What then of an entrenched moral code that demands that, in the name of the “poor in spirit,” a man like Rearden selflessly sacrifice his creation, profit and happiness to those who have not earned them?

This whole code, Atlas Shrugged declares, is in fact immoral. What the story’s logic reveals is that the very purpose of this code is to get the good voluntarily to surrender to evil. Atlas is the story of the rebellion of men like Rearden against a moral code that damns selfishness and demands the sacrifice of those rich in spirit to those poor in spirit.

With the publication of Atlas Shrugged, Ayn Rand became the most remarkable of thinkers: a moral revolutionary. For anyone interested in ideas, it’s a book which deserves to be read and re-read. No movie can substitute for this incomparably rich experience.

About The Author

Onkar Ghate

Chief Philosophy Officer and Senior Fellow, Ayn Rand Institute

In the legal wrangling over Obamacare, the Obama administration candidly admitted that the individual mandate, which forces Americans to buy health insurance, is the only thing preventing the new health law from eviscerating private health insurance.

The problem, the government said, is that Obamacare requires health insurers to cover individuals with preexisting conditions at the same premiums they charge other customers. Unless everyone is forced to carry health insurance, healthy people will refuse to buy it until they get sick, precipitating a free rider crisis that would ruin insurers.

That strikes us, not so much as an argument for the individual mandate, as an argument against Obamacare’s preexisting condition rule. But whether the mandate lives or dies, the preexisting condition rule is paving the way for socialized medicine.

The preexisting condition rule places crippling limits on the ability of insurers to create policies based on their best assessment of risk. It will turn them into essentially passive middlemen, who no longer appraise and control risk, but who merely perform the administrative function of doling out health care benefits. It’s only a matter of time before people start to ask: Why not save money by cutting out the middleman? (That, indeed, is what happened with student loans. After decades of subsidies and regulations, the government shoved the banks aside and took over the student loan market.)

This could play out in any number of ways, but here are two possible scenarios. If the mandate survives, Washington will denounce the insurance industry for charging premiums that “gouge” customers who have no choice but to buy the industry’s products. If the individual mandate is struck down or otherwise killed, insurers will be forced either to go out of business or jack up their rates. Those that do the latter will face a public outcry. Either way, the public will be told that the “free market” has failed and that the only solution is a complete government takeover of the health insurance market.

That certainly has been the historical pattern. Government has been amassing control over the health insurance market for decades. At every step, the proponents of regulation point to some alleged set of problems in health care, blame them on the market, and call on government to solve them.

But without exception, the actual problems they point to are not caused by the market, but by government intervention — and the outcomes they denounce which are a product of the market are not really problems at all.

Take the preexisting condition “crisis.” On the one hand, there is something wrong when people who are pushed into buying health insurance through their employer and then lose their job, lose their insurance and are unable to buy a new policy thanks to preexisting conditions. But as we’ve argued, that’s a situation created by government intervention, and would not arise in a free market.

On the other hand, is it really a problem that sick people have to pay more for insurance than healthy people?

Well, it’s definitely true that a free market does not promise people unearned health care. In a free market, health care is a good that you have to earn through voluntary trade. Even though there are endless ways that people — including the poorest of the poor — can find innovative solutions to their needs, and even though a free society has always had abundant charity, the basic rule of a free market is that you are responsible for your own life. It’s your job to figure out what your life requires — whether it’s food, a car, a house, or health insurance — and then to go out and earn it through your own productive action.

What’s true of the preexisting condition “crisis” is true of the “health care crisis” more broadly. The market is condemned for producing spiraling health care costs and for failing to achieve “universal coverage.” But in reality, those spiraling costs are the result of government’s relentless intervention in the health care market. Meanwhile, the market’s failure to generate “universal coverage” for Americans, including those who seek a free ride, is a problem only to those who believe that the mere fact of being born entitles you to the wealth and labor of others.

If unearned health care is what the pushers of Obamacare and its preexisting condition rule want, let them argue for it openly — and stop pretending they are trying to solve problems created by the market. And let those who criticize Obamacare for leading America down the road to socialized medicine stop pretending that the preexisting condition scheme is anything but a step down that road.

About The Authors

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Imagine a world without health insurance. You’re a young entrepreneur and you notice that a perennial problem people face is how to protect themselves against the risk of incurring costly and unexpected medical expenses. For most, the apparent option — save enough money to cover any medical bill — is impractical: what if they get sick before they save enough? Or what if the cost of treatment exceeds a person’s capacity to save?

You realize that wherever there’s a problem, there’s an opportunity. You could convince some of the people in your town to purchase from you insurance that pays out in the event of accident or serious illness. But starting such a company would require a lot of work, a lot of financial capital, and complex actuarial and business skills that take a long time to acquire.

You would need to set rates to make sure more money is coming in than is going out; process claims to separate the legitimate from the illegitimate ones; and grow your client base. The challenges are enormous, but if you succeed, the value you provide clients would be huge and the profit potential should be as well.

After some careful deliberation, you decide to launch the business. You launch the first health insurance company. Your idea quickly catches on, and soon other health insurance companies spring up in your town and beyond.

One day, a man named Paul walks in to your office. “I’d like to buy some health insurance,” he says.

“That’s great,” you say. “I just need you to fill out a form with a little background information and your medical history.”

“What for?” asks Paul.

“So I can figure out how much to charge you for your insurance policy,” you reply. “I have to assess how likely each one of my customers is to get sick and set my rates accordingly. If I set them too low, I’ll go broke. If I set them too high, my customers will sign up with another insurance company, and I’ll go broke.”

Paul frowns. “That’s not fair. Why should I have to pay more for health insurance just because I’ve had two heart attacks and a stroke?”

“Because you’re more likely to have serious and costly health problems in the future.”

Paul jumps out of his seat. “This is highway robbery! I need health insurance and I can’t afford to pay higher rates.”

“I can’t force you to purchase my insurance,” you say calmly. “I would like to help you — part of the reason I started this business was to help people meet one of their most vital needs. But the fact is, I’m running a business, not a charity. I work — virtually around the clock — in order to earn profits by providing a service that people value. If you don’t think the value I’m providing is worth the price I’m asking, you’re free to go elsewhere.”

“But it’s not my fault I have preexisting conditions.”

“It’s also not mine.”

Paul sits down slowly without looking at you. “So what am I supposed to do? Just go without insurance?”

“I wish you’d come to see me earlier — almost all my clients plan ahead for just this sort of possibility, and I’ve come up with innovative ways to make sure that a serious, ongoing condition doesn’t become a barrier to people continuing to be able to afford their annual health insurance premiums. I insure them against changes in their health status, for instance. They can buy a second insurance contract that pays out should they become sick and more costly to insure in the future. Their annual health insurance premiums will rise, but the payout from the second insurance contract enables them to afford the increase in their annual health insurance premiums. And my competitors may have other solutions.”

“A lot of good that does me now,” Paul says bitterly.

“Well, I could offer you a low-cost insurance plan that excludes any illness related to your preexisting conditions.”

Paul balks. “What am I supposed to do if I get an illness related to my preexisting condition? Just lay down and die?”

“Absolutely not,” you say. “If you get sick, you might need to take out a loan or run up your credit cards. I assume you were willing to take on a big bank debt to buy your house — why wouldn’t you be willing to do the same to keep yourself alive? Or you could use your savings. Or you could ask for help from a friend, or a family member, or a local charity.”

Paul shakes his head. “You don’t seem to get it. I want health insurance that covers everything, and I don’t want to have to pay more for it. Your job is to pay for my health care and you’re not doing your job.”

“That is not my job. I run a profitable business that enables people to manage one of life’s risks by purchasing health insurance. None of my customers would choose to stay with my company if his rates went up because I allowed people who are already sick or very likely to become sick to buy insurance without charging them higher premiums. Why don’t you visit one of the other insurance companies in our area? Maybe they can help you out.”

Paul grins. “I’ve got a better idea,” he says, leaving your office.

The next week, you find a letter from the government. “From now on you must accept all customers, and at the same premium, regardless of medical history.” You close up shop.

About The Authors

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Washington’s control of medicine has grown slowly, evolving piecemeal over decades. Even before Obamacare, half of all heath care spending was controlled by the government.

The general pattern of the expansion works like this: advocates point to some group in real or alleged dire need and declare that Washington has a duty to act; Washington eventually does. It started with the poor (Medicaid) and the elderly (Medicare). Then came the uninsured in need of emergency care (Emergency Medical Treatment and Active Labor Act). Then came middle-class parents (S-CHIP).

And Obamacare? It was sold to us, in large part, as the indispensible means of addressing the plight of those with preexisting conditions.

In his recent State of the Union, Obama named as the not-to-be-compromised central achievement of his health care bill that it put an end “to the days when insurance companies could deny someone coverage because of a preexisting condition.” Obamacare does indeed make it illegal for insurance companies to refuse to cover people with preexisting medical conditions or to charge them higher prices.

Far from justifying an expansion of the state’s role in medicine, however, the issue of preexisting conditions illustrates how badly we need to disentangle government from American medicine.

It’s a complex story, but let’s start here: too often people automatically ascribe our health insurance problems (before Obamacare) to the inadequacies of the free market.

But what we have today is not a health insurance market — not really. We have instead the crippled remnants of nearly a century of government intervention in the health insurance industry. These interventions are vast and complex, but for the most part they fall into three categories.

First, there’s our tax code. In a sane world, if you had insurance and got sick, you would simply stay with your current insurer. But today, most of us get our health insurance through our employers, so if we lose our jobs — which is not exactly unheard of today — we are likely to lose our insurance. And once we are ill, a new insurer will obviously want to take our preexisting conditions into account when offering to insure us.

Now, we don’t buy food, diapers, or car insurance through our employers, so why in the world do we buy health insurance this way? It’s not because it’s more efficient for every car dealership and paper towel manufacturer to learn the ins and outs of administering a health insurance plan. It’s because we can buy health insurance through our employer with pre-tax dollars. No such luck if you want to buy your own health insurance package. And it’s not really even insurance anymore, since we use it to pay for almost everything, from a routine blood test to a routine physical — which makes about as much sense as using car insurance to pay for an oil change.

Next, there’s each state’s laundry list of health insurance mandates. We aren’t talking about Obamacare’s individual mandate, which forces us to buy insurance whether we want to or not. These state mandates dictate what coverage must be offered in the insurance packages you and I are permitted to buy. Even if you’re young, don’t want kids, and don’t drink, these mandates can force you to pay top dollar for a package that covers everything from in vitro fertilization to liver transplants to alcohol rehab. One result of these mandates? Many of us are priced out of the market; those already facing higher costs because of preexisting conditions are particularly hard hit.

Finally, there is a category best described as “insurance blindfolds,” a category that includes the preexisting condition rule. Insurance blindfolds tell health insurance companies that they dare not take into account certain risk factors when setting insurance rates. The effect of such laws is not to erase the existence of these verboten risks, but to force low-risk patients to shoulder substantially higher premiums.

These are just some of the highlights. So, since there already exist enormous government interventions in health insurance, we can’t simply assume that our problems are caused by the free market and that government is the cure. The market is far from free and the cause of our health insurance problems could be government policy itself.

But to think about this question fully and seriously, we need an idea of what a genuinely free market in health insurance might look like. We’ll take up that issue in our next column.

About The Authors

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute