They’re calling it the tea party Congress, and the new leadership is busy snipping earmarks, targeting Obamacare, and quoting the Constitution. But can they succeed where similar conservative backlashes have failed? Whatever your opinion of the whole tea party movement — and mine stops far short of blanket approval — you have to admit it has some interesting qualities that set it apart from conservative approaches of decades past.

By idealistically venerating the founding fathers, the tea party avoids the kind of cynical pragmatism that reigned in Richard Nixon’s era. By steering clear of religiously divisive “social issues,” the tea party avoids the kind of attack on the Constitution’s separation of church and state that characterized Ronald Reagan’s era. And by stressing that both major political parties are guilty of expanding government power without apparent limit, the tea party breaks with the neoconservative, big-government Republicanism that held sway in George W. Bush’s era.

Entrenched thinking

All this has generated a refreshing “clean sweep” sensibility, consistent with a grass-roots movement of Americans who are sincerely focused on individual freedom — and frustrated at the futility of past efforts to combat the seemingly unstoppable encroachment by government power. If I close my eyes, I can almost imagine the tea party making good on its promise to permanently restore some of our freedom. But with eyes wide open, I see a movement imperiled by the same entrenched thinking that has driven government’s growth for more than a century.

One side of the divided tea-party mentality (its “right brain,” so to speak) recoils from the cumulative impact of government programs enacted over more than a century. In the wake of unprecedented “stimulus” spending, Wall Street bailouts, “Government Motors,” and Obamacare’s takeover of health insurance, the movement foresees economic ruin and diminished freedom for all Americans. To combat these evils, the tea party invokes America’s founding ideals of individual rights and limited government, and talks about cutting big government down to size.

Meanwhile, however, the tea party’s “left brain” harbors the same moral impetus that has justified bigger and bigger government since the Progressive Era. The basic idea is that some people’s needs constitute a moral claim on the lives and wealth of others. The list of needs is endless: economic stability, job security, housing, health care, retirement funds. To satisfy those needs, government concocts regulatory and wealth transfer schemes that coercively subject the individual to society. Over the years, each new program — from the Federal Reserve to Social Security, Medicare, and beyond — acquires an aura of moral dignity that renders it politically untouchable by later generations. The needs of others permanently displace the freedom of the individual.

Based on this conflict, my prognosis has the tea party headed for the political equivalent of an epileptic seizure.

Consider that the movement’s once-unanimous rallying cry of “Repeal Obamacare!” has already morphed into “repeal and replace,” so as to “retain some of its more popular provisions.” Indeed, even as House Republicans this week engineered a symbolic vote for repeal (which will be dead on arrival in the Senate), those same members of Congress are setting the stage to make many of Obamacare’s onerous provisions permanent.

And then consider what programs would have to be dismantled just to return to that conservative nirvana, the Reagan era: the Americans with Disabilities Act (enacted under Bush I), State Health Insurance for Children (enacted under Clinton), as well as prescription drugs for seniors and Sarbanes-Oxley regulations penalizing all businessmen (both enacted under Bush II). Can you imagine the tea party seeking to eradicate any of these programs?

They can’t imagine it either, because the scenario for failure is too obvious. The tea party’s adherents know that any attempted repeal would be attacked as “mean-spirited, heartless, and selfish.” And they know that, according to conventional moral standards, they would stand guilty as charged. Paralyzed by this moral conflict, they will simply refrain from starting battles they can’t win.

A difficult moral battle

And winning this kind of moral battle, though possible, would be difficult. The tea party’s adherents would need to discover the moral principle underlying the often quoted but little understood ideals of life, liberty, and the pursuit of happiness. They would need to argue that all schemes that sacrifice the individual to society are morally wrong. And they would need to argue that this country’s most rational and industrious citizens — including business leaders, doctors, health insurers, and taxpayers and productive individuals in all walks of life — are oppressed victims who deserve to be liberated, by permanent repeal of laws and regulations that invade their rights.

In short, the tea party would need to fully embrace individualism as a moral ideal. Although the odds against this are exceedingly large, I think there’s some cause for optimism. For the first time, a resistance movement is looking for answers in Ayn Rand’s writings. From the original public rant that inspired the tea party idea (when CNBC reporter Rick Santelli said “at the end of the day, I’m an Ayn Rander”) to last fall’s US Senate victory by Wisconsin Republican Ron Johnson (who calls “Atlas Shrugged” his “foundational book”), Rand’s uncompromising defense of individualism has become a part of the tea-party mix.

Can the tea party deliver on its promise to cut back big government? Yes it can, but not unless its supporters awaken to the need for moral intransigency in pursuing individual liberty.

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute

The recent debate over the Bush tax cuts was filled with enough rich-bashing and envy-stoking to make Karl Marx blush, and while the left may have lost that battle, it just might be winning the war. A recent 60 Minutes/Vanity Fair poll finds that 61% of respondents advocate raising taxes on wealthy Americans as the “first step” in balancing the budget. (By contrast, only 7% advocate cutting the entitlement programs — Medicare and Social Security — that are chiefly responsible for the budget crisis.)

It doesn’t take an economist to see that our fiscal mess was not caused by rich people keeping “too much” of their wealth, but by the government spending too much of everyone’s wealth. So why have cries to soak the rich started to, well, sink in?

Americans, historically, have not been envious of wealth. The predominant attitude has been: let a person make as much money as he can, provided he earns it. The reason class warfare rhetoric has been effective of late is because the practitioners of class warfare have largely succeeded in painting the rich as unproductive parasites.

Wealthy people are a bunch of Paris Hiltons and bailout recipients, they’ll suggest, even though most wealthy Americans are first-generation rich, and only a tiny sliver were bailed out after the financial crisis. (Whether anyone should have received a bailout is a different question.)

Other class warriors are more subtle. Former President Bill Clinton, for instance, put the matter this way: “I think that the people that benefit most should pay most. That’s always been my position — not for class warfare reasons” –no, never those –”for reasons of fairness in rebuilding the middle class in America.”

But if we’re talking about the creation of wealth in a division of labor economy, the most productive Americans don’t benefit the most: They contribute the most. Thirty years ago, if you were a shop owner, you spent a large chunk of your time poring over inventory, keeping your books, clinking away at your calculator, double checking your numbers, and going through enough correction fluid to whitewash a fence.

But thanks in large measure to software pioneers like Microsoft founder Bill Gates, most of those tasks now take a fraction of the time, can be performed far more accurately and have become so simple that you can probably delegate them to an entry-level clerk. You gave Bill Gates a few hundred bucks; he gave you a better life.

Super-wealthy Americans — men like Gates, Warren Buffett and Fred Smith — are predominantly thinkers and innovators who succeeded by contributing new ideas to the productive process. Not just new inventions, but new methods of organization, marketing, worker motivation and production, distribution and finance. That’s to say nothing of the fact that wealthy people are the primary contributors of capital to the economy — the factories, tools and technology that make the average American worker hundreds of times more productive than his Third World counterpart.

Relative to the new ideas they contribute, the most innovative individuals benefit the least. This is an aspect of what Ayn Rand called the pyramid of intellectual ability. As she observed, “The man at the top of the intellectual pyramid contributes the most to all those below him, but gets nothing except his material payment, receiving no intellectual bonus from others to add to the value of his time. The man at the bottom who, left to himself, would starve in his hopeless ineptitude, contributes nothing to those above him, but receives the bonus of all of their brains.”

Although class warriors like to pit “the rich” against “the working class,” it is the work of a small number of enormously productive individuals that is chiefly responsible for the unrivaled standard of living most Americans enjoy. People forget that before the Edisons, Carnegies, Fords, and Rockefellers of the 19th century, most of the “working class” lived on the edge of starvation — if they lived at all.

Considering how much we benefit from the great producers, it would seem that good manners–to say nothing of fairness and justice–requires a clarion “thank you.” Instead, in the political and public arenas wealth creators are increasingly smeared, spit on, and punished. This is un-American. A nation built on a foundation of individual rights and the pursuit of happiness should celebrate success, not punish it.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Avastin is a cancer-fighting drug that works by starving tumors of vital nutrients and oxygen. Although Avastin doesn’t cure cancer, it can improve quality of life by slowing the disease’s spread. The Food and Drug Administration approved its use for colon cancer (2004), lung cancer (2006), and advanced breast cancer (2008).

But now the FDA is on the brink of rescinding that last approval, relegating breast cancer to the category of an “off-label” use. In our semi-socialized health care system, that’s significant because government-funded insurance plans (such as Medicare, Medicaid, and Tricare, which serves the military) refuse to reimburse off-label prescriptions, and private insurers generally follow their lead.

Since an Avastin breast cancer regimen costs as much as $88,000 annually, withdrawal of FDA approval would, in effect, lock the medicine cabinet and throw the key onto a high shelf, unreachable by many desperately sick patients.

The FDA is slated to decide whether to follow the advice of its own Oncologic Drugs Advisory Committee, which back in July voted 12-1 that Avastin does not “represent a favorable risk/benefit analysis.” Does that mean the drug fails to help any woman more than it hurts her? Not at all — many individual women benefit from the drug. But the FDA regards such facts as sentimental distractions, to be deliberately ignored when deciding the fate of a drug like Avastin. The FDA’s idea of a risk/benefit analysis deals with health in the aggregate, as revealed in statistics involving large populations, not with the health of individuals.

But can risks and benefits really be weighed at the level of society as a whole? A society is only a collection of individuals. A society doesn’t enjoy life, or suffer — only individuals do. Metaphors aside, a society doesn’t get sick and die — only individuals do. To appreciate the difference, consider how a rational patient with breast cancer decides whether to undergo drug treatment.

Such a patient weighs (among other things) the statistical likelihood of a favorable result against the statistical likelihood of painful side effects. At all times, her judgment is individual and personal: How will my life improve if these tumors temporarily stop growing? How might side-effects interfere with my enjoyment of life? How much better will I feel if the results are above average — or how much worse, if the results are below average? How much is an additional year, month, or week of relatively normal life worth to me?

The FDA’s experts take professional pride in refusing to allow such individual considerations to influence their decisions. Instead, they float among the statistical clouds, observing that Avastin delays tumor growth by only 3 to 12 weeks on average and that some patients actually get worse after taking the drug. From behind a veneer of scientific respectability supplied by charts and graphs that ignore the individual patient, these experts then ask a question to which no rational answer can be given: What is the meaning to society of one month in an individual’s life?

At this point, you may be sympathetic to these women’s plight and yet also concerned about the national economy. Won’t cancer patients spend us into bankruptcy with expensive drugs like Avastin? Well, that’s the kind of question that arises only when health care is collectivized by such programs as Medicare, Medicaid, and ObamaCare.

The antidote is to challenge the notion that health care is a right, to be funded by shoving everyone’s wealth into one big pot and spreading it among those in need. On a free market, in which health care is purchased by a combination of private insurance, savings, and charity, your neighbor’s decision to take an expensive drug like Avastin will be no more concern of yours than his choice to wear an expensive watch or drink an expensive wine.

This ongoing Avastin travesty pits a cancer-fighting drug against a drug-fighting cancer — an out-of-control federal agency whose mission unashamedly includes choking off patients’ access to vital drugs. Reform should start by targeting the FDA’s power to substitute collectivized decisions for individual choice.

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute

More than a century ago, America celebrated the 400th anniversary of Christopher Columbus’s voyage of discovery by hosting an enormous world’s fair on the shores of Lake Michigan. This “World’s Columbian Exposition” featured statues of the great explorer, replicas of his three ships, and commemorative stamps and coins. Because Columbus Day was a patriotic holiday — it marked the opening chapter in American history — the newly written Pledge of Allegiance was first recited in schools on October 12, 1892.

Nowadays, however, an embarrassed, guilty silence descends on the nation each Columbus Day. We’ve been taught that Columbus opened the way for rapacious European settlers to unleash a stream of horrors on a virgin continent: slavery, racism, warfare, epidemic, and the cruel oppression of Indians.

This modern view of Columbus represents an unjust attack upon both our country and the civilization that made it possible. Western civilization did not originate slavery, racism, warfare, or disease — but with America as its exemplar, that civilization created the antidotes. How? By means of a set of core ideas that set Western civilization apart from all others: reason and individualism.

Throughout history, prior to the birth of Western civilization in ancient Greece, the world seemed impervious to human understanding. People believed that animistic spirits or capricious deities had supernatural powers to cure diseases, grow crops, and guide the hunter’s arrow toward his prey. To get the attention of these inscrutable spirits, people resorted to prayer, ritual, taboo, and human sacrifice, relying always on the mystic insights of shamans and priests.

This pervasive mysticism had practical consequences: festering disease, perpetual poverty, and a desperate quest for survival that made offensive warfare against human beings seem as natural as hunting animals. Such was the plight of America’s Indians before 1492 — and such was Europe’s own plight, once the civilizations of Greece and Rome had given way to the mysticism of Christianity and the barbarian tribes.

It was Western philosophers, scientists, statesmen, and businessmen who liberated mankind from mysticism’s grip. Once scientists revealed a world of natural laws open to human understanding, medical research soon penetrated the mysteries of disease and epidemic, allowing us to look back with pity upon American Indians and other historical victims of diseases now preventable and curable.

On a much wider scale, the Industrial Revolution employed science, technology, and engineering to create material goods in profusion, so that even people of average ability could become affluent by historical standards. By demonstrating how wealth can be created in abundance rather than stolen by armed force, America and the West supplied a moral alternative to the bloody tribal warfare of past eras.

Western civilization’s stress on the value of reason led inexorably to its distinctive individualism. Western thinkers were first to declare that every individual, no matter what his skin color or ancestry, is fully human, possessed of reason and free will — a being of self-made character who deserves to be judged accordingly, not as a member of a racial or tribal collective. And thanks to John Locke and the Founding Fathers, individuals were recognized as possessing individual rights to life, liberty, property, and the pursuit of happiness — rights that made slavery indefensible and led to its eradication, at the cost of a civil war.

These are the facts we are no longer taught — and the measure of that educational failure is the disdain with which Columbus’s holiday is regarded in the country that owes its existence to his courage. It is time to take back Columbus Day, as an occasion to publicly rejoice, not in the bloodshed that occurred before Columbus’s arrival and after, but in our commitment to the life-serving values of Western civilization: reason and individualism. We do so by honoring the great explorer who opened the way for that civilization to flourish in the New World.

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute

Apple Computer, which for decades played second fiddle to Microsoft, has achieved the unthinkable. Not only has it surpassed Microsoft as the nation’s biggest tech company (in terms of market capitalization), but it’s now poised to displace Exxon Mobil as the nation’s largest company.

With Apple’s crowd-pleasing success has come antitrust scrutiny. Both the Justice Department and Federal Trade Commission are investigating Apple’s business practices. News reports of antitrust enforcers’ “keen interest” in Apple are reminiscent of how Microsoft was targeted back in the 1990s, for the sin of packaging Web browsers and media players with its popular Windows operating system.

Said one former FTC official: “Apple is playing right out of Microsoft’s playbook — and it’s one they complained about a lot.”

Why is one of America’s most admired and successful companies caught in the prosecutorial cross hairs? Apple is being targeted for business practices that date back to the company’s earliest days.

In the personal computer arena, it has long been notorious for maintaining tight control over hardware and software. But so long as Microsoft’s more “open” licensing and software policies enjoyed vastly greater market success, antitrust authorities swarmed around Microsoft and left Apple alone.

Nowadays, however, Apple’s tight quality controls are helping generate breakthrough sales of iPhones, iPods and iPads, devices that customers love to load up with useful “apps.” Some apps are educational, some entertaining, some commercial.

To maintain quality control, Apple issued take-it-or-leave-it terms to outside software developers. These contract terms required that Apple’s own software tools be used in creating apps. As a result, certain apps created with competing software, such as Adobe’s Flash program, were not allowed on Apple devices.

Such practices, it was whispered, are “anticompetitive.” Antitrust investigators fanned out in search of jealous competitors and disgruntled software developers who could help legally demonize Apple’s money-making business practices (as Apple itself previously did to Microsoft).

Right on cue, Adobe ran full-page newspaper ads accusing Apple’s policies of “taking away your freedom to choose . . . what you experience on the Web.” Just last month (in response to this antitrust pressure?), Apple relaxed its rules on development tools, so long as the resulting apps don’t download code.

Meanwhile, antitrust storm clouds are gathering around iTunes (Apple’s copy-protected online music service since 2003), the iPad (Apple has been warned against making exclusive contracts with publishers of electronic books), and iAd (a mobile advertising service to compete with Google). In each case, Apple’s chief offense seems to be its innovative touch — its ability to create cool new products, expand the market by attracting loyal customers, and make a pile of money in the process.

We are told that antitrust regulators safeguard consumers against “anti-competitive” behavior from companies like Apple. But in reality, this is what competition looks like.

Apple is buffeted at every step by a competitive whirlwind, surrounded by talented rivals waiting for the slightest stumble (witness the recent “Antennagate” kerfuffle). Because Apple cannot force customers to buy its products, the company has no power to stop the competitive process. If Apple ever stops offering superior consumer value, its market share will fall accordingly.

Antitrust law gains adherents by conflating government monopolies with companies that earn their dominant market position. But unlike the Post Office, whose plodding inefficiency is shielded by a legal monopoly on delivering first-class mail, Apple’s success is not a product of government coercion.

On the contrary, Apple profits from the free choices of individual consumers applying their own standards of excellence. Instead of Apple’s iPod, customers could have bought Microsoft’s low-selling Zune music device. Instead of Apple’s iPhone, they could have flocked to Microsoft’s failed Kin smart phone. Instead of Apple’s iPads, they could have bought one of Microsoft’s tablet computers.

Can it be that antitrust prosecution of Apple would serve no purpose other than punishing the company for its success? The evidence points in that direction.

If prior antitrust proceedings against industry giants are any indication, Apple stands to lose hundreds of millions of dollars in employee time, lawyer fees and government penalties — not to mention the lurking possibility of criminal prosecution and jail time. And then there’s the impossible-to-quantify loss of innovative ardor — the nonexistent profits from devices that will not be invented if Apple is forced by antitrust exposure to keep a low profile.

Here’s a radical thought: What if there were no antitrust laws for government and struggling competitors to use to threaten the success of innovative companies like Apple?

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute

Dear American Billionaire,

Bill Gates and Warren Buffett have asked you to publicly pledge to give away at least half of your wealth to philanthropic causes. So far forty of the wealthiest Americans have signed the Giving Pledge, as it’s known. As people who have an enormous respect for those, like you, who create enormous wealth, we urge you not to join them.

At the beginning of your career, you set out to pursue your passion. Like your peers, you took immense risks, worked grueling hours, tackled complex problems, and experienced your share of bad luck and failure — but you persevered. Maybe you created unrivaled efficiencies that allowed you to charge unbeatable prices, like Richard Schulze of Best Buy . Maybe you found a way to make life and business incredibly more convenient, like FedEx founder Fred Smith. Maybe you helped create a new industry, like Intel’s Gordon Moore. Whatever the details, you became one of the world’s most productive individuals.

But while you may have received financial rewards, satisfaction, and the respect of your peers, the one thing you haven’t gotten for your achievement is moral credit.

The premise underlying the Giving Pledge is that so long as you were pursuing your own goals and well-being, what you were doing wasn’t moral. Only by making the good of others your primary aim and sacrificing your wealth to meet their needs do your actions acquire ethical significance.

Virtually everyone today shares that view — but what if it’s wrong? What if your greatest moral achievement consists, not in giving away your wealth, but in having produced it? What if morality is really about guiding you in making the most of your own life — not commanding you to serve the needs of others? What if the most virtuous thing you can do in life is to pursue your own happiness?

This conception of morality has a long and noble history, stretching back to ancient Greece. Greek philosophers conceived of ethics as a guide to living — to acquiring the virtues necessary to shape your life into the most enjoyable, most successful life it can be. That is also how the Greeks’ modern heir, Ayn Rand, viewed morality. And since creating material wealth is a central requirement of a human life, Rand argued, productive achievement is a profoundly moral activity.

You have produced on a grand scale. Now you have a tremendous amount of wealth at your disposal — more than you could possibly spend on your personal consumption. If the achievement of your own happiness is your goal, then perhaps you will choose to keep your wealth invested in business endeavors. Perhaps you will pass it on to loved ones. Perhaps you will use the money to promote capitalism — the economic system that made your success (and the success of every industrialized nation) possible.

Or perhaps you will donate your money to a charitable cause that matters to you. Like many of the businessmen targeted by the Giving Pledge, you may already fund educational programs in your home town, or medical research to fight an illness you’ve faced. You give to charity out of a benevolent desire to help those worthy of help. That’s perfectly consistent with your pursuit of happiness.

But according to the Giving Pledge, what makes you happy shouldn’t be your primary concern.

It is no accident that the Giving Pledge is not a call for charity but a public pledge to give. As Matthew Bishop and Michael Green observe, “Richesse oblige is part of American culture. The peer pressure to give is great (for donors large and small) . . . The Giving Pledge has upped that peer pressure . . .” The Pledge treats your wealth, not as a justly earned reward, but as a gift from society — one that came with plenty of strings attached. The message is: Fulfill the obligation that came with your riches, give your wealth away — or hide your face in shame.

But your wealth was not an undeserved gift. Every dollar in your bank account came from some individual who voluntarily gave it to you — who gave it to you in exchange for a product he judged to be more valuable than his dollar. You have no moral obligation to “give back,” because you didn’t take anything in the first place.

Your productive achievement and the rewards that go along with it are something you should be proud of, and they are something others should admire. Don’t let anyone treat them as a sin.

Don Watkins

Yaron Brook

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Human progress requires good ideas.

Consider how just two fundamental ideas have ushered in the modern world. Rewind a scant 600 years, and modern science doesn’t yet exist.

Men and women live and die in squalor and filth, largely ignorant of the germs that ravage their bodies and of the natural laws that govern the universe, instead imploring an alleged supernatural force to help them navigate this vale of tears.

But thanks to minds such as Galileo, Sir Isaac Newton, Louis Pasteur and Charles Darwin, this is not how we face the world today. They taught us our method of knowing: careful, mathematically precise observation, step-by-step inference and generalization, and systematic, evidence-based theory building.

They had the courage to challenge entrenched authority, toss aside superstition and defy popes. As others followed the trail the first scientists blazed, human knowledge advanced dramatically.

Thanks to a second idea, this explosion of knowledge broke the confines of the laboratory and ivory tower. Another daring group of thinkers challenged political authoritarianism.

Kings and aristocrats were swept aside to make way for the rights of man. This idea gave birth to a new nation, our beloved America, in which the individual was free to think and pursue his own happiness. A new person arose: the industrialist.

Slandered as robber barons, what these individuals actually did was earn fortunes by studying the discoveries of science and commercializing them.

A mind-boggling array of inventions and products ensued: automobiles, oil, radios, antibiotics, refrigeration, electricity, washing machines, air conditioning, indoor plumbing, airplanes and on and on, to our present world of personal computers and cell phones.

Try to imagine life without all of this. It’s not easy.

But as far as we’ve come because of these two ideas, human progress demands implementation of a third idea to complete the scientific and political revolutions. We’re still beholden to the past in ethics.

Although few of us would turn to the Old Testament or the Quran to determine the age of the Earth, too many of us still turn obediently to these books (or their secular copies) as authorities about morality. We learn therein the moral superiority of faith to reason and collective sacrifice to personal profit.

But the more seriously we take these old ethical ideas, the more suspect become the modern ideas responsible for human progress. The scientists in their laboratories did not demonstrate the superiority of faith. Thomas Jefferson in his Declaration did not proclaim the superiority of collective sacrifice. Why should we think these ideas are the path to moral enlightenment?

Perhaps, of all the damage these antiquated moral ideas do to human progress, the most significant is how they distort our conception of moral ideals.

Ask someone on the street to name a moral hero; if he isn’t at a loss, he’ll likely name someone like Jesus Christ or Mother Teresa. Why? Because they’re regarded as people of faith who shunned personal profit for the collective good. No one would dream of naming Galileo, Darwin, Thomas Edison or John D. Rockefeller.

Yet we should. It is they, not the Mother Teresas of the world, that we should strive to be like and teach our kids the same.

If morality is judgment to discern the truth and courage to act on it and make something of and for your own life, then these individuals, in their capacity as great creators, are moral exemplars. Put another way, if morality is a guide in the quest to achieve your own happiness by creating the values of mind and body that make a successful life, then morality is about personal profit, not its renunciation.

Monetary profit is just one of the values you have to achieve in life. But it is an eloquent representative of the whole issue, because at its most demanding, as exhibited by a Bill Gates or a Steve Jobs, making money requires a profound dedication to material production.

The fact that earning money is ignored by most moralists, or condemned as the root of evil, is telling of the distance we must travel.

In effect, we need to turn the Billionaire’s Pledge on its head.

The world grants, at best, no moral recognition to Gates and Buffett for the personal fortunes they’ve created, but it awards them a standing ovation for giving their profits away. But the standing ovation belongs to the act of creation, the profit they brought into their own lives and anyone who traded with them.

If morality is about the pursuit of your own success and happiness, then giving money away to strangers is, in comparison, not a morally significant act. (And it’s outright wrong if done on the premise that renunciation is moral.)

Science, freedom and the pursuit of personal profit — if we can learn to embrace these three ideas as ideals, an unlimited future awaits.

About The Authors

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Onkar Ghate

Chief Philosophy Officer and Senior Fellow, Ayn Rand Institute

An enterprising manager walks into Steve Jobs’s office and lays out his plan for Apple‘s future. “It’s simple,” he says. “Step one, stop giving employees bonuses. Step two, save money by doing away with our Quality Assurance process. Step three, pad our earnings in order to drive up our stock price. What do you think?”

Talk about an indecent proposal. In reality, that kind of plan would get a manager fired. But believe it or not, this reflects the conventional view of how profit-seeking businessmen think.

Health insurance companies make money by denying patients needed tests. Doctors make money by giving them unnecessary ones. Speculators make money by recklessly bidding up the price of stupid investments. Short sellers make money by driving down the price of sound ones. Lie, cheat, steal, roll the dice and cut corners: People think that’s the easy path to business success.

In his pitch for Dodd-Frank, President Obama complained that in “the absence of sound oversight, responsible businesses are forced to compete against unscrupulous and underhanded businesses, who are unencumbered by any restriction on activities that . . . take advantage of middle-class families, or, as we’ve seen, threaten to bring down the entire financial system.” In Obama’s view — a view many Americans share — being “unscrupulous and underhanded” is a competitive advantage.

Is it any wonder, then, that laws and regulations shackling businessmen are increasing by the day? If lying, cheating and stealing really are the road to riches, then businessmen can’t be trusted and economic freedom can’t be tolerated.

But it’s not true. In a truly free market, the fly-by-night shysters who try to make a killing get killed — by the government, which outlaws force and fraud, and by the market, which shuns any company that fails to create genuine value.

Just take a look at WorldCom. CEO Bernard Ebbers had spent nearly twenty years growing WorldCom into a telecom leader. But when the company ran into financial difficulties in the early ’00s, Ebbers hid its troubles through fraudulent accounting. After the $11 billion fraud was exposed, Ebbers was sentenced to twenty-five years in prison and WorldCom went belly-up.

Think about your own line of work. Think of the time, energy and money your organization pours into research and development, quality control, motivating employees and searching for innovative ways to meet its customers’ needs. Can you succeed via dishonesty and corner-cutting? We’ve spoken to businessmen all over the world and they all say the same thing: “Oh, you couldn’t get very far in my industry that way. But those other industries . . .”

They’re wrong. The only way to profit in a free market over the long run is via production and mutually beneficial trade. Henry Ford grew rich by building us cars. Walt Disney grew rich by bringing us delight. Robert Noyce grew rich by inventing the integrated circuit and making modern computers possible. Sam Walton grew rich by selling us virtually everything dirt cheap. The profit motive doesn’t drive people to cut corners but to create value.

And it is with the long run that most profit-seekers are concerned. In 1982, when children in Chicago started dying from Tylenol that had been deliberately tainted with cyanide, Johnson & Johnson immediately pulled over thirty million bottles from stores. Short term, the recall was costly, but the profit motive led Johnson & Johnson to ignore the short-term costs and make a decision that ultimately saved the Tylenol brand. This is the norm under capitalism — the Madoffs are a rare and fleeting exception.

In today’s semi-capitalist, mixed economy, however, Obama is right that a lot of charlatans are lining their pockets. But he’s wrong that government’s the solution: it’s the problem.

Take housing. Thirty years ago, when the housing market was much freer, lenders knew they couldn’t make money doling out bad loans. So they meticulously examined the credit history of potential borrowers and asked for substantial down payments.

Government intervention in the market changed all that. Thanks to Washington’s affordable housing crusade, unscrupulous mortgage bankers could make easy money by lending to anyone with a pulse and selling worthless paper to government-backed behemoths Fannie Mae and Freddie Mac.

But in a truly free market, profit-seekers have no more motive to resort to chicanery and crime than do teachers or doctors. The path to profit isn’t plunder — it’s productivity.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute

When the housing boom went bust and mortgage giants Fannie Mae andFreddie Mac failed, forcing taxpayers to cough up $150 billion and counting, Washington should have reconsidered its policy of promoting homeownership. It hasn’t.

Last Tuesday, Tim Geithner led a summit to determine the future of Fannie and Freddie. According to Geithner, “We will not support returning Fannie and Freddie to the role they played before conservatorship.”

We should hope not. But Geithner hastened to add that Washington would still play an important role in housing. “I believe there is a strong case to be made for a carefully designed guarantee in a reformed system, with the objective of providing stability in access to mortgages, even in future downturns.” HUD secretary Shaun Donovan put it this way: “The government’s footprint in housing finance needs to be much smaller than it is today.” Smaller? At a time when government backs 97% of new mortgages, it would be hard to make its footprint any larger.

For nearly a century it has been the policy of the U.S. government to increase American homeownership. Its efforts include (but aren’t limited to) bouts of easy money from the Fed, the mortgage-interest deduction, the exclusion of capital gains on primary residence sales, direct and indirect subsidies from the Department of Housing and Urban Development, and artificial liquidity pumped into the mortgage market via government sponsored entities Fannie and Freddie.

Policymakers assure us that the next generation of government housing programs will be “carefully designed” (bring on the next five-year plan, Comrade!). But the real question is why the government should be doing anything to promote homeownership.

“I do believe in the American Dream,” said President Bush in 2002. “Owning a home is a part of that dream, it just is. Right here in America, if you own your own home, you’re realizing the American dream.” Bush was echoing a theme that reaches back at least to Herbert Hoover: When the government encourages homeownership, the story goes, it strengthens individuals and communities and thereby fosters the American Dream.

They’re wrong. A government crusade to promote homeownership is un-American.

America’s distinction is that it was the first nation founded on the principle that you have a right to pursue your own happiness without government interference. But the government’s homeownership crusade means it gets to decide how you should live, and stick-and-carrot you into living that way.

Take the mortgage interest deduction. It so happens that Yaron has a mortgage and Don rents. Both of us have good reasons for our respective choices, but because the government has decided everyone should buy a home, for each dollar Yaron pays on his mortgage, he saves a few pennies on taxes, while Don does not. Instead of playing the role of impartial umpire, the government is playing the role of paternalistic master: “To keep more of your money, do what I want.”

And if that weren’t enough, the government also uses your money to get your neighbors to do what it wants. Welcome to the wild world of subsidies, where the government effectively robs Peter to house Paul. Typically these subsidies were indirect, as in the case of Fannie and Freddie. Their implicit government guarantee meant that you (and your kids) were forced to cosign on Fannie’s and Freddie’s debt in order to lower the cost of mortgages. This was supposed to benefit the people who did their duty and took out home loans, although it turned out to be a bad deal for everyone. Now, however, a number of policymakers, including the former patron saint of Fannie and Freddie, Barney Frank, are calling for direct subsidies to home buyers.

Here’s the real lesson: The American Dream is not some government-subsidized house foisted on you by George W. Bush or Barney Frank. It’s the undiluted freedom to decide how you want to live–and, if you want to own a home, it’s the freedom to work, save, establish credit, and earn one. In America, the government’s job is to protect our freedom to pursue our values, not to dictate what our values are. Its homeownership policy should be the same as its toaster oven policy: laissez-faire.

Government intervention in housing runs deep, and it can’t be eliminated overnight. But the government should make its long-term goal to fully extricate itself from the housing market. It can then start gradually dismantling Fannie, Freddie, tax preferences for homeowners, and every other government housing program.

Some say we can’t begin to accomplish this in the era of Obama. Our response: Yes, we can.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute

Ever since business groups such as the Chamber of Commerce and the Business Roundtable started attacking the president’s policies for throttling their ability to produce, political commentators have been asking: “Is Obama anti-business?”

That might seem about as debatable as heliocentrism. Why, then, have Obama’s critics found it so hard to make their case?

They call Obama a socialist–his defenders say he resisted calls to nationalize the banks and socialize health care. They say Obama has grown government “too much”–his defenders say he’s merely trying to cope with an economic emergency and provide markets with some “sound oversight.” Sure, they concede, the president’s rhetoric has sometimes crossed the line, but at the end of the day, he’s a pro-business guy.

All of which raises the question: What does it mean to be pro-business anyway?

One place to look for an answer is Ayn Rand’s 1957 novel Atlas Shrugged, a perennial favorite among American entrepreneurs, and a pro-business work if there ever was one.

From an executive who runs a transcontinental railroad to an industrialist who creates a metal stronger and lighter than steel, the heroes of Atlas are producers–individuals who use their intelligence to create vast amounts of wealth. Whereas many people think of business as a humdrum affair of paper-shuffling and pencil-pushing, Rand’s work dramatizes the incredible ingenuity, discipline and risk-taking that business requires.

Today “pro-business” often gets equated with assuaging the desires of the business lobby. But Atlas excoriates those “businessmen” who spend their time liquoring up politicians to coax favors or crush competitors. What it celebrates is the activity of business–the process of production and trade that has taken us from mud huts to Manhattan. The true producer Rand shows, makes just one demand of Washington: “Get the hell out of my way!”

Atlas shows that what business requires from politicians is not favors but freedom. To the extent producers are free to act on their judgment, they generate the kind of wealth that has lifted the West (and much of the East) out of poverty. To the extent they are forced to take orders from bureaucrats, the result is stagnation.

The economic system fully geared to the life of producers is complete, unregulated, laissez-faire capitalism–a total separation of state and economics, where the government protects each individual’s inalienable rights, including his rights to property and to freedom of contract and trade, and otherwise “gets the hell out of the way.” That’s what it means to be pro-business.

By this standard, Barack “At a Certain Point You’ve Made Enough Money” Obama is obviously anti-business. But many people are under the impression that Obama’s critics are pro-business. Nothing could be further from the truth.

One of the myths that arose following the financial crisis was that America pre-Obama was something close to a free market. According to this narrative, anyone who supports the status quo circa 2007 is a champion of capitalism.

But by 2007 the number of federal agencies and commissions riding roughshod over a businessman’s rights had already mushroomed to more than 100, including the IRS, SEC, EPA, FTC, FDA, FCC, USDA, FDIC, OHSA. These agencies were enforcing an unprecedented 73,000 pages of regulations, and their budgets had swelled to record levels. This included 2002′s draconian Sarbanes-Oxley, passed by the Senate 99-0 and signed into law by the supposedly pro-capitalist President Bush.

This vast government control of production and trade is the opposite of capitalism. Yet how many of these anti-business laws and regulations have Obama’s critics vowed to repeal? None of any consequence.

What’s more, despite an avalanche of evidence that the prime culprits in the financial crisis were the Fed’s low interest rates, government housing policy, and too-big-to-fail, Republicans have joined Democrats in blaming America’s “free market,” and vow, in Mitch McConnell’s words, to “rein in Wall Street to prevent another crisis.”

While Republicans often express admiration for Ayn Rand, the one thing they refuse to rein in is today’s massive regulatory-welfare state. To the extent they oppose Obama, it’s not on the grounds that businessmen have a right to function free from government coercion, but on the grounds that the amount of coercion Obama advocates goes a little too far.

None of this is to deny that in the short term, the threat Obama poses to business vastly outstrips the threat posed by most of his critics. But if Americans are looking for a pro-business alternative–one that defends America’s original capitalist system–they won’t find it in today’s political establishment.

About The Authors

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Yaron Brook

Chairman of the Board, Ayn Rand Institute