Imagine that your neighborhood is overrun by a gang. These brutes are wielding crowbars, knives, and pistols in a frenzied spree of home break-ins and mugging and murder. Now suppose the police reveal that their grand strategy for dealing with this gang is to block them from getting submachine guns — as if without such weapons, the gang would no longer bother people.

Would you sleep soundly at night?

Or would you be outraged? Of course you would, because this gang — even without more powerful weapons — is already a serious menace that must be stopped.

Now, what would you say if this ridiculous what-if scenario resembled our actual response to the very real threat from Iran?

Ever since taking U.S. embassy staff hostage in 1979, the Islamist regime in Teheran has led an international spree of bombings, hijackings, and other terrorist attacks on Americans and Westerners. Now politicians and diplomats, who put up with Iranian aggression for years, are loudly promising to block Iran’s pursuit of nuclear weapons.

On the campaign trail, for instance, the candidates debate how (i.e., with or without preconditions) they’d negotiate to dissuade Iran from pursuing a nuke — on the idea that without such a weapon in Iranian hands, everything will be hunky-dory.

But the uncomfortable truth is that if the mullahs got a nuke, Iran would not suddenly undergo a Jekyll-and-Hyde transformation from a friendly neighbor into a rabid enemy. Iran long ago proved itself a threat that must be stopped; a nuclear arsenal would only make it a far worse threat.

For three decades the ayatollahs of Iran have been using proxies — such as Hezbollah — to carry out murderous attacks. Iran’s Revolutionary Guard Corps helped create and train Hezbollah, which hijacked a TWA airliner and which kidnapped and tortured to death American citizens. Iran pulled the strings behind the 1983 bomb attacks on the U.S. Embassy in Lebanon and later the barracks of U.S. Marines, killing 241 Americans. Iran also orchestrated the 1996 car bombing of Khobar Towers in Saudi Arabia, where 19 U.S. servicemen died.

There’s more: The 9/11 Commission found that “senior al Qaeda operatives and trainers traveled to Iran to receive training in explosives,” and that “8 to 10 of the 14 Saudi ‘muscle’ operatives traveled into or out of Iran between October 2000 and February 2001.” During the Afghanistan war, Iran welcomed fleeing al Qaeda and Taliban fighters. Today, according to the U.S. military, Iran is running training camps near Teheran for Iraqi insurgents, who return to Iraq to practice and train others in their bomb-making skills. There’s also growing evidence that Iraqi insurgents get bomb technology from Iran. 

What’s going on here?

A rational assessment of Iran would have to recognize that the mullahs in Teheran have been conducting a proxy war against America. The inspiration for this war is Iran’s jihadist goal of imposing Islamic totalitarianism globally. Iran is a leading sponsor of jihadists and the self-identified role model for exporting its Islamic revolution to other countries. It is the sworn enemy of the West. We should take seriously its call to bring “Death to America!” — because it has already done so.

But too many American diplomats and commentators refuse to judge Iran. Instead, they regard its past hostility as a string of disconnected crises, unrelated to Iran’s ideological agenda. They avoid naming the nature of the regime and behave as if its acquisition of a nuclear weapon would be the decisive event. But that particular weapon — despite its power — cannot be the whole story, since we don’t worry about other countries, such as France and Britain, having nukes. The rarely admitted difference is that the regime in Iran would eagerly press the launch button.

This fear-the-weapon-not-the-killer mentality refuses to understand the threat posed by Iran right now. This view holds that only the concrete facts about Iran’s arsenal have any practical significance, while its abstract, ideological goals and character can be disregarded with impunity. But whether Iran uses one nuke, or attacks with more conventional weapons, its victims are still dead.

Our leaders’ narrow concern with Iran’s nuclear capability cannot make the regime’s longstanding hostility to America go away. Americans should face the real character and conduct of the Iranian regime, before it is too late.

About The Author

Elan Journo

Senior Fellow and Vice President of Content Products, Ayn Rand Institute

Do fishermen enjoy Hemingway’s The Old Man and the Sea? Do generals like Tolstoy’s War and Peace? I have no idea, but I’m reasonably sure no one looks to these novels for advice on how to catch fish or wage war. The purpose of a novel is not to provide concrete advice on particular tasks, but to present a vision of man and his place in the universe.

In Atlas Shrugged, Ayn Rand presents a vision of man that is unlike anything ever written. Rand’s ideal man is the visionary, the genius, the producer. Her foremost representatives of this ideal are businessmen, whom she portrays, at their best, as heroes, not villains; creators, not parasites.

Rand’s vision has inspired successful people from all walks of life for generations. They love the book, not because it tells them how to make better yoga clothing or run a better taxi service, but because it offers profound insights about the principles that lead to success (or failure) in any field, and it shows those principles playing out in the lives of the novel’s characters.

The book has been criticized often in the five decades since it was published. Most frustrating for those of us who love it are critiques that misunderstand its essential points and end up attacking straw men. Rand, they often say, believed that only the strong should survive or that a man’s worth is measured by the size of his wallet. Writing in the Business Insider, Max Nisen does all this but adds a new twist. In “‘Atlas Shrugged’ is Full of Terrible Business Advice,” Nisen criticizes the book for not being a better version of the Seven Habits of Highly Effective People.

Of course, Atlas Shrugged isn’t a business how-to manual. But it is full of powerful advice if you’re willing to consider what Rand actually says. Here are some of the real lessons in the novel that make it a favorite of so many productive, successful people.

Take pride in your success.

Like so many critics of Atlas Shrugged, Nisen claims Rand conveyed that successful people are inherently superior to everyone else. But anyone who has read the novel knows it is filled with noble characters who achieve only modest financial success. Eddie Willers, friend and ally to railway magnate Dagny Taggart; Gwen Ives, industrialist Hank Rearden’s superlative secretary; Cherryl Brooks, the store clerk who tragically marries a villain thinking he is a hero; Jeff Allen, the proud tramp who stows away on a Taggart train and is hired by Dagny; even a young bureaucrat who is assigned to monitor Rearden Steel and ends up becoming Rearden’s ally. The heroes in the novel don’t look down on these characters. They treat them as friends and allies. Clearly, Rand recognizes that moral character stems from the choices people make, not their wealth or status.

So Rand doesn’t condemn anyone for failing to become rich and successful. But she does condemn those who despise others because they are rich and successful. The “hallmark of the second-rater,” she has one of her characters say, “is resentment of another man’s achievement.” She spends much of the novel showing just how resentment of achievement — which she called hatred of the good for being the good — is destroying society.

Was she right? Well, President Obama thinks that “you didn’t build that.” We hear every day that we should despise and tax the “1%” because they are wealthy. Evidence of the resentment of success is all around us. Ayn Rand saw that in 1957, when Atlas Shrugged was published. And she knew that this attitude could prevail only if the successful allowed it to, by feeling guilty for their achievements. Rand’s response was clear: take pride in any success you’ve earned and never apologize for it.

Pursue your own happiness and achieve it.

Another common criticism of Atlas Shrugged, which Nisen repeats, is that its characters are motivated by money alone. This is an odd claim about a novel that is filled with characters who love their work and continually strive to achieve more and more, often at great short-term cost. Hank Rearden spends ten years developing a new alloy. Dagny leaves a secure position at Taggart Transcontinental and works around the clock to develop a new railroad, the John Galt line. Is money important to these characters? Yes, of course, but making money is not their primary motive. Money, as Rand recognizes, is not an end in itself, but only a means. The end — the purpose of all that hard work — is achieving happiness. And Rand believes that is possible. As her protagonist, John Galt, says, “The world you desired can be won, it exists, it is real, it is possible, it’s yours.”

Money is the product of virtue.

Speaking of money, critics also often misunderstand Ayn Rand’s view of it. In the novel, she gives that explanation to copper magnate Francisco d’Anconia, who answers the claim that money is the root of all evil. Nisen picks out one paragraph where d’Anconia says gold is an objective form of money because, unlike paper, it cannot be manipulated by government. Nisen cites a couple of articles that supposedly show the gold standard is bad, not good. They even have graphs. And he recommends that readers watch a video of Fed Chairman Ben Bernanke saying the same thing.

Certainly, if you are interested in all the debates about the gold standard, you can watch the government’s chief money manipulator respond to the view that he shouldn’t manipulate the money supply. After that, you might read the hundreds of books and articles on monetary policy from the last eight decades or so. Ayn Rand doesn’t try to address all of that in Atlas Shrugged. There are no graphs in the novel.

Instead, Rand focuses on fundamental questions about money, just as she focuses on fundamental questions on every issue. She asks: what is money and what role does it play in our lives? She argues that it isn’t the root of all evil, but the product of all the hard work and thought that sustains us. Money, as Rand says, “is the creation of the best power within you, and your passkey to trade your effort for the effort of the best among men.” If you value your mind, your work, and your life, Rand holds, then you will value money. And if government can control and devalue our money, then government can control and devalue our lives.

When have you ever heard an economist say that?

Trade is a virtue, but sacrifice is not.

Nisen says that the businessmen in Atlas Shrugged have contempt for their customers because in one scene, Hank Rearden says he would rather destroy his metal than sell it to anyone who demands that he produce it for them as his duty. But Rand’s point is that there is a big difference between trade, which is a virtue, and sacrifice, which is a vice. In fact, the heroes in the novel treat their real customers — those who want to trade with them, rather than take from them — with great respect. Rearden, for example, spends much of the novel figuring out how to produce enough of his metal to satisfy customers who are becoming more and more desperate for it as the economy collapses. But one of the primary points of the novel is that no one should work for their own destruction. Today, we see calls for businessmen to sacrifice more and more every day. Is that good business advice?

Government is a necessary good.

Finally, Rand does not treat government as a “pure antagonist” as Nisen and other critics claim, but as an essential institution that protects the rights on which individuals and businesses depend every day. Of course, Rand does illustrate the evil of a government that becomes a violator rather than a protector of rights. If you think she is wrong, look around. Is our ever-expanding government really the solution to what ails us today, or the problem?

The bottom line is that Atlas Shrugged isn’t an economics text or a business how-to manual, it’s a brilliant novel of ideas that challenges conventional thinking on every major issue in life — not just money, but work, family, politics, and even sex. It does contain great advice, just not the sort of advice that critics like Nisen prefer.

But if you want to see that, my advice is to go read it yourself.

About The Author

Steve Simpson

Former Director of Legal Studies (2013-2018), Ayn Rand Institute

Who commits the most murders, according to Hollywood? Serial killers? Gangsters? Terrorists? High school science teachers turned drug kingpins?

It turns out the answer is businessmen.

In 2006, the Business and Media Institute published a study in which it concluded that “According to primetime TV, you are 21 times more likely to be kidnapped or murdered at the hands of a businessman than the mob. Businessmen also committed crimes five times more often than terrorists and four times more often than gangs.”

A different study by the Business and Media Institute found that by age 18, “the average TV viewer has seen businessmen attempt more than ten thousand murders and countless lesser offenses, all in the name of greed.”

It’s more than a Hollywood convention: it’s a cultural stereotype. Businessmen are seen as greedy, selfish SOBs who care about nothing save for their bank accounts. And like all stereotypes, this one has consequences.

Look at how the press covers any economic problem or crisis. No one waits for actual evidence or peer-reviewed studies. Hardly anyone examines how government might have messed things up by distorting market forces. They just look for evidence of greed and connect it to the problem at hand.

When fraud was exposed in a handful of companies in the early 2000s, for example, the explanation was “corporate greed.” The solution? Sarbanes-Oxley, which treated all businessmen as guilty of accounting fraud until proven innocent. When the financial crisis hit, the explanation was “Wall Street greed.” The solution? Congress passed Dodd-Frank, generating nearly 14,000 pages — and counting — of complex regulations all aimed to stop greedy businessmen from being so greedy.

What’s striking is that it is virtually impossible to find a successful businessman who has not been criticized for his greed or selfishness. Even the late Steve Jobs, one of the most popular businessmen of his or any era, was routinely derided as selfish. Whatever his virtues, people said, Jobs was primarily concerned with his vision and his company’s success, not with the welfare of others. In the wake of his resignation from Apple, shortly before his death, some even rushed to condemn Jobs for focusing his efforts on profit seeking rather than philanthropy. Journalist Andrew Sorkin, for example, penned a missive in the New York Times in which he acknowledged that Jobs was a “visionary” and an “innovator” who “clearly never craved money for money’s sake and has never been ostentatious with his wealth.” Nevertheless, Sorkin complained, “there is no public record of Mr. Jobs giving money to charity.” A 2006 column in Wired put it more bluntly: Jobs was “nothing more than a greedy capitalist who’s amassed an obscene fortune. It’s shameful.”

In some ways, though, Jobs is the exception that proves the rule. Unique among businessmen, he was admired by many for his unrivaled creativity and passion for making “insanely great” products. If even he could not escape charges of selfishness and greed, then what chance have other producers had? History speaks: from Morgan to Rockefeller, to Ford, to Walton, to Gates, hardly any successful businessmen have been immune from the accusation that they are selfish.

The Madoff Comparison

And what is even more striking is that the charges of greed and the image of the greedy profit-seeker have led us to put the pantheon of business greats into the same moral category as some of the worst predators in history — predators such as Bernie Madoff, the Wall Street elder statesman who in 2008 was exposed as having orchestrated the largest Ponzi scheme in history.

From the start, Madoff was treated not as a criminal who pretended to be a businessman but as the symbol of business greed. He was, in the words of Diana Henriques, author of The Wizard of Lies: Bernie Madoff and the Death of Trust, “a creature of the world he helped create, a world that was greedy for riskless gain . . . arrogantly certain of success, woefully deluded about what could go wrong, and selfishly indifferent to the damage done to others.”1

The world around us has been shaped by a theory that says the Madoffs and Jobses of the world are brothers in spirit — or, rather, brothers in spiritual impoverishment.

But what if actual profit-seekers have nothing important in common with monsters such as Madoff? What if the profit motive is radically different from some unhinged “greed” capable of turning producers into predators? Then perhaps we owe businessmen an apology — and maybe, just maybe, a significant part of the justification for today’s regulatory state should be relegated to history’s ash heap.

Early in his business career, Madoff encountered his first major setback. The young investor had about 20 investment advisory clients — friends and family, mostly — whose money he had put into highly speculative stocks. “I realized I never should have sold them those shares,” Madoff later admitted.2 For two years the stocks soared, but in May of 1962, the market collapsed, and with it their value.

Madoff’s reaction was revealing. He used all the profits his firm had made up to that point to buy back the stocks from his clients’ accounts at their original offer price, leaving his investors with the illusion he had avoided any losses. In Henriques’s words, “rather than admit the truth that he had failed, he covered up those losses and lied about it.” The move wiped out Madoff’s capital, but he was able to dupe his investors into believing he was a genius; the market had tanked but he hadn’t lost a cent. It was a litmus test, Henriques says. “Faced with admitting failure or cheating, Madoff would cheat.”

The incident helps pull back the curtain on the motives that would later lead Madoff to con thousands of people out of billions of dollars. From the start, he seemed to be out to prove something. “He had an inferiority complex,” Marcia Mendelsohn, a childhood acquaintance, told Madoff biographer Andrew Kirtzman. “He never felt he was good enough.”3

Kirtzman elaborates: “Time and again as a kid, [Madoff] was spurned and humiliated for what was perceived to be his inferior intellect. . . . But he excelled at making money, and with it came the stature that once had eluded him. When he couldn’t generate as much money as he wanted or needed, he simply invented it.”4

Madoff didn’t seek money as a reward for his competence — he sought money to prove to others that he was competent. He aimed, not to build a great business, but to manufacture a reputation as a great businessman. He didn’t want to use his intelligence to create wealth, but to steal wealth in order to dupe others into thinking he was intelligent.

Madoff, you might say, wasn’t greedy, but needy: he needed to feel like a big shot because, in reality, he felt like a nobody.

Madoff recounted a telling episode to New York magazine in 2011: “The chairman of Banco Santander came down to see me, the chairman of Credit Suisse came down, chairman of UBS came down; I had all of these major banks. You know, [Edmond] Safra coming down and entertaining me and trying [to invest with Madoff]. It is a head trip. [Those people] sitting there, telling you, ‘You can do this.’ It feeds your ego. All of a sudden, these banks which wouldn’t give you the time of day, they’re willing to give you a billion dollars.”

Madoff went on: “It wasn’t like I needed the money. It was just that I thought it was a temporary thing, and all of a sudden, everybody is throwing billions of dollars at you. Saying, ‘Listen, if you can do this stuff for us, we’ll be your clients forever.’”

Madoff took the money and created false statements indicating to his investors that he was making incredible 15 percent returns. In reality, his returns were nothing close to that, but Madoff refused to face the facts and admit to his investors that he had failed to meet their expectations. “I was too afraid,” he said.

Madoff had first arrived on Wall Street with a chip on his shoulder. “I was upset with the whole idea of not being in the [Wall Street] club. I was this little Jewish guy from Brooklyn.”5 Once “the club” started giving him the attention he so desperately craved, he was unwilling to let reality get in the way.

In It For the Money?

It’s hard to imagine someone truly concerned with reaping profits over the long term behaving this way. Take a tour through Silicon Valley and it becomes apparent that the genuine profit-seeker makes mistakes and acknowledges them. He views mistakes and failures as part of the process of success. After studying successful entrepreneurs, business expert Peter Sims concluded that most “understand (and come to accept) that failure, in the form of making mistakes or errors, and being imperfect, is essential to their success.”6 Mistakes are inevitable, and they are an indispensable part of how a person learns and improves. But Madoff’s goal wasn’t to become a skilled investor; it was to project a certain image, to maintain the illusion that he was infallible. Whenever that illusion was threatened by reality, well, so much the worse for reality.

Much later, as Madoff stood at his sentencing hearing, he told the court, “I believed when I started this problem, this crime, that it would be something I would be able to work my way out of, but that became impossible. . . . I refused to accept the fact, could not accept the fact, that for once in my life I failed. I couldn’t admit that failure, and that was a tragic mistake.”7 (Kirtzman notes that Madoff was spinning the facts even then: “He was not an overachiever who’d failed at something; he was an underachiever who had succeeded by lying.”8 In either case, the underlying motive was the same: Madoff wanted to create the illusion of ability, and so the facts were dispensable).

It is impossible to overstate how different Madoff’s motives were from those of genuinely successful businessmen, who thrive and prosper over the long run through their productive exploits. Steve Jobs, for instance, explained that his “passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary.”9

That included money. In an interview for the PBS documentary “Triumph of the Nerds,” Jobs explained that “I was worth about over a million dollars when I was 23 and over 10 million dollars when I was 24, and over 100 million dollars when I was 25 and it wasn’t that important because I never did it for the money.”10

Madoff pursued money to prove he was a big shot. Jobs? In his words, “Sure it was great to make a profit, because that was what allowed you to make great products. But the products, not the profits, were the motivation.”11

A library of business biographies testifies to the fact that the reason genuine profit-seekers get out of bed in the morning is because they love creating things: they love producing new products, improving old ones, finding better ways to do things, building a business into something great, and making a fortune in the process. They are at heart producers.

Underneath all its complexities, production is the process of transforming the material world for the benefit of human life. Human beings figure out the potentialities of the things around us and then we rearrange them to create something even better.

In this regard, the financial industry is no different from the tech industry. Again, the history of Apple is illustrative. A critical factor in its success was attracting an early financial supporter, Mike Markkula, who invested $91,000 and extended Apple a $250,000 line of credit.12 Markkula’s great virtues were his ability to see Apple’s potential at a time when its future greatness was by no means apparent and his willingness to risk a significant portion of his personal wealth on that assessment. His decisions helped create one of the most productive companies in history. In one way or another, that is what all financiers do: they direct capital to what they judge to be its most productive uses, and so help make possible the creation of every sort of good and service on the market.

When a businessman — a real businessman, not a con artist with a business card — grows rich, it’s not by taking from others and leaving them with less, the way a criminal does. It’s by creating more and more wealth, of which his income — however large — represents only a fraction of what he created. He grows rich by making others richer. This is what led the late success guru Steven Covey to include “Think Win/Win” among his “Seven Habits of Highly Effective People.” Whereas win/win relationships foster long-term profits, Covey observes, “Win/Lose is not viable because, although I appear to win in a confrontation with you, your feelings, your attitudes toward me, and our relationship have been affected. If I am a supplier to your company, for example, and I win on my terms in a particular negotiation, I may get what I want now. But will you come to me again?”13

Alas, some businessmen do share Madoff’s desire to prove they are “somebody,” but it’s clear that goal is actually at odds with the profit motive. To the extent that a businessman is driven by the challenge of creating value, his work brings not only material rewards, but intense spiritual challenge, meaning, and satisfaction. On the other hand, to the extent an individual is driven, as Madoff was, by a desire to feel like a big shot, the effort to avoid acknowledging his weaknesses and mistakes will divert him from the productive process. In the long run, that’s a recipe for failure.

Jobs said it well. As he told the Stanford graduating class of 2005, “I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do.”

That hardly seems to have been the case with Madoff. Far from loving his job, he fled from it whenever he could. According to Kirtzman, “The [Madoff] family members were often on vacation and came and went as they pleased. Weeks would sometimes pass without a sighting of Bernie and Ruth.”14

Whenever we classify creators such as Jobs and destroyers such as Madoff as greedy or selfish, we equate polar opposites. A creator creates new wealth, is motivated by the process of creating wealth, and deals with other people by trading his creations for theirs, win/win style. Madoff wasn’t a producer, but a predator. He did not make money — he appropriated and ultimately destroyed it. In terms both of his motives and his means, Madoff was essentially different from profit-seeking businessmen. But he fit the pattern of other criminals to perfection.

Inside Madoff’s Criminal Mind

In February 2009, Dr. Stanton Samenow, a distinguished criminal psychologist, told an interviewer, “I’ll make you a bet that Mr. Madoff and others like him all say they’re good people; they by no means regard themselves as evil. I’ve interviewed serial killers who, despite leaving dead bodies in their own view, say they are good people.”

Samenow would have won that bet. Less than a month later, New York magazine published its interview with Madoff. “Everybody on the outside kept claiming I was a sociopath,” Madoff told the magazine. “I am a good person.”15

Going back and reading Samenow’s groundbreaking 1984 book Inside the Criminal Mind, it’s striking how well Samenow’s description of the criminal personality fits Madoff — and how radically different it is from the picture one gets from studying the lives of creators such as Jobs.

According to Samenow, the criminal “adamantly refuses to acknowledge his own fallibility.”16 Madoff, recall, “couldn’t admit . . . failure.”17 Creators embrace failure as a core component of success.

According to Samenow, “When doors do not open immediately to a criminal, he complains about lack of opportunity or discrimination.”18 Madoff saw Wall Street as “a business where you had to have an edge, and the little guy never got a break. The institutions controlled everything . . . . I realized from a very early stage that the market is a whole rigged job. There’s no chance that investors have in this market.”19 Creators don’t pout about their lack of opportunity — on the contrary, they search tenaciously for opportunity and even create it.

According to Samenow, “When the doors of prison first lock behind them, some criminals temporarily are frightened, remorseful, and depressed. These emotions are not strange because criminals experience them occasionally on the street when they weary of the daily grind, tired of looking over their shoulders, and regret disappointing people who care about them. Even on the outside, there were moments when life seemed no longer worth living.”20 Madoff claims that he could have kept his scheme going but turned himself in because he “got tired.”21 He knew it was just “a matter of time” before he got caught. “It was almost like . . . I just wanted the world to come to an end. . . . The world would come to an end, and I’d be dead and everyone would be gone.”22

Madoff’s world did come to an end. It had to, because Madoff was fighting an opponent he could not beat: reality. The pattern that emerges from Madoff’s life is one of systematically blinding himself and others to the facts of reality. The pattern of a creator is to ruthlessly face facts in order to deal with reality on a progressively higher level. “Face reality as it is, not as it was or as you wish,” says former General Electric CEO Jack Welch. “[F]acing reality is crucial in life, not just in business. You have to see the world in the purest, clearest way possible, or you can’t make decisions on a rational basis.”23

Apple’s iPhone, for instance, emerged from Jobs’s relentless focus on facts — in that case, the uncomfortable fact that despite the preeminence of Apple’s iPod in the portable music market, its days were numbered. As Wired explained, “[Jobs] saw millions of Americans lugging separate phones, BlackBerrys, and — now — MP3 players; naturally, consumers would prefer just one device. He also saw a future in which cell phones and mobile email devices would amass ever more features, eventually challenging the iPod’s dominance as a music player. To protect his new product line, Jobs knew he would eventually need to venture into the wireless world.” Many an enterprise has gone from bankable to bankrupt thanks to a failure to face unpleasant realities. Jobs faced them and Apple flourished.

To place criminals and creators in the same moral category is to commit an error probably best captured by William F. Buckley: it’s equal to “saying that the man who pushes an old lady into the path of a hurtling bus is not to be distinguished from the man who pushes an old lady out of the path of a hurtling bus: on the grounds that, after all, in both cases someone is pushing old ladies around.”24

Both a Madoff and a Jobs in some sense pursue their desires. But that is a superficial similarity hiding a fundamental difference. Madoff blindly pursued his desires in defiance of reality, and as a result achieved nothing but destruction. Creators think about what they want and the real-life requirements for achieving it. They see their interests as consisting in facing facts, in production, and in win/win trade.

Madoff’s crimes were not an indictment of businessmen, the profit motive, or the profit system. But the widespread claim that Madoff illustrated what’s wrong with American businessmen? That was an indictment of us.

About The Author

Don Watkins

Former Fellow (2006-2017), Ayn Rand Institute

Early on, the conventional view on the so-called “Arab Spring” was euphoric. In a nutshell, it was that the upheavals herald the triumph of freedom. Two-plus years on, however, Islamist groups have gained considerable political power — an ascendancy ominous not only for those subjugated under sharia, but also for American and Israeli security. Searching for silver linings on a darkening horizon, some point to Turkey: here is a regime widely feted as proof that Islamist rule is compatible with political freedom, after all. 

Andrew McCarthy roundly refutes that view in Spring Fever. Recep Tayyep Erdogan’s regime, he contends, serves as a case study of what to expect of ascendant Islamists in the Middle East: more oppression, and more hostility toward the West. “The trend-lines are unmistakable,” he writes, “the trajectory of change more certain than its pace.”

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About The Author

Elan Journo

Senior Fellow and Vice President of Content Products, Ayn Rand Institute

Starting next year, the Affordable Care Act will severely weaken the link between health insurance premiums and age-related risks. Health insurance companies won’t be allowed to charge older people any more than three times what they charge younger people for premiums. This is bad news for the young.

Preventing health insurers from fully accounting for age will not change the reality that, in general, the older you are, the greater your medical expenses (six times greater, when you compare 64-year-olds to 18-year-olds). These are costs that someone has to pay. If insurers can’t charge those older according to their risk, they have to overcharge those younger to make up the cost. In California, for example, once the new health law’s various rate restrictions and other provisions kick in, 25-year-old non-smoking men will see their premiums at least double.

As slogans go, “Let’s fleece our children and grandchildren” is not likely to draw much support. So proponents of the health law are trying to make their scheme palatable by arguing that it actually benefits the younger generation.

“[T]oday’s young people will be tomorrow’s old people,” says Matthew Yglesias of Slate, so while this arrangement may not benefit the young now, it will eventually do so. A senior official at the AARP echoes this sentiment, insisting, “If a younger, healthier person is spending a little more now, it’s okay because at some point they’re going to be a less healthy, older person too.”

But it’s of no benefit to anyone, young or old, to be forced into a scheme in which others dictate how he should arrange for his medical expenses. What’s in a young person’s interest is to be free to decide that for himself, in the context of his other priorities in life.

Consider that 25-year-old non-smoking male in California — let’s call him Brian. Brian is a freelance web developer committed to gaining enough experience and saving up enough money to one day start his own company.

Every dollar Brian can save right now brings him one step closer to starting and growing his business. In a truly free market, Brian would be able to choose a health insurance policy that best aligns with this goal. He could, for example, buy a policy that’s priced to reflect the real risk that he’ll get sick — just as he buys car insurance priced according to his risk of meeting with an accident. Since Brian is young and healthy, his premiums would be relatively low (just as safer drivers pay lower premiums), allowing him to put more of his income toward his start-up. Brian knows that when he’s older and in a higher-risk category, health insurers may charge him higher premiums, but that’s a fact he’s willing to face.

Even though Brian judges this to be the best way to manage his medical expenses, under the health law, it’s illegal for insurers to offer him a policy geared to his actual risk. Instead, per government mandate, a portion of the income he earns and intends to use to build his life is channeled into the pockets of others.

As a result of this and the many other wealth redistribution provisions in the health law, Brian’s goals are impeded. Maybe it takes him much longer to start the business he’s always wanted. When he finally does, maybe his venture is stunted by a lack of cash to put back into the business. Or maybe Brian must scale back or give up entirely his life-long goal, because by the time he can finance the start-up, he has a family and decides he can’t afford to take such a big risk.

Whatever the case, when Brian is sixty, he might get a few dollars from the younger generation (if they haven’t yet awakened to the injustice of the scheme, and if the whole system hasn’t already crashed). Meanwhile, Brian will have paid a high price, having been denied throughout the course of his life the right to decide how best to use his earnings.

Is it any wonder that the health law’s redistribution schemes had to be forced on people, by law? Nobody would choose to spend their own money this way.

The health law’s age-related rate restriction milks the hard-earned income of young people — those just starting out in life — for the sake of those older, sacrificing in the process a young person’s own goals and dreams. If they were honest, supporters of the law would admit this openly, instead of adding insult to injury by calling their immoral scheme a benefit to the young.

About The Author

Rituparna Basu

Rituparna Basu was a researcher and analyst at the Ayn Rand Institute between 2011 and 2016.

This past Valentine’s Day, American Airlines and US Airways announced their intention to merge — but now, six months later, the federal government wants to cancel the wedding.

Unexpectedly, the Department of Justice has filed an antitrust lawsuit to block the merger, citing potential “harm to American consumers.”

The airlines’ merger proposal was based on ten months of intense negotiations in which CEOs dealt with complex relationships among labor unions, bondholders, and other financial stakeholders. If all that ends up in the wastebasket, so do the hopes and plans of American Airlines, which is emerging from bankruptcy, and US Airways, both eager to achieve economies of scale that could help them compete with Delta, United, and Southwest.

In America, big companies cannot merge without government permission. For the largest firms especially, it’s a tortuous and inscrutable process with no guarantee of success — just ask AT&T, which wrote off $4 billion when its planned merger with T-Mobile in 2011 was barred by the Department of Justice.

Conventional wisdom holds that business mergers are not private matters — final authority must rest with antitrust regulators who can monitor, limit, and even forbid mergers and acquisitions that supposedly threaten the economy. Pursuant to the Hart-Scott-Rodino Act of 1976, businesses exceeding a certain size must ask federal permission to merge, and then endure a legal gauntlet to get an answer.

In this “Mother may I?” system, each proposed merger is automatically delayed thirty days — longer if the government requires it — while the DOJ and Federal Trade Commission sift through company documents and emails, compile statistics, run computations, and consult experts. Out of all the proposed mergers subjected to this legal scrutiny, only a select few are blocked. Which ones? Those that promise to be the most successful.

Antitrust enforcers want us to fear that mergers, if left unregulated, would allow large companies to destroy competition and hurt consumers. They use scary terms like “barriers to entry” and “monopoly prices” to paint a dire picture. 

Into this dangerous landscape rides the antitrust cavalry, flags flying and guns blazing, offering itself as a brave guardian of economic freedom against rapacious capitalism.

Now let’s switch off this Hollywood movie and look at the facts. So long as government stays out of the picture — that means no protected monopolies, franchises, subsidies, licensing schemes, bailouts, or other forms of coercive favoritism — merging companies have only one avenue to success. They need to offer products and services that people want to acquire through voluntary, win/win transactions.

In a free market, we have nothing to fear from mergers, no matter how big the resulting enterprise. Just as a student cannot be “too smart” or an individual “too healthy,” a business cannot be “too successful” or “too profitable.” 

If a particular company offers the most popular smartphones, cars, or airline tickets, then it may come to dominate its market. But no business, whatever its size, can let quality slip or raise prices too far above the cost of production without inviting competition from two sources — existing rivals, and venture capitalists who are constantly searching for opportunities to finance startups.

Regardless of what shape an industry takes, my only right as a customer is to buy or reject the products offered, at the prices offered — and it’s those choices that determine whether any merged company fails or succeeds. 

For example, the 1999 merger between Exxon and Mobil enabled the company to streamline operations and combine exploration and production capacities, despite a government-mandated asset selloff. But ExxonMobil’s resulting success comes with no guarantees for the future, if the company lets product quality slip or raises prices to levels that Shell, Chevron, or some oil startup can undercut.

The bottom line is that corporations have a moral right to merge without government permission — but in our unfree economy, that right is not legally recognized or protected. 

In March, just a month after American Airlines and US Airways announced their plans, both companies’ CEOs had to bow and scrape before a Senate panel, while the Government Accounting Office sounded warnings of projected changes to the airline industry.

Meanwhile, a New York Times editorial urged the DOJ not to approve the airlines’ merger “without requiring some concessions, like giving up gates and takeoff and landing slots.” 

Sure enough, it was soon reported that regulators were holding meetings with the defenseless airlines. We can only surmise that the airlines resisted whatever forms of legalized extortion may have been proposed in those meetings, leading directly to the lawsuit that now threatens to kill the merger.

Antitrust laws deny companies the right to organize their business as they see fit. That’s an injustice we need to identify and condemn, undistracted by the mythical dangers of private mergers.

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute

The quickest way to crush a development, water, engineering, or other similar project is to find an endangered species there.

It doesn’t matter if you are rebuilding your home after a devastating hurricane, breaking ground for a new hospital, using desert land for outdoor recreation, or diverting river water to help alleviate the effects of a drought. If a sand crab, flower-loving fly, fringe-toed lizard, or sheepnose mussel is found nearby, the “keep out” signs go up and human activity is stopped in its tracks.

In Atlanta in 2007, in the midst of a devastating drought, billions of gallons of much needed lake water were deemed off limits. That water was instead sent downstream, for the sake of a particular species of mussel. In another case, concern over the heelsplitter mussel led to a moratorium on river water extraction in Mint Hill, North Carolina, leaving residents without access to clean water for eleven years.

These examples aren’t anomalies. They are an expression of the ideas animating the environmentalist movement: That it is wrong for human beings to impact nature, especially if our actions affect endangered species. They consistently prioritize other species above human beings, regardless of what that means for human welfare.

The goal is not to protect nature for human enjoyment — it’s to protect nature from human beings. Forget about enjoying canoeing, swimming or contemplating a tranquil creek. Environmentalists regularly use the Endangered Species Act to limit or ban such activities. Nature, on their view, is intrinsically valuable and even in the process of enjoying it, human beings inevitably stamp their “footprint” on it.

But limiting human beings’ impact on nature harms human beings. Extracting water, for example, is just one of the many feats of engineering that make our lives happier, longer and better. We no longer have to worry about living near to a supply of freshwater such as a river or a lake, because we have the technology to bring that water to where people need it. But if the environmentalist idea that it is wrong to impact nature had been in vogue a century ago, cities such as Phoenix and Las Vegas would have never become anything more than desert outposts.

Human life and happiness requires that we use and transform the world around us. Sometimes that means building flood walls, dams, or extracting water for use in urban areas, other times it means maintaining waterways to enjoy the wildlife naturally found there. But it certainly doesn’t mean sacrificing people to mollusks.

About The Author

Amanda Maxham

Former junior fellow and later a research associate (2012-2018), Ayn Rand Institute

Apple Inc., #1 on Fortune magazine’s list of the World’s Most Admired Companies, is currently on trial in Manhattan federal court, defending against antitrust charges. Question: How many other businesses in Fortune’s top ten have been recently subjected to some kind of antitrust enforcement? Answer: all of them.

Surely, some would say, if the nation’s top companies are getting caught in antitrust’s grip with clockwork regularity, they must be doing something wrong. But what if they’re not? What if America’s best companies are being targeted not for bad behavior but for good? What if they’re being punished not for their sins but for their virtues? It’s hard to imagine, but consider the evidence.

Here are key facts underlying the Department of Justice case against Apple: In late 2009, Steve Jobs was ready to launch the new iPad and wanted to offer an e-bookstore, similar to Apple’s highly successful iTunes and App Stores. Jobs was confident that readers would value the iPad’s easy and colorful interface enough to pay $13 – $15 per e-book, price levels that the nation’s largest publishers eagerly sought. Five of those publishers agreed to let Apple retail their products at those preferred prices.

Under the Sherman Act of 1890, government lawyers charged Apple with acting as the “ringmaster” in a “price-fixing conspiracy” that imposed “restraint of trade.” Sounds bad, right? The terms evoke images of criminality and physical coercion. But contrary to the law’s pejorative language, Apple was simply trying to make profits through voluntary, win/win transactions with publishers and readers.

Was the economic wisdom of this strategy foreordained? Not at all. If antitrust authorities had not intervened (fining the publishers a total of $170 million and voiding their agreements), the market would have decided whether Apple’s e-book program succeeded or failed. As Jobs himself said in an email, “Heck, Amazon is selling these books at $9.99, and who knows maybe they are right and we will fail even at $12.99.”

Apple’s pursuit of growth and profits in the e-book industry deserved admiration, not legal persecution. Another “most admired” company, Google, is also known for offering products that people really like — and it, too, wears an antitrust target on its back these days.

Over the past fifteen years, Google’s legendary search engine has attracted users en masse, leaving competitors like Bing and Yahoo! in the dust. Leveraging that popularity, Google chose to display its own services (like Google Maps, Shopping, and Travel) more prominently than results for its competitors. So what? Every businessman in America understands that you paint your own company’s name on the side of your truck, not your rival’s name.

While Google’s ingenuity keeps birthing products that engage the 21st-century imagination, vague and elastic antitrust laws empower regulators, here and in Europe, to demonize Google’s business practices as “unfair” competition. By means of grinding, years-long investigations coupled with threats of massive fines, government agencies have recently forced Google to modify business practices that sought nothing but enhanced profits through voluntary transactions.

Antitrust has always worked this way. Go back to the late 1990s, when Microsoft was riding high on the phenomenal success of its Windows operating system. By adding a web browser (Internet Explorer) to every copy of Windows, Microsoft offered customers more value for the same price, leaving purchasers free to adopt competing browsers if they chose. By any rational business standard, Microsoft was pursuing a growth-oriented strategy whose success or failure should have been determined on a free market.

But under the Sherman Act, the Department of Justice had the power to charge Microsoft with “monopolization” and “tying” offenses. The very words evoke scary 19th-century images of a bug-eyed octopus gripping a far-flung economy in its tentacles. After years of litigation and unsuccessful appeals, culminating in a finding that Microsoft had violated the Sherman Act, the company lost whatever innovative edge it had and sank into doldrums from which it has yet to recover.

Precisely what are the bad acts for which America’s best companies — Apple, Google, Microsoft, and hundreds of others — are punished by antitrust laws? If you look closely, you’ll find they’re not bad acts at all. On the contrary, they belong in the same category as all the other growth-oriented, profit-driven strategies by which start-up firms survive, small firms become large, and large firms rise to new heights, flooding our economy with life-enhancing goods and services.

The scandalous truth is that antitrust laws penalize America’s best companies for their virtues, for business practices that generate growth and profit through voluntary trade. Such practices deserve legal protection, not prohibition. Antitrust stands exposed as something quite vicious: a legal regime that punishes good behavior.

About The Author

Tom Bowden

Analyst and Outreach Liaison, Ayn Rand Institute

President Obama has renewed his call for Congress to raise the minimum wage to at least $9 per hour. Advocates claim that raising the minimum wage helps low-wage workers. Opponents point out that if Congress makes it illegal to hire an employee for less than $9 per hour, there will be fewer job opportunities for those who lack skills and experience.

Most minimum-wage debates focus on these arguments — how the minimum wage affects low-wage workers. What’s rarely discussed is how it affects business people, especially start-up entrepreneurs.

Suppose a stay-at-home mom — let’s call her Susan — wants to open a bakery to make a business out of the pies and cakes that have been winning praise for as long as she can remember. To open her bakery, Susan must take enormous financial risks — paying upfront to hire and train staff, buying industrial baking equipment, decorating her store — costs that likely entail taking on a lot of debt.

She will succeed if she can make enough money to cover not only her operating costs but also her initial costs. That, however, is no cake walk as one out of two new business ventures fails in its first five years. Susan will have to work like a dog, knowing that if her business fails, she may lose her home if that’s what it takes to pay back her lenders.

One strategy Susan can take to keep her costs low is to hire some teenagers at $7.50 per hour to help work the cash register, haul supplies, and assist bakers. She prefers to hire several employees who are only looking for temporary work, because she cannot afford to commit to too many permanent employees until she has a steady customer base. And there’s no shortage of teenagers who are happy to work for a small wage for some work experience and extra spending money. For both sides, it’s a win/win trade.

Raising the minimum wage to $9 per hour would make Susan’s business strategy illegal.

Trying to launch a new business is difficult enough without the government passing laws preventing business owners from hiring employees for wages they are willing to accept. Even raising the hourly minimum wage by $1.75 could cost an entrepreneur like Susan thousands of dollars per month.

Susan is fictional but her experience is typical. Holly Wade, a senior policy analyst at the National Federation of Independent Business — a group representing 350,000 entrepreneurs — opposes raising the minimum wage. “We’re hearing from our members that they want more flexibility to structure the workforce as they need to,” she says.

David Houston, who co-owns the Barney’s Beanery bar and restaurant chain in Los Angeles, explains that raising California’s minimum wage to $9.25 “would just squeeze the heck out of us” and that “it would effectively absorb about half of my profits.”

Melvin Sickler, a businessman who “went all in financially” to start his first Auntie Anne’s pretzel franchise, estimates that raising the minimum wage to $10 per hour could swallow nearly 60% of an average location’s income.

Should these businessmen cut employee hours, cancel plans for growth and expansion, or absorb the blow themselves?

The debate over raising the minimum wage is in part a debate over whether entrepreneurs should be forced to shoulder even greater burdens. By not seriously considering what the minimum wage demands from such business people, we are treating them not as human beings with rights, but as pack animals that must obediently carry whatever additional weight is piled on their backs. Their judgment, their career dreams, their lives — why don’t these matter?

People would be outraged if the rights of employees were trampled with such callous indifference. Where’s the outrage over the treatment of entrepreneurs?

About The Author

Doug Altner

Doug Altner was an analyst and instructor at the Ayn Rand Institute between 2011 and 2014.

Anheuser-Busch InBev just wrapped up its controversial merger with Grupo Modelo — the parent company of Corona — despite initial opposition from the Department of Justice and then last-ditch efforts of consumer groups, rejected by the court. The merger, it was alleged, would lead to higher prices and less variety in beer. Leaving aside whether these concerns were real, there is something impacting beer prices and impeding the ability of brewers to bring new beers to market: government regulations.

Delivering better beer at lower prices isn’t easy. To continue to introduce interesting new beers, brewers like Anheuser-Busch are constantly experimenting with new tastes — Christmas beers, “strawberry lemonade” beers, etc. Bud Light Lime resulted from an initial crop of 26 experimental flavors. Brewers are constantly engineering better cans and bottles that are not only pleasant to drink from but also ensure the beer remains cold and fresh during transport. But there is one common business practice that brewers are prevented from undertaking: improving the distribution of their products.

Brewers are forbidden by law in many states from distributing their own beer because the government artificially partitions alcohol distribution into a three-tier system of brewers, distributors, and retailers. A relic from the tail end of Prohibition, this system forbids brewers from selling to retailers directly, mandating that they instead use middlemen. (There are exceptions. For instance, some states allow certain microbrewers to self-distribute provided they secure a license.)

In other industries, large companies such as Coca-Cola frequently distribute their own products to stores, allowing them to cut costs by centralizing operations like truck maintenance and routing. This also allows them to ensure that delivery schedules are planned in a manner that is most efficient for them, rather than relying on third-party shippers who may have several customers to please.

But brewers like Anheuser-Busch are prohibited from doing the same, and instead must deal with hundreds of distributors, each of which has its own priorities and procedures. In many states, it does not matter if Anheuser-Busch can cut costs by 20 percent with their own trucks; by law it has to rely on middlemen (five different ones in the St. Louis area alone).

The costs and hardships imposed by the three-tier regulations also impact small brewers. Rhonda Kallman risked everything to start her own beer company. She left a top executive position at the Boston Beer Company — the brewer of Samuel Adams — and mortgaged her house to finance her vision of introducing a caffeinated beer, which she called Moonshot. She worked hard to promote it, often spending late nights promoting her beer in local bars and visiting stores to ensure her beer had the display space she was promised.

But the government-imposed three-tier system was one significant obstacle that stood in her way. “Daily, I will get a request from a consumer that wants to buy a case or two or three,” Kallman explains in the documentary Beer Wars, “[but] I cannot get it to them. We can’t ship beer because we have to go through the three-tier system.”

In a truly free market, the main thing that a craft brewer would need to do to get his product on shelves is persuade the retailer to carry it. But under today’s government-imposed three-tier system, entrepreneurs face a giant hurdle: the requirement that they go through distributors, who may prefer to sign exclusive deals with larger brewers.

How absurd is it that in many states a microbrewer is forced to use a third-party distributor to take a few cases of beer to a convenience store down the street from his brewery?

Beer aficionados debate whether the three-tier regulations favor large brewers or small brewers. But what is essential is that they impose artificial obstacles on all brewers, big and small. Especially at a time when our sluggish economy is at the forefront of people’s minds, policymakers should be bending over backward to remove government-created obstacles that impede American businesses.

About The Author

Doug Altner

Doug Altner was an analyst and instructor at the Ayn Rand Institute between 2011 and 2014.