To a certain type of business person, “Atlas Shrugged,” Ayn Rand’s behemoth novel about the mysterious John Galt, is something of a holy text.
PayPal co-founder and early Facebook investor Peter Thiel counts it as inspiration. Lululemon founder Chip Wilson is also a big fan; the company got significant flack for printing the phrase “Who is John Galt” on its bags. Uber CEO Travis Kalanick is a Rand devotee as well, at one point using the cover of “The Fountainhead” as his Twitter avatar.
Given their success, these businessmen must rely on the book as more of a personal narrative than for many of their business decisions. Because, for a novel that’s at least partially about business, “Atlas Shrugged” offers some really bad business advice. There are good points, like the idea that successful businesses have to pick the best and most efficient partners over friends and that competition is usually a good thing, but there are lots of very bad ones.
We’ve picked out a few of the most famous quotes, passages, and ideas that could lead would-be devotees astray.
Favouring the gold standard
“Atlas Shrugged” is particularly popular among people, including some politicians, who object to the way monetary policy is currently conducted and favour a return to the gold standard or “hard money.”
They often point to one passage in particular — copper titan Francisco D’Anconia’s famous “money” speech. Here’s one part of the 23-paragraph monologue:
“Whenever destroyers appear among men, they start by destroying money, for money is men’s protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs; upon the virtue of the victims. Watch for the day when it becomes marked: ‘Account overdrawn.'”
The idea that the gold standard is more stable or objective is wrong. It’s actually quite unstable and was definitely bad for business. The current actions of the Federal Reserve, many of them only possible in the absence of the gold standard, helped save the country from economic collapse and support the economy as it continues to grow.
Ben Bernanke gives a more detailed debunking of the gold standard, which is worth a look, here.
Advocating a return to hard money is terrible business advice, because it’s not only unproductive and wildly unlikely but would also bring back the huge fluctuations in inflation that modern monetary policy has managed to largely end in the Western world.
Believing people who succeed are inherently superior, and often victims
The book portrays people who own and succeed in a business as being some combination of fortunate and brilliant, and above the rest. But having made a lot of money doesn’t make you inherently superior to other people. That’s an attitude that can very easily lose you friends, customers, and the goodwill of your employees.
Work hard, enjoy what you earn, and if people criticise you for being greedy, prove them wrong or bear it with grace. But don’t make pronouncements about your superiority and the inferiority of anybody who hasn’t made it to the top. Helping people achieve instead of looking down on them is true leadership.
A conversation between the book’s protagonist, Dagny Taggart, and Dr. Robert Stadler illustrates the attitude Rand holds up as a good thing:
“Miss Taggart, do you know the hallmark of the second-rater? It’s resentment of another man’s achievement. Those touchy mediocrities who sit trembling lest someone’s work prove greater than their own — they have no inkling of the loneliness that comes when you reach the top. The loneliness for an equal — for a mind to respect and an achievement to admire. They bare their teeth at you from out of their rat holes, thinking that you take pleasure in letting your brilliance dim them — while you’d give a year of your life to see a flicker of talent anywhere among them. They envy achievement, and their dream of greatness is a world where all men have become their acknowledged inferiors. They don’t know that that dream is the infallible proof of mediocrity, because that sort of world is what the man of achievement would not be able to bear.”
Any leader with the mindset described there is probably going to stay pretty lonely.
Suggesting people can and should be motivated only by money or trade
Rand’s portrait of an ideal society of sorts is one where the word “give” is banned.
The book espouses the idea that people can only be motivated when they give something in return for something else, usually labour or money. That’s an idea that research and reality frequently prove wrong. Many people are motivated by money, but many others are better motivated by doing something they think is worthwhile or by helping people.
Employees and customers are going to be of both types, and any business owner who can’t understand or acknowledge that is going to end up losing out on talent.
Viewing customers with contempt
At one point, copper titan Francisco D’Anconia asks steel magnate Hank Reardon if he wants to see a railroad he helped build used by his “intellectual equals,” or even the less intelligent people who at least work hard. Reardon is fine with that.
Then he asks Reardon if he wants to see it used “by whining rotters who never rouse themselves to any effort, who do not possess the ability of a filing clerk, but demand the income of a company president, who drift from failure to failure and expect you to pay their bills, who hold their wishing as an equivalent of your work and their need as a higher claim to reward than your effort, who demand that you serve them …”
The passage continues for a bit, and Reardon responds: “I’d blast that rail first.”
The “whining” person D’Anconia describes, he says “is any man who proclaims his right to a single penny of another man’s effort.”
Obviously, that’s dramatized. But it reflects an idea that anyone who takes assistance is somehow contemptible and is someone people in business should strenuously avoid.
Viewing the government as a pure antagonist
Government, as portrayed in “Atlas Shrugged,” is a caricature, existing pretty much exclusively to demonize and take from more successful people.
But the foundation of any business’ success is infrastructure, property laws, and particularly intellectual property laws.
Government provides all of that and a whole lot more. Businesspeople might be irritated by some of what government does, but they’d be a lot worse off without it.
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