Paul Ryan and the “Moral Case” for Capitalism

By John Paul RollertOctober 29, 2015

Paul Ryan and the “Moral Case” for Capitalism

AN ABRASIVE MIND invites strenuous disapproval. So it is that Paul Ryan has had to disavow Ayn Rand: repeatedly, unreservedly, and, above all else, entirely. “I reject her philosophy,” he told the National Review during the 2012 campaign. “It’s an atheist philosophy. It reduces human interactions down to mere contracts and it is antithetical to my worldview. If somebody is going to try to paste a person’s view on epistemology to me, then give me Thomas Aquinas. Don’t give me Ayn Rand.”

This is a little misleading. Critics hadn’t tried to “paste” Paul Ryan to Ayn Rand’s epistemology. Rather they had seized on his remarks at a 2005 “Celebration of Ayn Rand” event where the congressman said that if he had to “credit one thinker” for his decision to enter public service, it would be the author of Atlas Shrugged, a work he described as a reliable Christmas gift and “required reading” for his interns and staff. In the lead-up to the 2012 election, these revelations garnered a great deal of attention, in no small part because they made the vice presidential nominee’s repudiation of Rand seem awfully convenient. However, they alone tell us nothing about the elements of her philosophy that once spoke to the Wisconsin Republican, much less how they might have shaped his approach to public policy.

To answer these questions, you have to linger over an assertion that has always passed unnoticed, though it is, by far, the most telling moment in his 2005 remarks. Namely, that as far as Paul Ryan is concerned — or at least as far as he was concerned long before he became Speaker of the House — “you can’t find another thinker or writer who did a better job of describing and laying out the moral case for capitalism than Ayn Rand.”


An Ethics of Achievement and the Case Against the “Common Good”

Rand is best known for her hyper-individualism, the radical quality of which is never more apparent than in her attempt to disqualify what has always been the primary argument in the “moral case” for capitalism: the contention that free markets best ensure the common good. As Adam Smith observed in The Wealth of Nations, “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” The system of capitalism accordingly found its strongest defense in the fate of its most vulnerable participants. They were far better off, Smith contended, than the laboring poor in those societies whose resources were centrally organized, a claim Rand didn’t dispute so much as deem entirely irrelevant. “The moral justification of capitalism does not lie in the altruist claim that it represents the best way to achieve ‘the common good,’” she says in “What Is Capitalism?,” an essay that appeared nearly a decade after the publication of Atlas Shrugged. She concedes that capitalism best provides for the common good (“if that catch-phrase has any meaning”), but much like black smoke belched from a factory, this is “merely a secondary consequence.” It has no moral significance, unless a dubious one.

Instead of focusing on the larger community, Rand says we should look to the individual: “The moral justification for capitalism lies in the fact that it is the only system consonant with man’s rational nature, that it protects man’s survival qua man, and that its ruling principle is justice.”

This requires some unpacking. At first blush, Rand appears to be invoking what has typically been the second argument in the moral case for capitalism: that as capitalism thrives on free exchange, it serves as a check against coercion by the state and so underwrites a free society. An unsparing critic of communism, Rand fancied herself a fierce defender of liberty, but her commitment had little to do with traditional notions about the inherent dignity of the individual. Instead, she championed what we might call an ethics of achievement, one in which we are valued not for who we are (either uniquely or essentially) but for what we can do. Individual liberty is a requirement for such a system — how else might the competition proceed? — but its moral significance is a matter of proof, of demonstration by “man at his best.”

Such men (and in her fiction they are almost always men) are the heroes of Rand’s world. Solemn artists and steely-eyed inventors with the occasional industrialist thrown in, these supermen are characterized by preternatural intelligence, incorrigible solipsism, and a capacity for grandiose accomplishment too often hindered by lesser humans. Rand dubs them “creators,” a word that, by design, hints at the cosmological displacement of a heavenly counterpart. In the voice of Atlas Shrugged’s John Galt, she celebrates their mundane creations — “a factory, a highway or a bridge” — as each being a “monument to human morality,” testaments not to man’s inherent majesty but to the greatness that few men alone might achieve.

This is Rand’s ethics of achievement, and her “moral case” for capitalism is premised on it. As she describes it, capitalism is the only economic system that assumes a proving ground for creators (a free society) as well as the appropriate reward for those who create (hence “its ruling principle is justice”). No doubt, this is a strange, even deviant justification for capitalism, but even then does it necessarily exclude one that prizes free markets for being productive of the common good? Rand thought so. By advocating what she called a “tribal premise” for capitalism, figures like Adam Smith didn’t merely miss the point. They tended to destabilize the system and blunt its moral purpose.

By way of illustration, consider the ethics of a soccer match. For Rand, to award both teams the same trophy, regardless of the final score, is to fundamentally misunderstand the significance of a sporting event, which is to separate winners from losers. When we do so, we not only lose sight of the real goal of a game (winning), we commit an injustice by rewarding the losers at the winners’ expense. The same may be said when we take the reward of capitalism’s “winners” — the almighty dollar, “our symbol” Galt calls it — and turn it over to the “losers.” We commit a gross injustice, subverting an ethics of achievement by substituting a perverse distributive logic for the only one Rand recognizes: To each according to his ability — period.

As such, to praise capitalism for its broader effect on society is not only to misunderstand its real moral achievement — that the system best rewards individual greatness — it may lead one to believe that she should err in favor of the common good when the interests of society and those of the individual are at odds. The political temptations are obvious (Rand did escape Soviet Russia), but her individualism is so extreme that she scoffs at even a basic duty of care. As another of her avatars, Howard Roark, announces in The Fountainhead, “The only good which men can do to one another and the only statement of their proper relationship is — Hands off!”


The Culture of Dependency and the “Cult of Zero-Worship”

If you predicate the “moral case” for capitalism on an ethics of achievement, you will likely assume that the decisive force shaping human relations (and especially the subset of them that translates into politics) is the tension between “winners” and “losers.” This is the conceit of Atlas Shrugged, where the much put-upon creators finally go on strike, leaving the hapless masses to fend for themselves. It is also the conceit of Mitt Romney’s infamous remarks to a gathering of well-heeled donors about the “47 percent.” This is the percentage of Americans who don’t pay federal income taxes, and according to Romney, their tax status should have assured Republicans in the 2012 election that they would “vote for the president no matter what.” His explanation for why this might be so, in addition to showing him a poor student of party demographics and electoral history, is a crude précis of what, for Rand, is the social pathology of capitalism’s loser class. The 47 percent will invariably vote for President Obama, Romney explained, because they are the people “who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it.” In short, these are people “who are dependent upon government,” and as such, “I’ll never convince them that they should take personal responsibility and care for their lives.”

Whether or not he actually believes it — Romney subsequently distanced himself from these remarks — his formulation captures what, for Rand, is the bugbear of human development and the bitter fruit of competitive capitalism: the culture of dependency. On her telling, the masses are fundamentally dependent on creators, but they hate themselves for their dependency. Their self-loathing, or rather how they project it, propels a crude politics of envy. “Thousands of years ago, the first man discovered how to make fire,” Howard Roark says, epitomizing this conflict. “He was probably burned at the stake he had taught his brothers to light.”

Such ingratitude is par for the course in Rand’s world, but it is given a sinister cast by those who would make a virtue of it. This is where Christianity and Socialism enter the picture, what John Galt calls “two halves of the same dissected human.” Their false prophets are co-religionists of the common good — “collectivists” in Rand’s parlance — and they preach a gospel that stands for the very opposite of an ethics of achievement, one that establishes (in contrast to the heroics of the creator class) a “cult of zero-worship.” They seek, says Galt, “to make the concept ‘human’ mean the weakling, the fool, the rotter, the liar, the failure, the coward, the fraud, and to exile from the human race the hero, the thinker, the producer, the inventor, the strong, the purposeful, the pure.” To that end, they not only degrade and disenfranchise the creator, they make an “idol” of his antithesis: “the congenital dependent.”

If you are inclined to say Good grief, you are not alone. Passages like this helped to sever Rand from the upstart conservative movement in the late 1950s after Atlas Shrugged was first published. In his scorched-earth appraisal for the National Review that served as a forcible parting of ways, Whittaker Chambers said of such fiction — and, by implication, the philosophy underpinning it — that “everything, everybody, is either all good or all bad, without any of those intermediate shades which, in life, complicate reality and perplex the eye that seeks to probe it truly.”

Complication makes for good philosophy, but it makes for terrible politics, which favors (after Chambers) “the author [who] deals wholly in the blackest blacks and the whitest whites.” Paul Ryan also favors a limited palette. “In almost every fight we are involved in here, on Capitol Hill,” he told celebrants at the 2005 event, “it is a fight that usually comes down to one conflict: individualism vs. collectivism.” Given the significance of this distinction for Rand, Ryan’s pronouncement recalls Romney’s conclusion about the 47 percent, which is remarkable not because it dispenses with nuance (he is a politician after all) but because it does so in favor of an incredible formulation about the perverse motives of a very large group of people. Whereas Romney contended that half of the country wouldn’t support Republicans because of their “dependency upon government,” Ryan has accused his Democratic colleagues of making an ideal of this condition. “They are leading us to a social welfare state,” he told Glenn Beck in 2010, a “cradle-to-grave society where they create a culture of dependency on the government, not on oneself.”

For those who only know Ryan from his routine appearances on television, statements like this can seem somewhat surprising. He seems so different in tone from his “no compromise” colleagues that his congeniality is often confused for accommodation. But Ryan is neither a centrist nor a squish — otherwise he would never have gained the confidence of a fractured caucus to become Speaker — and there is no better evidence of this than in how he frames and prioritizes the problem of dependency.

Start with the framing. It is one thing to argue that the misguided policies of liberal politicians will foster dependency — this has been the cri de coeur of the conservative right since the New Deal — but it is another to contend, as Ryan did with Beck, that a “culture of dependency on the government” is “meant to replace the American ideal.” Or to suggest, as he did in a 2010 speech, that the goal of Congressional Democrats is to create a “centralized bureaucracy” that “will provide for everyone’s needs, care for everyone’s heath, direct everyone’s career, arrange everyone’s important private affairs, and work for everyone’s pleasure,” adding the ominous note, the “only hitch is, government must be the sole supplier of everyone’s happiness … the shepherd over this flock of sheep.”

If you frame the problem of dependency as an existential threat perpetrated by one of the nation’s two primary political parties, it shouldn’t be surprising if you treat it as a top priority for public policy, which is exactly what it has always been for Paul Ryan. “Now America is drawing toward a ‘tipping point’ for this culture of dependency,” he wrote in his January 2010 budget proposal, Roadmap for America’s Future. “It is a line that, once crossed, precludes any likelihood of turning back.” Forget the risible determinism. To put this statement in perspective, the same month that Ryan released his Roadmap, the unemployment rate finally fell back below 10 percent after hitting a 26-year high of 10.2 percent the previous November. A few months later, in April 2010, 44 percent of job-seekers would qualify for the wretched distinction of “long-term unemployment,” meaning they had been fruitlessly looking for work for at least 27 weeks.

And yet, amid all this human misery, on page three of the Roadmap, Ryan describes the most pressing problem facing the nation as a collapse of “national character”:

Until recently, Americans were known and admired everywhere for their hopeful determination to assume responsibility for the quality of their own lives; to rely on their own work and initiative; and to improve opportunities for their children to prosper in the future. But over time, Americans have been lured into viewing government — more than themselves, their families, their communities, their faith — as their main source of support; they have been drawn toward depending on the public sector for growing shares of their material and personal well-being.

If any one among the nearly 15 million people looking for work at the time read this selection, perhaps sitting in another waiting room to interview for another job he wouldn’t get, did he agree with Ryan’s formulation? Did he see his reflection and blink?


Job Creators and the Visible Hand of Capitalism

Paul Ryan is well aware that his language can seem stark, his vision bracing, and his sense of urgency more naturally suited to defusing a car bomb than cutting a deficit deal. To his detractors, these traits can make Ryan seem something like the Chicken Little of contemporary politics — whether it is debt, dependency, or national decline, the sky is always falling — but Ryan sees himself as a teller of truths, hard truths, a self-conception he shares with Ayn Rand. “My personal life is a postscript to my novels,” she declares in the afterword to Atlas Shrugged, “it consists of the sentence: ‘And I mean it.’” 

Doubtless she meant what she said about the “cult of zero-worship” and the creeds, secular and spiritual, supporting it: “The purpose of man’s life, say both, is to become an abject zombie who serves a purpose he does not know, for reasons he is not to question.” Yet Atlas Shrugged is not Dawn of the Dead. The zombies of dependency or, to use her favorite epithet, the “moochers” and “parasites,” are not the stars of the show, and they certainly aren’t celebrated. On the contrary, the failure of society to endure in the absence of the creators serves an allegorical purpose: it makes plain how capitalism works by celebrating an essential who. “You decided to call it unfair that we, who had dragged you out of your hovels and provided you with modern apartments, with radios, movies and cars, should own our palaces and yachts,” John Galt announces to a crumbling country on behalf of the striking creators. “Our answer to that, was: ‘May you be damned!’ Our answer came true. You are.”

By going on strike and “stopping the motor of the world,” Galt and his fellow creators provide an object lesson to the dependent class, one that wasn’t lost on Rand’s admirers. “You have the courage to tell the masses what no politician told them,” Ludwig von Mises wrote Rand, “you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you.” Mises was the founder of the Austrian School of Economics, the heterodox sect of hyper laissez-faire that Ron Paul has popularized and Paul Ryan has praised for shaping his thinking. Murray Rothbard, the man who assumed Mises’s mantle after his death, seconded his mentor in more abject terms. “Atlas Shrugged is not merely the greatest novel ever written,” he told Rand, “it is one of the very greatest books ever written, fiction or nonfiction.”

The “moral case” for capitalism need not tell us how capitalism works, nor does it need to locate an essential who, but that’s exactly what Atlas Shrugged did for individuals like Mises and Rothbard. Contrary to Adam Smith’s vision of capitalism, which assumes a shared instinct for sociable exchange that sees, by “the assistance and co-operation of many thousands,” the creation of a complex, decentralized commercial system, Rand is a spokeswoman for what we might call the visible hand of capitalism. She ridicules the idea that an egalitarian force like instinct might play a central role in the system and instead locates the driving force of economic development in the mind — or, more to the point, in the mental efforts of a tiny elite. They create the modern world; the rest of us are just along for the ride.

Rand’s ethics of achievement grafts nicely on her vision of capitalism, for wealth inequality is nothing more than material consequence of what Galt calls “the ‘competition’ between the strong and the weak of the intellect.” Of course, the psychological premise of Atlas Shrugged is that the “weak of the intellect” don’t much like the results of this contest, but as Rand makes clear, they should be grateful just for being invited:

In proportion to the mental energy he spent, the man who creates a new invention receives but a small percentage of his value in terms of material payment, no matter what fortune he makes, no matter what millions he earns. But the man who works as a janitor in the factory producing that invention, receives an enormous payment in proportion to the mental effort that his job requires of him. And the same is true of all men between, on all levels of ambition and ability. 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 their brains.

In other words, to the victors can’t go spoils enough. By the grace of them go the rest of us.

As a matter of public policy, the visible hand of capitalism announces itself in the insistence on the “job creators.” The phrase has been a rallying cry for supply-side conservatives for decades, but with the Great Recession, it grew into a drumbeat. The expression succeeds by tautological insinuation — How do we create jobs? Call the job creators! — but the battle over the Bush tax cuts in President Obama’s first term reaffirmed that neither the intention nor the success of actually creating jobs was essential to being a member of this class. “You don’t expect that they would try to make the middle class tax cuts permanent, but not tax cuts or raising taxes for the wealthy?” Sean Hannity asked Paul Ryan two weeks after the 2010 midterm elections. (He was referring to the aim of Congressional Democrats to renew the Bush tax cuts for those making under $250,000, while letting the rates expire for income above that amount.) “That could,” Ryan affirmed, omitting the word “happen” in his eagerness to correct Hannity. “And let’s not say ‘the wealthy,’ these are the job creators.”

To those who might object to this rhetorical sleight of hand, Ryan argued that, since a significant proportion of Americans work for what is known as “flow-through” businesses (defined as companies with owners who file as individuals for tax purposes), allowing the top tax rates to expire would hit small business owners who are trying to create jobs. In the vice presidential debate, he cited a report by Ernst & Young claiming that 54 percent of Americans are employed by such companies. Vice President Biden countered that “97 percent of small businesses fall under the $250,000 threshold,” and he went on to note that Ryan’s figure includes many businesses that don’t share much in common with traditional mom-and-pop shops. These included the 17 percent of “flow-through” companies and 500 or more employees, as well as hedge funds and large law firms. Until they went public in 1999, Goldman Sachs even qualified.

But to spend too much time on these statistics, and the dueling definitions they intend, is to lose sight of the more important point. Namely, that the phrase “job creators” affirms a vision of capitalism where a small group of people are deemed primarily responsible for the nation’s financial success. The fact that Paul Ryan extends this definition to include people who, as a matter of conscious purpose, have neither the interest nor the aim of creating jobs only makes the visible hand seem a little more crude. It trades an “aristocracy of talents,” the worldview of Atlas Shrugged according to Whittaker Chambers, for a politics of plutocracy. It conflates entirely the spur of development with the signature of wealth.

If you combine this vision of capitalism with a belief in the abiding antagonism between creators and dependents, it tends to have an effect on public policy that is stultifying and slightly paranoid. Consider the remarkable uproar around “you didn’t build that,” the line that was part of an extended riff by President Obama during a stop in the 2012 campaign. As the definite article in the sentence was endlessly disputed, it’s worth seeing in context what “that” was all about:

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet. The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.

In context, “that” clearly refers to the cosmos of goods and services provided to us by others that are necessary to, if not sufficient for, our individual success. But this is not what Paul Ryan heard. “It’s an explanation,” he told voters in a subsequent campaign event near the site of the original remarks. “It tells us why our economy is not growing like it should. It tells us the mindset that he’s using to lead our government. It tells us that he believes in a government-centered society and a government-driven economy. And that doesn’t work.”

To his credit, Ryan did not contend, as others did, that President Obama said the owner of a business does not actually build “that” business. Instead, he suggested that a vision of how the economy works that draws attention to those people not directly engaged in starting a business (a group that comprises the overwhelming majority of Americans) as well as the goods and services that, broadly speaking, comprise the nation’s infrastructure in addition to business owners and entrepreneurs is somehow indicative of a worldview that denigrates and dismisses individual accomplishment and underscores a “re-election strategy” that aims “to divide Americans, to foster envy and resentment, and to push programs that entrench dependency and grow government.”

These words come from Ryan’s 2012 speech to the annual Conservative Political Action Conference, better known as CPAC. It portrayed the president and members of his party as driven by class resentment (“collectivist, class warfare–breathing demagogues” as he described them in his “Celebration of Ayn Rand” remarks) even while it affirmed that the essential organizing force of politics is the tension between two classes, whether they be termed “creators” and “parasites” or, to use terms Ryan preferred throughout the presidential election, “makers” and “takers.” Such a view not only sanctions the kind of class-based triumphalism that Marx commended (albeit in favor of a different class), it prefers a vision of capitalism with little in the way of moral or mechanical complexity as well as the conviction that those who contend otherwise are either conspiratorially sinister or else hopelessly stupid.

The rhetoric of extreme dependency presumes the second trait (how else to describe people who are seen as so obtuse toward their own best interests?), but as for the first, consider Ryan’s keynote address to CPAC in February of 2009, five months after the start of the financial crisis and less than six weeks after President Obama took office:

Democrats want to use this crisis to move America toward the sort of Europeanized economy that runs counter to the freedom and entrepreneurial sprit of our people: To usher in an era of greater government control and micro-management of our economy.

It’s an audacious scheme: Set off a series of regulatory blunders and congressional meddling, blame the free market for the financial crisis that follows — then use this excuse to impose a more intrusive state. Sounds like something right out of an Ayn Rand novel.

What can one say? Indeed.


A Questionable Case

Ayn Rand relished the role of philosophical provocateur, and embracing her “moral case” for capitalism presents a familiar problem for those who gravitate toward authors distinguished more for rebellious formulations than revolutionary ideas. Indeed, notwithstanding her protests to the contrary, Rand’s ideas are not entirely new. A concern for state-inspired dependency may be found in the writings of Alexis de Tocqueville and John Stuart Mill. Destutt de Tracy and Joseph Schumpeter supply arguments that support the visible hand of capitalism. And there is no end to the list of people who identify individual productivity with moral exceptionalism: John Locke, Benjamin Franklin, Herbert Spencer, Andrew Carnegie. In all of these authors, there is the makings of Rand’s “moral case” for capitalism. What there is not is the same sense of ideological certainty and moral absolutism that invigorates one’s beliefs and isolates one’s enemies. This is what makes the experience of reading Atlas Shrugged so exhilarating. It is no different from feelings others have when reading Che’s Motorcycle Diaries.

Near the end of the first of these books, John Galt says, “A country’s political system is based on its code of morality.” Rand’s “code” reserves endless awards for the winners of life’s race, and regards the losers, a rather large group that includes just about everyone, with social indifference, moral antipathy, and deep political distrust. To the degree that it also extols a vision of capitalism that sees “job creators and entrepreneurs on one side and parasites on the other,” Scott Galupo of The American Conservative has observed, “there is no account of the vast gray expanse of janitors, waitresses, hotel front-desk clerks, nurses, highway maintenance workers, airport baggage handlers, and taxi drivers.” He asks, “They work hard, but at the end of the day, what can they be said to have ‘built’?”

A philosophy that blithely replies Nothing, nothing at all is one that the new House Speaker is right to disavow. As is the politics it commends.


John Paul Rollert is a Lecturer at the University of Chicago Harris School of Public Policy and the author of a recent paper on President Obama’s “Empathy Standard” for the Yale Law Journal Online. You can follow him @jprollert.

LARB Contributor

John Paul Rollert teaches classes in leadership, ethics, and politics at Harvard and The University of Chicago. His work has been featured in Harper’s, The Atlantic, the New Republic, the Paris Review, and The New York Times. He also writes the “In-House Ethicist,” a featured column for the Chicago Booth Review.


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