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30 May 2011

Ayn Rand and the "Californian Ideology" as Proximate Causes of U.S. Economic Decline

Adam Curtis' documentary,All Watched Over by Machines of Loving Grace (2011).



 

Overview

Ayn Rand, a Jewess born in Russia, got into Hollywood screenwriting through Jewish connections. After being required to write a screenplay for a story in which she hated all the characters, she wrote her novel The Fountainhead, which was on a similar theme as the screenplay but espoused pursuit of self-interest. It became a bestseller.

In her next novel, Atlas Shrugged, Ayn Rand attacked altruism. The talented and creative people go on strike and the USA collapses. After the collapse the creative people return to build a society based on “the virtue of selfishness.”

The extreme individualist ideology that she espoused directly conflicted with mainstream social thinking since the Great Depression, which was based on the (true) understanding that uninhibited pursuit of self-interest had been an underlying cause of the Depression. Rand was propagandizing for that piece of acquired wisdom to be discarded.

Ayn Rand’s circle considered themselves to be promoting a revolution toward “a totally free society.”

Enter the idolators of technology. Silicon Valley entrepreneurs of the 1980s were heavily influenced by Ayn Rand. The Californian Ideology said that computers would enable everyone to become a Randian hero. Computers would allow the world to become more free, ordered through individual choices, with less need of government to maintain order, including less need of economic regulation. Extreme individualism and antipathy toward government translate into globalism and free trade.

Allan Greenspan was a member of Ayn Rand’s circle. An economic boom started during the Clinton administration, after Allan Greenspan persuaded Clinton to cut taxes. It was believed that the boom could go on forever because of the controlling factor of computers, keeping everybody well informed and preventing anything from going too far as had occurred prior to the Great Depression. This was called “the new economy.”

Greenspan worried, however, because he noticed that profits were increasing while there was no increase in productivity. He warned in 1996 that the market was overvalued, but then changed his mind under pressure, deciding that computers were somehow contributing to productivity in ways that he could not detect.

The documentary points out Ayn Rand’s inability to live in a purely rational manner, while convincing herself that everything that she did was rational. Similarly, despite the pervasive implementation of new technology, human nature remained the same.

By 1997 the U.S. Government was dominated by global free-trade thinkers. Southeast Asian nations were pressured to open their economies to foreign investment. Joseph Stiglitz of the Council of Economic Advisors was worried about this. He says that it was only in the interest of a very small group of people to do this. Secretary of the Treasury Robert Rubin blocked the CEA’s attempt to warn the president. Stiglitz believed that Rubin was working for the finance markets.

Overly optimistic investment in Thailand and South Korea led to economic crisis in those countries. The IMF offered loans to stabilize their economies, under the condition that the governments eliminate economic barriers in those  countries. Indonesia also was pressured to make this agreement in 1998. What happened was that the IMF bailout money was used to allow Western investors to withdraw their investments: then the economies collapsed. Then U.S. taxpayers had to bail out the IMF.

Robert Rubin was making these decisions while Bill Clinton was tied up with the Monica Lewinsky scandal. Power over U.S. foreign policy had been transferred in effect from the elected President of the United States to financiers. (This could last so long as the president is merely an idiotic or corrupt frontman willing to acquiesce in plutocratic predations.)

The attack on the World Trade Center was an attack on a symbol of the Ayn Rand ideology. This economic shock exposed weaknesses in the economy: many companies like Enron had been falsifying profits and concealing debts. (Result of deregulation.)

Stability of the U.S. economy after the World Trade Center attacks was maintained by the Chinese Politburo. China sold cheap goods to the USA and used the profits to buy US Treasury Bonds, which in turn funded lending to bad credit risks. In 2008, when this orgy of bad lending came to a crashing end, the United States taxpayer was required to save the bankers from the consequences of their bad lending decisions just as had occurred in 1998.


U.S. society is now stuck in a way of looking at the world that is false and produces bad results. The rule of unregulated self-interest turns out to be the rule of a few super-wealthy financiers, without accountability.

17 May 2011

National-Socialism Not for Export?

Sir Oswald Mosley, leader of the British Union of Fascists, as of 1938 was referring to his worldview as national-socialism.


Occasionally some sophomore, somebody hostile to national-socialism, usually somebody wedded to liberal notions (by which I mean a so-called conservative),  will argue that national-socialist ideas have no application outside of Germany, adducing as evidence  some statement attributed to Adolf Hitler: "National-Socialism is not for export." Ipse dixit!

Isn't it interesting how these people who are basically hostile to our worldview, suddenly, when it suits them, treat Adolf Hitler as a man whose every casual word must be taken as an inviolable commandment? The assumption seems to be that there is no general idea, no substance in national-socialism, except to copy Adolf Hitler on every point.

Let us examine, however, what this statement, in its original context, must have meant.

In 1934 and 1935 Dr. Joseph Goebbels declared that National-Socialism was not for export, as part of an attempt to maintain positive relations with foreign governments, including that of the United States, that were concerned about the influence of National-Socialist Germany on their ethnic-German populations. The dictum, "National-Socialism is not for export," was in the first place simply a piece of diplomacy to avoid conflict with foreign governments.

In 1942 when Hitler himself made essentially the same statement in the context of a private conversation, he gave an additional motive behind the position that would have been impolitic to state publicly:

I am firmly opposed to any attempt to export National-Socialism. If other countries are determined to preserve their democratic systems and thus rush to their ruin, so much the better for us. And all the more so, because during this same period, thanks to National Socialism, we shall be transforming ourselves, slowly but surely, into the most solid popular community that it is possible to imagine. [Hitler's Table Talk, entry for 20 May 1942]

Hitler was not saying that other nations could not apply national-socialism: on the contrary, the assumption was that neighboring European states, having adopted national-socialism, would become strong. Hitler was saying that it was simply not in Germany's interest to encourage nations that might eventually come into conflict with her to adopt national-socialism.

At the same time, however, Hitler did not say that Germany should attempt to stifle the development of national-socialism anywhere, only that Germany should not exert herself to bring about such a development. Let the other nations keep their liberal system if that's what they want.

As with many things, Hitler had not been entirely consistent in the application of this principle.

Where it was a question of a nation's becoming strong and nationalist or aligning with Germany's enemies, as in the case of Spain in the 1930s, Hitler provided the necessary assistance for the ideologically kindred forces to prevail.


Also, for a few years Hitler subsidized Sir Oswald Mosley, who as of 1938 was referring to his political creed as national-socialism. At that time Hitler was hoping to avoid conflict and even to have harmonious future relations with Britain as described in Mein Kampf, with Britain ruling the seas and retaining its empire while leaving hegemony on the European continent to Germany. When the war broke out, a plan to have Mosley broadcast to Britain from a transmitter on German soil had to be scrapped.

Ultimately, whether or not to attempt to export national-socialism seems to have been determined in each case based on whether it appeared likely to help or hurt Germany's security.

The statements of Adolf Hitler and Joseph Goebbels about national-socialism being "not for export" did not mean that other nations could not apply national-socialism, only that Germany would not attempt to make the world National-Socialist the way the Soviet Union worked at making the world Communist.