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Apple vs. GM: Ayn Rand knew the difference. Do you?

Apple acts like a producer. GM acts like a looter. It’s a key distinction that Ayn Rand laid out in ‘Atlas Shrugged.’

By Don Watkins and Yaron Brook / March 2, 2010


The House Ways and Means Committee is now reviewing President Obama’s “Financial Crisis Responsibility Fee,” a bank tax that will fall on some institutions that never asked for money from the Troubled Asset Relief Program, never took TARP money, or already paid back TARP money. In promoting the measure, supporters have been invoking widespread anger over bank bailouts, brazenly ignoring the fact that this punitive tax would punish businesses that eagerly fed at the public trough in the wake of the crisis as well as those that did not.

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Since the advent of capitalism, businessmen have been denounced for the corrupt actions of a few political profiteers. To help understand that there is a distinction, consider two characters in Ayn Rand’s 1957 novel “Atlas Shrugged.” In the book, Rand describes two opposite kinds of businessmen – those she calls the “producers” and those she calls the “looters.”

The producers, such as Hank Rearden, inventor of a new metal stronger and cheaper than steel, work tirelessly to create products that improve human life. The looters are basically pseudobusinessmen, like the incompetent steel executive Orren Boyle, who get unearned riches by getting special favors from politicians. Their business isn’t business, but political pull.

It is the producers who make life possible: who keep grocery shelves stocked; who discover new lifesaving drugs; who make computers faster, buildings taller, and airplanes safer.

The looters, on the other hand, leech off the wealth created by producers.

The novel rejects the widespread notion that both the producer Reardens and the looter Boyles are fundamentally united by a desire for profit. Only the Reardens, she argues, deserve to be called profit-seekers, because they earn rewards through productive effort; the Boyles are antieffort parasites seeking unearned loot.

But it’s not only unearned wealth the looters want. In “Atlas Shrugged,” Boyle uses his influence to throttle Rearden with progressively harsher government controls and regulations, because he can’t survive except by hindering the competition.

Producers, however, don’t need special favors, only freedom: the freedom to produce, to trade voluntarily, and, if they succeed, to keep the profits. As a country becomes less free, it creates and unleashes more and more Boyles, who succeed at the expense of the Reardens.

America, today, is still a land of producers. Our country is full of industrialists, managers, and financiers who display the ruthlessly high standards, exceptional intelligence, and extraordinary work ethic that are characteristic of a producer.