Dr Smith is a professor of philosophy at the University of Texas at Austin, and is a thoughtful and charming speaker.

Full details of this event, including how to register, may be found here at the Adam Smith Institute website.

Enjoy!

The Ayn Rand Forum is delighted to announce that Dr. Yaron Brook will be speaking in January 2010 at the UK Parliament on the subject of rights. The event is free and all are welcome, but space is limited, so if you would like to attend, please email us as soon as possible on the above address to avoid disappointment on the night.

The popularity of the concept of rights in modern politics has led to a cacophony of conflicting rights claims from every corner of society. The task of politicians is said to be somehow “finding an appropriate balance” between such contradictory demands. The result is a constant tug-of-war between the right to be presumed innocent and the right to be safe from crime and terrorism; the right to freedom of speech and the right not to be harmed by the speech of others; the right to keep what you earn and the right of others to “free” health care, education and welfare; the list goes on.

The novelist-philosopher Ayn Rand (1905-1982) had a radically different view of rights. A famous and uncompromising defender of laissez-faire capitalism, Rand viewed rights in absolute terms as “moral principle[s] defining and sanctioning a man’s freedom of action in a social context”. Dr. Brook will discuss Rand’s view and some of its applications to modern political controversies. His speech will be followed by a question-and-answer session, and a drinks reception.

Dr. Yaron Brook is the President and Executive Director of the Ayn Rand Institute, the world’s premier think-tank for the study and promotion of Ayn Rand’s philosophy, Objectivism. He appears frequently on radio and television shows (including Fox News, CNN, CNBC and C-SPAN) to debate current events, and is a popular lecturer at corporations, universities, public forums, and community and professional groups. Dr. Brook is known for his radical ideas and passionate speaking style, so we expect a lively and provocative evening in these prestigious surroundings.

Step forward Daniel Hannan, the Conservative Euro-MP who catapulted to fame when a video of his passionate denunciation of the Prime Minister went viral. He recently dared to criticise the National Health Service on American TV. For this he has been branded “unpatriotic” by the Health Secretary and “eccentric” by his own party leader.

In light of what was actually said, I think the character assassination Mr Hannan endured was unjust. The spectacle of a spluttering John Prescott demanding that the Americans “reject this man” exemplified the political reaction in the UK. Since Mr Hannan is quite capable of defending himself, I want to concentrate on the subject cultivating all this brouhaha. Why does the NHS excite such extraordinary emotions in my fellow countrymen? Where did it come from? And what’s wrong with it?

The political froth notwithstanding, the failings of the NHS are manifest. It has grown into a staggering leviathan of bureaucracy. There are countless reports, articles, essays and books that will give you all the statistics, anecdotes and arguments you could possibly want (please see the links at the end of this article). I don’t want to debate figures here; plenty of misinformation is swirling around on both sides of the political divide and I see no value wading in to fight over the shifting minutiae. I’m interested in exploring the underpinning ideas.

Complaining about the NHS is almost as common as complaining about the weather. Whining about some specific personal outrage is generally acceptable, but if your criticism broadens to encompass the institution you can reasonably expect at least one member of your group to take on the aspect of beetroot. It’s as if you’ve assailed their religion. It’s even worse if a foreigner launches into a critique of our “national treasure” – doubly so if they happen to be American. The BBC has gleefully shown some carefully selected sound-bites from across the pond. They feature remarkably misinformed individuals mouthing wildly exaggerated statistics and horror stories about our NHS. I can understand the irritation this causes here in the UK.

Why do people get so upset? Most people have, at some point, either had their lives or the life of a loved one saved by the NHS. They feel an obligation; a profound debt of gratitude. The high likelihood that they would have had the same happy outcome under another kind of healthcare system is irrelevant. These are the doctors and nurses who helped them and, when you criticise the NHS, they see it as an attack on these individuals.

It is undeniable that the NHS is sustained by many thousands of extraordinarily dedicated men and women. They do an amazing job under terribly difficult circumstances. But they are not the system and, although I imagine many of them probably wouldn’t agree, it punishes the best of them. This unfair collectivisation of individuals goes some way to explaining why the electorate is so attached to the institution. But there are other reasons.

Fear is a big factor. People may be unhappy about the quality of healthcare they receive under the NHS but they’re terrified of the idea it could be taken away. They feel they’d be helpless. I’m sure that many of them believe, if they suffered an accident and didn’t have a healthy bank balance, they’d actually be left to die.

The primary reason, however, that the NHS has a death-grip on the psyche of our nation is tied to its founding beliefs. It is no coincidence that the NHS was sold to the British public during wartime. In a country conditioned by emergency measures, nationalised industries and rationing the idea of an egalitarian “free” health service, based on need not ability to pay, struck a powerful chord. No-one would be left behind; everyone would be treated the same; we were all in it together.

The wartime spirit is palpable in NHS hospitals even today. Nowhere else in 21st Century British life do you feel this atmosphere. The staff seem to be constantly fighting a losing battle. As a patient you’re a supplicant, not a customer, pathetically grateful for what you receive. You’re just one of the many faceless victims waiting to be treated. Waiting, for everything, is a matter of course. Queueing, filling in forms, being moved  by harassed looking nurses, more waiting. But you mustn’t grumble; stiff upper-lip and all that.

Today, few people remember what healthcare was like before the NHS. There’s a popular impression that we lived in a Dickensian nightmare where the poor went untreated. This is not true. The vision that Clement Attlee, William Beveridge and Aneurin Bevan sold to the electorate was a moral one. Their pamphlets, reports and speeches were notable in that they did not attack the existing quality of healthcare (other than some minor complaints about remote rural areas). Doctors and hospitals were then very well respected by the British public. No, their vision was not designed to fix a failing system but to launch a new era of centralisation, standardisation and redistribution.

The fiercest opponents of this new order were the doctors. They did not fight it on financial grounds; most of them spent a large portion of their time working for free. They were concerned that their independence, the relationship with their patients and the standard of medical care would be compromised. They were eventually cowed by a combination of threats, bribes, political manoeuvring and the electoral mandate.

It is now a well-worn bromide that the National Health Service is “the envy of the world” but long before it existed British hospitals were renowned for their high quality of service. Britain led the world in medical research. The Labour government didn’t create hundreds of efficient modern hospitals; it seized them.

Before the NHS people could pay for healthcare in a number of ways. They could use their insurance, join a friendly society, pay a regular sum to a hospital as a subscription or simply pay directly out of their savings. The few that had no insurance and couldn’t afford to pay through any other means were helped by a large and growing network of charities. Today only the wealthy can afford the high quality healthcare that private insurance provides.

The American healthcare system, which is often contrasted with ours, is usually held up as an example of the free market. This is mistaken. Healthcare in the United States is now so intertwined with the machinations of government that it is on the brink of collapse. There’s no doubt it needs reform; it’s expensive, uneven and surprisingly bureaucratic. People have very little control over their health insurance and not nearly enough choice. The few elements of the free market that remain, however, are not the problem.

In 1965 President Lyndon B. Johnson established Medicare, to provide free healthcare to the elderly, and Medicaid, to provide it to the poor. Again, the doctors opposed it and, again, they were ignored. The selling point was the indignity of having to rely on private charity and “means testing”. The government claimed it didn’t want to control the industry; it just wanted to pay the bills for the small number who were in need. Healthcare is a fundamental human right, it said. But this is a deliberate perversion of the very concept of individual rights. Healthcare is not a right. Rights, as the Founding Fathers very clearly understood, pertain to freedom of action not free benefits.

What were the consequences? Imagine what happens when a valuable resource, with practically infinite demand, is suddenly made free. Imagine how it would work with food, clothing, or computer equipment. The expenditures doubled, then doubled again, and again. America cannot afford it. Medicare has metamorphosed into a middle-class entitlement program.

The U.S. government realised they had to do something about it but, of course, would not countenance cancelling the program. Instead they imposed greater controls and bureaucracy in an attempt to limit “inefficiencies” in the system. Does this sound at all familiar?

In the NHS, as in all healthcare systems, doctors generally work long hours under great stress. They must be able to recall vast amounts of specialised knowledge. They have to remain focussed, even when tired. Their job requires them to keep up to speed with a tidal wave of technical information. They must think, clearly and scientifically. They must weigh difficult decisions and not allow themselves to be distracted. Can you imagine how much more difficult, and dangerous, their job is made if they have to balance political considerations alongside the interests of their patients?

People often assume that removing financial incentives encourages virtue and will somehow simplify the decision making process, but resources are limited and the need for medical care is infinite. If money is taken out of the equation other, less direct, constraints become necessary and the remaining incentives are twisted. Long waiting times, mushrooming administrative bureaucracy, rationing of care and lack of transparency are not simply a matter of insufficient funding; they’re inescapable components of this type of system.

Here’s an example. You come in for a check-up and your doctor notices a minor discrepancy. It’s probably nothing but to eliminate all doubt she needs to order an expensive test. If you were paying for your healthcare, or had control over your insurance, she could explain the situation candidly and leave the decision up to you. You would need to balance the small risk against the expense, or – depending on the nature of the potential problem – a change in your lifestyle. You might even shop around for a cheaper kind of test; it’s your money after all. But if your doctor is required to give you free treatment the situation changes drastically. She must now consider the fact that if she tells you the whole truth you will naturally demand the test. It doesn’t matter to you how much it costs or how tiny the risk; you’re not paying for it. Your doctor, however, has to think about the hospital targets, the other patients waiting for tests and, if you’re elderly, the effectiveness of continuing treatment considering your age.

As far as I can tell, most doctors maintain their integrity. They’re honest with their patients and zealously fight their corner against the hospital managers. But what kind of system sets up a clash between the interests of the patient and the doctor? What kind of system punishes virtue?

Many people, who would normally oppose nationalisation, are under the illusion that healthcare is a special case because it saves lives. Well, food saves lives too. It is at least as much a necessity to human life as medicine. Does it follow that we should therefore nationalise all food production and distribution? Can you imagine what would follow if it did? No, the system doesn’t work for healthcare just as it doesn’t work for any other provision of goods and services. It doesn’t work because there’s something fundamentally wrong with its assumptions.

The government can provide “free” healthcare only by forcing others to pay for it. The socialist ideal of “from each according to his ability, to each according to his need” is unjust. It is moral cannibalism. It drains the life blood from the productive and feeds it to scoundrels. It makes beggars and slaves of us all. Those who implement such a system, whether they know it or not, are forging manacles for mankind.

The NHS works today only to the extent that it is inconsistent. It is kept running by the work outsourced to private companies, the contractors, the imported skills, medicine and technology, the constantly increasing infusion of money expropriated from tax payers, the stoic patients and, above all, the heroic efforts of thousands of men and women who, quietly and conscientiously, pull out every stop to deliver the best care they possibly can. Nevertheless it’s a losing battle; no matter how much money is pumped in to it the system will fail.

There is an alternative. It doesn’t require us to copy the current American model, or to somehow turn back the clock, but it does require us to reject the Marxist doctrine of collectivism and self-sacrifice behind the idea of the NHS. I don’t pretend that the current system can be removed quickly. It cannot disappear overnight; too many are dependent upon it. But it can be gradually replaced, and with something that is so much better people will look back at what we suffered under in complete disbelief. I do not have the space here to outline the practical steps that could be taken to move towards such a goal. I may return to this subject in a future article but, in the meantime, I refer you to some of the ideas on reform articulated by the Adam Smith Institute and in Daniel Hannan’s book, The Plan: Twelve Months to Renew Britain.

There are encouraging signs that people are beginning to lose their unquestioning faith in a monolithic welfare state. If the government tried to impose something on the same scale today it would be roundly rejected. We are not children and our memories are not as short as politicians like to think. We can provide a healthcare system superior to any that exists in the world today, one that provides inexpensive, cutting-edge and prompt medical procedures for everyone. The reason the NHS cannot work in practice is because its theory is dishonest; its moral principles are wrong. It is only by identifying, repudiating and replacing these principles that we can begin to rebuild.

Further Reading

British Healthcare

• Basic care ‘lacking’ in hospitals
  BBC News
• Death hospital ‘problems persist’
  by Nick Triggle
• The NHS is not free
  by David Rawcliffe
• Patients’ fears ‘being ignored’
  BBC News
• Which health care system is the best?
  by Tim Worstall
• Who’d be a NHS whistleblower?
  Panorama
• The Welfare State We’re In
  by James Bartholomew

American Healthcare

• Moral Health Care vs. “Universal Health Care”
  by Paul Hsieh and Lin Zinser
• Health Care Is Not a Right
  by Leonard Peikoff
• The Right Vision Of Health Care
  by Yaron Brook
• The Whole Foods Alternative to ObamaCare
  by John Mackey
• Obama doesn’t have the only prescription for healthcare reform
  by Michael Tanner
• A true count of the ‘uninsured’
  by Michael Tanner
• How American Health Care Killed My Father
  by David Goldhill
• What Is the Free-Market Approach to Health Care Reform?
  Cato Institute
• A uniquely American plan for health care reform
  by Jeff Scialabba

Swedish Healthcare

• The Right to Wait
  by Carl Svanberg

We apologise for any inconvenience caused by this, and recommend that you take steps to keep yourself safe online. The most important measures you can take are running anti-virus software and keeping all your programs, particularly your operating system and web browsers, up-to-date.

Of course it is very sad that such measures are necessary: it is yet another reminder of the significant proportion of humankind which has no respect for property rights.

Their election caused outrage: mainstream politicians expressed resentment, journalists expressed disgust and liberal activists took to the streets in protest. It is clear to most that the BNP are an anti-intellectual, heavy handed and barely masked pool of racist and fascist sympathisers, similar in many ways to the National Socialist party of Germany.

Despite the obviously unjust nature of the BNP policy and ideology, the mainstream politicians, analysts and intellectuals find themselves utterly unable to defeat the ideas of the BNP. Why?

To defeat an idea, one must first prove it wrong. To prove it wrong, one must understand it. What is the nature of the BNP ideology? The BNP’s policy can be summarised as follows[1]:

• Immigration: The BNP advocates a halt to immigration, the deportation of illegal immigrants and the “voluntary resettlement” of ethnic minorities.
• Economy: The BNP campaigns for protectionist measures, such as the restriction of imported goods, the end of free trade agreements and the priority-allocation of jobs to “indigenous” people. They also advocate government support of workers’ cooperatives and worker-shareholder schemes, as well as the redistribution of the property of large corporate entities.
• Education: The BNP advocates an education delivered by the state, with an explicit aim of instilling pride and patriotism.
• Environment: The BNP advocates punishing “polluters”, and replacing “brutalist modernism” in architecture with traditional buildings.
• Foreign policy: The BNP calls for an end to what it dubs “spineless subservience” to the USA.
• Democracy: The BNP supports democratically directed policy.

From the party’s manifesto, as well as from comments from their leader and members, we can identify that their policy is based upon two distinct premises.

The first is altruism. The party seeks to impose laws forcing Britons to make sacrifices. Education is not to be for the purpose of equipping the individual to deal with life, but to make him into a lover of his brothers and his nation. The individual is not to change the environment for his own ends, but should sacrifice his pursuits for the sake of the environment itself. He is not to build the buildings most suitable to his needs, but is to build the style of building that looks best by the standards of the state. He is not to succeed in business, but must share the spoils of his efforts amongst cooperatives and unions.

He is not to buy goods from abroad, regardless of their suitability: he is to produce everything in Britain, for the good of whoever needs a job. Altruism runs rife through the manifesto and ideology of the BNP. The recurring theme is that man should not live for his own sake, but should exist to further the interests of his race and his nation.

The second premise is collectivism. Not a single BNP policy is concerned with the welfare of the individual, only with the collective. In BNP ideology, race is the source of rights – the state exists to defend not the rights of individual citizens, but to plunder on the behalf of the “indigenous” race. Wealth exists not for the benefit of those that produced it, but for the benefit of the working class as a whole.

A corollary of the collectivist premise is the BNP’s belief in the legitimacy of public opinion, as embodied by their democratic policy. An idea is right or wrong, legal or illegal, not based on its objective merits and fallacies – but instead because “the people” voted for it.

Understanding the nature of the BNP’s ideology makes it instantly clear that the mainstream politicians and intellectuals are helpless to defeat it – they share the same basic premises.

For example, no party pays greater lip service to tolerance, community cohesion, race relations and “human rights” than the Labour party. Most in the Labour party are disgusted by the election of the BNP, yet they cannot mount a convincing argument against them. The very first accusation brought to the table by Labour, and other mainstream activists alike, is that the BNP are a ‘racist’ or discriminatory organisation. This is clearly true – the BNP support different rights and privileges based on racial background, and do not let black or Asian Britons join their ranks. Yet the Labour party, with its all-women shortlists, also peddles collectivist discrimination.

Another common criticism of the BNP is that they are protectionist. Mainstream detractors will point out that protectionism is economic lunacy, that free trade agreements and globalised economies have allowed people to produce unmatched quantities of wealth. Yet the BNP can now point out the protectionist tendencies of their opponents. “British jobs for British workers” is a phrase peddled by our ruling Labour party, and most political parties and commentators would respond negatively to news of an industry outsourcing a factory or a call center abroad. “You believe in jobs for British workers:”, they will cry, “we are delivering it”. In this instance, the BNP’s position is different from the political mainstream only in the degree of consistency. The BNP would put into practice what the mainstream considers ‘good’.

The BNP’s radical economic policy shares the collectivist premises of the British mainstream left. The Labour party claims to be the champion of the working class: their traditional support of trade unions, socialised industries and wealth redistribution are the concrete manifestations of this goal. Yet it is now the BNP who are proposing new waves of nationalisation, powerful trade unions, workers cooperatives and the redistribution of corporate property. They are again consistently practising the policy of their mainstream opponents.

Finally, and perhaps the most potent premise of all, the BNP agree with the mainstream that democracy is equal to justice. A government is good if it is “democratically elected”, say the mainstream. A dictator in the Middle East is said to have “democratic legitimacy”, and our domestic government is right because it has “democratic mandate”. The BNP have this blessing, now that they have elected representatives, which for so long the mainstream has considered sacred.

Outside of debate, the BNP are often called “thugs”. The implication is that they resort to intimidation instead of debate, that they try to scare voters instead of winning them over. This is, to some extent, true. However, it is now the BNPs opponents who are most notably engaging in such acts. When they fail to debate the party, they block their access to election counts, pelt eggs at the leadership, scream meaningless insults and attempt to silence their communications. The public is given the choice between one group who argues by force, and another.

Sharing the basic ideological premises of the BNP has made the mainstream totally unable to defeat them. The only way to counter the BNP is to reject their basic premises on principle.

Their racial policies can only be defeated if one accepts that collectivism is wrong, on principle. It is futile to argue that racial collectivism is wrong, yet cultural and economic collectivism is acceptable.  Instead it is necessary to reject all collectivist ideas, to accept that race, culture or economic status have no bearing on the merit, rights or benefits of an individual. Yet the mainstream parties often flaunt their collectivist ideology, notably with the sexually-collectivist “all-women shortlists”[2].Only by consistently opposing racism, including the multi-culturalist policies of the mainstream left, can racism be defeated on the ideological battlefield.

Their policies on unprecedented waves of nationalisation, redistribution and protectionism cannot be defeated by suggesting that the best course of action is to advocate lesser forms of the same policies, but by denouncing the moral status of such actions. Only by declaring that a man has the inalienable right to trade with whoever he chooses, to keep whatever he produces, and to form any private industry he pleases, can one defeat the crippling economic policies of the BNP.

Their claims of democratic legitimacy cannot be countered by suggesting that democracy is right, but only when it elects the right people. Instead it must be held that public consensus is not the same as justice, that ideas must be judged on their merit according to the facts of reality, and not according to popular opinion. Popular opinion does not prove an idea, either in science or politics. It was consensus that derided Galileo as a heretic and exalted slavery as an economic necessity: public approval does not justify tyrannical actions. Democratic mandate is a legitimate method for choosing governments, providing those governments are objectively limited by constitutional constraints – a concept held firm by the founders of the United States.

In conclusion, the BNP are succeeding in political persuasion because they share the ideological premises of their most vocal opponents. The only way that British culture can rid itself of such parties is to recognise that the premises that both the BNP and mainstream analysts take as correct are in fact morally wrong. Such premises must be opposed with an uncompromising moral conviction – any substitute is to hand the country to groups like the BNP on a silver platter.

[1] BNP Policy Pages, http://bnp.org.uk/policies, (June 2009)
[2] http://www.independent.co.uk/news/uk/politics/the-big-question-are-allwomen-shortlists-the-best-way-to-achieve-equality-in-parliament-412987.html

The first part of the speech is below.

You can watch the first part below:

The evening speech which followed this interview, as well as the Q&A which followed that, will be available soon: when it is, it will be posted here.

People are right to feel angry about injustices like this, and to ask for the deeper causes. However, we need to be careful to avoid knee-jerk responses and put the blame in the right place.

It is widely believed that the way to prevent future situations like this is to increase the regulatory oversight of the banks, including the way they pay their staff. I see it differently. The main problem with the UK banking system today (and that of every other highly-developed country) is that banks cannot be allowed to fail when they make bad decisions.

In our current financial system, banks actually create money when making loans, and if a bank fails, the money it has created winks instantly out of existence. Such sharp drops in the money supply are very dangerous: this is what politicians refer to as “systemic risk” and they are right to want to avoid such contractions. Many have argued that since banks cannot be allowed to fail, regulatory oversight is needed to make sure they do not exploit this fact by engaging in excessively risky behaviour in the knowledge that they will not have to assume the full consequences.

However, this analysis fails to recognise that the current banking system is not a creation of the free market but a product of government intervention. It is the state which grants banks the power to create money, and the state which forces us to use this money instead of a form of currency of our own choice.

This policy has more serious ramifications than a few undeserved bonuses and pensions for bankers. The explosion in debt we have seen over the past decade is not a result of the uncoerced choices of individuals and businesses, but a consequence of government intervention in credit markets. The Bank of England (the state-owned central bank in the UK) has a Monetary Policy Committee which meets once a month to decide the official interest rate for the UK. The Bank of England then manipulates the money supply in order to target that rate.

An interest rate is a kind of price: it is the amount a borrower must pay to persuade a lender to delay their consumption and give the borrower the use of some capital for a time. By manipulating interest rates, the state is destroying the objective price mechanism for credit, replacing it with one based on political whim. Participants in the economy are not trusted to decide what price they should pay or charge for a loan: the state overrides those decisions in “the public interest”.

When interest rates are set too low, as hindsight clearly shows they were during the boom, there is an explosion in borrowing — just as when the Soviet Union set bread prices too low, the demand for bread exploded. Just as the Soviets were unable to set the right price for bread, modern central banks are unable to set the right price for loans, because the very act of setting prices requires forcibly overriding the rational judgement of participants in the economy. However, modern money is unlike bread in that the state can create more of it at will and keep the process going — at least until the inflation can be sustained no longer, at which point a bust is inevitable.

It should be quite clear from the above that the economic system which has failed is not laissez-faire capitalism. Nine people sitting around a table deciding what interest rates should be this month is clearly not capitalism: in fact, it is more redolent of its opposite. What has failed is the mixed economy: a mixture of freedom and government control. If we are to avoid crises like this one in the future, it is vital that we recognise and understand the alternative to the current system which true capitalism represents.

The fundamental basis of capitalism is a separation between economy and state. Under capitalism, the state’s only role is to protect the rights of the participants in the economy from violation by force or fraud (for example by preventing theft and enforcing contracts). Individuals and businesses are free to buy and sell loans and other goods according to their own rational judgement, and no-one may intervene in a transaction between willing parties unless a violation of rights can be demonstrated.

Under capitalism, people can use whatever they like as money, but historically, gold and silver have proven the most popular choices because of their physical properties (they are rare, they do not easily corrode or decay, they can be divided into arbitrarily small quantities, etc). Banks would not be allowed to create new pieces of paper and claim they are as good as gold — unless they truly are, by virtue of the fact that every note corresponds to a physical piece of gold in the vault of the bank.

Under such a system, the collapse of a bank would have no effect on the money supply: the bank has created no money, and its failure cannot destroy any. So if a bank did make foolish decisions and lend unsustainably, it could be allowed to fail with no “systemic risk”. Any deposit insurance would be invoked, and everyone involved — shareholders, savers, insurers, and uninvolved members of the public — would bear the full consequences of their actions. (If any fraud has occurred, it would be punished by the courts.) Banks would then have a clear incentive to find the right way to pay their employees, as getting this right would have clear business survival value.

More importantly, with a stable money supply and no central bank interfering with the price system, there would be no forces inflating a debt bubble. The law of supply and demand, and the knowledge that everyone will have to bear the consequences of their actions, would keep the system balanced. Over-lending would not look profitable, even in the short term, so there would be no temptation to sacrifice long-term stability for short-term gain.

The causes of and solutions to the financial crisis, then, are more complex than the popular account currently maintains, in my view. So why have people got it so wrong? Partly, perhaps, due to politicians’ desire to hold onto their power to intervene in the economy. Lack of imagination may also play a role. But I believe deeper forces are at work here.

John Prescott appeared on BBC Radio 4′s Today programme this week denouncing Sir Fred Goodwin’s pension (currently available online here at 0810). His comments, while wildly unprincipled (he wanted to suspend payment of the pension despite the fact that the government apparently has no legal right to do so), were very interesting. He was willing to acknowledge some government responsibility for the shortcomings of banking regulation, but he placed the real moral blame for the recession on bankers’ “pursuit of greed”.

Why do people who know little about finance or economics feel qualified to apportion blame for recessions, and propose long-term solutions? The answer, I think, is because they think they have identified a moral issue, which transcends economics. The argument goes as follows: we have all been selfish and greedy, especially the bankers; “everyone knows” selfishness and greed are immoral, and now we are all paying the price.

This is a powerful illustration of Ayn Rand’s view that fundamental philosophic ideas are the driving force of history, determining a country’s basic direction. In this case, it is the morality of altruism — the idea that one must place others before oneself and that selfishness is therefore wrong — which is conditioning our responses to the crisis. It is also what caused the crisis in the first place: the idea that we cannot leave self-interested individuals free to act in the economy as they see fit, and must interfere with their judgements in the name of the “public interest”, is what caused the kind of mixed economy we have today.

Ayn Rand’s view provides us with a true alternative. By defending selfishness — the idea that one’s own rational, long-term self-interest is the ultimate standard of morality — she gives true capitalism a moral base for the first time. Far from being evil, bankers’ greed is a good thing. In a system free from state coercion, it is precisely the self-interested behaviour of lenders and borrowers which will bring the supply and demand of loans into a sustainable balance. More broadly, it is the self-interest of all participants in the economy which will bring about a vast network of people trading to mutual advantage, producing the wealth which improves our lives in a way no other system can match.

As Adam Smith famously pointed out, “[i]t is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”. However, for Smith, influenced by the altruist morality of Christianity, this self-interest was at best a necessary evil. For Rand, by contrast, it is the essence of the good. It is therefore clear to me which of the two history will ultimately regard as the greater, more principled and more effective defender of capitalism.

The real lesson of this economic crisis is: ideas matter. While our culture continues to embrace the altruist morality of Christianity, the debate about how to deal with the recession will remain a stale one. What is worse, we will be virtually certain to suffer the same basic kind of crisis in a different form a few years from now.

Thankfully, interest in Ayn Rand’s ideas is at an all-time high, and there is considerable evidence that it is being prompted by this economic crisis, as the Economist points out this week. This gives me a real sense of hope for the future — but there is much still to be done.

Further reading

• Economics for Real People, by Gene Callahan, especially chapters 9 and 13
• Atlas Shrugged, by Ayn Rand
• Capitalism: The Unknown Ideal, by Ayn Rand
• The Virtue of Selfishness, by Ayn Rand
• Objectivism: The Philosophy of Ayn Rand, by Leonard Peikoff

At the event, we handed out free copies of Ayn Rand’s essays, “Man’s Rights” and “The Nature of Government”, which we are very grateful to the Ayn Rand Institute for providing. It has been pointed out to me that these essays are available online here and here respectively. The essays are vintage Ayn Rand: clear, principled and well-structured. They are worth reading if you haven’t seen them before.

Watch this space for the videos from last Tuesday’s event! In the meantime, you’ll have to be satisfied with my report from my own website, which also includes my recollections of some other UK events Dr Brook participated in last week.