Ayn Rand Followers Blame Altruism for Economic Collapse

I risk some seriously angry comments for attacking Ayn Rand - her followers tend to demonstrate the myopic worldview in their defense of their idol that I often criticize - and they rise quickly and vehemently to her defense. Be that as it may, I want to point out an article in The Objective Standard that blames altruism for all that ails our nation these days (Altruism: The Moral Root of the Financial Crisis by Richard M. Salsman).

First, let's look at the definition of altruism:

Main Entry:al·tru·ism

Pronunciation:\ˈal-trü-ˌi-zəm\

Etymology:French altruisme, from autrui other people, from Old French, oblique case form of autre other, from Latin alter

Date: 1853

1 : unselfish regard for or devotion to the welfare of others
2 : behavior by an animal that is not beneficial to or may be harmful to itself but that benefits others of its species

Apparently, caring about our fellow citizens - maybe even above our own self-interest - is just morally wrong in the Objectivist worldview. This is exactly why I dissed them in a recent post. But to be fair, this article isn't really talking about altruism, it's just a convenient straw man to be knocked down while ignoring greed and idiot compassion as the real issue.

Here is a quote:

By surveying the government interventions that caused the latest turmoil and wealth destruction in housing and banking, this article will demonstrate that the current financial crisis was caused not by a return to free markets or pro-capitalist policies in the past decade, but by a tragic progression toward socialism. More importantly, it will demonstrate that altruism—the notion that being moral consists in sacrificing oneself for the needs of others—is the basis for this government intervention, and thus the root cause of the crisis.

Of course, in order to recognize that capitalism is innocent of the latest charges against it, we must bear in mind what capitalism is. Capitalism is the social system of individual rights, including property rights, in which all property is privately owned.11 Capitalism upholds the rule of law and equality before the law, forbids government favors to any person or group (including businesses), entails the complete separation of state and economics, and thus leaves each individual free to act on his own judgment for his own sake.

And this works, in theory, because human beings are NEVER greedy and insensitive to the harm they may do to others in the pursuit of their own self-interest?

What a load of shit. Capitalism is soulless.

Without some form of regulation, those with power and wealth will continually take advantage of those lacking these things. If we remove ALL regulation, it's survival of the fittest, and in our culture there isn't a level playing field, so some people are born into a position of power, while others are born into a position of weakness.

The best solution would be that all people act with compassion, thereby leveling the playing field - but that clearly isn't going to happen. It's not that human beings are incapable of doing this, but Capitalism encourages them not to do so.

Here's another quote:

It should surprise no one that the altruism-infested “credit market” has been impractical—and impractical even as regards the altruistic goal of helping the needy to own homes. Washington pushed to raise the national home ownership rate from 65 percent to 70 percent and to narrow the “gap” in ownership rates between white and nonwhite households, but in the wake of that push—as mortgage defaults and home foreclosures skyrocketed—the home ownership rate, after rising a bit, is now slipping below 65 percent, while the “gap,” having narrowed in years before 2002, has been widening since 2007. Home ownership rates among blacks and Hispanics, those who were targeted by the Bush administration, have dropped precipitously, in many cases to below the prior peaks that were deemed unsatisfactory by the social planners.

Who is to foot the gargantuan bill for this altruism-induced mess? Just as altruism would have it: the innocent—the innocent taxpayers and the 93 percent of all American home owners who pay their mortgages on time but now will be forced to pay other people’s mortgages and to bail out businesses they did not botch and do not own.

In all fairness, I agree in part with their critique, but not with their stance on altruism (which is a word used loosely and wrongly in this article). Banks (as well as Fannie Mae and Freddie Mac) made bad loans to get people into homes, but that had nothing to do with altruism, it had solely to do with greed. ALL they wanted to do was make money. So they took risks that were unethical and possibly illegal.

This isn't altruism - to blame altruism for the crisis might make sense in Rand's philosophy, but it's simply wrong.

One more quote:

From a state monopoly on money, to state guarantees of bank liabilities, to state sponsorship of mortgages, to state ownership of banks—the progression in the past century has been to move away from free markets toward socialist banking. Why? The fundamental answer is: altruism. The fitful, halting lurches toward ever greater government intervention in American finance follow logically from the altruistic premise that permeates our culture and resounds throughout the halls of power—the premise that being moral consists in self-sacrificially serving those in need. The welfare state and its main financier, the Federal Reserve, are ultimately “justified” on the grounds that the government has a moral duty to provide the needy with goods and services—from education to health insurance to mortgages.

So we should never take care of the weak and needy? In the real world, the measure of a nation's soul is not how it protects the strong, but in how it takes care of the weak. But in Rand's world, soul is a dirty word - she hated religion as much as she hated communism. But the notion of a soul is not confined to religion - perhaps compassion is a better word.

In the end, what the Objectivist's are railing against is idiot compassion, not altruism or true compassion. Here is a brief definition of idiot compassion, so you know what I am talking about:

Pema Chodron: Idiot compassion is a great expression, which was actually coined by Trungpa Rinpoche. It refers to something we all do a lot of and call it compassion. In some ways, it's whats called enabling. It's the general tendency to give people what they want because you can't bear to see them suffering. Basically, you're not giving them what they need. You're trying to get away from your feeling of I can't bear to see them suffering. In other words, you're doing it for yourself. You're not really doing it for them.

What the Bush administration did with trying to get people who could not afford mortgage payments to be approved for mortgages anyway (by Fannie Mae and Freddie Mac) was idiot compassion, not altruism. For the Rand people to call it altruism is only to confuse the issue in an attempt to further their own agenda, which is completely unregulated markets.

Rather than face the prerational greed that lies at the heart of their own worldview, they dress it up as altruism to mislead people into thinking that a deregulated market is a good thing. What they are really talking about is idiot compassion fused with greed - not altruism.

Tags: Ayn Rand, Followers, Altruism, economic Collapse, The Objective Standard, Altruism: The Moral Root of the Financial Crisis, Richard M. Salsman, idiot compassion, greed, housing bubble, credit crisis, economics, Philosophy, society