Ayn Rand and Unintended Consequences

Justin Raimondo of antiwar.com has been spending a bit of time on the"Objectivist Death Cult" here, here, and here. I, myself, have been criticizing the foreign policy positions of many Objectivists for nearly two years, starting in the days after September 11, 2001, and extending through the Iraq war and beyond.

I did not attend the recent Cato conference on the Iraq war, but, if Raimondo's report is accurate, and I have no doubt that it is, one point made by my colleague David Kelley, Executive Director of The Objectivist Center, raises some concerns (and I will have to hear the comments and their context in order to assess them fully). As Raimondo sees it, Kelley" comes up with a real whopper: The Hayekian law of unintended consequences is not applicable to foreign policy, because there is no reason that the results of inaction are any more unpredictable than taking action." Raimondo retorts:"But couldn’t one make this same argument when it comes to domestic policy: that if we don’t, say, take 'action' to ensure that all people have government-subsidized healthcare, that there will be some horrific 'consequence' of 'inaction'? Why these universal principles supposedly stop at the water’s edge is a mystery that Kelley did not do a very good job of clearing up."

In actuality, however, Ayn Rand herself never paid much formal attention to the concept of"unintended consequences." It's not that one can find no attention to"unintended consequences" in her work. It's that her attention was much more focused on the efficacy of reason, and efficacy, by its nature, means the ability to produce an intended or desired effect. But even Rand understood that human beings were not omniscient, and that the world could never be made completely subject and predictable. To revolt against this fact is to revolt against both psychological maturity and one's own nature; Rand reserved some of her harshest criticisms for those whom F. A. Hayek himself derided as"rationalists" of the constructivist variety.

Unlike Rand, Hayek paid extraordinary attention to the unintended consequences of human action. These consequences are so much a part of what it means to be an actor in a social environment that they are, in essence, constitutive of social life. Whether we call them"side effects,""externalities," or by the more colorful term"blowback," they are an omnipresent factor of living in society. They are part and parcel of what it means to be a social actor. Every social actor has to take into account the possibility of both negative and positive externalities generated by action—or inaction (especially if one has had a history of being involved in certain sets of social relations, which continue to exert an influence on current conditions; see, for example, the U.S. role in the Middle East). One of the virtues of a private property free-market system is that it creates the social conditions whereby such social actors internalize the externalities generated, that is, take them into account. That's what it means to make actors accountable and responsible for their actions or inactions, actions of commission or omission, so-to-speak. And that's why it is not enough to enunciate a moral principle (like Rand's principle that any free society has the right, though not the obligation, to invade any slave pen) without tracing the potential costs and benefits of such actions or inactions.

Rand may have uttered that principle, but she herself understood the enormous repercussions of concretizing it. Unwilling to allow such a principle to be a floating abstraction applicable regardless of context, Rand was very careful about applying it wholesale to the conditions of the real world because she genuinely grasped the politico-economic dynamics that shaped those conditions. For example, she was opposed to U.S. entry into World War I. She was among those on the Old Right who were against U.S. entry into the Second World War; she was prepared to allow the evil twins of collectivism—the Nazis and the Soviets—to slaughter one another, before allowing one American soldier to lose his life. And, despite a virulent hatred for communism, a system from which she escaped, she was equally opposed to U.S. entry into Korea and Vietnam.

Rand grasped that there was an indissoluble link between domestic and foreign policy. She wrote:"Foreign policy is merely a consequence of domestic policy." As I explained in my essay,"Understanding the Global Crisis" (citations can be found in the essay):

When Rand called for a complete"revision of [U.S.] foreign policy, from its basic premises on up," she knew that this would entail a simultaneous repudiation of the welfare state at home and the warfare state abroad, an end to"foreign aid and [to] all forms of international self-immolation." She knew that"a radically different foreign policy" required a radically different domestic one—and that both required a philosophic and cultural revolution.

Rand had identified U.S. domestic policy as the"New Fascism." This was—and is—a de facto, predatory fascism, the result of pragmatic expediency and of ad hoc, incremental policies that had enriched some groups at the expense of others. A business-government"partnership" was its"economic essence." In such a system, she argued, we are all victims and victimizers; the whole society becomes a" class of beggars." For once the rule of force begins to predominate, the institutional means for legalized predation expand exponentially."If this is a society's system," writes Rand,"no power on earth can prevent men from ganging up on one another in self-defense—i.e., from forming pressure groups."

The New Fascism therefore"accelerates the process of juggling debts, switching losses, piling loans on loans, mortgaging the future and the future's future. As things grow worse, the government protects itself not by contracting this process, but by expanding it" beyond its national borders. Just as pressure groups had slurped at the government trough in seeking domestic privileges, so too did they benefit from a whole global system of foreign aid, involving financial manipulation (through, for example, the Federal Reserve System, the Ex-Im Bank, and the IMF)," credits to foreign consumers to enable them to consume" U.S.-produced goods,"unpaid loans to foreign governments, and subsidies to other welfare states," to the United Nations, and to the World Bank.

Rand goes further:"If looting collectivists did not exist, America's foreign aid policy would create them." The overwhelming profiteers of this system were those peculiar"products . . . of the mixed economy," those statist businessmen who"seek to grow rich not by means of productive ability, but by means of political pull and of special political privileges." Rand observes"that there are firms here and there, in various businesses and industries, who are growing prosperous by trading with foreign countries, the specific foreign countries who receive American aid. In other words, there are businessmen who are selling their products to the foreign countries receiving American aid and who are paid by American funds—who are paid by the aid money granted to those countries. In other words, some Americans are draining the money, the tax money, of other Americans, into their own pockets, via a longer tour through every corner of the globe which receives our foreign aid. This tax money is taken from some citizens, handed to foreign governments and pressure groups and then comes back to some of our citizens, through those successful pressure groups who have pull in Washington." This was a"siphoning" process, in Rand's view, a"necessary corollary of a mixed economy, or rather the necessary expression of a mixed economy, now being carried to the international scene. It is a civil war gone international; it is pressure groups using foreign countries in order to destroy our own. That is the meaning of our foreign aid policy."

Thus, the New Fascism exports"the bloody chaos of tribal warfare" to the rest of the world, creating a whole class of"pull peddlers" among both foreign and domestic lobbyists, who feed on the carcass of the American taxpayer, causing massive global political, social, and economic dislocations. Whereas the Left derided" capitalist imperialism" for this state of affairs, Rand recognized that capitalism,"the unknown ideal," had taken the blame for the sins of its opposite. She lamented the internationalization of the New Fascism; given"the interdependence of the Western world," all countries are"leaning on one another as bad risks, bad consuming parasite borrowers." She recognized how the system's dynamics propelled such internationalization, but advised:"The [fewer] ties we have with any other countries, the better off we will be." Suggesting a biological analogy in warning against the spread of neofascism, she quips:"If you have a disease, should you get a more serious form of it, and will that help you?"

I have argued that this critique of the"New Fascism" is as relevant today as it was when Rand first presented it.

Rand's comments focused not on the historical concretes, but on the principles entailed in interventionism. Like Ludwig von Mises and F. A. Hayek, Rand predicted that the interventionist system would expand its reach, making possible an ever-deepening social fragmentation among warring foreign and domestic pressure groups. ... In Rand's view, even noble actors pursuing noble goals are defeated by this system. The New Fascism can only engender"parasitism, favoritism, corruption and greed for the unearned"; its power to dispense privilege, Rand emphasizes,"cannot be used honestly."

Note that in Rand's critique of the global statist system, she never bothered to draw a distinction between the spheres of domestic and foreign policy. In other words, these principles did not"stop at the water’s edge," to use Raimondo's phrase.

Those of us who have drawn as well from the work of Hayek understand that in the global sphere, the network of social relations is far more complex than the domestic sphere, far more likely to generate even more insidious negative externalities, given that our knowledge of other cultures is even less than our knowledge of our own.

I have had enormous differences with many of Objectivism's modern exponents on these questions; even if we come to dramatically different conclusions, however, it is my hope that more of them will begin to appreciate Rand's actual perspective on U.S. foreign policy. Unfortunately, however, I see no indication that Rand's radical critique has been fully integrated into any current Objectivist writings on the global situation. I will have much more to say about this issue in the coming weeks.