Ayn Rand, "disciplining the workforce" and positional status

by John MacBeath Watkins

Our Capitol Hill store has surplus copies of Atlas Shrugged and The Fountainhead, two of Ayn Rand's books that are usually hard to keep on the shelf. Jamie attributes this to the publicity surrounding Paul Ryan's adherence to her philosophy. Make the connection with right-wing Republicans, and any author will suffer on Capitol Hill (for the benefit of non-Seattlites, I should mention that there is no Capitol on Capitol Hill. There were boomers who wanted the state capitol to be there, but it went to Olympia instead.)

You see, the age where people tend to be most eager to read Rand is the teen years to young adulthood. From Kung Fu Monkey:

"-- There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs."

But of course, as we discussed in this post, the Republican Party has become the ungrateful party, wanting to attribute all that is good in the world to the heroic individual, and, as in Mitt Romney's 47 percent comments, showing contempt for those who need any help.

There is an older, deeper strain here. When I was a thin, handsome young grad student, I wrote a test for a political science intro course on which I had a question about something mentioned in their textbook -- a reference in a 1950s Republican document to the role recessions play in "disciplining the workforce." I can't find that document now; like so many things that happened before the internet, it is invisible to casual research. But a student questioned the validity of asking the question, so my professor, Dan Alper, did a statistical analysis of the test, and found that correct answers to that question correlated very closely to high scores on the test as a whole.

In other words, if you didn't recall which party that phrase came from, it was unlikely you understood what the author of the textbook was saying about the differences between the parties.

A big part of this is about positional status. A more equal society tends to produce higher economic growth, as demonstrated at length in Why Nations Fail, by Daron Acemoglu and James Robinson. But through most of history, inequality has prevailed. It is a curious thing about humanity, that we desire not merely to be equal to our fellows, but to be better. High positional status in a poor society still involves being better in a relative way, even if we are not as objectively wealthy. The answer to the question posed in Acemoglu and Robinson's title is in one sense answered by their distinction between extractive and inclusive institutions, but to explain the preference through most of history for the less successful social model of the extractive society, we probably need to consult Thorstein Veblen's Theory of the Leisure Class.

Veblen coined the term "conspicuous consumption" to explain the behavior of what we would now call the 1 percenters. He practiced economics as anthropology, explaining the behavior of high-status individuals in his own society through comparisons to societies they considered more "primitive."

And, human nature being what it is, this is still going on. The Washington Monthly's Ryan Cooper recently wrote a brilliant post on Why Employers Like Unemployment. Essentially, his argument is that full employment undermines the bargaining position of the bosses, and when people can easily get a new job, the threat of firing lacks any terror as a threat. Cooper quotes Michal Kalecki:

Indeed, under a regime of permanent full employment, the ‘sack’ would cease to play its role as a ‘disciplinary measure.’ The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would create political tension. It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire, and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests. But ‘discipline in the factories’ and ‘political stability’ are more appreciated than profits by business leaders. Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the ‘normal’ capitalist system.

 When we had full employment in the 1990s, we saw a big increase in productivity. Why? Bosses found that they could not extract more profits by bargaining harder, they had to make more with less, and found that they could. The result was a generally more productive and prosperous society.

But, as Kalecki points out, this did nothing for the status of those at the top.

Framing the matter this way makes sense of the Republican behavior over the past couple years. Steve Benen, when he was blogging for Political Animal at the Washington Monthly, used to marvel at the terrible things Republicans would say about the unemployed, and their resistance to helping the jobless.

If I didn't know better, I might think Republican lawmakers actively dislike -- on a personal level -- those who've lost their jobs in the recession.
One GOP congressman recently compared the unemployed to "hobos." Several Republicans have blocked extended benefits for the unemployed. In the House, GOP lawmakers tried to eliminate a successful jobs program.
But Sen. Orrin Hatch (R-Utah) is taking Republican revulsion for the jobless to new depths.

And, of course, Rick Perry notoriously appeared to threaten grievous bodily harm to the head of the Federal Reserve for, well, doing his job, which is supposed to include achieving full employment. Perry thought it was unpatriotic to do that while a Democrat was president. But of course, he also could say this because his financial backers, like the financial backers of House and Senate Republicans, do not value full employment. At a time when employment is high and inflation is low, the right is constantly harping on fears of inflation, probably to justify not doing anything about unemployment.

The thing is, for the party of the owner class, full employment is a bug, not a feature. I've been a boss. In the '90s, I found it hard to get and keep experienced employees for what I could pay. I hired people with no experience in bookselling and trained them, and had them hired away. I was philosophical about this, because after all, they were doing what I would do, and as a person who believes in markets, I expect people to act in their own interest. Of course, I was nice to my employees, as is my nature, and as a consequence was generally able to keep good folks on staff.

But suppose part of your psychic reward for being a boss is being bossy? It always struck me that the need to show people who's boss was a sign of insecurity, but many people are insecure, and many if not most are more ardent in their desire for status than I am.

For those most ardent in the pursuit of status, it is not enough to be successful and to have all your needs met. There must be people below you, and they must be made to acknowledge that they are below you. They must fear devastating consequences for crossing you. If they can simply quit because you're an asshole, that takes a lot of fun out of humiliating them.

But you have to have some justification for a social structure that moves so much of society's wealth and status to the top. In the Gilded Age, the justification was social Darwinism. In fascist states, "class war," that is, people at the bottom wanting more money and status, was a crime against nature, because class was biologically determined, and if your father was a laborer, that was all you were suited to.

In our new Gilded Age, Ayn Rand's philosophy, to the extent that it is social Darwinism without the bogus biology, has taken on this role. It is no surprise that a man like Paul Ryan is admired within his party, and espouses the virtue of selfishness, when his entire party has come increasingly to serve the 1 percenters. Ryan may talk about "job creators" and wealth creation, but he is really all about positional status and how wealth is distributed.