Ayn Rand's Greatest Mistake

It was those heady early days of the Libertarian Movement. Icons like David Nolan, Murray Rothbard and James Libertarian Burns still walked the earth — and L. Neil Smith was just getting up a head of steam.

That’s when I got my first clue to Ayn Rand’s greatest mistake, though, as often happens, I failed to understand it at the time. It came as Larry Moser and I gave a talk to the Las Vegas Junior Chamber of Commerce (the “JCs“).

We presented two libertarian issues; heroin decriminalization to demonstrate civil liberties and voluntary exchange in free markets to demonstrate economic freedom. Since JCs are business folks, we figured we’d get static on decriminalization, but if we addressed the free-trade issues last, we would leave them happy.

Sure enough, immediately after the decriminalization presentation one JC stood up and in no uncertain terms told us we were crazy to propose such a thing. Before we could answer, another JC said, “Sit down Bob. They’re right.”

There was a murmur of assent from the rest of the thirty or so, presumably conservative, business folks in the audience. Against the Left: A Ro... Rockwell Jr, Llewellyn H Best Price: $7.24 Buy New $8.00 (as of 09:03 UTC - Details)

Larry and I looked at each other amazed. We figured we were over the hump.

After our free market presentation, however, there was dead silence. We felt a chill. Someone murmured something like “You can’t have that sort of thing going on.” Another murmur of assent. What was going on here?

My second clue came a few years later at the Colorado LP Presedential Nominating Convention just outside Denver where Bill Huncher was squaring off against Ed Clark. It came in a story related to me by a libertarian, let’s call him “Jim,” running for office in Colorado.

Jim had managed to get an appointment with Adolph Coors Jr., purportedly a libertarian sympathizer himself. During small-talk, Coors expressed admiration and support for the Libertarian Party and its “bold pro-freedom platform” about which he proved himself well informed. However when Jim asked for a campaign contribution, Mr. Coors declined.

If you were elected, you’d eliminate the ICC (Interstate Commerce Commission) wouldn’t you?” he asked. Jim responded that, in accordance with the LP Platform, indeed he would.

Mr. Coors explained that because of a regulatory technicality, Coors trucking subsidiaries didn’t have to “dead-head” and could bring their trucks back loaded, something ICC didn’t permit other trucking companies to do at the time.

ICC literally defined a truck returning full as “illegal competition” with the railroads. Coors Jr. forth-rightly told Jim that elimination of the ICC would thus weaken Coors’ competitive advantage and so he couldn’t justify supporting Libertarian candidates.

And another clue: In the late 1970s, developers in Lake Tahoe wanted to build a hotel/casino they were calling “The Park Tahoe,” but an environmental organization calling itself approximately “The Society to Preserve Lake Tahoe” (SPLT) blocked them every step of the way.

The main movers and shakers behind SPLT weren’t, however, environmentalists; they were Harrah’s, Harvey’s, Barney’s, Sahara Tahoe, and the other hotel/casino operators already established in the Stateline-South Shore area. Had all these casino organizations suddenly become environmentally conscious?

Shortly after the grand opening of Park Tahoe — which later became Caesar’s Tahoe — a local rancher applied for permits to build yet another hotel/casino across the street. Would you care to guess the identity of the newest environmentally conscious member of SPLT who zealously led the fight against this newest environmental hazard?

Park Tahoe of course!

As I finally began to realize, business people, Rand’s heroic figures notwithstanding, generally aren’t the champions of laizze-faire and free market voluntary exchange many libertarians tend to assume. Often, quite the contrary. Assuming otherwise was Ayn Rand’s greatest mistake.

Merchants using government to stifle the competition etc. is nearly as old as government itself. Like this “seven or eight hundred years’” effort to stifle competition from rural textile production and early trading for example – – –

“(h) The countryside was cut out of trade in the Middle Ages.
‘Up to and during the course of the fifteenth century the towns were the sole centers of commerce and industry to such an extent that none of it was allowed to escape into the open country’ (Pirenne, _Economic and Social History_, p.169). ‘The struggle against rural trading and against rural handicrafts lasted at least seven or eight hundred years’ (Heckscher, _Mercantilism_, 1935, Vol. I, p. 129). ‘The severity of these measures increased with the growth of ‘democratic government‘ . . . . ‘All through the fourteenth century regular armed expeditions were sent out against all the villages in the neighborhood and looms or fulling-vats [in which cloth was dyed] were broken or carried away.’ (Pirenne, op.cit., p. 211).” -Karl Polanyi, The Great Transformation. (Boston: Beacon Press 1957), p. 277

You have to admit a century of loom-stealing and fulling-vat smashing shows persistence and dedication. And notice the connection to ‘democratic government.' Against the State: An ... Rockwell Jr., Llewelly... Best Price: $5.02 Buy New $5.52 (as of 11:35 UTC - Details)

Seminal Austrian-school economist Ludwig von Mises completely understood the broader context of vested economic interests using government for their own ends, which of course, has been quite thoroughly perfected today – – –

The consumers do not care about the investments made with regard to past market conditions and do not bother about the vested interests of entrepreneurs, capitalists, land-owners, and workers… It is precisely the fact that the market does not respect vested interests that makes the people concerned ask for government interference. –Ludwig von Mises, Human Action

So, when vested interests ask for government interference — to protect themselves from markets and competition — they have to do it in cahoots with politicians.

To make this work, they regularly disguise the interference as “regulation.” They pretend “regulation” is to protect us “consumers” from businesses instead of the other way around.

You can catch a surprising glimpse of just how remarkably successful vested interests are at using politicians to get their disguised and bogus protective “regulation” here:

UNCOMMON SENSE: What government regulation is REALLY used for

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