“We’ve become a nation of net takers versus makers,” Rep. Paul Ryan (R-WI) said recently. It’s the Horatio Alger myth … Randianized. (More)

The Self-Made Myth, Part I: Makers and Takers

This week Morning Feature looks at Brian Miller and Mike Lapham’s new book The Self-Made Myth. Today we consider how the “self-made man” myth of the Horatio Alger stories morphed into the “makers vs. takers” meme of Ayn Rand and her followers. Tomorrow we’ll see stories that illustrate what Miller and Lapham call “The Built-Together Reality.” Saturday we’ll conclude with how “The Build-Together Reality” calls for different policies to support innovation and entrepreneurship.

Brian Miller is the executive director of United for a Fair Economy. Over the past 20 years, Miller has worked to build cross-class alliances of citizens from all walks of life – business leaders, workers, family farmers, seniors, students, and others – to work together for change, promoting healthy communities and an economy that works for all Americans.
 Mike Lapham is the founding director of Responsible Wealth, a project of United for a Fair Economy. Responsible Wealth amplifies the voices of more than 700 progressive business leaders and other affluent individuals in public policy debates to promote progressive tax policy and greater corporate accountability in Congress, in the media, and in corporate boardrooms.

Success, Morality, and Stories

Most Americans have heard of author Horatio Alger and his “rags to riches” stories of young men who made good through self-discipline and hard work. Alger was a Unitarian pastor and his books are morality stories. They were written to warn boys away from the vices Alger decried and toward the virtues Alger celebrated. Boys who strayed from the virtuous path came to ruin, while those who tied the line made good. In fact the “rags to riches” meme is a myth that grew around rather than within Alger’s stories. Few of his protagonists became wealthy. Instead they were hired into mostly low-level jobs that – coupled with their moral uprightness – were presented as the baseline for middle-class respectability.

Still, the persistent themes of his stories were that any young white man could escape poverty through hard work, and that success was based on individual merit and moral worth. Alger did not write about the lives of young men of color, and the women in his stories were temptresses to be avoided or victims to be rescued rather than persons who might achieve their own successes. Despite (or perhaps because of) their narrow scope, Alger’s stories came to define one version of the American Dream and remained popular until the Great Depression left such dreams in tatters.

Alger was a minister, not an economist. He neither gathered nor presented empirical data to support his thesis of success through individual virtue and merit. Yet his books embodied an American economic ethos because – as Miller and Lapham emphasize in their introduction – cultures are shaped by stories. The stories that supplanted Alger’s took the myth of success through individual virtue and merit to new extremes.

The World According to Rand

Born and educated in Russia, Ayn Rand visited the United States in 1925 and stayed. She moved to Hollywood and worked various studio jobs until 1940, when she and her husband volunteered to work for Republican presidential candidate Wendell Wilkie’s campaign. That work led to contacts with other laissez faire proponents, and in 1943 she wrote The Fountainhead. The book’s success brought her to New York City where she acquired a group of followers including future Chairman of the Federal Reserve Alan Greenspan. She led them in discussions of the philosophy she called objectivism, while writing her most famous work: Atlas Shrugged.

Atlas Shrugged is a story of wealthy industrialists, scientists, and artists besieged by a government intent on spreading their riches to the masses. They leave for a mountaintop hideaway, where they create an independent free economy that flourishes while the rest collapse into poverty and chaos. Where Alger portrayed any hardworking young man able to make good, Rand presents the masses as lacking the essential intelligence and vigor to create anything or maintain civilization without the guidance of the wealthy. As Austrian School economist Ludwig von Mises wrote in a letter to her:

You have the courage to tell the masses what no politician told them: You are inferior and all the improvements in your condition which you simply take for granted you owe to the effort of men who are better than you.

Like Atlas holding up the world, Rand portrays the wealthy as demigods upon whom the burden of civilization rests. They are, in Rep. Ryan’s parlance, the “makers” from whom the rest of us are merely “takers.”

Meet Your Makers

Miller and Lapham offer critical biographies of Donald Trump, H. Ross Perot, and the Koch brothers, each of whom is often portrayed as a “self-made man.” As Miller and Lapham show, Trump’s father used Federal Housing Authority programs to build his real estate business, and Trump himself relied on eminent domain rulings and bank bailouts to grow and sustain that enterprise. Perot’s business was built on state government contracts to administer Medicare and Medicaid.

The Koch brothers inherited a $300 million business from their father and their far flung holdings now include cattle grazing on and timber harvested from public lands, eminent domain rulings to build pipelines, and government subsidies to produce ethanol. They are also partners in a state-run fertilizer firm in Hugo Chavez’ Venezuela, a firm that receives millions in subsidies each year. Indeed working with socialist leaders is a Koch family tradition that began with their father, who got rich by launching the Russian oil industry for Josef Stalin.

And just this week Edward Conrad, former Bain Capital partner and fervent supporter of Republican presidential candidate Mitt Romney, was profiled in the New York Times Magazine. Conrad’s forthcoming book Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong is virtually a tribute to the Randian worldview. The problem with our economy, Congrad says, is not that income inequality is too wide but that it is not wide enough. He argues – reasonably – that all of the easy business and technology problems have been solved and it is becoming harder to find successful new ideas. Conrad concludes – less reasonably – that the only solution is to offer ever greater rewards to the wealthy investors, who must sift through more new ideas to find fewer that succeed.

Conrad and other believers of the self-made myth ignore the “sidewalk ballet” of innovators who spark each others’ ideas, the workers who turn ideas into tangible goods and services, and the hard and soft infrastructure that enable those to meld and create wealth. In the Randian worldview, all of that wealth is created by those at the top, and any wealth that lands elsewhere was “stolen” from them.

This is what Rep. Ryan – an Ayn Rand acolyte himself – means when he speaks of “makers and takers.” Unless you are among the chosen few at the very top, “You are inferior and all the improvements in your condition which you simply take for granted you owe to the effort of men who are better than you.”

And anyone who argues otherwise is an “elitist snob.”

Tomorrow we’ll return to Realworldia….

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Happy Thursday!