Atlas Shrugged Tops Amazon’s Bestseller List

Washington, D.C., March 18, 2009 – Earlier this year Ayn Rand’s prophetic novel Atlas Shrugged was selling at triple the rate it sold at in the beginning of 2008. Now the novel is soaring to even greater heights, and its trade paperback edition is currently in first place in the Classics category on Amazon.com’s best-seller list for sales in the United States. The 50th anniversary mass-market paperback edition of Atlas Shrugged ranks as #2 and the trade paperback Centennial edition ranks as #3. For several weeks Atlas Shrugged has been holding steady in the top 10 best-sellers in the broader United States Literature and Fiction category, and as of the writing of this release, different editions of the novel stand at #3, #5 and #6 in Amazon’s ranking.

In a recent Wall Street Journal op-ed, Yaron Brook, executive director of the Ayn Rand Institute, explained the parallels between Atlas Shrugged and today’s events.

“In Atlas Shrugged, Rand tells the story of the U.S. economy crumbling under the weight of crushing government interventions and regulations. Meanwhile, blaming greed and the free market, Washington responds with more controls that only deepen the crisis. Sound familiar?”

Brook also stressed the importance today of the book’s often overlooked message that capitalism cannot be properly defended without morally defending profit and self-interest: “. . . only an ethic of rational selfishness can justify the pursuit of profit that is the basis of capitalism–and that as long as self-interest is tainted by moral suspicion, the profit motive will continue to take the rap for every imaginable (or imagined) social ill and economic disaster. Just look how our present crisis has been attributed to the free market instead of government intervention–and how proposed solutions inevitably involve yet more government intervention to rein in the pursuit of self-interest.”

Those interested in understanding the morality of capitalism can learn more in Ayn Rand’s The Virtue of Selfishness–which, at #12 in the Classics category, is setting records of its own.

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Yaron Brook is executive director of the Ayn Rand Institute. He is a contributing editor of The Objective Standard and his articles have been featured in major publications such as The Wall Street Journal, Forbes.com, USA Today, the Houston Chronicle, Chicago Sun-Times, Providence Journal and the Orange County Register. Dr. Brook is often interviewed on radio and is a frequent guest on a variety of national TV shows, having appeared on the new Fox Business Network, FOX News Channel, CNN, CNBC and C-SPAN. Dr. Brook, a former finance professor, lectures on Objectivism, capitalism, business, and foreign policy at college campuses, community groups and corporations across America and throughout the world.

To interview Dr. Brook or book him for your show, please contact media@aynrandcenter.org.

Bush Is No Champion of the Free Market

Washington, D.C.–In a recent speech on the financial crisis, President Bush said, “If you seek economic growth, if you seek opportunity, if you seek social justice and human dignity, the free market system is the way to go.”

According to Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “It’s true that free markets are the source of economic prosperity and individual liberty–but President Bush, while he may pay lip service to free markets, has been a consistent opponent of them.
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The Maestro vs. the Market

By Alex Epstein and Yaron Brook

Alan Greenspan claims that the free market failed to prevent the financial crisis, and that he is “shocked” that his professed “free-market ideology” turned out to contain a “flaw.”

But why should we take him seriously? Greenspan, while once associated with laissez-faire philosopher Ayn Rand, hasn’t advocated genuinely free markets for decades. Remember, this is a man who for two decades reveled in being, as the New York Times put it, “the infallible maestro of the financial system.”
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Let Them Fail

By Amit Ghate

Everywhere today politicians are blaring that they must save America’s financial institutions, alleging catastrophic risk to the economy were any to fail. Paulson and the entire Bush administration, in a discernible panic, are now pouring $700 billion into the big banks, having already bailed out AIG, Fannie Mae, Freddie Mac, and Bear Stearns to the tune of $300 billion.

Capitalism doesn’t work, they declare, but fortunately the government is here to rescue us.

Sadly, they have it all backwards. The credit crisis is just more evidence that whenever the government supplants the free market and attempts to “manage,” i.e., control, the economy–disaster ensues.
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Greenspan Has No Free Market Philosophy

Washington, D.C. – Opponents of the free market are giddy at Alan Greenspan’s declaration that the financial crisis has exposed a “flaw” in his “free market ideology.” Greenspan says he is “in a state of shocked disbelief” because he “looked to the self-interest of lending institutions to protect shareholder’s equity”–and it didn’t.

But according to Dr. Yaron Brook, executive director of the Ayn Rand Center for Individual Rights, “any belief Greenspan ever had in truly free markets was abandoned long ago. While Greenspan long ago wrote in favor of a truly free market in banking, including the gold standard that such markets always adopt, he then proceeded to work for two decades as leader and chief advocate of the Federal Reserve, which continually inflates the money supply and manipulates interest rates. Advocates of free banking understand that when the government inflates the currency, it artificially increases prices and causes booms in certain sectors of the economy, followed by inevitable busts.

But not only did Greenspan lead the inflation behind the  dot-com bubble and the real estate boom, he blamed the market for their treacherous collapses. Greenspan should have recognized that what he wrote in 1966 of the boom preceding the 1929 crash applied here: ‘The excess credit which the Fed pumped into the economy spilled over into the stock market–triggering a fantastic speculative boom.’ Instead, he superficially blamed ‘infectious greed.’

“Should it be any shock that Greenspan now blames the free market for today’s meltdown–rather than the Fed’s policies, which fueled an inflationary housing boom, which rewarded reckless lenders and borrowers from Wall Street to Main Street? Greenspan didn’t mention the word ‘inflation’ once in his testimony.
Whatever Greenspan’s economic philosophy is, it is not anything resembling a free market.”

Yaron Brook is executive director of the Ayn Rand Center for Individual Rights. He is a regular contributor to Forbes.com and a contributing editor of The Objective Standard. His articles have been featured in major newspapers such as USA Today the Houston Chronicle, the Chicago Sun-Times, the Providence Journal and the Orange County Register. Dr. Brook is often interviewed on radio and is a frequent guest on a variety of national TV shows, having appeared on the new Fox Business Network, FOX News Channel, CNN, CNBC, and C-SPAN. Dr. Brook, a former finance professor, lectures on Objectivism, capitalism, business and foreign policy at college campuses, community groups and corporations across America and throughout the world.

Ayn Rand Saw This Coming

Washington, D.C. –“Despite overwhelming evidence that government policies caused the current financial crisis, Congress is blaming businessmen,” said Yaron Brook, executive director of the Ayn Rand Center for Individual Rights. “What’s worse, the capitalists who have been shackled with unprecedented regulatory burdens are unable to defend themselves morally. Though the events are different, this pattern of abuse and submission is straight out of Ayn Rand’s Atlas Shrugged.

“The cycle starts with government intervening into the economy and imposing regulations and controls on business. This distorts the free market, leading to economic dislocations. When the problems caused by these distortions inevitably follow, everyone blames the free market and its greedy capitalists. The proposed solution? More government controls. Over the years, conservative critics of creeping government have repeatedly exposed this illogic but have always been helpless to explain why the cycle keeps repeating, decade after decade.

“The pattern keeps recurring because businessmen are willing to take the blame. From capitalism’s inception, its defenders have been morally disarmed by the widespread view that self-interest is morally suspect, and disinterested service to others is a moral ideal. So each new spate of controls has been grudgingly accepted as a fair price to pay for society’s toleration of the selfish pursuit of profit.

“Atlas Shrugged depicted a society in economic collapse due to this recurring cycle, and today’s parallels are obvious. Government manipulation of money, credit, and lending standards over several decades caused the mess we’re in. Now, the offered solution is more of the poison that sickened the economy–more bailouts, more cheap money, more government-guaranteed loans, and above all, more regulations.

“This chronic cycle will not end until businessmen accept that their production of profit is neither immoral nor amoral–it is the capstone of moral virtue. Once they shrug off the role of scapegoat, businessmen can demand with moral certitude that government punish fraud and enforce contracts but refrain from interfering with voluntary trades among consenting adults.

“When America’s markets are finally free of all coercion–in other words, when laissez-faire is achieved–financial crises such as the one we’re experiencing will never happen again.”

Yaron Brook is executive director of the Ayn Rand Center for Individual Rights. He is a regular contributor to Forbes.com and a contributing editor of The Objective Standard. His articles have been featured in major newspapers such as USA Today, the Houston Chronicle, the Chicago Sun-Times, the Providence Journal and the Orange County Register. Dr. Brook is often interviewed on radio and is a frequent guest on a variety of national TV shows, having appeared in the new Fox Business Network, FOX News Channel (The O’Reilly Factor, Your World with Neil Cavuto, At Large with Geraldo Rivera), CNN (Talkback Live and the Glenn Beck Program), CNBC (Closing Bell and On the Money), and C-SPAN. Dr. Brook, a former finance professor, lectures on Objectivism, capitalism, business and foreign policy at college campuses, community groups and corporations across America and throughout the world.

In Defense of Speculators and Short-Sellers

By Amit Ghate

Everywhere today government bureaucrats and media pundits blame unwanted price movements on speculators and short-sellers. If prices are “too high”–it’s the fault of greedy speculators; if prices are “too low”–it’s the work of evil short-sellers. To hear these critics tell it, speculators have the ability to create artificially high prices, while short-sellers can wantonly destroy sound companies. (Ignore for now the obvious question: “Where are the short-sellers in markets that are ‘too high’ and the speculators in markets that are ‘too low’?”)

The critics then claim that since neither speculators nor short-sellers perform any positive economic function, barring them from the marketplace is an appropriate remedy, one that’s long past due. (Recently the United States did just this by making some shorting illegal.)

So to begin, let’s ask what the critics consider a “correct” price? Clearly it’s not the price which obtains when all market participants are free to engage in trade based on their best judgment, because this is precisely the free-market price–a price which they so vociferously condemn. But if “too low” and “too high” aren’t judged relative to the free market, what is the standard? Stripped of euphemism: their wishes.

For example, they wish–contrary to all relevant facts–that oil be priced at $20/barrel and that Lehman’s stock trade at $80/share. Never mind that environmental policy has prevented the drilling of oil and the development of nuclear power for decades now, or that Chinese and Indian oil consumption is growing relentlessly; forget too that Lehman chose to leverage itself at 35:1 and made riskier trades year after year–if these critics wish for a price, then that should be the price, facts be damned!

But of course, attempting to set prices by wishing doesn’t–and can’t–work, not for Lenin, Stalin or Brezhnev; or for Paulson, Bernanke and Bush. If prices are to reflect reality, they must be the result of an objective process of discovery and judgment performed by interested actors.

So just as doctors specialize in identifying and evaluating the facts affecting health and disease, speculators and short-sellers specialize in identifying and evaluating the facts pertinent to market prices. They make it their business to understand economic facts like supply and demand, and then risk their capital on their judgment, properly profiting if they’re right and losing if they’re wrong. Thus in a free market, rather than prices being set by wish or decree, they are set by a rational process, one which benefits from the knowledge of all who participate.

For instance, if speculators believe that future oil supplies won’t match demand, they buy oil, increasing its price. If they’re right, and oil prices continue to increase, they sell their positions, profiting from their insight but also capping prices as their supply comes to market; furthermore, their initial effect on prices signals to the market that greater oil supplies are needed and reduced oil consumption is appropriate–efficiently allowing market participants to adjust their actions to the facts.

So too for short-sellers. If they judge that Enron is cooking the books, or that Lehman is insolvent, they can seek to profit from their insight by short-sales. These lower stock prices in the present and convey to the market that there are potential problems with the companies, helping others avoid losses in the stocks. And if shorts are proved correct, rather than exacerbating any price slide, they actually mitigate price declines when they buy their positions back. (Of course, short-sellers, like speculators, only profit if their judgment is correct. If they short a productive, undervalued firm, say, e.g., Wal-Mart or Apple, they lose when the actual facts belie their predictions.)

Consider the recent failure of Lehman, where critics claim that short-sellers caused the decline by obscuring and distorting the company’s true value. The facts say otherwise. When the government shopped Lehman to potential buyers, opening the books to them, not a single buyer emerged, not at any price! Everyone who examined the company concluded it was worthless. This was the fact that short-sellers grasped earlier than others–it wasn’t a fact they created.
 
Speculators and short-sellers don’t create facts, they seek to identify and respond to them; and in the process they help adjust prices to economic conditions and establish smooth and liquid markets. As a result–instead of being scapegoated and banished–they should be respected and welcomed for the productive role they play in our markets.

Amit Ghate is a guest writer for the Ayn Rand Center for Individual Rights, a division of the Ayn Rand Institute. He is a full-time trader who often speculates and shorts.

Advertisers vs. the Free Market

Washington, D.C.–The Association of National Advertisers, a trade association representing 400 companies, has asked the Justice Department to use antitrust law to halt a proposed Google-Yahoo search advertising partnership. The deal, the group claims, will “diminish competition,” increase Google and Yahoo’s “market power,” and “raise prices.”

“This call to prevent Google and Yahoo from collaborating is an attack on the free market,” said Alex Epstein, an analyst at the Ayn Rand Center for Individual Rights. “Google and Yahoo, individually or combined, have no power to force anyone to advertise with them; their only power is the power to continually persuade advertisers that their services are the best use of advertisers’ money.

“If the members of the Association of National Advertisers object to the advertising options offered under a new Google and Yahoo partnership, there is a simple solution: don’t advertise with them. But they have no right to dictate to Google and Yahoo how to run their businesses.”

Mr. Epstein’s op-eds and letters to the editor have appeared in such publications as the Wall Street Journal, San Francisco Chronicle, Philadelphia Inquirer, Canada’s National Post, and the Washington Times. He is also a contributing writer for The Objective Standard, a quarterly journal of culture and politics. Mr. Epstein has been a guest on numerous nationally syndicated radio programs.

Alex Epstein is available for interviews.
Contact: Larry Benson
E-mail: media@aynrandcenter.org
Phone: (949) 222-6550 ext. 213