Honoring Ayn Rand: The Morality of Capitalism

Outside the concentration camps, which all collectivists felt necessary to establish in order to physically exterminate the last vestiges of freedom, the color of communism was not "red." It was "gray." My childhood memories of communist Czechoslovakia are filled with gray skies, gray streets, gray houses, and gray masses of joyless people. My family, like most families in the Soviet bloc, had its share of "problems" with the communist authorities.

My great uncle, because of his alleged anti-communist activities, was sent to mine uranium for Soviet nuclear weapons.

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My childhood memories of communist Czechoslovakia are filled with gray masses of joyless people.

Like so many others, I understood early on that communism was both murderous and a gargantuan economic failure. But recognition of communist failings does not automatically translate into love for capitalism. Millions of people around the world continue to see capitalism as a prerequisite for wealth creation, yet abhor its moral premises. They tolerate capitalism as a necessary evil. Such half-hearted commitment to capitalism is dangerous. On an ethical level, it legitimizes envy and theft. On a practical level, it makes capitalism less effective in producing economic growth.

I first understood the importance of a moral defense of capitalism when, as a university student in Great Britain, I read Ayn Rand 's Atlas Shrugged . In that book, Rand identifies the entrepreneur as the creator of value and the rightful owner of the risks and rewards of his economic activities. Others, who do not share the risks that the entrepreneur takes, should not expect to be rewarded. As Francisco d'Anconia says to Hank Rearden in Atlas Shrugged : "All your life you have heard yourself denounced, not for your faults, but for your greatest virtues. You have been hated, not for your mistakes, but for your achievements….You, who've created abundance where there had been nothing but wastelands and helpless, starving men before you, have been called a robber. You, who've kept them all alive, have been called an exploiter."

Similar insights greatly contributed to Austrian economic theory. For example, F.A. Hayek and Israel Kirzner identified the entrepreneur as the creator of value, thus challenging the morality of government redistribution of income. Unfortunately, university undergraduates are seldom exposed to either Austrian economics or Rand's writings. That is both a pity and a call to action. In the long run, the public's failure to understand the morality of capitalism makes a future return of collectivism more likely.

Marian L. Tupy is a policy analyst with the Center for Global Liberty and Prosperity at the Cato Institute.

This article originally appeared in the December 2004 issue of Navigator magazine.

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