Saturday, May 17, 2014

ATLAS SHRUGGED summer reading


We’re slogging through the early chapters of Part I, and in this installment we’re confronted by what it means to live. 

What is our work for? What animates us?

Work is what we’re going to be involved in for the greater parts of our existence, shouldn’t it be about more than mere drudgery? Must everyone be a super model or rap star? Or can we find satisfaction in the producing of industry, of logistics, in the heartbeat of commerce?

Why do we produce? Is it to please others, ourselves, or some combination? Rand's characters have the answers, but they are conflicted … as we all are.

These three chapters set up the central tension of the novel: the right of a person to pursue their dream with obsessive focus, those who won’t ever understand that, and those who attempt to slow the motor of creators and producers.

This tension has a profound impact on what our views are toward government involvement, how we love, and to the source and goodness of certain social interactions.

If you want to freshen your memory, click over to the introduction, background, and Chapter 1 discussion from last week. 

This week, it's Chapters 2, 3, and 4 of Part I up for commentary.

Let’s continue on. 

PART I, Chapter 2, The Chain
We’re formally introduced to another of the novel’s central characters, Hank Rearden, proprietor of Rearden Steel, a manufacturing concern (Rearden Ore, Rearden Limestone, Reardon Coal) in the Northeast.

He’s a man of principled obsession, attempting to make the finest steel products imaginable. And when we meet him, the singular achievement of producing his very own alloy, named Rearden Metal, has been poured – a project ten years in the discovery. Told of his idea’s impossibility, Rearden toiled, working and failing during countless hours to get the formulas right, to make his dream a reality. He worked since a teen at the directive purpose of what he would later accomplish. He learned the industry inside and out. And now Rearden Metal is real.

It is achieved on this night.

Rearden brings home a bracelet fashioned from the first pouring of Rearden Metal for his wife, Lillian.

When Rearden arrives, we’re given a portrait of the assorted folk whom depend upon him: his wife, his brother, his mother, and a friend.

It’s immediately evident that there is a lasting tension between Rearden and his wife. 

Lillian appears never to tire of ribbing Rearden, nagging him, teasing him for working too hard. At her jabs, Rearden’s mother and brother both back Lillian in this regard. Rearden is cast by the eyes of his family as a money-seeking control freak, unconcerned with anyone else. And when Lillian asks Rearden attend a party at a future date, Rearden is caught in the irony of the occasion. It is to be the wedding anniversary of the Reardens. He embarrassingly agrees to be there. 

As few heroic characters are in Rand’s world, Rearden is flawed. He has very real doubts about his relationship with Lillian, about their marriage. Yet he presses on. It’s not entirely clear as to the struggle he’s having, but slowly the chasm between Rearden and his wife is revealed.

Lillian taunts him, but ever-so, passively.

Rearden catches up with an old friend, Paul Larkin, and the two discuss how Rearden is viewed in the media and through the eyes of the country’s legislative body. 

It’s apparent Rearden doesn’t have much regard for his public relations image, and he employs a lobbyist in the most hand’s off manner to deal with whatever pending laws or regulations coming down. Rearden is super-focused on his businesses, and not on the peripheral institutions surrounding him.

It’s in this chapter we also get a glimpse at how Rearden is viewed by these groups.

Rearden’s brother, Philip, is completely supported by Rearden financially. And it isn’t exactly evident what Philip does, except in his incessant raising money for charitable, political groups like the Friends of Global Progress, an organization advocating for a hodgepodge of causes and issues. 

In a revealing moment, Philip asks Rearden for a donation, or hints at it, and Rearden okays a large amount. There’s one catch: Philip asks the donation be made anonymously so as to not formally associate the group’s good name with Rearden’s horrible public image.

Rearden agrees, begrudgingly, out  of a flawed sense of familial duty.

The chapter ends with Lillian not appreciating the bracelet made of Rearden Metal. She belittles it, and, by transference, him, but accepts the gift as along the lines of doing the best Rearden can.

It’s a remarkable sign of disrespect, and further allows us to see the huge valley between Rearden and his wife. Lillian even goes so far as to compare her gift to a handcuff, a chain by which Rearden is accused of holding them all in his debt, his favor. It is an ominous ending to a short but revealing chapter.

PART I, Chapter 3, The Top and the Bottom
Rand takes us back to New York, and plops us at the table of four shadowy figures, all of whom we’ve met already at least in passing or mention: Taggart, the head of Taggart Transcontinental; Boyle, the head of Associated Steel; Paul Larkin, Rearden’s friend and a businessman from the last chapter; and Wesley Mouch, a Washington lobbyist employed by Rearden and other industry leaders.

Hank Rearden is not present.

Their meeting is centered around a theme quite a few business owners at an industrial scale seem to have. They dislike competition of any kind, and they work hard to prevent usurpers from entering the market when the bigger, more established companies aren’t getting the job done. Plenty of examples in history are there for the reading.

Taggart’s and Dagny’s argument from the first chapter is over the supply of steel badly needed to help Taggart Transcontinental continue service on the Rio Norte line. Taggart wants to remain loyal to his friend, Boyle of Associated Steel, insisting Boyle can handle matters. But it’s obvious Associated Steel won’t honor the needs of Taggart Transcontinental, and Boyle spends the first part of Chapter 3 excusing his company’s lack of efficiently. Much of this conversation is a direct call-back to the Taggart and Dagny argument in the first chapter.

Taggart is more than willing to accept Boyle’s excuses.

The men devise a rationale for what they know is in front of them, shortages of necessary elements to make the manufacturing of steels, and therefore rails, for the tracks on which trains travel, which in turn move the nation’s goods, and then power the economy’s blood as a heart pumps through arteries. 

These shortages, they deduce, are due to competition and overuse. Businesses need to work together, the men being led in the conversation by Boyle and Taggart conclude, because they depend on one another. And if one fails, they all stand to fail. So they must protect the weakest elements in the supply chain.

It too is a classic economic argument, one we often hear and read today. Too big to fail is a direct outcome of such thinking. 

On this score, the philosophical discussion turns rather practical. Instead of a pure power play to eliminate competition from a superior rival, Boyle casts Rearden’s new metal, Rearden Metal, as something of a rip-off. Boyle, an industry veteran, finds it beyond difficult to believe that a metal can be invented both to solve the Taggart Transcontinental track problem and also happen to be a lighter metal. 

In Boyle’s expert opinion, it’s dangerous and risky.

The men continue to the conclusion none of the established review bodies, none of officialdom, will regard Rearden Metal as anything more than a hazard. And with the addition of Rearden Steel’s other holdings, like ore, it does appear Rearden has a decidedly unfair advantage as the industry and country are washed out in shortages. 

Why should one man have control over natural resources?

Two of the men directly employed and befriended by Rearden, and remember Rearden isn’t invited to this cabal, Larkin and Mouch, agree wholeheartedly with the implication something must be done about Rearden, his new metal, and his holdings.

All four are pinning their hopes on mining operations in Mexico, mines promising to be the way out the American economy needs. With more resources extracted from there, particularly copper, more business will be had by all the established industries. All four men happily ignore rumors the Mexican government might nationalize private property in the country thereby potentially zapping any financial gain.

Taggart learns from Boyle his company is running a sparse operation into Mexico. Taggart was under the impression Taggart Transcontinental was providing as many trains and trips as it could in hopes of a grand success in Mexico. Boyle confirms Taggart is mistaken, but Taggart doesn’t let on that he is surprised by Boyle’s revelation. 

The company is using the bare minimum in terms of supplies on the Mexican mining operation. Taggart is privately confused while he assures Boyle the operations have been slow in Mexico due to the shortages like those plaguing Boyle’s company. Boyle is satisfied, but Taggart is silently troubled.

We learn more about Dagny and Taggart, the brother and sister team running Taggart Transcontinental. Dagny has always worked in the nuts and bolts of the company, working her way up through the ranks. Taggart started in public relations. Though through tradition the company is left in the ultimate hands of Taggart, Dagny’s rise is heroic. She doesn’t have time for the politicking of the industry, of cozy relationships. She’s too busy running the actual business, getting to know its function, how it goes. She, like Rearden, has always been a purposeful person, one headed in a certain direction.

One of the first major decisions made under Taggart’s leadership was to build, supply the San Sebastian Mines, owned by international copper king, Francisco d’Anconia. The San Sebastian Line, as it’s known, is costing the company a lot of money. It’s a huge gamble, and it’s even a greater one when Dagny learns the basic facts: d’Anconia purchased these stark mountains and didn’t bother to encourage stock sales in his venture; instead, everyone in the industry came to d’Anconia, begging to be let in. d’Anconia obliged, selling shares to companies like Taggart Transcontinental. Boyle too invested heavily, all seemingly on the news, just the news, d’Anconia was  doing something in Mexico, and if it was good enough for him, it was good enough for them.

Taggart diverted resources away from their most productive line, the Rio Norte, and plowed money into the new line from Texas to San Sebastian.

Dagny could not see why her brother was so confident and so eager to follow d’Anconia when their own lines needed to be refitted and kept up. Dagny fought against the move, and insisted on facts as to the exact minerals contained in that part of Mexico. Instead, she was given the business reputation of d’Anconia and his past record of success. When that didn’t work, she was told of how the Mexican economy needed and deserved a first class mining operation and line to help its struggles. And, the company’s board members insisted, the new Mexican government had control over everything, so the deals made with Taggart and Boyle and d'Anconia were sound, guaranteed.

Taggart Transcontinental’s lines were suffering, especially the Rio Norte, however. 

Accidents. Faulty equipment. Oil producers who depended on the Rio Norte line, like Ellis Wyatt in Colorado, switched over to other companies, like Phoenix-Durango, in order to get their products to market. Not only was Dagny’s family company taking a wild risk in Mexico, it was also losing customers at home.

Taggart, having learned from Boyle that operations in Mexico are not going the way he planned, confronts the one person he knows would’ve made that decision, Dagny. Taggart is furious. He rails against Dagny undermining him, and he questions her loyalty, her decision making. She confronts Taggart with the facts, and Taggart responds with pure emotion.

Taggart relies on altruism, giving to others, friendships, and making business choices based upon whim rather than sound evidence. Dagny reminds him she’s been submitting reports to Taggart regularly, reports he cannot be bothered to read evidently. So none of this should surprise him if he's doing his job. They argue more, and Taggart seems to imply more should be done for the Mexican line.

Dagny calls his bluff. 

She asks how many trains would it take to satisfy Taggart. She forces Taggart to do something he hates – take responsibility. Taggart folds and cries he’ll take up Dagny’s decision with the company's board, surely having her removed or at the very least heavily rebuked, reprimanded.

In the meantime, Eddie Willers, the childhood friend of both Dagny and Taggart, and now Taggart’s personal assistant, has lunch with a worker at Taggart Transcontinental. Willers confesses his fear at the company’s rough patch, telling this lower-level worker a great deal about the company’s inner workings. Willers ends the conversation by insisting they have someone dependable to lay track for the Rio Norte line and that all will be well.

PART I, Chapter 4, The Immovable Movers
Dagny instantly understands how it is ‘motive-power’ that makes and sustains buildings even though they appear to be static. Someone had to dream them up, take to adding sums, and move to construct them.


Every living thing needs activity to prevent deterioration. Without it, we die. Same goes with business.

Taggart wants no change of any kind. And it’s obvious his way of looking at the world is causing the company to rot, slowly die off. Willers sees the company as something that will always exist because it always has. But it is Dagny who has the right idea, ultimately. A company must adapt and change, move.

Dagny needs new engines, and United Locomotive is stalling, not getting the job done. She pays them a visit, only to find perfectly good engines left to rust and rot. The connection is one of a senseless waste, of how people and ideas, and of the world we create, need motive-power.

Both Dagny and Willers learn the last hope for their Rio Norte line has quit, left. And there’s no explanation. The supplier has suddenly vanished. Willers is panicked, and Dagny is to a degree as well ... but she keeps her cool.

Dagny seeks greatness in everything she encounters, and it comes through in her listening to music, especially Richard Halley. She’s constantly searching for kindred spirits who want greatness, movement, and competence.

We learn through Taggart’s tryst with Betty Pope that the San Sebastian Mines have indeed been nationalized by Mexico. 

All that investment is gone, taken by the Mexican government for the good of their people. What’s interesting about this encounter is how sexless sex seems between Taggart and Pope, how passionless it is. All they find in common, in terms of passion, is their hatred of his sister, Dagny. And Taggart wants to destroy his sister through tattling on her to the company’s board. Taggart wouldn’t reverse the orders Dagny made at various points, but he will completely blame Dagny for the line’s collapse. It makes him and Betty Pope content to agree on their mutual hatred, Dagny.

In front of the Taggart Transcontinental board, we might expect Taggart to resign. He was the one who pushed the Mexican adventure and the San Sebastian line through. He fought to up the trains and supplies. We find he won’t do any of that, taking no moral responsibility.

Instead he blames two underlings, taking credit for the minimizing of the company’s loss due to Dagny’s decisions without mentioning Dagny. He also looks to Washington and tax payers to make his company whole. 

And what of the board? Shouldn’t they hold Taggart accountable? They were the ones who rubber stamped Taggart’s decisions when it came to Mexico. However, like Taggart, they too have to cover their decisions to save face.

Dagny, rather than doing a victory dance, never mentions she was right to Taggart. She hopes this will prove to Taggart she is in full control and will finally leave her alone to run the company proper.

It appears Dagny is making a huge mistake by not holding Taggart responsible. And this is what producers do, they move on to produce. They do not wallow in others’ failures. They’re too busy doing.

What’s curious even still is how d’Anconia has lost $15 million in the Mexican deal. This is out of character. Taggart is furious and attempts to contact d’Anconia to no avail.

While all of this is going on, the advocacy group led by Boyle and Taggart has gotten the Anti-Dog-Eat-Dog legislation to pass. What this does is effectively end competition aimed at older, established companies like Taggart Transcontinental. It basically says those newer companies who’re offering lower prices and competing for resources and customers must yield, sell their businesses and get out of the market altogether.

Established businesses like Taggart's and Boyle's are the clear winners. 

The new law also means businesspersons like Ellis Wyatt who left Taggart Transcontinental for companies like Phoenix-Durango must now only do business with Taggart Transcontinental. 

By law.

Here, Rand gives Dagny a moral spine like no other. Dagny goes to Conway, the Phoenix-Durango owner, and she expresses her outrage that his company is being shut out of the market. It’s a weird scene. It is because, well, now Dagny can relax, right? She doesn’t have to worry about providing the quickest, best service because now other businesses like Ellis Wyatt have no choice but to deal with her company. Why on Earth would Dagny wish to help Conway, her main competitor?

It’s an important lesson. While free markets and capitalism are not the function of competition, competition is a natural outgrowth of capitalism and free markets. It is through having to please the customer that businesses know whether or not they’re doing a good job. It’s a classic feedback mechanism. It provides the motive-power for businesses to constantly innovate and get better. And the new law is a strike at the root of what makes a sound economy go. But it's also a deeper affront to Dagny's sense of life, her commitment to ethical behavior, her desire for greatness.

Dagny understands this, and she urges Conway to fight. Ironically, again, Conway gives up. He deep down believes what the legislature did was for the greater good, and he’s willing to sacrifice himself for what he thinks is the greater good.

Shortly after, Ellis Wyatt visits Dagny. He is obviously upset at the legislation because now he cannot be sure he'll always be able to find a way to get his oil to market if Taggart Transcontinental doesn’t come through. Due to the new law, he is forced to do business with Dagny. Instantly Dagny wants to scream out that she isn’t in agreement with what has happened, but as a good business woman she knows it’s better to simply listen to her customer and take his anger seriously. She feels a connection with Wyatt, and that's evident in the way she allows him to speak to her.

In another fit of irony, the new legislation inspired by keeping Rearden down puts Rearden in the prime position to extract whatever terms he wants from Dagny and her company. She needs steel, tracks, and she needs it now. The fate of Taggart Transcontinental depends on Rearden Metal.

The scene is long enough to get a sense of how both characters love what they do and are unashamed to admit it. They know it is they who move the world, who make it work. While everyone around them uses excuses and force to get their way, Dagny and Rearden produce.

The discussion is of two similar souls agreeing they must work within the system they find themselves. Whatever the new law's consequences, it’s a chance for Dagny to save her company, and a brilliant showcase for the newly minted Rearden Metal.  

Check back next week as we dig deeper into Atlas Shrugged, and begin to explore the true terror at the center of the novel.

And I mean it.

Craig Edward Kelso is the author of Anarcho-Capitalism (2014), a primer on the philosophy of peaceful, stateless cooperation. His curriculum vitae include a Bachelor of Arts in Political Science from San Diego State University, and a Post-Baccalaureate secondary education credential in both Social Science and English Language Arts. Kelso taught for nearly a decade in the American public school system, and was voted by colleagues Teacher of the Year, twice in his short tenure, earning numerous accolades from chambers of commerce, mayors, state assembly persons, governors, congresspersons, senators, and even Wal-Mart. Currently he struggles to earn an opportunity to be employed, working as a laborer, dishwasher. He is deliriously happily married to Myra Kelso, living in Southern California with their adorable children.

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