I've read the Fountainhead and Anthem (because I was a fan of Rush's 2112) some time ago. First, I thought the Fountainhead could have been about 800 pages shorter, although I'm sure an English major could tell why all the bits and pieces needed to be in there. The word "verbose" comes to mind.
But more importantly, Rand wrote fiction. She uses allegories to explain her philosophy. Very long allegories. But it's an idealized world that has no bearing on reality (much like the models on which most modern economic theories are based).
How do I know this? Simple.
From 1945 - 1964, the top marginal tax rate was over 90%.
From 1964 - 1980, the top marginal tax rate was over 80%.
Here is a graph of real US GDP for the same period:
There was no "Going Galt." The economy still grew. In fact
As the above chart of the YOY percentage change in GDP shows, the economy was more prone to grow at faster rates in the "going Galt" days of massively high taxation.
BTW: This is not an endorsement of 90% top marginal tax rates. Or 80% However, I have continued to argue for some time that top marginal rates do need to be higher than current levels only because the budget gap is so large. And no, that will not kill the economy or lead to people fleeing the U.S. in droves. But that's for another day.
But, the argument that people will "go Galt" when rates increase is, well, bullshit.
This moment of clarity was brought to you from the world of objective facts and figures, not the idealized world of Ayn Rand.
9 comments:
Being the wizard of the charts, what I would be very curious to see is a historic chart of the average effective tax rate over time, charted against GDP. Talking about the marginal rates tends to confuse the issue because really what it comes down to is that we need a certain amount of revenue coming in to pay for what we're doing.
A common talking point is that we have one of the highest corporate tax rates in the world. But the reality is that few corporations pay at that rate because they hide their assets. So their effective tax rates are quite low despite that supposedly high rate.
My guess would be that there's near zero correlation between effective tax rate and GDP growth.
Capitalism's secret is to put restricted resources into productive people's hands. A power-to-the-productive scheme. High taxation can disturb, but you have to go a long way to destroy the scheme.
All moral philosophers are on the wrong track, not only Rand. If knowledge is the goal, societies should be studied like biologists study ants. They make observations and never ask questions like "Look what that ant did. That's morally wrong!".
Dear Bonddad,
I am a long time reader of your blog and have gathered much useful insight from your analysis. I have not commented before because my area of specialty is literature, not economics and data analysis. Now, however, I think I can make a useful contribution. Ayn Rand's work seems long, verbose is the word you have used, because it is long and, as you say, verbose.
Hope this helps clarify the origins of your response to her work.
"First, I thought the Fountainhead could have been about 800 pages shorter, although I'm sure an English major could tell why all the bits and pieces needed to be in there."
No. No self-respecting student of literature could tell you why both of Rand's long novels are so long. They should not have been, nor did they need to be. But they are.
Another lit major here...Rand's books are poorly written tomes full of ill-though ideas. For that reason they have little respect in literary circles. They hold attraction for people who are already inclined to overestimate their importance to the rest of the world.
A friend told me to read either the odd or the even pages (didn't matter which) of Rand's epics and I wouldn't miss a thing.
Perhaps the excessive length is a key to their popularity? Reading very long books gives readers a sense of accomplishment they can't get from reading novellas or watching movies. You read Animal Farm (or Anthem, if you must) and feel like you've gotten a lesson; you read Atlas Shrugged and feel like you've gotten a Philosophy.
Q: Why is Rand's writing so long and verbose? A: She epitomizes the old saying, "If you can't dazzle them with brilliance, baffle them with bullshit."
"I have not commented before because my area of specialty is literature, not economics and data analysis. Now, however, I think I can make a useful contribution. Ayn Rand's work seems long, verbose is the word you have used, because it is long and, as you say, verbose."
OK, now that was funny.
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