Saturday, August 19, 2006

The Atlas of Economics

Austrian economist Peter Boettke, here in New Zealand recently to deliver the 2006 Ronald Trotter Lecture, had this to say recently about how effective Ayn Rand's novel Atlas Shrugged is in teaching economics (the article, 'Teaching Economics Through Ayn Rand: How the Economy is like a Novel and How the Novel Can Teach Us About Economics,' is unfortunately offline).

During his years of teaching, Boettke confesses he frequently used Atlas as a teaching tool, comparing the economic ideas it taught with those in John Steinbeck's Grapes of Wrath. He writes that 'Atlas' "details the benefits from voluntary exchange, the importance of a sound monetary standard, and the role of individual initiative and creativity as the engine of economic progress. Rand's work highlights the importance of private property rights in providing incentives, the mutually beneficial aspects of exchange, and exalts the human achievement of innovation and wealth creation..."
Rand makes the very important point that the critique of socialism was never against rational planning per se. Rather the question was who was to do the planning and the scope and the scale of the planning proposed.

[Rand] communicates to her readers within the context of a beautifully constructed story the basic insight concerning the perverse incentives of collectivism, the inability to engage in rational economic calculation without private property, the law of unintended consequences in interventionism, and the interest-group logic of political capitalism...
The difficulty of reasoning economically from first principles to logical conclusions combined with unmasking the sophisms of special interest groups led [Henry] Hazlitt and [Ludwig von] Mises to devote their lives to economic education through the written and spoken word.

It is my contention that Rand picked up that challenge and attempted to provide economic enlightenment to her readers through the story of 'Atlas Shrugged.' The book is no doubt one of the most philosophical novels of the twentieth century -- whatever one's judgment is of that philosophy -- but learning philosophy through Rand is not my topic....

The slippery slope that Hayek, Hazlitt and Mises warned about -- where one failed intervention begets another failed intervention -- is neatly illustrated in Rand's story. Moreover, as in the work of these economists, the reversal of public policy away from statism and toward freedom will not occur until a sea change in the underlying ideology takes place. So one can read in Rand's novel both the dynamics of interventionism and the mechanism of effective social change that a variety of classical liberal economists since Adam Smith have attempted to articulate in their articles and books.

'Atlas Shrugged' is arguably the most economically literate work by a major novelist in the history of literature. Daniel Dafoe actually wrote in the field of economics, and his story of Robinson Crusoe became the quintessentially fictional allusion for economists. But in my opinion, Rand taught more common-sense economic truth than any other novelist.
As the chaps at LFB say, it's a fascinating article about not only how the novel illustrates economic principles through its plot about a massive breakdown of an economy, but also how economists must tell a "good story" about how the economy works to be successful both theoretically and pedagogically.

LINKS: Learning while visiting NZ - Peter Boettke - Austrian Economists Blog
To what extent was Rand a Misesian - Mises Economics Blog
Atlas Shrugged - Amazon.Com

RELATED:
Books, Economics, Objectivism, Philosophy

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2 Comments:

Anonymous Liam said...

OK then - now I politely invite you to have a look at a more lucid analysis of the writer and her outlook...
http://nymag.com/arts/books/features/60120/

11/13/2009 05:46:00 pm  
Blogger PC said...

That's not "lucid," Liam, it's just plain venomous.

11/17/2009 06:39:00 pm  

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