I am now reading, or I should say listening to, Atlas Shrugged by Ayn Rand. While just now finishing part 1 of the book I am amazed at how prophetic the book really is – much of the dialog of Rand’s liberal characters is now a standard part of speeches and campaign promises today. Written in 1957, this future world does not contain cell phones and iPods but the politics is definitely the “Change” we are getting in 2010.

The book is a novel that tells a story about capitalism versus collective socialism. Those who build businesses by their own work, toil, risks and genius are plagued by the Looters (Now, where have we heard that term in the news lately?). Looter is the term the capitalists use for those that take from those that earn wealth to give to those than they deem need wealth. On the other side, the humanitarians choose to value a person because of their motives. Even the ones that control large corporations see “doing good” as more important than making a profit. The humanitarians see the capitalists as uncaring, unfeeling “robots” that run a business based on greed.

The worldwide economy is bad in the book. Products are shoddy. Nothing is delivered on-time. Work goes undone almost everywhere as businesses run by the humanitarians tend to fail or languish in mediocrity. The worse the economy gets the more people empower a humanitarian government bureaucracy to take more from those that produce and to give it to those that do not produce (Socialism vs. Parable of the Talents, Matthew 25:14-30). This, of course, makes the economy worse. At this point in the book what we are beginning realize – through the characters – that that the industrialists/capitalist are starting to fight back.

How do they fight back? Let’s look at a fictitious new chapter for the book.

Ellis Wyatt is the CEO of a great oil company that discovered an excellent large resource of oil offshore in the Gulf of Mexico. Everyone wants the oil but the bureaucrats don’t want a well in shallow water too close to shore so they demand, and permit, a deep-water oil well. Wyatt Oil has all the expertise and takes all the risk as they go forward because there is good profit for success. They pay off the customary people that could not discover, recover or convert the crude to anything of value. Everything is fine – the oil company is making a profit from their work, governments are paid from taxes and fees and people benefit as they go to work at great jobs in support of the oil rig. It is a great asset to the community until one day there is an industrial accident – the oil rig blows up and oil gushes into the sea.

There is not time for investigation to determine whether the accident was human or machine failure. The oil company is trying to stop the oil flow, people are out of work, and the oil in the ocean is chum to the environmentalists and liberal media. All the while the Wyatt Oil is working with their best experts available – the bureaucrats without capability are conspicuously quiet playing golf and plotting their political moves.

Wyatt Oil has contract with the government for the ability to operate the well. The contract signed by all charges Wyatt Oil for the highly paid inspectors to review safety but also limits liability of Wyatt Oil on any accident to 75 million dollars.

The highly paid government bureaucrats that wrote the contract with Wyatt Oil and required payment to their highly paid inspectors can’t do anything to help stop the flow of oil. When it is discovered by the media that Wyatt Oil has a contract with a 75 million dollar maximum limitation of liability clause for any accidents then the pressure builds on the politicians. Since the bureaucrat can’t do – their only job becomes forcing, threatening or otherwise getting Wyatt Oil to lose more for their stockholders than the amount of the contract. The bureaucratic machine can be a hero and gain power if they make the oil company to pay fishermen to sit idle instead of temporarily moving their fishing boat to another place, and pays owners of multi-million dollar ocean front properties and restaurant workers. Thus begins the propaganda that fits the public expectation – big business is wrong-headed and heartless caring about profit and not the environment or people.

The local conservative politicians have it tough. On one hand they want the oil company to pay their constituents for “damages” to appease constituents; but on the other hand they know that Wyatt Oil is the life blood of their community which has suffered from loss of other manufacturing concerns. They cannot afford to kill Wyatt Oil. In the end they side with the looters – the people join with the machine and are against the greedy capitalist company.

Activist lawyer turned celebrity talking head, Gerald Rivers, berates Ellis Wyatt and Wyatt Oil as greedy, “They have been taking the oil that belonged to us. After all they didn’t make the oil. God put the oil there and it belongs to all of us yet they are taking it for their profit. They deserve to pay for every problem from this disaster.”

No one is concerned with the legal contract, the agreement that made the risk and benefit to the community and the company worthwhile. That is forgotten as is the fact that Wyatt Oil discovered the oil and produced the men, machines and capability to get it. The bureaucrats strong-arm the company to give them 20 billion dollars for the people. Yet, the bureaucrats really want power and to create another powerful bureaucratic branch of government to award the earnings of the company to non-workers as they see fit. People wait in line to get money they didn’t earn while the oil workers, that couldn’t afford an oceanfront house, are laid off.

Starting with Ellis Wyatt, the men and women behind the Wyatt Oil have had enough of the looters and the bureaucrats that they are supporting. The top engineers, scientists, technical workers, and managers, and all those that we all know as “doers” fight back by quitting and disappearing. Ellis Wyatt plugs the well, but a series of bad luck disasters worldwide destroys much of the company assets. Wyatt Ellis disappears leaving Wyatt Oil to go bankrupt without company equipment or oil production trade secrets – leaving the looters with as little as possible to plunder.

Another industrial company supporting millions of good working people and stockholders as well as non-value add moochers and looters goes bankrupt. The additional people on relief exasperate the crisis where the next step is government action is to take more control of business.

In real life, the BP episode will likely end private companies never again trusting a contract with the government, prices for contracts going up, oil drilling leaving the gulf taking with it billions in taxes and high paying jobs, more people in needed of government assistance, new power to the bureaucratic government, and fewer companies that can compete for government work due to incredibly high liability insurance. (Side note – notice how the people that despise Halliburton are the ones that make competition to Halliburton impossible.) The meaning of it all being that the bureaucrats make policy that keep real businesses out of competition with the bureaucracy.

So far in the book Ayn Rand has introduced some wild government policies that an apathetic and misguided people tolerated. So far even she couldn’t think up something as incredibly stupid as allowing our government to violate the one person one vote rule.

I don’t know how the book ends. I will keep the blog updated and let you know as I read more. Even now, however I would say that this book is powerful. It should be required reading for any engineer, scientist, welder, builder, inventor, factory worker and entrepreneur. Forget Ayn Rand’s politics, her philosophical Objectivism, or anything else. Just read the book and listen to the politics of the day.

As a side note – I think Obama’s teleprompter plagiarized the dialog in the book spoken by Eugene Lawson. I can hear the cadence of the voice now as the humanitarian socialist brags that he never once made a profit from business. He later goes on to a career as government bureaucrat leader that ruins the economy and the people of the whole country with collective socialism and fewer Atlas’ to bear the weight. Lawson, I mean, not Obama’s teleprompter – or its mouthpiece.

 

Kevin Totherow is a Business Development Manager of MES for Schneider Electric and a consultant for helping manufacturing clients manage their operations better. Kevin has been a controls engineer, consultant and president of Sylution Incorporated. He can be reached at (864) 252-6819 or by email at kevin.totherow@schneider-electric.com.

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