Off the top of my head, what makes a work of literature potent:

1 – raising questions and issues that are general to all times and all people.
2 – containing characters who combine elements of Everyman and the heroic.
3 – drawing readers in, so they have something at stake in the book’s ending.
4 – demonstrating innovative or powerful use of language.

Do you have any thoughts about the question?

The point of this post is not to elevate one argument over the other, but to show how, in the midst of current events, we are drawing from literature for understanding. I have read Atlas Shrugged, though not Capitalism: the Unknown Ideal (maybe at some point in the future!) and have great admiration for Rand’s ambitious project. The paragraph mid-way through my post, beginning “Others, defending the free market…” highlights and links to a similar position to your own, in an effort to fairly represent both sides.

However, in one sense – namely the proof that literature and society are not divorced from one another – the outcome of the debate is secondary. Because the focus of this blog is the impact of literature on society, that’s the angle I have chosen. Although I am interested in the economic debate, I am not qualified to take a definitive position. I happily leave that role to those better qualified in economics.

Again, thanks for sharing your ideas and for your interest in my blog.

The “if” is so small an escape hatch as to be disingenuous.

This crisis was neither a failure of laissez-faire capitalism nor Ayn Rand’s ideas, it was a failure of intensive regulation —with Greenspan’s hypocritical contributions. From The American Competitive Enterprise Institute:
“While the Dow collapses, we have a bull market in government regulations. The 50-plus departments, agencies and commissions are now at work on 3,882 rules; 757 will affect small businesses. More than 51,000 final rules were issued from 1995 to 2007.”

That’s nearly 54,000 NEW regulations, added to what was there before, in only 12 years!

That is hardly Rand’s laissez-faire capitalism; that’s massive socialist/fascist government interference! At root, those are the very ideologies Rand spent her lifetime hoping to save Americans and America from. Now, when the effects of those destructive ideologies from Washington hit the fan, everyone is blaming laissez-faire capitalism instead. They are ridiculous, uninformed, or dishonest.

Greenspan dropped any pretense of understanding Rand’s arguments well before he became head of the Fed., and he then became a major part of the problem. His monetary policy and suppression of interest rates (1%!!), when Rand would have said “let the market decide”, were an appalling government intervention. Add in the HUD, CRA, CDS, Fannie Mae, Freddie Mac and the recipe for a catastrophically distorted market, including the trading of derivatives, was complete. There is no room for the implicit doubt of “if”.

Edward Cline wrote, “Reason and rationality flee when force becomes a factor in men’s decisions, to be replaced with the pragmatism of punishment-avoidance or a risk-free shot at easy money.”

So imagine YOU are the CEO of a large financial organization. Your competitors are complying with the regulations and appear to be making good for their shareholders, while things are getting tight for your firm. What do you do?

You want to buy a house, and the government directly or indirectly tells your lender they will protect him from default so long as he keeps the mortgage interest low. What do you do?

You do the pragmatic thing, join in, and trusting in the state’s easy money guarantee. As a CEO, if you are able to understand the fraud in the government’s game, you build yourself some protection for when the government’s house of cards collapses. Most people believe the “government is here to help” (say by regulation), so they don’t protect themselves.

You would not have dared to engage in the risky lending or buying that lead to the crisis, were it not for the handful of people in the US government who believed they were smarter than the free market and installed legislation to distort it. Without those people, lending rates would have adjusted themselves years ago, paper money would not have been printed like it grew on trees (e.g. “helicopter Bernanke”) and the present crisis would never have materialized.