Ayn Rand on Governments..and the curious case of US Auto sector (and Satyam in India)

Ayn Rand, the person who developed concept of ‘Objectivism’, was a staunch supporter of ‘free will’. Through her books FountainHead and Atlas Shrugged she strongly criticized ‘Collectivism’ and role of anybody/ agency (e.g. Government) who imposed restrictions on Free Will and freedom of expression.

I have a couple of great videos of interview of Ayn Rand where she has talked in depth about her thoughts on ‘Objectivism’, ‘protectionism’ (which leads to creation of state-sponsored Monopoly).

Here are a few of her quotes on Government:

“The only proper purpose of a government is to protect man’s rights, which means:  to protect him from physical violence. A proper government is only a policeman, acting as an agent of man’s self-defense, and, as such, may resort to force only against those who start the use of force.

 The only proper functions of a government are: the police, to protect you from criminals; the army, to protect you from foreign invaders; and the courts, to protect your property and contracts from breach or fraud by others, to settle disputes by rational rules, according to objective law.”

A government is the most dangerous threat to man’s rights: it holds a legal monopoly on the use of physical force against legally disarmed victims. 

Government “help” to business is just as disastrous as government persecution… the only way a government can be of service to national prosperity is by keeping its hands off. 

So according to Ayn Rand it was not government’s job to build schools, feed poor or run social business enterprises – that should be left to businessmen who out of their own benefits will do these (without need of so called ‘philanthropy’)


Now why am I discussing all this right now?

Because of the following news:


For many many years the US has been viewed as a Capitalist country, with very few interference from the Government or any of its agencies. It was truly a country of opportunities and if you had an idea, you could become billionaire through legitimate ways.

But that was during heydays. With recession gripping the world, even the US is turning towards protectionism, interfering the ‘free market’.

It was an unpleasant surprise when Obama talked in favour of putting a cap on H1-B or against outsourcing of work outside the US. It was a kind of ‘protectionism’ that Ayn Rand was opposed strongly. It was a norm in developing countries – including India – but the US??…no way!

<span class="Apple-style-s
n” style=”font-size:small;”>But since then Obama has moved beyond just ‘protectionism’ – and has started dictating business policies , how his bailout package should be used and – even who should run the businesses!

General Motors (GM) CEO Wagoner went on 29th March to meet Obama Administration, to discuss bailout plan for GM. But instead the Administration ‘requested’ him to ‘step aside’ as CEO which Wagoner agreed to almost immediately!

I can understand the US government’s keenness in restoring the economy, ensuring that every single dollar they give out as support is used efficiently – and they did a good job when AIG misused that money to give fat bonuses to their top executives – but asking CEO to step down is just a bit too much.

Of course, GM is in DEEP trouble. They just announced loss of $30 billion (!!!) for the year 2008…

To put this in perspective…Infosys’ total annual revenue is $6 billion that too with employees over 100,000! 

This means, GM lost, in a single year, the amount that 100,000 Infosys employees will generate after 5 full years of hard work!!! Whoaaaa….

In the light of this, one may argue in favour of the need for interference by Obama (or any Government)…but definitely, in the long run such interference by Governments is not good (yes, I support Ayn rand’s views in this matter)


Meanwhile, the situation is not very different in india. After the Great Satyam Robbery, government jumped in – appointed key executives on the board which is now overseeing the sale procedure.


Three months later – the charges are not yet established against the tainted founder…which is Government’s primary job according to Ayn Rand – to privide legal protection.

Instead the government is busy trying to sell Satyam off – by spending all the time on the stake sale procedure.

One bidder has already accused government appointed board of lack of transparency.

But at least in case of Satyam, the interference by Government was necessary – given the size of scam.

In short, I favour Ayn rand’s views of Free Market without government interference, in general. But in specific extraordinary situations like these two (Auto sector in the US and Satyam in India), government MUST take control until the things are restored to normalcy.

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