The crux of Rand’s approach is found in a key
radical
insight—that there is an inextricable connection between government intervention at home and abroad, and that many issues can be more fully understood only through an elucidation of the interrelationships. Rand states unequivocally: “Foreign policy is merely a consequence of domestic policy.”
58
When Rand called for a complete “revision of [U.S.] foreign policy, from its basic premises on up,” she knew that this would entail a simultaneous repudiation of the
welfare
state at home and the
warfare
state abroad, an end to “foreign aid and [to] all forms of international self-immolation.” She knew that “a radically different foreign policy” required a radically different domestic one—and that both required a philosophic and cultural revolution.
59
Rand had identified U.S. domestic policy as the
“New Fascism,”
whose “economic essence” is the business-government “partnership.”
60
Once the rule of force begins to predominate, the institutional means for legalized predation expand exponentially, at home and abroad.
Rand argues that the political economy of
neofascism
“accelerates the process of juggling debts, switching losses, piling loans on loans, mortgaging the future and the future’s future. As things grow worse, the government protects itself not by contracting this process, but by expanding it” beyond its national borders. Just as pressure groups seek domestic privileges, so too do they benefit from a whole global system of
foreign
aid. Government subsidizes foreign investment through direct and indirect assistance; business sells its products to foreign nations, which
pay for them with money received from foreign aid. This entails financial manipulation (through, for example, the Federal Reserve System, the Ex-Im Bank, and the IMF), “credits to foreign consumers to enable them to consume” U.S.-produced goods, “unpaid loans to foreign governments, and subsidies to other welfare
states
,” to the United Nations, and to the World Bank.
61
Rand goes further: “If looting collectivists did not exist, America’s foreign aid policy would create them.” The overwhelming profiteers of this system were those peculiar “products … of the mixed economy,” those statist businessmen who “seek to grow rich not by means of
productive
ability, but by means of political pull and of special political privileges.”
62
She observes
that there are firms here and there, in various businesses and industries, who are growing prosperous by trading with foreign countries, the specific foreign countries who receive American aid. In other words, there are businessmen who are selling their products to the foreign countries receiving American aid and who are paid by American funds—who are paid by the aid money granted to those countries. In other words, some Americans are draining the money, the tax money, of other Americans, into their own pockets, via a longer tour through every corner of the globe which receives our foreign aid. This tax money is taken from some citizens, handed to foreign governments and pressure groups and then comes back to some of our citizens, through those successful pressure groups who have pull in Washington.
63
This was a “siphoning” process, in Rand’s view, a “necessary corollary of a mixed economy, or rather the necessary expression of a mixed economy, now being carried to the international scene. It is a civil war gone international; it is pressure groups using foreign countries in order to destroy our own. That is the meaning of our foreign aid policy.”
64
Thus, neofascism exports “the bloody chaos of tribal warfare” to the rest of the world, creating a whole class of “pull peddlers” among both foreign and domestic lobbyists, whose “methods range from mere social courtesies and cocktail-party or luncheon ‘friendships’ to favors, threats, bribes, blackmail,” feeding on the carcass of the American taxpayer and causing massive global political, social, and economic dislocations.
65
Whereas the Left derided “capitalist imperialism” for this state of affairs, Rand recognized that
capitalism
, “the unknown ideal,” had taken the blame for the sins of its opposite. While she appreciated the Left’s repudiation of
“socialism for big business,” she insisted that “[t]here is a name for a system of ‘socialism for big business’; it is called
fascism
.”
66
She lamented the internationalization of the “New Fascism”; given “the interdependence of the Western world,” all countries are “leaning on one another as bad risks, bad consuming parasite borrowers.” She recognized how the system’s dynamics propelled such internationalization, but advised that “the [fewer] ties we have with any other countries, the better off we will be.” Suggesting a biological analogy in warning against the spread of neofascism, she quips: “If you have a disease, should you get a more serious form of it, and will that help you?”
67
In discussing a section of the 1972 Communiqué between the U.S. and Red
China
, Rand suggests a universal principle. “[L]ike charity,” she writes, “courage, consistency, integrity have to begin at home.… What we are now doing to others … we began by doing it to ourselves. We are the victims of self-inflicted bacteriological warfare: altruism is the bacteria of amorality, Pragmatism is the bacteria of impotence.”
68
There was a crucial distinction that Rand saw between early twentieth-century fascism and the “New Fascism.” The latter had a less authoritarian character, even if it still had pernicious cultural effects on a free citizenry. For Rand, the real “dividing line” between fascist dictatorship and neofascism is “
freedom
of speech
,” since “
censorship
is the tombstone of a free country.” This is why she condemned a “servile press” even more than a “censored press”; the “servile press” embraces “‘voluntary’ self-enslavement,” relying on government manipulation of news “‘as an instrument of public policy.’”
69
The “New Fascism,” therefore, is a kind of liberal corporatism, which keeps in place democratic forms and procedures while deadening the prospect of real political and social change. In Rand’s view, even noble actors pursuing noble goals are defeated by this system. Not even a former Randian sympathizer, such as
Alan Greenspan
, who once advocated the end of central banking, can control the business cycle and its associated bubbles, or the massive redistribution of wealth that often results—all systemic byproducts of the central bank that he once chaired.
70
The “New Fascism” can only engender “parasitism, favoritism, corruption and greed for the unearned”; its power to dispense privilege, Rand emphasizes, “
cannot be used honestly
.”
71
In this deteriorating “non-free society … no pursuit of any interests is possible to anyone; nothing is possible but gradual and general destruction.”
72
Rand traced the destructive impact of statist militarism on everything from
science
and
technology
to
education
.
Atlas Shrugged
depicts a statist society in which there is a deadly alliance between government, science, and big business.
73
In the novel, the creation of “Project X” by the state-science nexus illustrates Rand’s conviction that only the state can breed
weapons of mass destruction. Under
statism
, “the progress of science is a threat to the people.”
74
Like the Frankfurt school theorists, who decried scientism and instrumentalism, Rand warned of the lethal barrier that modern statists had built between science and
ethics
. For Rand, Western scientific civilization was dominated by an altruist morality of “prehistorical savagery.” This was “a ghastly spectacle,” in Rand’s view, because it divorced means from ends, process from substance.
75
This
dualism
was a central implication of Kantian philosophy, which had allowed “man’s
reason
to conquer the material world,” even as it eliminated “reason from the choice of the goals for which material achievements are to be used.” Consequently, contemporary scientists, slurping at the public trough, proposed strictly technical solutions to human problems, never asking how people
should
live.
76
In Rand’s view, state-sponsored scientific research was necessarily politicized. Whether it attempted to restrict or alternatively, to promote, certain forms of technology, the state introduced massive distortions into the structure of production. Rand saw the problem of pollution control, for instance, as one that could be ameliorated by the internalization of market “externalities” through privatization. Ultimately, she believed that pollution could be controlled through technological and scientific progress that state intervention would only undermine. In restricting technology, state planners acted as if they were omniscient. They had no way to ascertain the consequences of any given restrictions on future technological innovation.
77
As Rand explained:
Technology is applied science. The progress of theoretical science and of technology—i.e., of human knowledge—is moved by such a complex and interconnected sum of the work of individual minds that no computer or committee could predict and prescribe its course. The discoveries in one branch of knowledge lead to unexpected discoveries in another; the achievements in one field open countless roads in all the others. The space exploration program, for instance, has led to invaluable advances in medicine. Who can predict when, where or how a given bit of information will strike an active mind and what it will produce?
78
But if space exploration contributed to medical advances, it was also true that the state-funded space program, much like the state-funded railroad expansion of the nineteenth century, introduced discoordinating changes into the delicate network of the social economy. Though Rand celebrated the symbolism of the lunar landing, she did not see scientific research as a
legitimate governmental function. Rand claimed: “The ‘conquest of space’ by some men … [was] accomplished by expropriating the labor of other men who are left without means to acquire a pair of shoes.”
79
The intervention of the state into scientific research also had far-reaching effects on the structure and content of U.S. education. Rand had opposed compulsory public schooling on moral grounds; she saw state-controlled education as consistent with the Nazi or communist worldview. But government intervention had created a disaster even in private education. The voluntary contributions that sustained private universities were eroded by ever-increasing taxes and rising inflation. Most universities became dependent upon government research projects as their prime source of income. Inevitably, government controlled the direction of research and created an official orthodoxy and privileged elite. Typically, such research perpetuated anti-conceptual compartmentalization of the disciplines. Moreover, it forced the taxpayers to support ideas that were often inimical to their own beliefs.
80
In her analysis of the effects of statist intervention, Rand followed her
Austrian
contemporaries in their belief that government controls create “economic dislocations, hardships and problems, which—if the controls are not repealed—necessitate further controls, which necessitate still further controls, etc.”
81
Each intrusion into the market becomes both the precondition and the consequence of every other intrusion. Each intervention—both at home and abroad—is a precondition because it necessitates further interventions; each is a consequence because it is brought about by previous interventions. In this regard, Rand’s analysis of the statist spiral resembles the dialectical formulations of Marx in his examination of the
production
process: “Each pre-condition of the social production process is at the same time its result, and every one of its results appears simultaneously as its precondition. All the
production relations
within which the process moves are therefore just as much its products as they are its conditions.”
82
Like Marx, Rand recognized an organic conjunction, a mutual reinforcement of factors within a self-perpetuating
system
. And also like Marx, Rand recognized that the “chain reaction” is far more insidious because it embodies internecine warfare between social groups. Each intrusion into the market process leads the victimized groups to seek a form of “redress by imposing controls on the profiteering groups, who retaliate in the same manner, on an ever-widening scale.” Employing the
master-slave
analogy on this structural level of her analysis, Rand wrote: “If a nation cannot survive half-slave, half-free, consider the condition of a nation in which every social group becomes both the slave and the enslaver of every other group.” The neofascist mixed economy institutes a “cold civil war” in which “every
social group is destroying every other.”
83
In its persistent use of physical
force
to achieve its policy goals, the statist system engendered massive social
fragmentation
.
SOCIAL FRAGMENTATION
Rand argued that in a free society, there are no inherent conflicts of interest among rational individuals, but in a nonfree society, there
are
inherent conflicts of interest among individuals—whether they are rational or not.
84
In this proposition, Rand suggested a grasp of class dynamics in contemporary
statism
. But Rand did not develop a theory of class struggle because she did not believe that statism benefited any one social group
structurally.
In this regard, her exploration of power relations on Level 3 applied the master-slave analysis of Level 1 with ruthless consistency. Statism made masters and slaves of every social group. All were “victims and losers,” even if some gained differential benefits at the expense of others (Rand 1962). Each group was tied helplessly to the government in some fashion (1971T). In her view, statism required “a class of beggars.”
85