Arnold Kling  

Two Dismal Books

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Atlas Shrugged, by Ayn Rand and The Dismal Science by Stephen Marglin

Flying and waiting in airports is conducive to reading.

I had never read Atlas Shrugged before. What I like is the "in your face" defense of businessmen and the unremitting attack on the "looters" of government. Rand is uncanny in her depiction of government involvement as a tar-baby phenomenon where "solving" each problem creates a worse one.

What I don't like are three things.

1. The heroes are so humorless and self-absorbed that I cannot root for them.

2. The credo of "I will not live my life for any man nor ask any man to live his life for me" (I'm paraphrasing) sounds too much like a survivalist fruitcake holed up in a shack in the hills. Ironically, at the climax of the book, the heroes behave more in Three Musketeers fashion. Although of course they don't say "one for all and all for one," Rand is playing that tune on your emotional violin in the end.

3. The villains are clearly villains from the beginning. What would be really neat, particularly in a movie version, would be instead to start out as if you were following a conventional Hollywood script, and get the audience to root for the crusading politicians against the greedy industrialists. Then...gradually...let it become clear that it's the industrialists who are the heroes and the politicians who are causing ever-greater harm.

Stephen Marglin was the first radical economist I ever read. I think Bernie Saffran introduced me to "What do Bosses do?" back in the mid-70's, right around when the paper was published. In that paper, Marglin argues that bosses succeed by withholding information.

Think of an owner-chef of a restaurant, who needs assistants to help with the cooking. The owner doesn't want any of the assistants leaving to start his own restaurant, so she breaks down the cooking tasks in such a way that none of the assistants is able to learn how to make a complete item.

It's a clever theory, but I doubt its empirical relevance. It suggests that real-world businesses are complex not because that is efficient but instead because it reduces the bargaining power of workers. I'm sorry, but I think that if you look at, say, Wal-Mart, it is easier to believe the conventional explanation that the business has evolved a complex structure in order to achieve efficiency.

Marglin's new book, The Dismal Science, expresses a couple sentiments which I share. One is a rejection of the nation-state as an embodiment of collective virtue. Another is a sympathetic treatment of Hayek and the problem of tacit knowledge. Marglin writes (p. 166)


If people really could formulate all their knowledge in algorithmic terms and calculate as economic theory assumes, there would be no need for real-life markets...The virtue of the real market is precisely that it calls forth knowledge that people cannot explain, justify, or defend intellectually. It calls forth this knowledge by the incentives it provides for action and the ruthlessness with which it weeds out error...

The Hayekian argument...is, I believe, a powerful defense of capitalism as an engine of growth...in marked contrast with the post-Lange, Arrow-Debreu defense that presupposes a static world of algorithmic knowledge and complete probability distributions.


Otherwise, however, the book is largely a grab-bag of criticisms of economics and modernity. His point is to blame the ideology of economics for some of the features of modernity that he laments.

A major theme is how economic thinking and economic growth undermine community. Marglin's example of a community is the Amish. His example of their community spirit is an instance where they allowed an infant to die because they could not afford his medical treatment and they refused on principle to accept Medicaid.

I agree that close-knit tribal and village communities are incompatible with modern economies. However, I have absolutely no romantic sentiments for primitivism. Cato's Tom Palmer speaks with eloquent sarcasm about Western tourists who lament when they see Guatemalan villagers wearing blue jeans instead of the native apparel that used to require hours of backbreaking labor to produce.

If you are going to accuse me as an economist of undermining primitive village societies, I am prepared just to plead guilty and move on.


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COMMENTS (22 to date)
Robert S. Porter writes:

What is a "survivalist fruitcake"?

mgroves writes:

You know, guys who live in remote shacks and hole up with lots of weapons, food and water, etc, preparing for apocalypse or martial law or something.

Not that it's crazy to have weapons, food, and water and live in a remote setting...

But you know, guys like the Unibomber and such.

Robert S. Porter writes:

I understand what a survivalist is. I just don't understand the fruitcake qualifier. But perhaps I am just taking the more offensive meaning of the term, rather than it's more general connotation of "crazy".

manuelg writes:

> Marglin argues that bosses succeed by withholding information

Wow.

The problem would be if a less secretive competitor's employee delivered outstanding value to the customer. The employee could do it because he would have access to all the parts of the business and understood their interconnections.

Like a little restaurant where the waiter can whip up some hot chocolate, in the corner of the kitchen, for the granddaughter of a valued regular customer. No fuss, no muss, no need to add it to the menu.

Construction companies in Southern California precisely "break down the ... tasks in such a way that none of the assistants is able to learn how to make a complete item". They do this with their "semi-documented" workers. (Employers are charged with demanding documentation. They are *not* charged with verifying the documentation is _real_. With predictable results.)

So there is a bizarre construction schedule with workers shuffling in and out, leaving items _almost_ ready for the next operation.

It works as well as you would expect. What benefit do they get from pissing off the people with the ability to write checks large enough to build buildings? Beats me.

I would be terrified if my customers knew the extent of the ignorance of my employees. Ashamed of it, and working hard to remedy. I wouldn't dream of actually _conspiring_ to keep them more ignorant.

Scott Scheule writes:

You're right about Rand.

Also,

1. The characters are not only humorless, they're all the same, humorless character. Every protagonist is indistinguishable, both within Atlas and in Rand's fiction at large. Eddie Willers (I believe that's the name) is the only human one among them, and he never gets the spotlight.

2. It's so damn preachy. Even the choir gets bored eventually.

David writes:

Did Marglin ever take on Schumpeter's theory of the entrepreneur? In Arnold's example, he would seem to think that anyone who is capable of cooking at a high level is automatically capable of running a restaurant.

Andrew writes:

Thank you for the link to Marglin! I just read "What Do Bosses Do?" and I agree with Arnold that Marglin's point is not well made. However, I consider Arnold's counter-example of Wal-Mart to be very weak. It could be that some of the complexity of Wal-Mart is due to the factors Marglin suggests - we are a society has had a great deal of time to develop really complex (and efficient) forms of exclusion to competition of this kind.

Universities are a prime example of information control to attain prestige. In my own field of engineering, the information that the workers would need to compete with me would take 4 full-time years (at least) to acquire. Could Universities be critical part of our well-developed information-control capitalist society? Further, I suspect that having the native intelligence to understand modern complex tasks forms a Marglin-like layer between worker and boss.

Unfortunatly, I must also point out that people are naturally strongly compelled to dominate each other, even if there is no clear advantage. Perhaps this is so much a part of our psyche that the disadvantages of dominating others are minimized (and accepted)??

Matt writes:

I'm really struggling to finish Atlas Shrugged right now. Despite the EconTalk podcasts with Tyler Cowen saying that I should be willing to put down a book that I don't want to read any longer, I'm not quite to that point yet. It's gonna be difficult...

emh writes:
if you look at, say, Wal-Mart, it is easier to believe the conventional explanation that the business has evolved a complex structure in order to achieve efficiency

I don't have any first hand knowledge of complexity at Walmart, but I have worked for a few large enterprises. I would have to say that they achieved efficiency in spite of their complex structure.

axel molotov writes:

I completely agree with your opinion of Atlas Shrugged. Furthermore, I think the entire book is so "in your face" straightforward that it feels like Rand is bashing you over the head with one single idea, which, in turn, is chewed up, spit back up, and presented on a silver platter so you cannot misunderstand it. The entire book may be summarized by one idea, thereby begging the question as to why I need to spend my time reading 500 odd pages of abismal prose.

Troy Camplin writes:

The novel is no worse than most of what passes for literature. In fact, it's better than most. A bit preachy, yes. But I don't recall it being that bad. Not any worse than any of the other Existentialists' works.

simpsonian writes:

I notice more and more criticsms of Ayn Rand and Atlas Shrugged by people who are in some ways sympathetic to her views (freedom, capitalism). I think there is a need to distance oneself from her radical work.

Many of the criticisms are valid. As a novel, it may not be an incredibly creative plot and is probably too long. And of course, the heroic characters are all about the same.
But I'd like to offer a bit of a defense of the book, since it had a signifant impact on my life shortly after I graduated high school. I had never been exposed to someone who thought as she did and certainly no one who defended this type of view so passionately and completely. In a way, Atlas Shrugged started me down a road of thought that has been particularly satisfying over the course of my life.

I enjoy her in your face approach, she makes no apologies for her views. She openly defends the nasty sin of selfishness. (I still think of myself as completely selfishness. However, I view it largely as a debate over sematics since many things I do others would label altruistic.)

I continued to read about her and soon discovered many of my own critisms of her. However, I was riveted by the book at the time and couldn't put it down. The power of the idea was more important to me that the intracy of the plot. I think the size works well for someone like me who really had no exposure to these ideas before, as I was educated to hold socialistic ideals dear in a catholic school system. It took a lot of explaining to get to me.

I will say, I have never read it again and don't feel any urge to.

TGGP writes:

The Amish are doing something right. There has only been one Amish murder.

Ajay writes:

I have to say that I've never read any of Rand's fiction, as I suspected it would have precisely the flaws listed here, fictionalized, overlong pamphlets that bore. If you're looking for some good reading, I highly recommend Gore Vidal's Creation, which he himself will rightly tell you is perhaps the best book ever written. :) You may think of him as a radical socialist but I can assure you that he's a good enough historian that it doesn't infect his work (and I'm not sure he's as much a socialist as somewhat of an anti-authoritarian who tries to fit in with his crowd of socialist intellectuals and goes a bit too far sometimes). I also highly recommend his American Empire series, particularly Burr, Lincoln, or Empire.

Snark writes:

A cursory glance at the bio of the author and the list of celebrities who endorse his book makes me suspect that The Dismal Science is simply recycled Marxism.

Randy writes:

Simpsonian,

Exactly. The story of the people on the train was the cause of a paradigm shift for me - right up there with the parable of the Grand Inquisitor from The Brothers Karamazov and Phaedrus in Zen and the Art of Motorcycle Maintenance.

Frank writes:
What would be really neat, particularly in a movie version, would be instead to start out as if you were following a conventional Hollywood script, and get the audience to root for the crusading politicians against the greedy industrialists. Then...gradually...let it become clear that it's the industrialists who are the heroes and the politicians who are causing ever-greater harm.
You should go see "Urinetown: The Musical". I think you would find it very interesting...
Troy Camplin writes:

SImpsonian,

Excellent point, as that is what happened with me when I read her. I was actually exposed to the ideas of capitalism through Ronald Nash, a Christian philosopher at Western KY Univ. After taking his class and reading his book "Poverty and Wealth: A Christian Defense of Capitalism," I started reading many things on economics, which led me to Ayn Rand. In many ways my ideology is still fundamentally Objectivist, though I do have to admit a great deal of influence from Nietzsche (Ayn Rand's comments on Nietzsche led me to reading him). This lineage led me to dropping out of a M.S. program in molecular biology to get a M.A. in English and a Ph.D. in the Humanities, so certainly one cannot underestimate the influence of Rand on my life.

Ed Lopez writes:

Rand's extremism has to be taken in the context of the pervasiveness of socialism at mid-century. Mises too.

Most people who read Rand as youths come back to it as adults differently. It's very refreshing to see a review by someone as learned as Arnold who hadn't read it as a youth.

Scott Wood writes:

Have you ever read The Fountainhead? IIRC, it had quite a bit more subtlety, albeit still little ambiguity, in the heros and villains.

Scott Scheule writes:

Snark,

Celebrities? The only one on the list I've heard of is Jagger, and even her--just barely.

Snark writes:
Snark,

Celebrities? The only one on the list I've heard of is Jagger, and even her--just barely.

Scott,

I guess I should have italicized celebrities. My point was that those who critically acclaim this book appear to me, anyway, to be socialist ideologues philosophically opposed to capitalism and free markets.

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