Goddess of the Market: Ayn Rand and the American Right (13 page)

Rand was right to notice a whiff of decay around the advocates of capitalism. Through the campaign and her organizing efforts she had encountered the last remnant of nineteenth-century laissez-faire, loosing its final breath into Willkie’s anti–New Deal campaign. The pessimism of her compatriots was in many ways an accurate assessment of reality, for the intellectual climate had shifted decisively against limited government. Once influential free market economists like Frank Knight and Joseph Schumpeter had raised dire warnings against government interference in the economy, only to see their ideas eclipsed by the rising star of John Maynard Keynes, a Brit who argued that government stimulation should play a vital role in supporting industrial economies.

First published in 1936, Keynes’s
General Theory of Unemployment, Interest, and Money
launched a full frontal assault on the received wisdom of classical economics and the hands-off doctrine of laissez-faire. Instead Keynes offered what came to be known as the theory of “pump priming.” When the economy became sluggish, governments should intervene
with ambitious spending programs that would stimulate the economy. Unlike older economists Keynes was unconcerned about deficit spending, which he saw as a temporary measure to prevent small recessions from spiraling into deeper depressions. His timing could not have been better. Professors and politicians alike were casting about for explanations of and solutions to the economic malaise that gripped the globe. By 1940 Keynes’s ideas had triumphed in both academia and government, making supporters of laissez-faire seem like relics from a bygone era.
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Indeed, to counter Keynesian economics, many of Rand’s Willkie group reached for arguments popular during America’s Gilded Age in the late nineteenth century. The British economist Herbert Spencer and his great American disciple, William Graham Sumner, were particular favorites. Most contemporary social scientists considered both thinkers hopelessly out of date. “Spencer is dead,” the Harvard sociologist Talcott Parsons declared in his seminal 1937 work,
The Structure of Social Action
.
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But Spencer was very much alive for Nock, who identified as a “Spencerian Individualist” and modeled
Our Enemy, the State
on Spencer’s 1884 book,
The Man versus the State
. In 1940 Nock helped republish Spencer’s volume, claiming in the introduction, “This piece of British political history has great value for American readers.” It was this copy of Spencer that Rand had in her personal library, the pages thoroughly marked up.
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That this older tradition should persist, to be encountered anew by Rand during her political awakening, is not surprising. As Richard Hofstadter and other historians have detailed, arguments for laissez-faire saturated American society in the late nineteenth century, permeating both the intellectual climate of small-town America and commanding respect at the nation’s most prominent universities. Sumner was among Yale’s most popular (if controversial) teachers, and Spencer “was to most of his educated American contemporaries a great man, a grand intellect, a giant figure of thought.”
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Educated or well-read Americans in the 1930s and 1940s would have had at least a passing familiarity with the ideas of Sumner, Spencer, and other laissez-faire theorists, for they constituted a significant part of the American intellectual tradition.

Moreover, there seemed to be an almost natural structure to procapitalist thought. The writings of Spencer and Sumner, launched as
polemics in an earlier age of state expansion, fit easily with vehement distaste for the New Deal. Both sets of thinkers had similar ground to cover. To argue convincingly against government action it was necessary to prove that government was incompetent, unfair, or both. Lacking extensive evidence about the ultimate success or failure of New Deal reforms, writers in the 1940s turned eagerly to theoretical and historical arguments articulated at an earlier time. These older thinkers lent an air of timeless wisdom to their critique of the state.

If Rand’s associates replicated the arguments of nineteenth-century laissez-faire in many ways, they were noticeably circumspect about evolutionary theory, which had played such a dominant role in the thought of Spencer and Sumner. The earlier generation of capitalist boosters had based their arguments largely on evolutionary science and the corresponding idea that natural laws were at work in human societies. From this basis they argued that government interference in the economy was doomed to failure. Some of these arguments came close to the infamous social Darwinist position, in that they suggested government support for the poor might retard the evolution of the species.
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Vestiges of this scientific background still remained in 1940. On his cross-country speaking tour Channing Pollock came close to attacking New Deal relief programs in the old terms, arguing, “We can’t afford a social order of the unfit, by the unfit, for the unfit.”
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Ruth Alexander referred to herself half-jokingly in a letter to Rand as a “bad jungle sister, who believes in survival of the fittest.” Nock’s receptivity to pseudo-science, such as his interest in the architect Ralph Adams Cram’s theory that most people were not “psychically” human, also hinted at this earlier legacy. Rand too shared Cram’s elitist affectation, a residue of her readings in Nietzsche. In a 1932 note about
We the Living
she remarked, “I do give a good deal about human beings. No, not all of them. Only those worthy of the name.” But now Rand was beginning to drift away from this perspective. The campaign had been a taste of how a broader audience could actually appreciate her ideas. And in Nock and his fellows she saw how libertarian superiority could shade off into a debilitating pessimism.

As it turned out the only person who did not disappoint Rand was one who didn’t even join the group: Isabel Paterson, a well-known
columnist for the
New York Herald Tribune
. Rand sent Paterson an invitation to their meeting and followed up with a brief visit to her office. They had a cordial conversation, but Paterson explained that it was her policy not to join any group. Rand was surprised when, a few weeks later, Paterson found her home phone number and asked if they might meet again. More than twenty years Rand’s senior, the divorced and childless Paterson had a formidable reputation. She had published several successful novels but wielded true influence through her weekly column, “Turns with a Bookworm.” Written in a chatty, conversational style, Paterson’s column mixed literary gossip with book reviews and ran for twenty-five years, from 1924 to 1949.
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Paterson had oddities to rival Rand’s. At parties she sat silently by herself, refusing to talk to anyone she deemed uninteresting. She was openly rude. A friend recounted a typical anecdote from a publisher’s luncheon given for a French author. After Paterson spoke disparagingly of H. G. Wells,

the Frenchwoman turned most charmingly to Isabel and said, “You see, my dear Miss Paterson, it has been my great honor, privilege and happiness to know Mr. Wells most closely, most intimately. We have lived together, Mr. Wells and I, for seven happy years on the Riviera as man and wife.” . . .Isabel then raised her lorgnette (being nearsighted as you know) and carefully looked at the Frenchwoman, from the table level slowly up and slowly down, and laying down the lorgnette she said, “I still say, H. G. Wells is a fool.”
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Abrasive behavior was part of Paterson’s shell and her persona, and it made her legendary among New York writers. A mention in her column could send book sales skyrocketing, but to curry favor with Paterson authors had to risk incurring her wrath. Always a contrarian, by the time of the Willkie campaign Paterson had become implacably opposed to Roosevelt. She peppered her columns with political commentary, a move that cost her readers and, eventually, her column.

Rand and Paterson’s political friendship quickly became personal. Paterson invited Rand to her country home in Connecticut, an “enormous jump in the relationship,” Rand remembered. “I was being very polite and formal, since it’s just a political acquaintance. And she made it personal in very quick order.” Initially hesitant, Rand soon found
Paterson to be a boon companion. She left Frank behind in New York and spent the weekend in Connecticut. The two women stayed awake “the whole first night, ‘til seven in the morning—we saw the sunlight— talking philosophy and politics. And of course I was delighted with her for that reason.”
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Words and thoughts flowed easiest for Rand in the midnight hours, which she usually spent alone, buried in thought. That she so happily spent this time with Paterson, or “Pat” as Rand was now calling her, testified to the fast bond that grew between the pair. It was the first of many long talks that came to define their friendship.

Especially in the beginning, these conversations were decidedly one-sided. Paterson spoke and Rand listened. Educated only through high school, Paterson was nonetheless widely read, and friends recall the younger Rand literally “sitting at the master’s feet” as Paterson discussed American history.
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Paterson was working on a lengthy nonfiction treatise that would express her political views and had developed a commanding grasp of world history and economics that she gladly shared with Rand. She was an encyclopedia of knowledge. Rand would propose a topic—the Supreme Court, for example—and Paterson would hold forth for hours.

Like the other libertarians Rand met during this time, Paterson drew from an older tradition to make her case for limited government and individualism. Spencer was one of her favorites, and her column brimmed with references to his ideas. She was also taken by the concept of the status society versus the contract society, an idea first set forth by the British jurist and historian Sir Henry Maine but given legs by Spencer and later Sumner.
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According to this theory, Western societies had evolved from a feudal system, in which relationships between individuals were determined by their status, to societies in which relationships were determined by contract. Although Maine was a Burkean conservative who believed firmly in ties of tradition and society, in American hands his idea of contract quickly became shorthand for a fluid, individualistic society that encouraged personal autonomy. Thinkers like Paterson interpreted Maine’s ideas to mean that the New Deal betokened a return to the status society, or “rebarbarization.”

Although she profited from the work of older and more obscure thinkers, as a prominent columnist and reviewer Paterson was well versed in contemporary intellectual debates. Where Rand spoke of “organization,”
Paterson warned against “planning” and “technocracy,” invoking the more commonly used collectivist buzzwords. She also advanced a different kind of argument against organization. Rand used moral rhetoric about individual rights to make her case, but Paterson tended toward the practical, emphasizing that such planning simply could not work. There were several reasons why. Planners could never hope to determine the true value of goods and services, for such values were always in flux, as economic actors made individual decisions about what they wanted and how much they were willing to pay. Moreover, planning would interfere with invention and innovation, the very engine of the economy; before long, there would be nothing left to plan. And finally, Paterson worried, who would do the planning?

Paterson’s particular preoccupation was energy. When she and Rand first met Paterson was working on the book that would become her only work of nonfiction,
God of the Machine
. She had been inspired by the dolorous
Education of Henry Adams,
and like Adams, she used energy as a central organizing metaphor. In Paterson’s scheme the dynamo was individual man, who alone could generate energy through thought and effort. Energy could never be created by governments, but it could be directed—or misdirected—by state institutions and structures. More often than not government gummed up the works and stanched the flow of energy by interfering with individual freedom. Paterson hailed American government as a triumph of engineering design, for the careful balance of power between the states, federal government, and a free citizenry maximized the long circuit of energy released by individuals. She encouraged Rand to think not only about what made capitalism fail, but what made it succeed.

Paterson also had a handy explanation for the Great Depression, one that Rand would repeat throughout her later career. She was impressed by the analysis of the financial journalist Garet Garrett, who argued that the economic crisis had been brought about by government action. In the boom years of the crisis, Garrett argued, the Federal Reserve had inflated the money supply, leading to a speculative bubble that triggered the Depression.
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As Paterson watched the government’s efforts to repair the damage she saw only more of the same. Government had mismanaged the economy in the first place and was now making the problem worse through bungling efforts to fix it. The myriad shifting policies
directed at ending the Depression had created a climate of uncertainty that was further drying up the free flow of capital. Paterson’s prescription was to leave well enough alone; the government should pull out and let the economy recover on its own. Although her solution was unusual, her sense of the problem was not. Writers like Snyder and even members of Roosevelt’s administration such as Stuart Chase fingered Federal Reserve policy as a cause of the depression. Most were willing on grounds of expediency to excuse government action to avert the crisis. Paterson, who set great stock in principles and consistency, was not.