Atlas Shrugged has its share of alpha male heroes like Hank Rearden who invents a new form of steel, but they are all usurped by a no-nonsense woman, Dagny Taggart, who takes over the family railroad and saves it from the brink of failure. But she notices that the country’s leading industrialists, such as aircraft manufacturer Dwight Sanders and oil magnate Ellis Wyatt, are gradually disappearing. As they do so, the country’s economy tanks and there is no longer any money to pay for the government’s crony programmes devised to keep the looters on side.
Where have the nation’s entrepreneurs gone? Asking tough questions like that elicits the standard response, who is John Galt? It turns out they’ve all gone on strike in protest at the increasing weight of regulation, red tape and cronyism from the government. They know that they are the ones keeping the lights on and the masses in employment, and that government bureaucrats would prove clueless if they had to create wealth rather than confiscate or destroy it to suit their political agenda.
The collapse of the system is described as a parable based on the story of the Twentieth Century Motor Company, where the second generation owners abandoned the profit motive and changed the company into a kind of worker’s collective. Twenty years ahead of her time, Rand could have been writing about British Leyland or General Motors in the nineteen seventies where union power brought the companies to their knees, only for government to step in with subsidies that gave short term protection but caused long term market distortions that destroyed the British motor industry.
The ruins of the Twentieth Century Motor Company factory reveal a prototype of a revolutionary engine that can convert static electricity to kinetic energy. This cheap new form of power provides the catalyst for resurrecting the economy when the entrepreneurs emerge from their hiding place to take over from the fallen government.
Atlas Shrugged has always been a divisive book. It’s a paean to capitalism which you’d imagine would go down well in America, but even in the nineteen fifties there were many who resented it’s exposure of the unproductive rent seekers who try to game the system to get something for nothing. Where do I stand on it? Well, there’s a reason why they call me the renegade investor. I am anti big government and I do think we’ve reached the point of unaffordability and unsustainability in the current system.
Whatever your political views, I give you the cast iron certainty that the only way out of the mess we are currently in, the only engine for growth left in our economy is small and medium sized businesses. They are the lifeblood of the economy and have the potential to generate the growth, wealth, employment and taxes that we need to keep the country going and growing.
But we need massive change in the role of government and in people’s expectations of it. We also need to take a machete to years of stifling regulation especially in areas like employment law. My proposal is that none of the rules apply if you have fewer than ten staff in your business. It might surprise you to learn that only four per cent of businesses ever reach a million pounds in revenue. If you know the story of how few larvae turn to caterpillars and how few of those into butterflies you’ll have some idea of the fragility of a small business.
As more and more conventional jobs disappear thanks to new technology we need to create a new generation of entrepreneurs and an environment in which the businesses they start can be nurtured rather than smothered. Every head teacher, government minister and MP should be forced to read Atlas Shrugged so they catch a glimpse of what Ayn Rand was talking about and make sure we don’t experience the nightmare that her novel so brilliantly describes. Thanks for watching.