Michael Hiltzik

Has Ayn Rand's day as a business guru finally passed?

Goodbye 'Atlas Shrugged,' hello Piketty--how CEOs' reading has changed

It wasn't so long ago that American corporate CEOs were professing their devotion to Ayn Rand's potboiler "Atlas Shrugged" as though it were a badge of unsentimental industrial muscularity.

They handed out the book to their junior executives, told interviewers how reading Rand in their youth had changed their lives, identified with her granite-jawed, confident characters. The pathology extended to Washington, where Rep. Paul Ryan (R-Wisc.) was requiring staffers to read "Atlas Shrugged" and talking about how her philosophy of uncompromising individualism was what got him interested in politics. "Ayn Rand did a fantastic job of explaining the morality of capitalism, the morality of individualism, and this, to me, is what matters most," he said in a 2009 campaign video.

They all found something encouraging in Rand's notion that looking out for No. 1 was the best way to serve society, and were perhaps comforted by her depiction of a world made up of makers (themselves) and takers (everyone else). If they needed a justification for ruthlessly cutting payroll and subverting government regulation, there it was. 

That time may have passed. Ryan started playing down his love for Ayn Rand back in 2010. And last month, Aetna CEO Mark Bertolini cited a very different book when he announced that his company was raising its minimum wage to $16 an hour as of this April. The change, affecting 5,700 employees, comes to an average raise of 11%, and for some workers as much as 33%.

Bertolini told the Wall Street Journal that he made the move to help upgrade the quality and commitment of the firm's workforce (and hold on to them in a tightening job market), but also as a reflection of the lessons he had learned from a book he had instructed his executive team to read: Thomas Piketty's "Capital in the Twenty-First Century"--the theme of which, the rise and dangers of income inequality, is the polar opposite of "Atlas Shrugged."

Raising wages to create a happier, more productive and more loyal workforce isn't new, of course. A recent column in The New Yorker about Bertolini's policy cited the example of Henry Ford's 1914 decision to raise his assembly line pay to $5 a day. (Historians often ascribe the move to Ford's partner, James Couzens, a future U.S. senator who argued that it would decrease absenteeism.)

But it is a long time since Ford's raise has been cited in connection with a similar move by a U.S. company, and the treatment of Piketty's liberal-minded tome as a handbook for U.S. corporate policy is, as far as we can tell, unique. 

There may be several reasons for what seems to be the decline of Ayn Rand as a business beacon. One is that she hasn't proved to be a very useful guide. The most prominent Randian in corporate America, Sears Holdings Chairman Edward Lampert, seems well on the way to running that once-dominant retailer into oblivion. (See accompanying chart.)

Rand's me-first philosophy, moreover, simply doesn't serve very well when income inequality is on the front burner--indeed, when the issue even is being cited by conservative Republican politicians on the stump. As the economy strengthens and corporate profits remain strong, the essential defensiveness of Ayn Rand's worldview doesn't seem as necessary as it used to be. 

Finally, America's business and political leaders may simply have grown up. Remember the classic joke about "Atlas Shrugged" and the enduring appeal of its crude power and sexual politics for adolescent boys: 

"There are two novels that can change a bookish fourteen-year-old's life: 'The Lord of the Rings' and 'Atlas Shrugged.' One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood. The other involves orcs."

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