The Twentieth Century Motor Company - Part 2
Plummeting profits and plunging production
To recap part 1 of our story, a tramp who stowed aboard a train is dining with Dagny Taggart, the Operating Vice President of the Taggart Transcontinental railroad. During their meal, he is relating to Dagny the story of a manufacturing company for which he once worked, the Twentieth Century Motor Company. This company, in essence, attempted to implement a socialist/communist/collectivist system, making all employees equal, and having the employees vote on who has what abilities, and which employees have what needs. The impression here is much like the democratic socialism the likes and virtues of which Bernie Sanders and Alexandria Ocasio-Cortez extoll.
One thing I did not directly address, but would like to before moving on, is a statement from the last bit of the text we have so far covered:
…no man could claim his pay as his rightful earning, he had no rights and no earnings, his work didn't belong to him, it belonged to 'the family,' and they owed him nothing in return, and the only claim he had on them was his 'need'—so he had to beg in public for relief from his needs, like any lousy moocher, listing all his troubles and miseries, down to his patched drawers and his wife's head colds, hoping that 'the family' would throw him the alms.
There are three things of note here: not being able to claim the product of your own labor as your own and only being able to lay claim to your “needs”, together resulting in having to list one’s “miseries.” First, imagine not being able to claim your earnings for your own. Is this how a free state operates? Yet this is how taxes and welfare work. You get to hold on to a portion of what you earn, but how much you hold onto is not truly up to you. If people, whether the general populace or just Congress, vote in such a way as to decide that others have greater need than you, taxes are raised, and you keep less of your wages. Many would argue this is “right,” “righteous,” or “fair,” but as Rand accurately characterized it, it is looting. The government is stealing from those who produce in order to support those who do not. There is nothing righteous or fair about being robbed at gunpoint, yet this is precisely that for which democratic socialists fight.
Second, the word need is a critical term of which we need to be mindful. Most people are incapable of distinguishing between need and want. While to an outside party, a person’s desire may be clearly distinct from a necessity, the person wanting does not always see the distinction. Thus wants are interpreted as needs, and a person will fight tooth and nail to have his or her needs met.
Third, this mindset and methodology lead to a proliferation of the perpetually aggrieved. If one must continuously enumerate one’s “miseries”, in order to have one’s “needs” met, people will be naturally inclined to find ways in which they are disadvantaged - even if they need to manufacture a category of privilege that they lack. We see this happening today as the cries of the obsessively oppressed rise to the gods of greed. Everyone is a victim and must be compensated. This is not conducive to a productive society.
From here, the tramp continues with his tale:
But that wasn't all. There was something else that we discovered at the same meeting. The factory's production had fallen by forty per cent, in that first half-year, so it was decided that somebody hadn't delivered 'according to his ability’ Who? How would you tell it? 'The family' voted on that, too. They voted which men were the best, and these men were sentenced to work overtime each night for the next six months. Overtime without pay—because you weren't paid by tune and you weren't paid by work, only by need.
Do I have to tell you what happened after that—and into what sort of creatures we all started turning, we who had once been human? We began to hide whatever ability we had, to slow down and watch like hawks that we never worked any faster or better than the next fellow. What else could we do, when we knew that if we did our best for 'the family,' it's not thanks or rewards that we'd get, but punishment? We knew that for every stinker who'd ruin a batch of motors and cost the company money—either through his sloppiness, because he didn't have to care, or through plain incompetence—it's we who'd have to pay with our nights and our Sundays. So we did our best to be no good.
Here we reach the crux of the situation - the inevitable decline to which socialism leads. The problem stems from the fact that, under such a collective system, as so eloquently put by Adrian Rogers, “what one person receives without working for another must work for without receiving.” To those who claim they seek equity because it is the only way to make life fair, I say, all it promotes is theft. It is by no means fair. There may be nothing less fair of which men can conceive. This kind of unfairness is incredibly destructive. To quote Rogers once again, “When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend is the beginning of the end of any nation.”
Why would someone want to work when another receives the fruits of his labor? Would it not be, as Rand here intimates, more natural for the worker to instead desire to be the one receiving the fruits of another’s labor? It is a downward spiral like that of an airplane, with failed engines on one side and broken ailerons, unable to recover from its rapid and tortuous descent. Like the lost energy of those failed plane engines, motivation to labor dissipates. This leads to a drop in productivity, which leads to loss of profits, which leads to layoffs and lower wages, which leads to lowered productivity… It is a self-sustaining, or, perhaps more accurately, self-destructive cycle. It cannot be maintained no matter the initial amount of capital invested. It is a losing proposition for everyone involved.
The stranger then moves on to an interesting comparison:
What was it they'd always told us about the vicious competition of the profit system, where men had to compete for who'd do a better job than his fellows? Vicious, wasn't it? Well, they should have seen what it was like when we all had to compete with one another for who'd do the worst job possible. There's no surer way to destroy a man than to force him into a spot where he has to aim at not doing his best, where he has to struggle to do a bad job, day after day. That will finish him quicker than drink or idleness or pulling stick-ups for a living. But there was nothing else for us to do except to fake unfitness.
Capitalism is here described by the man, in a manner of disbelief, as a “vicious competition.” This is the contention of the collectivist cabal. Capitalism creates inequality and division; collectivism creates equity and cohesion. Capitalism is cruel and cold; collectivism is civil and compassionate. This former employee came to realize that these were lies. It was the new order that was truly vicious. As he understood, we must also. People who believe these mischaracterizations of communism understand neither economics, history, nor human nature. Socialism is suicidal for society, as the tramp has informed us thus far through his story. It destroys the individual. It neither lifts up nor empowers. It saps the life of its subjects.
As bad as this all seems, we have not yet fully plumbed the depths of the insidiousness. As we are further told:
God help us, ma'am! Do you see what we saw? We saw that we'd been given a law to live by, a moral law, they called it, which punished those who observed it—for observing it. The more you tried to live up to it, the more you suffered; the more you cheated it, the bigger reward you got. Your honesty was like a tool left at the mercy of the next man's dishonesty. The honest ones paid, the dishonest collected. The honest lost, the dishonest won. How long could men stay good under this sort of a law of goodness? We were a pretty decent bunch of fellows when we started. There weren't many chiselers among us.
Those who believe in these democratic dictates believe them to be morally unassailable. To fight for the common good is the most benevolent of battles. There is no more righteous pursuit than that of the general welfare. But this thinking is backward. The best way to provide for the general welfare is to allow for individual freedom.
The Anglo-American relies upon personal interest to accomplish his ends, and gives free scope to the unguided strength and common sense of the people; the Russian centres all the authority of society in a single arm. The principal instrument of the former is freedom; of the latter, servitude. - Alexis de Tocqueville
In his work, Democracy in America, Alexis de Tocqueville looking at America and Russia, could already in 1835 see the diverging destinations of the two countries. He recognized that freedom was the instrument that would lead to the growth and prosperity of America; he also understood that the path the Russians traveled led to enslavement. It is painted as morally superior, yet it reduces the populace to the basest of conditions. This is the inexorable end of collectivism. Only the strength that comes through individualism can raise a country to the unmatched prosperity America has seen. Though not everyone is elevated to the same heights, individualism provides for all the opportunity to improve. Socialism only sets people at each others throats, devouring one another for scraps. There is no alternate terminus for such a system.