Disturbing Thought #722: Could it be that Ayn Rand was right?
Ayn Rand wrote 1088 pages of Atlas Shrugged to disprove the theory that every Russian immigrant can be a Nabokov. What I remember from wading through this sea of prose (about 15 years ago, to see what the fuss was about) was (a) an astutely observed description of the bureaucratic mind, and (b) the idea that the most productive American individuals flee the bureaucratic/socialist constraints to form their own society in the mountains of Colorado. My thoughts about the book at the time were that, like Karl Marx, Ayn Rand succeeded pretty well as a historian (describing the American fondness for bureaucracy and top-down government planning of the economy) but failed as a prophet. The share of the U.S. economy consumed by government has grown since the 1957 publication of Atlas Shrugged (chart), but few individuals have fled (example exception).
I’m a little embarrassed by this idea but now I am wondering if Ayn Rand might not have been mostly right in her prophecy, just wrong about the structure of the fleeing. In Atlas Shrugged individuals fled physically. What if we looked at the extent to which corporations have fled virtually?
If I recall correctly, not everyone sought to flee in Atlas Shrugged. The less productive chose to stay around as cronies of the government or collectors of government hand-outs. The least productive American enterprises certainly seem to be sticking around: education, health care delivery, health insurance, etc. I haven’t heard about an American hospital system engaging in a corporate inversion with an Irish hospital or funneling all of the profits through an offshore trust in the Netherlands. What about our corporate heroes, though, such as Apple and the pharmas? There is still a lot of accumulated wealth in the U.S. so they operate here but, perhaps with an eye toward the Tax Foundation’s tax competitiveness index (U.S. rank: 32/34), are virtually fleeing to other jurisdictions as their tax and/or profit home.
- “Curbs Don’t Stop Tax-Driven Mergers” (WSJ on inversions)
- “U.S. Beer Maker Says Tax Code Encourages Foreign Takeovers”
- “The Hypocrisy of ‘Helping’ the Poor” (nytimes article by Paul Theroux suggesting that managers of U.S. companies act against shareholders’ economic interests by locating factories in the U.S. South)

