How Atlas Really Shrugs: Striking is Unnecessary

Fifty-two years ago Ayn Rand published her literary masterpiece Atlas Shrugged. In spite of its age and the difficulty most people have finishing it, the cultural impact of this book would be hard to overstate. In January The Economist reported that the book ranked #33 on the Amazon.com bestseller list.

Here's the plot: the innovators and producers of society are taxed and regulated by an authoritarian government to the point that they just simply give up and go on strike. They go to a place called Galt's Gulch where they are organized by the hero of the novel, John Galt. The title of the novel is a reference to the mythical Atlas who holds the world on his shoulders. If Atlas – which Rand equated with society's producers – were ever to shrug, the world would fall.

At the recent Tea Party I attended in Bossier City, Louisiana I saw two Rand-inspired signs. One said, “I AM John Galt.” Another said, “Atlas will shrug.”

Leftists scoff at the premise of the novel. People typically do not quit working when their taxes go up. They continue to soldier on. To some extent I agree. Most people – particularly ambitious, productive people - continue to try to better their circumstances even with terrible obstacles. Raise their taxes and they'll probably just work harder to maintain their standard of living. At some point – probably north of a 70% tax rate – they do finally begin to give up. But the economic system falters long before the heroic producers.

To understand why, look at both ends of the economic spectrum. Welfare recipients have two barriers between themselves and a better lifestyle. They have the first natural barrier that all people face - they have to find the energy and ambition to work harder, or get an education to work for better money. Recipients also have an artificial barrier – they would lose the largess they are currently depending on. A marginal improvement in their productivity could actually result in a net loss of income. So it would take a significant improvement of their productivity before they'd see any benefit to their lifestyle at all. That's a bigger obstacle to productivity than some people can overcome. So they, quite rationally, work less than they would have otherwise.

At the opposite end of the spectrum are the John Galt's – those producers that Rand suggested would strike. As more voters become more dependent on government, taxes go up. But, as liberals predicted the producers don't strike. They keep working. The economy falls apart anyway. What happened?

Imagine that John Galt owns and operates a store - "Galt's Gulch Gifts." With higher taxes Galt doesn't quit. He pays himself more to offset the higher taxes. But now he finds that he can't afford the same payroll. He lays off his cashier and does that job himself. The cashier files for federal assistance. Trimming payroll helps in the short run, but Galt begins losing business because with reduced staff he's not servicing his customers as well. He finds that there's less money at the end of the month to restock his inventory. He decides to put off reordering snow globes for a couple of months.

This story is repeated countless times nationwide. More and more cashiers are on assistance. The snow globe industry crashes. Cashiers and snow globe factory workers that would have bought holiday gifts at Galt's Gifts struggle instead to just survive. Realizing that he can't afford to keep the lights on, John Galt reluctantly closes his store.

There was never a strike, but Atlas shrugged.