Mixed Economy

We are not a capitalist system any longer: we are a mixed economy, i.e., a mixture of capitalism and statism, of freedom and controls. A mixed economy is a country in the process of disintegration, a civil war of pressure-groups looting and devouring one another.

A mixed economy is a mixture of freedom and controls—with no principles, rules, or theories to define either. Since the introduction of controls necessitates and leads to further controls, it is an unstable, explosive mixture which, ultimately, has to repeal the controls or collapse into dictatorship. A mixed economy has no principles to define its policies, its goals, its laws—no principles to limit the power of its government. The only principle of a mixed economy—which, necessarily, has to remain unnamed and unacknowledged—is that no one’s interests are safe, everyone’s interests are on a public auction block, and anything goes for anyone who can get away with it. Such a system—or, more precisely, anti-system—breaks up a country into an ever-growing number of enemy camps, into economic groups fighting one another for self preservation in an indeterminate mixture of defense and offense, as the nature of such a jungle demands. While, politically, a mixed economy preserves the semblance of an organized society with a semblance of law and order, economically it is the equivalent of the chaos that had ruled China for centuries: a chaos of robber gangs looting—and draining—the productive elements of the country.

A mixed economy is rule by pressure groups. It is an amoral, institutionalized civil war of special interests and lobbies, all fighting to seize a momentary control of the legislative machinery, to extort some special privilege at one another’s expense by an act of government—i.e., by force. In the absence of individual rights, in the absence of any moral or legal principles, a mixed economy’s only hope to preserve its precarious semblance of order, to restrain the savage, desperately rapacious groups it itself has created, and to prevent the legalized plunder from running over into plain, unlegalized looting of all by all—is compromise; compromise on everything and in every realm—material, spiritual, intellectual—so that no group would step over the line by demanding too much and topple the whole rotted structure. If the game is to continue, nothing can be permitted to remain firm, solid, absolute, untouchable; everything (and everyone) has to be fluid, flexible, indeterminate, approximate. By what standard are anyone’s actions to be guided? By the expediency of any immediate moment.

The only danger, to a mixed economy, is any not-to-be-compromised value, virtue, or idea. The only threat is any uncompromising person, group, or movement. The only enemy is integrity.

There can be no compromise between freedom and government controls; to accept “just a few controls” is to surrender the principle of inalienable individual rights and to substitute for it the principle of the government’s unlimited, arbitrary power, thus delivering oneself into gradual enslavement. As an example of this process, observe the present domestic policy of the United States.

You have seen, within the span of the last few years, that controls breed more controls, and that the proliferation of controls breeds the proliferation of pressure groups. Today, you see political manipulators setting up new conflicts, such as ethnic minorities against the majority, the young against the old, the old against the middle, women against men, even welfare-recipients against the self-supporting. Openly and cynically, these new groups clamor for “a bigger slice of the pie” (which you have to bake).

In a controlled (or mixed) economy, a legislator’s job consists in sacrificing some men to others. No matter what choice he makes, no choice of this kind can be morally justified (and never has been). Proceeding from an immoral base, no decision of his can be honest or dishonest, just or unjust—these concepts are inapplicable. He becomes, therefore, an easy target for the promptings of any pressure group, any lobbyist, any influence-peddler, any manipulator—he has no standards by which to judge or to resist them. You do not know what hidden powers drive him or what he is doing. Neither does he.

If parasitism, favoritism, corruption, and greed for the unearned did not exist, a mixed economy would bring them into existence.

A mixed economy has to reach the day when it faces a final crossroad: either the private sector regains its freedom and starts rebuilding—or it gives up and lets the absolute state take over the shambles.

Copyright © 1986 by Harry Binswanger. Introduction copyright © 1986 by Leonard Peikoff. All rights reserved. For information address New American Library.


Excerpts from The Ominous Parallels, by Leonard Peikoff. Copyright © 1982 by Leonard Peikoff. Reprinted with permission of Stein and Day Publishers. Excerpts from The Romantic Manifesto, by Ayn Rand. Copyright © 1971, by The Objectivist. Reprinted with permission of Harper & Row, Publishers, Inc. Excerpts from Atlas Shrugged, copyright © 1957 by Ayn Rand, The Fountainhead, copyright © 1943 by Ayn Rand, and For the New Intellectual, copyright © 1961 by Ayn Rand. Reprinted by permission of the Estate of Ayn Rand. Excerpts from Philosophy: Who Needs It, by Ayn Rand. Copyright © 1982 by Leonard Peikoff, Executor, Estate of Ayn Rand. Reprinted by permission of the Estate of Ayn Rand. Excerpts from “The Philosophy of Objectivism” lecture series. Copyright © 1976 by Leonard Peikoff. Reprinted by permission. Excerpts from Alvin Toffler’s interview with Ayn Rand, which first appeared in Playboy magazine. Copyright © 1964. Reprinted by permission of Alvin Toffler. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Plume, a member of Penguin Group (USA), Inc.