Atlas is Shrugging in the People's State of California

I have developed a morbid fascination with reading stories about California’s energy supply situation. I am also working my way through a second reading of Ayn Rand’s Atlas Shrugged.

It is a good thing that the news stories appear as text on my computer screen while Rand’s book is a three-inch thick 35th Anniversary hardback edition. (I picked it up cheap at an outlet on I-95 last year. Atlas was originally published in 1957.) The physical contrast is one of the few things allowing me to keep the characters and plots of the two epics separate.

Unfortunately, I know there are plenty of technically oriented people who have not recently had the time to work their way through a 1,168-page novel. There is a reason why Rand is popular among a certain kind of college student; that is often the last time ambitious people have sufficient leisure to engage in mind-expanding novel reading.

I have heard that Chairman Alan Greenspan was a Rand fan, but he seems to have forgotten some of her teachings. I consider myself extremely fortunate to have found some time to reflect on her thoughts following almost 20 years as a producer.

Atlas is an ode to creators. It celebrates the joy for life that naturally comes to the people who manufacture useful goods, create original works of art, keep transportation systems running, and provide the fuel that enables humans to control their environment. The reason California’s crisis sounds so much like the plot of the novel is that Rand illustrates the value of productive people by creating a stark contrast between them and the scavengers and parasites—the “looters.” Looters attempt to survive by establishing a system that allows them to take what they need from those who actually do something.

The looters hate profit; they profess a philosophy that all work should be motivated by “the public good.” Of course, a looter’s definition of the “public” always includes themselves. A publicly minded railroad executive provides trains as a service, as long as his territory and rates are protected and his locomotives are subsidized.

A publicly minded—but totally incompetent—steel company owner operates mills for the good of society, as long as his “greedy,” but capable, competition is hounded out of existence. Socially oriented employees work for the good of society, as long as their jobs are permanent, their wages grow a bit faster than inflation and they do not have to work too hard.

Eventually the producers quit, leaving their factories, railroads, mines, power plants, bridges, and mills behind. Society spirals down quickly as the looters find out that factories do not magically create goods without people who diligently and competently do the hard work of planning, ordering, dealing, inventing, repairing, stocking, pumping, drilling, cooking, bulldozing, accounting, and selling.

Though vilified as being blood-sucking capitalists, it becomes obvious that the heroes of the story are valuable for reasons that have nothing to do with “capital.” They are not productive because they own a factory. The factory exists because they are productive.

In recent weeks, an amazing collection of articles described an almost completely analogous situation in the formerly great state of California. Utilities have continued providing power even though the price they are allowed to charge–even with the recent 40% increase–does not come close to covering the published cost of the electricity. (The fiction thickens further since they evidently don’t plan to pay their suppliers.)

The Governor has threatened to station observers in privately owned power plants to make sure that they do not shut down if their output is needed. There has been little discussion, of course, about where the governor will find people technically capable of deciding if a power plant really needs to shut down.

Courts have told nearly bankrupt utility companies that they cannot lay off employees. Columnists have suggested that the “power” produced by generating plants belongs to the people, and legislators have expressed disbelief at the lack of interest in building facilities in a state that suggests that plants and pipelines can be seized if the public wants them.

There have been fluff stories with pictures of restaurant customers cheerfully enduring blackouts by lighting candles, but those stories have ignored the food tossed into dumpsters behind the restaurant when ovens and refrigerators lost their ability to maintain the proper temperature. There has also been very little discussion of the fact that “conservation” is most assuredly going to work, at least as measured by overall demand.

Factories, farms, bakeries, and bistros will close shop as electricity becomes unreliable and exceedingly expensive. The former employees of those enterprises will leave the state to find work. Amazingly enough, demand will drop well below the official capacity to produce electricity. And Amory Lovins will claim that his “negawatts” have saved the day.

Of course, there may still be insufficient power available to customers. I expect that average capacity factor will drop as maintenance, fuel supplies, and the very real limits of officially sanctioned renewable energy systems continue to be ignored.

It is not too late, California may yet survive this man-made catastrophe. It will take a lot of effort and some heated discussion about what really makes society productive, but it can be done. There are some voices of reason heard in the state. State Senator Tom McClintock, for example, has published several insightful columns on the value of free enterprise and the dangers of socialized power.

In Rand’s book, the dissenting voices were either silenced or decided to quit trying. The looters were left with the ability to say, “Don’t be a chump. . . You don’t want some recalcitrant hacks to come up with treatises that will wreck our entire program, do you?” If you will allow me a tiny bit of vanity, I hope that this recalcitrant hack has some minor impact on the looter’s entire program.