With the movie Atlas Shrugged, Part I playing in several hundred theaters across the nation, attention has turned to a book published in 1957 that many see as relevant to today’s economic and political policies. Energy policy is no exception.
In Rand’s most famous novel, the hero, John Galt, has invented a radically new dynamo that promises to make energy superabundant. Ellis Wyatt’s oil fields and Ken Danagger’s coal mines power America. Diesel powers the great railroads.
Energy for Rand is the great enabler, what Julian Simon would later codify as the master resource. But for Rand, as for Simon, energy comes from the mind, not the ground.[1] Therefore, it is—or can be–super-abundant, given a pro-achievement socioeconomic system.[2]
Yet Atlas Shrugged is also about the forces that repress energy: the philosophy that sacrifices its creators, the taxes that drain its producers, and the edicts that hobble its profitable use. The book goes from fact-to-fiction with oil shortages (pp. 342–44, 475), gasoline shortages (pp. 272–73), and electricity blackouts (pp. 669, 671).
There is energy rationing (pp. 349–50), conservation edicts (pp. 339, 343), and the Industrial Efficiency Award (pp. 44–45). The Bureau of Economic Planning and Natural Resources (p. 273) is in charge of prices, profits, and allocation.
There is fair profit legislation (p. 507), anti-profit law (pp. 997, 1074), common carrier regulation (p. 677), and public utility regulation (p. 195). Crony capitalists game regulation (p. 217), and trade associations stifle economic freedom (pp. 46–47, 274). There is the dynamics of government intervention as one regulation spawns another (pp. 130, 273, 413)
The title, Atlas Shrugged, refers to a protest against such regulation and oppression, undertaken by those creative, market-driven energy producers who carry the world on their shoulders. Far from fantasy, one can remember the price controls in the 1970s that had many Americans in gasoline lines and discouraged an estimated 900,000 barrels of domestic oil production per day (more than 10% of output at the time).[3] Atlas was shrugging: Capital that would have gone into exploration and production went elsewhere; some went elsewhere in the economy, some just went to the sidelines (a sit-down strike).
Today, Atlas is shrugging again, as offshore production has dropped significantly in response to the Interior Department’s guilty-until-proven-innocent lease policy. By one estimate, seven out of thirty rigs active in the Gulf of Mexico at the time of the oil spill a year ago have moved to better environs.
Judging by the popular response to the novel Atlas Shrugged and the film based on it, Americans see the big picture. And to judge by the intelligentsia’s reaction to the sales and the film release of Atlas Shrugged, the political classes are afraid that the American people may finally “get it.” If so, energy policy will swing toward the free market, as will public policy in many other areas.
[1] “We are the soul, of which railroads, copper mines, steel mills and oil wells are the body ….” Francisco d’Anconia speaking to Dagny Taggart in Ayn Rand, Atlas Shrugged. New York: Random House, 1957, p. 620.
[2] “Man does not live on a raft with one bottle of water. He lives on earth, which gives him infinite resources—and it is up to him to get them. His proper conduct and morality must be based on this fact.” Letter from Ayn Rand to Rose Wilder Lane, in Michael Berlinger, ed., Letters of Ayn Rand (New York: Dutton, 1995), p. 354.
[3] Kalt, Joe. The Economics and Politics of Oil Price Deregulation (Cambridge, MA: MIT Press, 1981), chapter 5. Cited in Robert Bradley, Oil, Gas, and Government: The U.S. Experience (Lanham, MA: Rowman & Littlefield, 1996), p. 530n205.
