Who is John Galt?

There’s been a lot of talk lately about free market types “going Galt” to protest current economic policies. This provokes my friend Jeff, and many others, to say “Go ahead, be my guest.” They’re right that few productive people are really going to venture off into the wilderness and watch the rest of the world descend into chaos, and that adolescent power fantasy is undeniably part of Atlas Shrugged’s appeal. But there’s a more sophisticated reading than that, one that’s relevant to current debates. Jason Kuznicki puts it very well in the third item of this post:

Ayn Rand hated F. A. Hayek, but in a weird way, the Hayekian idea of the entrepreneur — a little guy who happens to stumble onto a tiny, useful bit of knowledge, and who finds himself free to employ it — is a better fit to the relatively more sophisticated view of Rand’s work, which holds that Atlas is just a metaphor, not a blueprint for world takeover. Schumpeter’s heroic entrepreneur is, I think, empirically wrong, but better suited to a literal reading of Atlas.

Who is John Galt? An ephemeral process. And if you could follow that, well, you get the libertarian gold star for today.

I won’t pretend to have any great insight into how current policies will affect that process; Jim Manzi takes a stab at it here, arguing that they could be very detrimental to entrepreneurship. Even if, like Jeff, you’re not concerned about losing talent, losing investment capital and reducing the rewards to innovation should be a significant concern.

A fascinating paper from Tyler Cowen is worth contemplating here (“Caring About the Distant Future: Why It Matters and What It Means,” [pdf]). He makes the underappreciated point that economic growth isn’t simply cumulative; growth provides the fuel for further growth in an exponential process. To oversimplify, a few years delay in getting Edison’s bulb to market is a few years in which other entrepreneurs toil less productively in the dark. From the paper:

Just as the present appears remarkable from the vantage point of the past, our future may offer comparable advances in benefits. Continued progress might bring greater life expectancies, cures for debilitating diseases, and cognitive enhancements. Millions or billions of people could have much better and longer lives. Many features of modern life might someday seem as backward as we now regard the large number of women who died in childbirth for lack of proper care. It is a simple failure of imagination to believe that human progress has run its course. […]

The importance of the growth rate increases the further into the future we look. If a country grows at 2 percent, as opposed to growing at 1 percent, the difference in welfare in a single year is relatively small. But over time the difference becomes very large. For instance, had America grown 1 percentage point less per year between 1870 and 1990, the America of 1990 would be no richer than the Mexico of 1990. At a growth rate of 5 percent per annum, it takes just over 80 years for a country to move from a per capita income of $500 to a per capita income of $25,000, defining both in terms of constant real dollars. At a growth rate of 1 percent, such an improvement takes 393 years.

Robert Lucas put it succinctly: “The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about [exponential growth], it is hard to think about anything else.”

Again, I’m not bringing this up with regard to any particular policy. But we are living in a time in which drastic measures are being taken in response to an immediate economic crisis, the costs of which will be felt for decades to come. The impact these policies will have on the ephemeral process of market production deserves attention. Conservatives and libertarians threatening to “go Galt” aren’t merely expressing selfish frustration at having to pay more taxes; they’re calling our attention to the vital moral imperative of considering long-term growth.