The Mother of Capitalism About the “Spirit” of Capitalism

This post is the fourth in a five-part series on the real purpose and spirit of capitalism. You can read of the purpose here, of the spirit here, and of Adam Smith on the spirit of capitalism here. Our use of the word “spirit” (small ‘s’) in this series does not mean Spirit (capital ‘S’) in a religious or metaphysical sense. Rather, we’re using spirit to mean a set of values – the ethics and behaviors – that drive people to behave as they do. This is to be consistent with the way 20^th century sociologist and economist Max Weber discussed the spirit of capitalism.

The influence of Ayn Rand’s last novel, Atlas Shrugged, first published in 1957, simply can’t be ignored. A 1991 survey conducted for the U.S. Library of Congress and the Book-of the-Month Club identified Atlas Shrugged as the second-most influential book in America, second only to the Bible. In 2012 the U.S. Library of Congress included this novel in its eighty-eight-book display of “Books That Shaped America.”

What should be read as a cautionary tale against the evils of collectivism and socialism that she suffered as a child in her native Russia, Atlas Shrugged teaches Rand’s created philosophy of “Objectivism.” Particularly through the voice of her protagonist John Galt, in his nationwide radio broadcast toward the end of the novel (“Galt’s speech”), Rand extols the benefits of her Objectivism.

Much of what Rand wrote/Galt said in Galt’s speech has been distorted and elevated by her adopted America and its postmodern audience, particularly the libertarian and neo-libertarian myths of radical self-interest, rugged individualism, and a limited government that does not interfere with individual liberty. Nevertheless, emerging from the distortions of Atlas Shrugged, Rand has been dubbed “The Mother of Capitalism.”

The Mutuality of Self-Interest

Working through the distortions to correctly understand Galt’s speech, as we do in our book Better Capitalism, one would recognize the Mother of Capitalism rejects many of the values that drive America’s current version of capitalism. Yes, she advocates for self-interest but not in a vacuum. She does not advocate for a self-interest that has no regard for the interests of others or regard for the costs or harms to others. Rather, Rand-Galt speaks of a self-interest that involves mutual relationships with others who are likewise pursuing their self-interests.

In Galt’s speech, the portion of Rand’s work that she herself identified as the perfect presentation of her philosophy via a novel, she explicitly rejects gaining for self at the expense of others and explicitly advocates for exchanging in mutually beneficial ways with others. In a sentence, Rand-Galt describes the spirit of capitalism as being based on an ethic of mutuality. Let’s take a closer look at some of the ethics and values that Rand teaches in Galt’s speech.

Image Credit: Proud Producers

Honesty

Galt’s speech opens with a fiery introduction where he lays his fictional world’s social and economic collapse at the feet of its failed moral code. After dismissing the old moral code, Galt presents his code of morality, which comprises three values and seven virtues.

Galt describes honesty, one of the virtues that frame his code of morality, with a paragraph-long single sentence that argues “neither love nor fame nor cash is a value if obtained by fraud . . . [and] . . . that honesty is not a social duty, not a sacrifice for the sake of others, but the most profoundly selfish virtue man can practice . . .” (We encourage you to read your copy of Atlas Shrugged for yourself because we encourage ‘trust but verify’ even with our work.) Honesty in business dealings is a solid ethic and building block by which to construct a healthy and sustainable spirit of capitalism!

An Evil That Cannot Be Tolerated

John Galt doesn’t set out many absolute rules in his code of morality. But he does have one that frames his spirit of capitalism.

Galt emphatically argues that no matter what else might be open to disagreement, the use or even threat of force to make a person act against his or her will is an act of evil that cannot be tolerated. In fact, Galt argues, to force a person to act against his or her will—to not do what is in his or her best interest—is to negate and paralyze his or her means of survival. To do so destroys that person’s capacity to live.

Galt illustrates this evil with the visual of a pointed gun forcing a person to act against his or her will. To strip a person of free will through force is to coerce them to surrender their life. This “your mind or your life” coercion is antithetical to his code of morality—and it is antithetical to mutually beneficial dealings. Galt affirms, “Force and mind are opposites; morality ends where a gun begins.”

As the human experience has long and painfully taught, coercive force as effective as a gun can take any form. Let’s illustrate with a familiar example consistent with Galt’s “your mind or your life” coercion.

Image Credit: Lionsgate

I live in metro-Atlanta, Georgia. According to the MIT Living Wage calculator, in order to afford the low-end of a middle-class lifestyle in Georgia (on average across the state in 2025), a single person working full-time without children or special needs has to earn at least $24.00/hr. By the way, this amount assumes the person pays no more than 30% ($1300/month) for housing, which current research indicates is not possible for a middle-class lifestyle unless you already own a home outright or live rent free. (See, for example, Brian Goldstone's new book, There is no Place for Us: Working and Homeless in America, Crown 2025).

Legions of people who are capable and willing to work full-time in order to live at least a middle-class life can be found across the country. But they can’t afford that middle-class life because their employer, or would-be employer, denies them the necessary middle-class wages or hours or both. According to Galt’s values, these workers are forced to act against their will by taking the suppressed wages provided by whatever employment is available.

As Galt would logically agree, whatever shape the gun takes—physical in the form of a gun-bearing taskmaster or economic in the form of a suppressive lack of options—to force a person to choose against his or her will in exchange for his or her life is an evil that cannot be tolerated. The opposite of this evil of coercion—the corrective remedy and cure to this and similar evils—is the mutually beneficial alignment and partnership that Galt speaks to earlier in his speech, which springs from the virtue of honesty.

Trader Mentality

Contrary to popular (mis)conceptions of Rand as espousing a dog-eat-dog, brutally selfish style of self-interest, Rand’s own words say otherwise. From Galt’s speech: 

Just as I support my life, neither by robbery nor alms, but by my own effort, so I do not seek to derive my happiness from the injury or the favor of others, but earn it by my own achievement. Just as I do not consider the pleasure of others as the goal of my life, so I do not consider my pleasure as the goal of the lives of others. Just as there are no contradictions in my values and no conflicts among my desires—so there are no victims and no conflicts of interest among rational men, men who do not desire the unearned and do not view one another with a cannibal’s lust, men who neither make sacrifices nor accept them.

In strong contrast to the “dog-eat-dog” philosophy that is frequently attributed to Rand, Rand plainly disavows abuse through sacrifice or cannibal’s lust. Do you see dog-eat-dog or a cannibal’s lust behavior in our capitalism? No doubt. Well, now you’re reminded that Galt didn’t advocate for such behavior.

Continuing with the next paragraph in that same passage of Galt’s speech:

The symbol of all relationships among such men, the moral symbol of respect for human beings, is the trader. We, who live by values, not by loot, are traders, both in matter and in spirit. A trader is a man who earns what he gets and does not give or take the undeserved.

Image Credit: babypips

From this part of Galt’s speech we note the use of the word ‘relationships,’ itself a counter to notions of self-interest without regard for others. Rand then explicitly espouses respect for human beings and names her moral ideal “traders,” those who live by values and do not loot others. Those who do not give or take the undeserved but earn in fair exchanges by trading value for value.

From the next paragraph in Galt’s speech:

I deal with men as my nature and theirs demands: by means of reason. I seek or desire nothing from them except such relations as they care to enter of their own voluntary choice. It is only with their mind that I can deal and only for my own self-interest, when they see that my interest coincides with theirs. When they don’t, I enter into no relationship . . . I have nothing to gain from fools or cowards; I have no benefits to seek from human vices: from stupidity, dishonesty or fear.

Opposite of taking advantage of others in the name of self-interest, Rand again plainly disavows gaining at the expense of others: “I seek or desire nothing from them except such relations as they care to enter of their own voluntary choice.” She advocates for dealing with others and engaging in relationships voluntarily when self-interest coincides with the other’s interest.

Galt’s values are easiest to advocate and defend when the power is balanced between traders, but not so easy when the power is unbalanced. When the power is unbalanced, the trader with the greater power (e.g., employer or landlord) is duty bound to not take advantage of the weaker trader (e.g., employee or renter). If they do take advantage then the more powerful trader is no longer a trader but a tyrant.

Self-interest that includes mutuality, honesty, evils that cannot be tolerated, and trader mentality are all ethics that form and inform the spirit of capitalism according to the Mother of Capitalism.

Take a moment to think about the current spirit of American capitalism.

How would you describe that spirit? Do you like it or would you like to see a different spirit? Would you like to see a spirit of capitalism as Ayn Rand envisioned? Anything stopping you or your organization from helping create that spirit of capitalism?

Right. We don't think so either. So, would you please join us in helping breathe life into the best of that spirit of capitalism?

Fix Capitalism. Fix the American Dream.

Our vision is to benefit society by transforming capitalism's current core ethic of 'maximize shareholder value' to the better core ethic of 'optimize mutual value.' We achieve our vision by impacting learning, opinion, beliefs, and policy. Institute for Better Capitalism, Inc.

Invite Us to Speak

⭐⭐⭐⭐⭐ Our Amazon number 1 new release: Unleash more with Better Capitalism: Jesus, Adam Smith, Ayn Rand, & MLK Jr. on Moving from Plantation to Partnership Economics.

"This book merits close, sustained attention as a compelling move beyond both careless thinking and easy ideology."—Walter Brueggemann, Columbia Theological Seminary

"Better Capitalism is a sincere search for a better world."—Cato Institute

The Institute for Better Capitalism, Inc., is a 501(c)(3). We invite and are grateful for financial partners in this work. We invite you to donate here or contact us for more information. Thanks!

Donate Now >>