The Cave and the Light

by Arthur Herman

  He then closed his book with this:

  If in the first attempt to create a world of free men we have failed, we must try again. The guiding principle that a policy of freedom for the individual is the only truly progressive policy remains as true today as it was in the nineteenth century.37

  The year was 1944, and the book was titled The Road to Serfdom. Hayek was living in London, a city battered by five years of war and under siege from Hitler’s V-2 rockets. On the other side of the world in New Zealand, Karl Popper was writing The Open Society and Its Enemies. (It was his friend Hayek who would find the book its London publisher.) At exactly the same time a third man, Eric Blair, was living in London. In a couple of years, under the pen name George Orwell, he would paint a chilling picture of what Hayek’s dystopia of modern serfs and masters in which all free choice is banished and whatever is not forbidden is made compulsory, might look like: 1984.

  In the spring of 1944, however, the place to see the future was not in London but on the south coast of England. The D-day invasion was only weeks away. Plato’s American offspring had once tried to save the world and failed. Arguably, they had made it worse. Now Aristotle’s children were going to take their shot.

  In 1944, you found them in places like Richmond, California, and Sparrow Point in Baltimore. These were two of eighteen shipyards building the so-called Liberty ships that in 1941 began sending tons of food, raw materials, and war equipment to embattled Britain and Soviet Russia.

  In 1940, none of these yards had even existed. Then buildings, slipways, cranes, and warehouses went up with an explosion of industrial productivity and engineering and managerial skill, from California and Oregon on the West Coast, to Florida, Alabama, and Baltimore on the East Coast. More than 2,700 Liberty ships would be built—and once bombs fell on Pearl Harbor on December 7, 1941, the ten-thousand-ton cargo vessels would also carry and supply American forces fighting in North Africa, Italy, and the south and central Pacific.

  The Liberty shipyards were only the leading edge of a massive American wartime production effort that began in 1940 and would continue for the next five years. The old idea that America became “the arsenal of democracy” in World War II because of actions by the federal government is a myth. It was in fact an explosion of productivity by the most capitalist—and Aristotelian—economy on earth.38

  In Aristotelian terms, its dyanamis, or potential for change, was stupefying.

  In the fifty years after the Civil War, that economy had grown faster, and become larger, than any nation had ever seen.39 Once a net importer of capital, America had become a world financial power equal to Great Britain. After World War I, the automotive, electronics, and chemical industries joined giant corporations like U.S. Steel, Standard Oil, Goodyear, and Eastman Kodak as the driving engines of the most productive economy in the world.

  Feared and loathed by the New Nationalists, Progressives, Socialists, and various neo-Hegelians, America’s capitalist sector had been hit by various waves of legislative restrictions and disruptive regulations, including antitrust laws. Yet it still managed to raise living standards and grow the nation’s wealth with cars, radios, washing machines, and other consumer goods in a tsunami of rising industrial output—from 1921 to 1925 by almost 53 percent.

  Even the coming of the Great Depression barely slowed it down. The U.S. economy’s growth rate from 1933 to 1941 was still the highest of any other peacetime period, compared to every other industrialized country.40 The Progressive gurus of the New Deal not only failed to lift the country out of economic decline; by 1938 they had deepened it. We now know that it was the coming of war that broke the back of the Great Depression. Few, however, realize that the reason was that war production tapped the pent-up dynamism of American private industry. “Made lean by court battling,” as one chronicler put it shortly afterward, “weakened by depression and recession, and starved for new capital by inordinate tax burdens, [American business] still had the strength and means” to equip and arm not only the country’s own forces but those of its allies as well.41

  “Choose any American at random,” Alexis de Tocqueville had written, “and he will be a man of burning desires, enterprising, adventurous, and above all, an innovator.”42 As twelve million Americans went into uniform, millions more—including eight million women and three million African-Americans—poured into factories, shipyards, airplane plants, and offices to join the production effort. Already by the time of Pearl Harbor, American war production was approaching that of Hitler’s Germany. By the end of 1942, it was equal to that of all three Axis powers; by the end of 1943, it surpassed that of all the other major combatants combined.

  Hayek had shown that economic growth was about not production but productivity, the release of potential human energy by matching buyers to sellers and means to ends in a chain reaction that rivaled the one scientists would soon be working on for the Manhattan Project. Tocqueville, too, had seen something heroic about the American way of business, and the war brought forward a number of heroic entrepreneurs to match Andrew Carnegie, John D. Rockefeller, and Henry Ford and those who had built the earlier industrial economy.

  They were men like Henry Kaiser, wizard of the Richmond and Portland Liberty shipyards and former builder of Hoover Dam as well as the country’s most advanced steel plant in California; Roy Grumman, the aircraft engineer who founded Grumman Aircraft in an abandoned garage and built the U.S. Navy fighters and bombers that would command the skies of the Pacific theater; and Andrew Jackson Higgins, the New Orleans–based boat builder who designed 92 percent of the vessels used by the U.S. Navy in World War II—although most were too small to deserve a name or a christening. Higgins landing craft would carry Marines into battle at Guadalcanal and Tarawa, and soldiers onto the beaches of Normandy on D-day. Supreme Allied Commander Dwight Eisenhower called Higgins “the man who won the war for us.”43

  Higgins was hardly alone. By the time of D-day, American factories were building a warplane every five minutes and producing 150 tons of steel every minute. Shipyards were launching eight aircraft carriers a month and fifty merchant ships a day. The country’s railroads were moving 142 million carloads, carrying guns, ammunition, parachutes, helmets, rations, and rubber boats produced in the industrial heartland to both coasts for shipping over-seas—the most massive cargo lift in history.44

  And the scientists whom Europe’s totalitarianism had chased to America—Albert Einstein from Germany, Enrico Fermi from Italy, Leó Szilárd, Edward Teller, and John von Neumann from Hungary—turned out to be the arsenal of democracy’s deadliest secret weapon. They would team up with American physicists like Robert Oppenheimer and Arthur Compton, and American engineers from the chemical giants DuPont and Union Carbide, to turn the unimaginable power buried in the heart of the atom into the world’s most destructive device—the atom bombs that would win the world’s most destructive conflict in 1945.

  Henry Kaiser and fellow businessmen at Hoover Dam, circa 1932: the capitalist as hero. “He is the great liberator,” Ayn Rand would write, who “has released men from bondage to their physical needs.”

  “To American production, without which this war would have been lost”: that was the ceremonial toast of communism’s biggest dictator, Marshal Josef Stalin, at the Tehran summit in 1943. He knew American industry had kept his Red Army on the move with trucks, half-tracks, and fuel, and his people clothed and fed throughout the war—providing almost one-fifth of Soviet GNP. It was also the acknowledgment by Platonism’s most potent political offspring—Marxist communism—that economies and societies built around Aristotle’s empirical system were not only wealthier and more productive but better able to meet the stress of crisis better—even the crisis of total war.

  This came as a complete surprise to an entire century of social thinkers. The whole premise on which Lenin had built his revolution was that capitalism was in the last stage of collapse. Max Weber had treated the capitalist businessman as the master of routine, repr
esentative of a world drained of magic (the term he coined was charisma) and spontaneity. Werner Sombart had divided the world into “traders” and “heroes,” with only the latter embodying the values of courage, duty, and compassion. “The trader approaches life with the question, what can you give me,” Sombart wrote. “The hero approaches life with the question, what can I give you?”

  Now it turned out, the trader could give you victory—as well as wealth beyond people’s imagining. Far from quailing in the face of danger, he had risen to the occasion. Like modern-day Archimedes, American businessmen and engineers had harnessed the forces of science and technology to the service of freedom—just as he harnessed them to the energies of the free market. Thymos, the Platonists’ heroic virtue of spirit or courage, turned out to be much the property of the capitalist entrepreneur as it was of the Homeric warrior.

  By contrast, none of this came as a surprise to one writer—an exile from Russian communism, as it happened—living in New York City. As the United States and Soviet Union lurched toward the climactic confrontation of the heirs to Plato and Aristotle in the Cold War, she would turn capitalism’s new heroic face into a full-blown philosophy—and give credit directly to Aristotle for setting it in motion.

  Born in St. Petersburg in 1905, she was the child of nonobservant Jewish chemists. The Russian Revolution forced Alisa Rosenbaum to flee into hiding in the Crimea, while her family remained trapped and starving. She managed in 1925 to obtain a visa to the United States. Her first sight of the skyscrapers of Manhattan led her, as she wrote later, to weep “tears of splendor.” She had found her true home, and after changing her name to Ayn Rand, she would spend her life celebrating that home’s explosive dynamis.

  The Aristotelian term is appropriate. As a university student in the 1920s, she had read the works of Plato and Aristotle, as well as Nietzsche and the German Romantics, and found that while Plato left her cold and dissatisfied, Aristotle seemed a kindred spirit. When she wrote later that “Aristotle’s philosophy was the intellect’s Declaration of Independence,” and that he “should be given the title of the world’s first intellectual, in the purest and noblest sense of the word,” she was thinking of a far larger historical and philosophical context than simply the United States.

  Borrowing from the Enlightenment as well as Nietzsche, she derived her view of premodern societies as dominated by a self-serving priestly class, who used guilt and an ascetic ideal to manipulate the majority to sacrifice their own identities for a false communitarian ideal. Rand refers to them as Witch Doctors, but Plato is their true archetype, along with his followers Plotinus and Saint Augustine.45

  Far from serving virtue or God, as they claim, the Witch Doctors’ real ally is the warlord, designated as Attila, whose entire perspective is shaped by his dependence on brute force. Like the Witch Doctor, he produces nothing, creates nothing. He only steals from those actually growing the crops, raising the livestock, forging the implements, and exchanging the produce of their labor with others.

  Together this unholy alliance ruled Europe until Thomas Aquinas and the rediscovery of Aristotle. This, not the Renaissance, marks for Rand the true rebirth of Western civilization: the rediscovery of the “basic principles of a rational view of existence … that the task of man’s consciousness is to perceive, not to create reality.” Everything else, for Rand, flows from this realization that there is only one objective reality, the world perceived through the senses. The Renaissance, the scientific revolution, the Enlightenment, and the industrial revolution are for Rand all perched upon Aristotle’s original basic insight.

  This was the vision, Rand declared, that had set civilization on its great ascent. “Everything that makes us civilized beings,” she wrote, “every rational value that we possess—including the birth of science, the industrial revolution, the creation of America, even the [logical] structure of our language, is the result of Aristotle’s influence.”46 Her novels like The Fountainhead and Atlas Shrugged are much more than a Romantic celebration of laissez-faire capitalism and entrepreneurs like Kaiser and Grumman. They are allegories of how our practical reason can turn us into active producers rather than passive recipients of life’s deepest truths.

  For Rand, the final product of this burst of Aristotelian enlightenment was the modern free market entrepreneur. He is the field marshal of the army of freedom, Rand insisted in 1960, and his “lieutenant commander-in-chief is the scientist.” The businessman turns science’s discoveries “into material products that fill men’s physical needs and expand the comforts of man’s existence.” The free market becomes a mass market, where millions of people of every income level are able to get the products they want cheaper, faster, and more efficiently.

  Aristotle’s great-souled man becomes Rand’s great-souled entrepreneur:

  By using machines, he increases the productivity of human labor.… By organizing human effort into productive enterprises, he creates employment for men of countless professions. He is the great liberator who, in the short span of a century and a half, has released men from bondage to their physical needs … and released them from famine, from pestilence, from stagnant hopelessness and terror.47

  For a refugee from Lenin’s revolution, the term terror had a special significance. Soviet communism, like its Hegelian predecessors, hoped to remold human nature with the same confidence and ease as it would build new factories and hydroelectric dams. The State itself, which Hegel saw as the last stage of human progress, would wither away once everyone understood that “to each according to his need; from each according to his means” was the only just pathway of justice. Law, one Soviet theorist enthusiastically predicted, would be replaced by Plan—including the first Soviet Five-Year Plan in 1928.48

  But the New Soviet Man never appeared, except in propaganda posters and films.

  The first gulags appeared only months after Lenin and Trotsky seized power. Under their successor Stalin, they would swell to the point that at the start of the Cold War in 1948 some twelve million people were in Soviet labor camps. Millions of others had been shot, starved to death, or fled the Communist regime—while tens of millions more were being forced to the same system from East Germany and Poland to Vietnam and China.49

  Aristotle had been proven right, and Plato and Hegel wrong. What ultimately killed communism—and ended the Cold War—wasn’t a great military crusade or a nuclear apocalypse, as so many feared, including many of the inventors of the atomic bomb. It was a triumph of ordinary human nature, backed by Rand’s triad of science, technical engineering, and free market productivity. Free creative minds—embodiments of what Aristotle called energeia or an impulse toward action—made the mountains of vinyl records and blue jeans that revolutionized youth culture in the fifties and sixties, including the youth of Soviet Russia and Eastern Europe. They formed a military-industrial complex that would shrug off defeat in Vietnam and produce advanced military miracles like the Stealth fighter and the Strategic Defense Initiative. (The Soviet military-industrial complex, by contrast, would produce nuclear submarine meltdowns and Chernobyl.)

  Finally, that same creative power spawned a computer industry that would reconnect the world via satellite, fax, television, and the Internet—and enable dissidents in Iron Curtain Europe to defy their Communist masters and rejoin the West.

  By 1980, they knew what that Western legacy meant—and what it didn’t. Their heroes were very different from the ones whose portraits studded government walls and adorned public squares: Lenin, Stalin, Marx. Most had contraband copies of Popper and Hayek. One leading Czech dissident, Rita Klimova, wrote her officially banned articles on free market economies under the pen name “Adam Kovarc,” the Czech for Adam Smith. Another, Václav Havel, actually studied with American free market economist Milton Friedman. And when Russian dissident Alexander Solzhenitsyn told an audience at Harvard in 1975 that Americans had died in Vietnam fighting for freedom, he sent shock waves across Cambridge—but spoke for a generation of E
astern Europeans who knew where the road to serfdom really led and what closed societies really were.

  Ayn Rand didn’t live long enough to see the fall of the Berlin Wall. But Karl Popper did and sensed that the fall of communism hadn’t cleared away all of Plato’s political disciples, the avowed enemies of the open society. “Communism is dead,” he would point out, but “it’s left the hatred of capitalism still alive and well.”

  Meanwhile, in a snug little house in Freiburg-im-Breisgau in Germany, a frail white-haired man watched the TV images of crowds smashing the Berlin Wall, and other images of crowds in Prague proclaiming what Rita Klimova had dubbed the Velvet Revolution, the peaceful overthrow of Communist Czechoslovakia.

  He was Friedrich von Hayek, now ninety years of age and in poor health. He had almost lost the power of speech. But on that day, his son remembered, Hayek was beaming. He turned away from the television for a moment with a smile on his face, and said: