Ayn Rand’s Atlas Shrugged – the Movie
A Business Ethical Analysis
Introduction
The movie Atlas Shrugged follows the novel by Ayn Rand closely although it encompasses only
the first half of the book. Written in 1957, Rand explores a world in which the freedom of the
individual to create has been subjugated to an ever more intrusive government. As regulations
and taxes increasingly burden entrepreneurs and industry leaders, they become disheartened.
More and more these few remaining drivers of a failing society decide to leave and seek refuge
in a hidden retreat, Atlantis. Atlas Shrugged was an expression of Rand’s personal philosophy of
Objectivism. At its core this emphasized the importance of the individual’s efforts, the value of
reason, the advantages of capitalism and the dangers of an overreaching government. There is
no specified time for the setting of the novel. The place is the United States and the condition is
extreme economic hardship. The producers of the movie take the liberty of placing Rand’s
characters in the year 2016. Given the current recession and a government that has saddled its
citizenry with vastly increased regulation while espousing positions such as “If you’ve got a
business-you didn’t build that” (Barack Obama), Rand’s novel seems more relevant than ever.
Portrayal of Business
With few exceptions business and business leaders are portrayed in a positive light.
The
protagonist, Dagny Taggart, is the Operating Vice President of Taggart Transcontinental, the
Nation’s largest railroad. While her brother James, the CEO is ineffectual and allows the firm to
deteriorate this has much to do with his personal weakness and willingness to be lead astray by
government influences. Dagny takes over the operation of the railroad against James’ will and
through strength of character rebuilds a one hundred year old line in Colorado. Dagny Taggart is
the face of the business and as she works to rebuild the railroad she displays courage in
employing an as of yet unproven new metal alloy, Rearden Steel for her rails and bridges. When
confronted by the union boss of the Colorado Line who informs her that none of his workers will
help on the new untried line she simply states that she’ll make the run herself and ask for
volunteers. When a lack of financing threatens the new rail line, it is Dagny’s reputation that
attracts investors, not the soundness of the project. Later she and Hank Rearden, CEO of
Rearden Steel, discover that an engineer in Wisconsin had come close to developing a motor
powered by static electricity in the air. Realizing the potential of this device to revitalize the
nation’s economy she travels extensively to find the engineer to fund the motor’s completion.
One senses that this is more for the good of the country than any financial gains to her company.
If Dagny Taggart embodiesTaggart Transcontinental, then Hank Rearden defines Rearden Steele.
A self-made man whose success is due to hard work, intelligence and relentless determination,
Hank Rearden like Miss Taggart is portrayed as a person of integrity. When she approaches him
in need of steel rails for her failing railroad he knows that no one will sell to her and he can name
his price. She offers $40,000/ton but Rearden settles for $20,000 simply because it’s the right
thing to do and in Taggart he sees a fellow entrepreneur struggling against the same government
created barriers to success. When Rearden sees that the new rail line will necessarily cross an
old bridge that Taggart can’t afford to replace he builds a new bridge at a discounted rate with
his new alloy. Amazingly, he even helps his brother’s charity with a $100,000 contribution after
being told that cash would be preferable to check, as “my liberal friends don’t really like you and
your company.”
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The final business of note in the film is Wyatt Oil. As with Taggart Transcontinental and
Rearden Steel this company is portrayed through a single character, its founder, Ellis Wyatt.
Wyatt is in many ways analogous to Hank Rearden. He started a huge firm from nothing and is a
true entrepreneur. Like Rearden he must contend with government interventions intent on
parasitizing his business and like Rearden he is optimistic and works to solve problems to
improve the world. In the end, however, the appeal of leaving an increasingly difficult business
climate for John Galt’s Atlantis proves irresistible and Wyatt suddenly vanishes, leaving his oil
wells in flames.
Ethical Dilemmas
I James Taggart and the Equalization of Opportunity Bill
The government is seeking support for a new policy that will weaken Hank Rearden. Dubbed
the Equalization of Opportunity Bill, it would prevent individuals from owning more than one
business. The government needs the support of at least some business leaders so they turn to
James Taggart. In return, they promise an additional policy that will allow for only one rail line
to operate in each region of the country, driving Taggart’s competition in Colorado out of
business. Taggart quickly agrees and is seen in public pushing the Equalization of Opportunity
Bill that then passes. Rearden’s empire is largely dismantled and Taggart’s competitor is ruined.
The movie portrayed this as an act of treachery on the part of both the government and James
Taggart. Both the government’s representative and Taggart are seen as advancing their selfish
interests at the expense of more honorable men. Both succeed in gaining what they seek.
The correct response by Taggart, of course, should have been to refuse to support the bill. There
was no justification for the new policy aside from a vindictive and power hungry government
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official attempting to destroy a successful private citizen. Taggart was well aware of this. There
can be no justification for supporting the arbitrary and capricious actions of others. Further, as
Taggart stood to benefit from giving his support he had taken a bribe and further compromised
his ethical position. I would have refused to support the government’s policy and would have
advised Rearden of their attempts to influence me to do so.
II Government Misrepresentation of Rearden Steel
In a bid to retaliate against Hank Rearden and level the economic playing field for all steel
producers, the government’s Office of Science and Industry declares Rearden steel unsafe. A
number of papers are released to this effect and industries are instructed not to employ the steel
for any purposes. Later, when confronted by Dagny Taggart, the head of the government’s
Science and Industry Department essentially admits that the entire campaign was fabricated and
had no basis in fact, but had he not gone along with the demands placed upon him he would have
lost his job.
This was such an egregious example of unethical behavior there can only be one correct response
as to how the situation should have been resolved. The head of the government’s Office of
Science and Industry should have refused to falsify data on the safety of the new alloy. Issues
regarding the potential loss of employment are simply irrelevant. I am quite certain I would have
refused to lie about the nature of the alloy if I had been in the position of the government official
or any of his subordinates who were complicit in the falsification of the data.
III Francisco d’Anconia’s Copper Mine
Francisco d’Anconia is a childhood friend of Dagny Taggart and a billionaire having inherited
the family’s copper mines in Mexico. The Mexican government like its American counterpart
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has adopted anti-business policies and d’Anconia correctly anticipates the government’s
nationalization and seizure of his mines. Wishing to leave nothing for the government to take, he
begins to use the firm’s resources to develop worthless land. Outside investors assume that
d’Anconia has identified a new and potentially lucrative mine site and are quick to buy large
quantities of the companies stock while d’Anconia works to destroy the value of his own firm.
He is careful never to suggest that he has identified a new mine but at the same time does
nothing to disabuse investors of this belief or dissuade them from investing. In the end the stock
becomes worthless as the mines are seized and many of those who bought heavily into
d’Anconia Copper stock are ruined.
Technically, I do not believe d’Anconia behaved unethically. He never solicited investors and
never made promises regarding a new mine. Those who invested and lost money did so because
they made assumptions and then took on risk, as does any investor. Further, while the investors
are furious with d’Anconia and blame him for their losses, in reality once the Mexican
government nationalized the mines and seized them their investments would have lost all value
regardless of whether or not company resources had been poured into the development of
worthless land. I found myself admiring d’Anconia’s foresight and his ability to prevent the
government from taking what he and his family had created. If I would have been as far seeing
as he I might well have done the same thing.
Additional Ethical Issues
The three Ethical Dilemmas discussed are a fairly comprehensive treatment of the ethical
business issues presented in Atlas Shrugged. An additional topic has previously been alluded to,
that being Phillip Taggart’s request of Hank for a contribution to his charity. Phillip, like the rest
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of Hank’s family is a left-wing unemployed parasite of his brother. He pursues a life of selfindulgent leisure, occasionally raising money for an undefined charity. Raising money seems to
largely consist of asking Hank for a contribution. As the other board members of the charity are
also “progressives” Phillip explains that it would be embarrassing to take Hank’s $100,000 check
as then it would be clear the money had come from a conservative capitalist and so he asks for
and receives a wire transfer instead. If we consider the charity a business then the business
ethical consideration becomes whether Phillip should ask for and take a donation from a source
that he considers disreputable? The answer is clearly that he should not. The behavior is
unethical. A charity is unlike other businesses in that aside from the positive feelings that may
accompany an act of altruism and possibly a tax deduction the business is not providing any
good or service to the donor. The donor can expect nothing more than the possibility of some
sort of recognition for their act of generosity and in this case that is being denied. It is to Hank’s
credit that he made the contribution even after the insult from his brother.
Summary
Rand’s philosophy of Objectivism with an emphasis on the efforts of the individual, the value of
capitalism and the dangers of big government were refreshing in that so rarely are these positions
presented in a major motion picture given the usual Hollywood bias. The ethical issues raised
highlight that “big business” is not always to blame for societies ills; big government is just as
capable of engaging in unethical behavior. Further, while the movie is fiction, the types of
behaviors are completely believable e.g. a government worker nearly destroying a new product
simply to protect his job. Perhaps we all need to be a bit more aware of the potential for the
government to engage in unethical behavior. Likewise, perhaps we need to greet what we are
told by government officials with greater skepticism.
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