Monday, May 21, 2012

Is Directive 10-289 in Our Future?

I'm currently rereading Ayn Rand's Atlas Shrugged, thanks to an ongoing discussion of the book with a first-time reader-friend from the previously mentioned Absolute Write Politics & Current Events forum.

For those not familiar with the novel, it tells the story of an America choking on special favors and regulation, where each attempt to "fix" things leads only to more problems, where legislation promoted for the "common good" instead serves to line the pockets of the politically-connected, where regulations claimed to promote stability instead institutionalize stagnation. An America where "too big to fail" applies not only to banks, but to the steel mills, copper mines, and railroads of those who curry favor with the administration.

An America, in short, not too far distant from the one we inhabit today.

Naturally enough, since each new act of the legislature leads to even more unintended consequences, each subsequent act of legislation must work harder to overturn basic economic laws of nature.

The Anti-Dog-Eat-Dog Rule gave the National Alliance of Railroads the authority to forbid competition between railroads in certain parts of the country. It's important to note that Atlas Shrugged was published in 1957, during the heyday of the Civil Aeronautics Board, which held precisely the same authority over the then-emerging airline industry. It wasn't until the Airline Deregulation Act of 1978 that airlines were mostly freed to determine their own routes and rates. This ushered in an explosion in airline traffic as airlines began to compete not only for business travelers, but for a tourist market that had failed to develop during the time of heavily-regulated routes and rates and the refusal of the CAB to authorize new interstate airlines.

The Equalization of Opportunity Bill limited the number of businesses any one person could own to a single company, with the claim that it would assure opportunities were left open for "the little guy." The result was that thriving businesses were sold to politically-connected incompetents who performed their own versions of "vulture capitalism," leaving nothing in their wake but the empty shells of once-productive businesses.

Under a directive from the Bureau of Economic Planning and Natural Resources, bonds issued to finance railroad construction were frozen, no longer payable to those who held them Once again, however, the politically-connected found it possible to buy such frozen bonds for pennies on the dollar, then prevail on their insider connections to "unfreeze" them. One has to look no farther in the past than the treatment that General Motors bondholders received to find a ghastly parallel.

The Railroad Unification Plan required all railroads to pool their income, then split the revenue in proportion to trackage owned rather than services rendered; "from each according to his ability, to each according to his needs" made concrete. This is reminiscent of the Democrat proposal, led by Dennis Kucinich, for the creation of a Reasonable Profits Board. This board would be given the legal authority to punish companies that earn what some bureaucrats consider to be "too much money" - by confiscating 50 percent to 100 percent of the profits they earn above arbitrary benchmarks.

As the situation spiraled even more out of control, the government finally issued Directive 10-289, an attempt to freeze reality so that perhaps, if things could get no better, they would at least get no worse. My first-time reader friend summed it up nicely.
They've passed that new, horrible law that doesn't allow for anyone to do anything! I can't believe...gosh, call me naive but I can't imagine us ever getting to a point where the government says we must pay our employers more even while operating at a loss. It's not even possible! And then...to neither spend more or less than you spend one year ever again...to make no more or less, to never hire or fire anyone...it's all so ridiculous!
I've included the full text of Directive 10-289 at the end of this column, but the summation above is both concise and fairly accurate. Workers are chained to their jobs; companies to their workers, their suppliers, and even their production schedule. New workers entering the market are to be assigned jobs by the Unification Board, all patents become government property, no new inventions are to be permitted, and even individuals are ordered to spend their money as they did in the year before.

Admittedly, Directive 10-289 sounds ridiculous on the surface. But as a summation of the philosophy of government as it's practiced today, is it as far-fetched as it appears at first glance? I remember the wage and price controls of the Nixon years, and they were also common during World Wars I and II. Rationing, an even more severe restriction than "buy what you did last year," was a keystone of those price control eras. The Agricultural Adjustment Act of 1933 was designed to limit production of commodities such as wheat, cotton, corn, hogs, rice, tobacco, and milk at a time when unemployment was at an all-time high; animals were slaughtered, crops tilled under and milk poured into gutters to keep prices high.

Stephen Moore made note of more modern parallels in an essay in the Wall Street Journal over three years ago.
The current economic strategy is right out of "Atlas Shrugged": The more incompetent you are in business, the more handouts the politicians will bestow on you. That's the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies -- while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to "calm the markets," another trillion of national wealth is subsequently lost. Yet, as "Atlas" grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate "windfalls."
Now consider what we're hearing from the campaign trail; both Obama and Romney swear they can fix the economy without any substantial cuts in services or major tax increases. Neither seems particularly concerned by a $15 trillion debt or a hundred trillion in unfunded liabilities and intend to continue deficits for the foreseeable future. Romney fully intends to expand the military, apparently believing that 43% of the worldwide expenditures on "defense" aren't enough for the U.S. They both support bailouts of failed companies, declaring them "too big to fail," handed out hundreds of billions in "stimulus" to their cronies, promote Cap and Trade as a fix for the environment and think they can fix healthcare by making people buy health insurance... is that so far off from the wishful thinking of Directive 10-289?

...and that's all I have to say about that.

Directive 10-289

In the name of the general welfare, to protect the people's security, to achieve full equality and total stability, it is decreed for the duration of the national emergency that:

Point One. All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment, under penalty of a term in jail. The penalty shall be determined by the Unification Board, such Board to be appointed by the Bureau of Economic Planning and National Resources. All persons reaching the age of twenty-one shall report to the Unification Board, which shall assign them to where, in its opinion, their services will best serve the interests of the nation.

Point Two. All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any and all of their property.

Point Three. All patents and copyrights, pertaining to any devices, inventions, formulas, processes and works of any nature whatsoever, shall be turned over to the nation as a patriotic emergency gift by means of Gift Certificates to be signed voluntarily by the owners of all such patents and copyrights. The Unification Board shall then license the use of such patents and copyrights to all applicants, equally and without discrimination, for the purpose of eliminating monopolistic practices, discarding obsolete products and making the best available to the whole nation. No trademarks, brand names or copyrighted titles shall be used. Every formerly patented product shall be known by a new name and sold by all manufacturers under the same name, such name to be selected by the Unification Board. All private trademarks and brand names are hereby abolished.

Point Four. No new devices, inventions, products, or goods of any nature whatsoever, not now on the market, shall be produced, invented, manufactured or sold after the date of this directive. The Office of Patents and Copyrights is hereby suspended.

Point Five. Every establishment, concern, corporation or person engaged in production of any nature whatsoever shall henceforth produce the same amount of goods per year as it, they or he produced during the Basic Year, no more and no less. The year to be known as the Basic or Yardstick Year is to be the year ending on the date of this directive. Over or under production shall be fined, such fines to be determined by the Unification Board.

Point Six. Every person of any age, sex, class or income, shall henceforth spend the same amount of money on the purchase of goods per year as he or she spent during the Basic Year, no more and no less. Over or under purchasing shall be fined, such fines to be determined by the Unification Board.

Point Seven. All wages, prices, salaries, dividends, profits, interest rates and forms of income of any nature whatsoever, shall be frozen at their present figures, as of the date of this directive.

Point Eight. All cases arising from and rules not specifically provided for in this directive, shall be settled and determined by the Unification Board, whose decisions will be final.

2 comments:

  1. I can see the horse drawn wagons trudging down the railroad frontage road... and recall the horror of that young man (can't remember his name right now) who sat on the train watching them...

    But don't forget "the gulch."

    Nothing lasts forever.

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  2. Again...just thinking. I'm not sure what I'm thinking, and you didn't really post anything we hadn't been talking about already. :) This book is going to take me several times through if I want to get the most of it and really try to understand what is similar to today and what is not.

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