Krugman’s unlikely reading of Rand

Paul Krugman writes:

… Ryan has said that his views on monetary policy are based on Francisco d’Anconia’s speech in Atlas Shrugged.

Aside from revealing just how much of a Rand fanboy Ryan is — urban legend, my foot — this is interesting because that 23 paragraph speech isn’t just a call for the gold standard; it’s a call for eliminating paper money and going back to gold coins.

That speech is the one known as the money speech, I’ve linked to it because Krugman doesn’t. Krugman is right to some extent, the speech does represent a call for the gold standard, but it is wrong to characterise it as a 23 paragraph speech in favour of a return to gold coins. Yes the characters in Atlas Shrugged do exchange gold coins for cigarrettes, for the use of a car, groceries etc, and there is one tiny sub-clause in 1100 pages about how slips of paper should be gold:

Those pieces of paper, which should have been gold, are a token of honor – your claim upon the energy of the men who produce. Your wallet is your statement of hope that somewhere in the world around you there are men who will not default on that moral principle which is the root of money. Is this what you consider evil?

When I read this, I considered it a simplification. You could argue that Rand’s portrayal of the characters using gold coins cannot be a simplification, or that could be a nod in the direction of plausibility. A bank note found in the hands of a worker, labelled “Bank of Midas Mulligan”, would be a bit of a giveaway to the authorities looking for missing industrialists; the coins marked US Dollars less so. But the best evidence that this is a simplification is twofold:

  • Rand’s aesthetic premises, which are well documented, advocate leaving out details and simplifying down to what is most important.
  • Its 0.19% of the money speech. Five words from 2617. Five words from 1100 pages of a book, does not make it a theme.

Krugman is just setting up a strawman for the purpose of poking holes. These five words are his protection from accusations of outright dishonesty. He knows the speech is about the moral status and cultural role of sound money. He knows it advocates money as a store or token of stored wealth given value by production, rather than a debt payable by the confiscation of wealth from future generations of the virtuous. He knows that only the most literal and bone headed reading of the speech would read it as a serious call for gold coinage, and that the real message in policy terms is that money should be backed by real wealth, and not confiscated future wealth.


Krugman read it closely enough to count the paragraphs and he was able to read its content at his leisure. He did not. Instead he is just trying to cast aspersions on Paul Ryan so that credulous democratic voters will be able to feel they have read something about Ryan’s beliefs and will be happy to vote Obama, and thus for Krugman’s favoured economonic theories. If he had chosen to discuss where the value of money should come from his readers would be lead in another direction that Krugman does not favour, so he offers up a tidbit about the history of coinage instead.

Dear Democrats if this is all you’ve read then you haven’t read a damn thing, but please vote Obama anyway because if this trash represents the level of discourse of our most honoured intellectuals then all that can come of a Republican victory is that Rand continues to get the blame for policies she would never endorse.