The Ayn Rand Institute recently posted the below video from 1961 by Ayn Rand herself about capitalism and communism. At the time there was a lot of debate about which was better for society. The political class and intelligentsia decided they liked communism whereas the American people still in love with their John Wayne westerns and old-fashioned ideas of westward expansion loved their capitalism. Democrats and labor unions in a partnership with each other decided that they would avoid the name of communism in much the same way that Fidel Castro did during the period that he was trying to convince Cuba to turn toward Marxism by denying that his proposed dictatorship was a party of communists. Of course we know by history that it was a complete lie, just as history will show that in America public schools, colleges, and the federal government itself has fully embraced communism all along—and sought to teach children those “communal” concepts from before even kindergarten. Visit any daycare facility and you will see communism being taught to 3 and 4 year olds in great abundance. In 1961 Ayn Rand was despondent as to how the great America could even conceive of making the mistakes she had just escaped from in her mother Russia. So she made the below recording to the Presidents Club of the American Management Association to contemplate why.

Speaking of management associations and the innovations available to America it is an aspect to my life that I know first hand. I came to know Ayn Rand and the ARI work because I share with them very similar ideals about how business should be conducted and why capitalism is such a vastly superior mechanism in any global marketplace. I never read Ayn Rand until just a few years ago, yet I lived my life nearly in parallel with her character Howard Roark from the great novel The Fountainhead. When I finally did read it I wondered how I had traveled through life for over 40 years without running across it—and once I did I understood completely the intentions of the novel.

For me the most powerful part of the book was when Roark refused to be a member of the architectural board for the World’s Fair exhibit because of his strict personal revulsion toward collectivism. I too have been invited and had to decline many such associations and it has cost me likely millions in so doing. For thirty years I have been given many, many, many opportunities to do just as what was offered to Roark in The Fountainhead and I declined for the same reasons so to keep my own integrity intact. I had never heard of anybody doing the things I had been doing and taking the social positions I had until I read The Fountainhead, which was really the first time I had a measure that I was actually right in my instincts—and it was good to hear Ayn Rand from beyond the grave tell me she understood.

I had for years been struggling with the communism so present in American business—everything from Six Sigma concepts to Jack Welch management methods. I was sent to many classes over a great deal of time and on day one I lost interest because essentially what they were teaching was classic communism—not capitalism. It was no wonder that companies struggled with profits and innovation and I had no desire to learn such a stupid thing. I often refer to my years at Cincinnati Milacron as one of those pinnacle moments of understanding. I was sent to a Lean Manufacturing seminar as a hand-picked bright spot in their future only to discover that the company was dying on the first day of class. I lost interest in that company once I realized that they were has-beens and would soon go out of business more or less—which of course they did. My views at the time I couldn’t articulate against the current because everyone essentially thought I was nuts—since I was the lone voice against “consensus” and other focus group derivatives. I knew from experience that I wanted to maintain my individuality because it was within that element that true innovation in thought was brought forth.

I still run into the same opposition—actually every day. But I now have a track record to beat over people’s heads which quiets them. When I was in my 20s and 30s everyone just thought I’d grow out of such thoughts of independence—but instead I just got worse over time the more I saw that my methods worked as opposed to other studies. During the 90s I likely read every management book there was in Barnes and Nobel over a ten-year period, and most of them were so wrong, that they might as well be the equivalent to the latest “quick diet” fad because the methods were built around the same mysticism. Most corporations, and most businesses function like a communist dictatorship which quickly saps the strength of an organization of its most valuable resource—the individuals who actually work for the institution. It isn’t long that a company dies on the vine once a few decades of communist dictatorship ruins them for life. Cincinnati Milacron died in this fashion—as did General Motors. The later was only saved by government bail-outs.

Banking institutions, corporations, political structures—everywhere that there is a hierarchy of a few nameplate administrators who have power over others just by title, communism is found to be at the core philosophy of the leaders within the institution. Many of those tuning in to listen to Ayn Ran only cared about what she had to say about profit—not about the means of obtaining it. Most American businesses in 1961 were already infiltrated with communist ideals through their education institutions. They were already thinking in the wrong manner and were mapping out their own personal destructions even as the leaders built their careers and retirement pensions. Those same individuals might have been paid good money for their leadership—but what they often left in their wake was a declining business, not a flourishing one. I simply refused to play along—and over time it has benefited me and many others because when fresh ideals are needed, they are available because I have not destroyed the means of obtaining them.

As Ayn Rand said, it wasn’t communism that proved to be superior to capitalism. It was that in America capitalism committed suicide because businessmen and women discovered that to be good at capitalism they actually had to be good people to the very core of their being and could not have their egos uselessly massaged by corporate structure. The ability to dictate the lives of others because they held power over their employees’ financial purse strings proved too tempting and they fell in love with the power of communism—the ability to be the center of control of all things distributed to others according to their need. For men, the best way to test this morality is in placing a beautiful young secretary outside of their offices. If they contemplate using their power and influence to bed her—they are not moral enough men for capitalism. For women, if they use their power and position to decorate themselves with excessive sign stimuli and tales of oversea travel not out of necessity—but grandeur for the sake of it—as if to exemplify that they hold a higher title than others and therefore hold the fate of so many in their hands—then they are not moral enough for capitalism and will become seduced by the profiteer communism eventually. Once they do, you can hear the term, “team” uttered from their mouths more and more often as they are always on the search for “communal” exercises intended to achieve consensus. A typical episode of The Office is a good place to start to see this withering, pathetic diatribe of failure manifested through comic relief.

As I write this article my wife and I just bought iPhone 6 mobile devices—which to me is one of the most innovative items on planet earth presently. The company itself is nearly at a $1 trillion market cap valuation, and they’ve done it their way. They are very much as a company the way Howard Roarke conducted his business—vastly independent of other companies. They make the market come to them instead of forming themselves to the market. Many analysts college trained to think like nice little communists wonder why the market evaluation of Apple isn’t already over $1.26 trillion—after all it could be. But Apple does things their way for their own reasons and they are driving the market according to their creative input as a company driven by individuals. Steve Jobs after all was a very informal businessman who didn’t have a college degree, and was actually fired from the company he created. But in the end it was Jobs who made Apple what it is and paved the way for creative minds through an excessive commitment to a capitalism loving culture that made Apple such a successful company. Jobs was one of the first to introduce casual wear to the business place just to break down the top down communist culture of rigid dress codes and oppressive company reminders that the employees served the institution—not the other way around. What Jobs did at Apple he was able to perform because he wasn’t taught in college to hate it capitalism—but to use it to be a creative human being. He was essentially a modern real-life Howard Roarke.

Apple isn’t the only company out there who understands that communism has no place in American business. There are others, but they are definitely on the fringe. I am one of those proud fringe people and I know of several others because like-minded people tend to know each other. But what Ayn Rand said in her lecture to the Presidents Club of the American Management Association was completely accurate. It’s not that communism is superior, or had even won. Communism has seeped into our culture as a profiteer while those who were supposed to protect capitalism were too busy thinking about how powerful they are over their employees, or in banging their secretaries. Instead of conducting themselves in a moral way, they have instead turned toward Apple and tried to copy everything about the company hoping that they will strike gold in the same manner. But they can dress in jeans and follow other similar attributes of Apple, but if they don’t develop a creative—capitalist environment for their employees to prosper in—they will fail leaving the default mode of operation to the mindless communists who will sweep in to save the day with bail-outs, focus groups and the constant reminder that institutions are all about “consensus” building. But they were, and will always be wrong. Successful companies are built by individuals for the sake of creative enterprise and it is there that capitalism shines best and brightest—and for the most people’s benefit. It is what’s missing from our present culture and why everything taught counter to that basic ideal is a waste of time.  American business knows how to get there, but they are not willing to act morally to achieve it—which is why Ayn Rand in 1961 was so baffled by the American approach to the long-standing debate. There just weren’t enough defenders of capitalism out there because too many executives were staring at the boobies of their secretaries—instead of on the next great idea and how to free the minds of mankind to unleash the power of capitalism and the ideals that spring forth from such a culture.

Rich Hoffman

CLIIFFHANGER RESEARCH & DEVELOPMENT