Quote of the Day – Ayn Rand on Big Business Stifling Innovation

On my return flight from vacation, I had time to read more in Ayn Rand’s “Capitalism: The Unknown Ideal,” and I was amazed how much of my Kindle copy I ended up highlighting in the chapters I read, so expect a fair number of quotes to come.

This first is from the essay “Notes on the History of American Free Enterprise” by Ayn Rand, and references something I see a lot of among my conspiracy theory loving friends on Facebook, especially in regards to oil companies and “free energy” technology.

Still another popular accusation against big business is the idea that selfish, private interests restrain and delay progress, when they are threatened with a new invention that might destroy their market.  No private interest could or ever has done this, except with government help.  The early history of the railroads is a good illustration.  The railroads were violently opposed by the owners of canals and steamship companies, who were doing most of the transportation at the time.  A great number of laws, regulations, and restrictions were passed by various legislatures, at the instigation of canal interests, in an attempt to hamper and stop the development of the railroads.  This was done in the name of “public welfare” (!).  When the first railroad bridge was built across the Mississippi, the river steamship interests brought suit against its builder, and the court ordered the bridge destroyed as a “material obstruction and a nuisance.”  The Supreme Court reversed the ruling by a narrow margin, and allowed the bridge to stand.  Ask yourself what the fate of the entire industrial development of the United States would have been, if that narrow margin had been different-and what is the fate of all economic progress when it is left, not to objective demonstration, but to the arbitrary decision of a few men armed with political power.

So if such a suppression of “free energy” is taking place, which I doubt, it is due to government action.  Even if “Big Oil” is bribing government officials to achieve this, the solution to not to restrain business, but to get government out of it.  If the government had no power in the economy, other than enforcing laws against actual rights violations, companies would need to work very hard to stay competitive.

Patents for new technology are relatively short, about 20 years, and even while active only cover specific applications.  One only has to look at the plethora of tablet computers today to see that any specific set of patents does not prevent other companies from finding a way to achieve the same, or similar, results in another way.


2 thoughts on “Quote of the Day – Ayn Rand on Big Business Stifling Innovation

  1. Larry Black (@LarryBlack10)

    Reminds me of the ubiquitous internet ads I see, even on reputable websites, with a picture presumably showing some new piece of equipment “guaranteed” to give you “free energy”, usually headlined : Power Companies Hate This!

    As I think you referenced in an earlier post, where would we be if the government had gotten involved in the early days of the development of the internet? If they could have foreseen what it would become, isn’t it likely that they would have intervened in order to “protect” the established industries such as AT&T and USPS? Not to mention the thousands of “mom and pop” stores that would be killed off by internet sales? Of course, they’d never look a couple more steps ahead to realize that the same internet sales would open up the market to even more small businesses.

    It’s precisely because people like Steve Jobs and Bill Gates had the freedom to challenge the established information tech giants (and earlier, Edison and Tesla’s competition with the lamp oil industry, and each other) that we have made the strides in innovation with a lowering of costs. As long as such freedom exists, while the big guys can (and may) collude to make it harder for competition to enter the marketplace, real monopolies are impossible without government assistance.

    1. gmgodrich@gmail.com Post author

      And really, other than being the best and most efficient producer, the only way the big guys can make it more diificult for new competitors to enter a market is via government action. Take away government regulation, licensing, and so forth, which all act to protect existing businesses, the only bar to entry is how good, and potentially profitable, your idea is compared to what is already out there.

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