Tuesday, March 24, 2009

Is It Ethical to Go John Galt?

The concept of "going John Galt" has been denounced for being amoral and selfish. Its detractors believe that if you work at less than your optimal capacity you are subverting the economic and social order.

The argument leads to an absurdity. As Dr. Helen Smith explained: "It strikes me as odd that if you work and make money, you're a selfish bastard, and if you stop working hard and making money, you're a selfish bastard."

The detractors assume that your work does not belong to you. If that is true, then someone else, a bureaucrat, has the right to force you to do what he wants you to do.

But then no one can say that you are responsible for your actions. Coercion removes personal responsibility.

Under such a regime, the only way to exercise your freedom is to work less. When taxes become so onerous that you are working mostly for the state, the only way to exercise freedom is to go on vacation.

Some have criticized "going John Galt" by conjuring dramatic images of physicians going on strike and leaving their patients to die.

Of course, that is not the point. It's not about the strike, but about the extra effort that might make the difference between finding or not finding the correct diagnosis.

When a physician earns a fixed salary no matter how hard he works, he is going to be less present when he is needed. Not so much because he has decided to become a slacker, but because his extra effort has not been appreciated.

Perhaps this is why patients in government-run health care systems must wait so long to receive needed treatment. Even with the best of intentions, when physicians have lost their freedom to earn as much as they can, their morale will be undermined and they will work less effectively.

It all goes back to "animal spirits." In times of deflation and depression how can we motivate people to work harder, to spend more money, to invest in productive enterprise, and to loan out money.

According to the concept of "going John Galt" granting them more freedom-- not more regulation-- is the key. They will be more likely to put their capital to work if they are free to take risks... to enjoy the benefits or to suffer the losses.

And this does not just apply to investment capital or human capital. It also applies to psychological capital, the self-respect that is gained or lost through social interaction.

It's all about competition. Competitive games need to be fair. They should afford everyone an opportunity to engage their energies. But they never yield equal outcomes. If the game is rigged, then there is no reason to play. And, when nothing is to be gained-- in money or self-respect-- a rational actor will naturally not engage.

The problem is not so much that people are going to go on strike. More insidiously, excessive taxation and regulation will cause people to work less effectively, to lose focus, to be more distracted, to take more time off, and to seek out more leisure.

No one is going to take very many risks or to invest very much effort if he is not allowed to enjoy the rewards.

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