NYC Covid-19 and Conservative Business Interests

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” – Adam Smith, The Wealth of Nations, (Book I, X “Wages and Profit,” Part I)

Writing for The Savvy Street and cross-linked for discussion on Galt’s Gulch Online, Objectivist scholar Walter Donway identified New York City’s long history of business regulations as the root cause of its horrific Covid-19 death toll. Writing primarily for an audience that supports President Donald Trump’s populism, Donway sprinkled his essay with a pejorative use of “liberal” via the redundant “left-liberal.” But his facts would have been the same and more damning if he had called the failed political policies “service to conservative business interests.”

Donway wrote: “But the city is the most ideologically left-liberal city in America. ...  Here is the briefest rundown on the left-liberal ideological principles and policies that have left New York City spread-eagled, utterly vulnerable to violation by the new epidemic. It was inevitable, an accident waiting to happen. ...  Understand that almost every university, government agency, foundation, and think tank in New York City has a left-liberal bent, tending to support and further these housing policies....  NYC is the U.S. epicenter of the  coronavirus because it is the U.S. epicenter of left-liberal economic intervention that in every possible way has increased the cost and decreased the pace of building ordinary housing for ordinary people.”

Donway has two targets: rent control and labor unions. Donway conflates rent control and rent stabilization. NYC has only 22000 rent-controlled apartments. About half the housing in NYC is “rent stabilized.” 

NYC as seen by the New York Times

Onerous as the regulations are, though, realize that they are business regulations that benefit a special interest: renters. Many capital goods are leased: personal automobiles, taxicabs, semi-trucks and trailers, railroad engines and cars, construction equipment, aircraft, computers, telephones, and office space. If semi-truck rentals were subject to onerous government-mandated pricing, it would be wrong, but we would all know how to analyze the problem. It would be a business interest using civic legal authority for its own profits. And so it is with apartment renters. 

Rent-stabilized housing distorts those markets. Landlords seek and find escapes. Rentals become condominiums. Owners sell and go into other businesses that they hope to enjoy more. Tenants also could find escapes. My brother was an executive for a classical music label headquartered in the City. When I found out how little he paid his warehouse workers, I was shocked. “How can they afford to live in the City?” I asked. “They don’t,” he replied. “They live in New Jersey and take the train.” So did junk bond billionaire Michael Milken. Everyone knows that Warren Buffett enjoys his middle class home in Omaha. No one has to live in NYC, though Walter Donway himself is among the 20 million who choose to.

Labor unions are also businesses, no less than are our local chambers of commerce. Their members pay dues. The unions set up their own qualifications, including specialized training; and in that they are in the same category as university MBA programs. The political advantage that labor unions enjoy is a direct consequence of one-person-one-vote. But they are voting for their business interests. 

NYC as seen by the New York Post

 Among the business interests that Donway disparages—I say that he sleights it as left-liberal snobbery—is the explosion in “historical” properties. It may be true that zealous urban planners at city hall hunt for such opportunities, but largely, the historical marker plaque is sought, applied for, fought for, and won by the property owner who seeks a marketable cachet, whether for a building or a vacant lot. It is the hallmark of conservatism to find intrinsic value in that which went before and to fear change. So, we must preserve barns and tenements just as we protect markets and job titles.

In excoriating renters and laborers (and left-liberals), Donway engages in a strategy explained succinctly in The True Believer by Eric Hoffer. A mass movement can succeed without God, Hoffer noted, but none can succeed without a devil. In modern language, we “otherize” our enemies: they are essentially different from us and therefore essentially evil. I believe that in otherizing labor unions and renters as beneficiaries of left-liberal government intervention Walter Donway’s goal is to seduce pro-Trump conservatives into accepting Ayn Rand’s Objectivism. See his two essays on The Savvy Street, “The Unquiet Grave: Ayn Rand Declared Conservatism Dead in 1960,” and “The Unquiet Grave Part II : Edmund Burke’s Challenge for Objectivism.” He could have made the same argument that I just did: disasterous as such government interventions have proved to be, they were motivated by conservatism in service to business interests.

For context, remember that Ayn Rand was radically opposed to racism and that the central figures of her three novels were independent women. Moreover, she was in favor of open immigration. And she was proud of having gotten around the laws limiting her own immigration. In addition, she was also an atheist. No surprise, she advocated for a woman’s right to end her pregnancy. In her novels and in her own life, she rejected the social traditions of family as the foundation for society. And among all of the very many political interventions in the economy, she was opposed to tariffs. 

Even more to the point here, many of the villians in her novels are businessmen, some of inherited wealth, all with close ties to government regulators. On the other hand, when we first meet the architect Howard Roark, he is wearing blue jeans, sandals, and a shirt missing most of its buttons. Before going to the dean's office to be expelled, he tosses his long hair into a semblance of order. 

 

Ayn Rand on Wall Street
(Cover of The Virtue of Selfishness)

Those are all points of failure for anyone who wants to sell her utopia to conservatives. The reason why is fundamental. Conservatism absolutely requires other people for its practice because it is a social philosophy. Objectivism is a personal philosophy. If your neighbors play loud music at 3:00 in the morning, the conservative response is to call the cops because their anti-social behavior deprives you of your right to property. The Objectivist response is to move. Objectivist ethics of selfishness recognize that you might find it much easier (and satisfying) to call the cops. But that would be your choice based on your values and your decision on how best to minimize your losses and discomforts. You might take your guitar over there and join them. But the choice remains yours because Objectivism is a personal philosophy. 

Walter Donway's major premise is empirically undeniable: New York City's terrible losses from the novel coronavirus are a direct consequence of over-crowding. It is population density rather than population alone that spreads the infection. In response to Donway's discussion on Galt's Gulch, I posted these comparisions.

New York City Population 18 million (Metro area 21 million)

Covid-19 cases 40,900 (31 March)

Houston area: Population 7 million

2020 Estimate 2.4 million for the city proper

1,266 cases

12 dead

168 recovered

(31 March Fox News 26)

The City of Houston does not have zoning but development is governed by codes that address how property can be subdivided. The City codes do not address land use.-- Oct 1, 2018; Planning and Development - City of Houston at https://www.houstontx.gov/planning/De...

Corona Virus Cases Metropolitan Dallas-Ft. Worth

Total Population 7.5 million

Dallas Dallas County - 549

North Suburbs Collin County - 160

Northwest Suburbs Denton County 191

Fort Worth Tarrant County - 161

Dallas Metro total case: 1061 (31 March)

PREVIOUSLY ON NECESSARY FACTS

Michael Shermer’s Moral Arc 

The Market for Voting 

Ayn Rand versus Conservatives 

President Trump and the Military 

Timothy Snyder’s “On Tyranny” 

Against Gulching

"Gulching" refers to setting up a retreatist community of political conservatives. It is named after Galt's Gulch in Ayn Rand's Atlas Shrugged.

Saturday Night Live ran this in the wake of the GOP victory in the Presidential election of 2016:

In The Bubble, the election never happened.
View on YouTube here.

On the Objectivist discussion board, Rebirth of Reason, frequent contributor Luke Setzer posted a link to the video under the headline "Turning Galt's Gulch on Its Ear." In the discussion there, I said that no successful society is monolithic.

The defining attribute of fans of the Atlas Shrugged movies is that they are people who want to set themselves apart in a separate, isolated and hidden community of like-minded people. Many dream of a physical locale. Most enjoy online communities. In those discussions, the occasional reports of attempts at a “Galt’s Gulch” receive close attention.

Although the plot element of “Galt’s Gulch” served a poetic purpose, it was not a call to action. Ayn Rand was specific in stating that art is not didactic: a romance novel does not teach. When Ayn Rand had something to teach, she wrote essays and delivered lectures. Rand’s intention as a philosopher was to create and explain the ideas that can liberate individuals, human society in general, and the United States of America in particular.

 

New York City from ClassicHistory.com

Admirers of the works of Ayn Rand generally have two goals: to improve their own lives by living better; and to change the world. They intend to achieve the latter by spreading the ideas of Objectivism until they are accepted by (arbitrarily) “enough” other people. Their goal is a cultural shift more dramatic than the rise of classical Greece or the Renaissance.  Specifically:

(1) reason, science, and philosophy replace religion
(2) the ethics of egoism become as widely accepted as the tenets of altruism are today
(3) capitalism displaces socialism
(4) government is limited to basic functions of law and order by protecting the rights to  property.
(5) the observably dominant works of art (painting, sculpture, architecture, literature, theater) project rational people living in a knowable universe.

Cleveland's West Side Market indoor space.
(cleveland.com)

The inherent contradiction in “Objectivist culture” – the common interactions in-person and online among those who admire the works of Ayn Rand, perhaps just best called “Rand Fans” – is the dichotomy between reaching out to teach other people and walling yourself in with a group of individuals who claim to believe the same things that you do.

 

In the language of Objectivism, “in Atlas Shrugged, the heroes withdraw their moral sanction from their destroyers.” In other words, not only do they stop obeying the economic regulations of the government, they divorce themselves from anyone who would claim a right to any moment of their lives. They want nothing to do with looters and moochers. That is the active ideal of a Rand Fan in dealing with other people.

The problem that they cannot solve is that the capitalist who owns a gas station is a Muslim. The capitalist who owns a convenience store is a Hindu. It is a fact that Costco founder James Sinegal is an ardent Democrat.  The greatest capitalists of our age – George Soros, Bill Gates, Warren Buffett, and the entire list of global billionaires—are all condemned as “crony capitalists” traitors to laissez faire, who cause and amplify the oppressive laws, taxes, and regulations under which we suffer, but they, by the power of their privilege do not. Objectivism does have its own real-life capitalists. Three that stand out are T. J. Rodgers of Cypress Semiconductor, Ed Snider (1933-2016) of Comcast Spectacore, and John Allison of BB&T. Many others orbit in the pull of Ayn Rand. Mark Cuban (Dallas Mavericks) and Frederick W. Smith (FedEx) are among them. But Cuban supported Hillary Clinton for President. 

Cleveland's West Side Market outdoor space
from Delta Sky Magazine

As explained by Ayn Rand and her one-time colleague psychologist Nathaniel Branden, most people harbor unresolved personal contradictions. If the Muslim who owns a gas station were consistent in his philosophy, he would recognize that the principles that bring success in business – identifying facts, testing theories, treating customers fairly  - speak against the tenets of his religion. If the crony capitalists were consistent, they would deny their government subsidies and advance laissez faire.

 

I and M Bank Market, Nairobi 

What do you do when other people do not live up to your expectations for philosophical consistency?

For many Objectivists, as distinct from mere “fans of Ayn Rand,” the unworkable solution is to withdraw from those who disagree with you. So, it is ironic that the philosophers of the Ayn Rand Institute who do not speak to the philosophers of the Atlas Society probably buy their gasoline from Muslims and get their cars fixed by Christians and find great bargains at big box stores owned by Democrats all the while running Windows software on their computers.

The minor premise of "Gulching" and a theme that is easy to find among fans of Atlas Shrugged, is that in order for there to be a second Renaissance, civilization must collapse. They do not just predict it, they look forward to it with a millenarian fervor. 

The fact is that civilization is, literally, city life. Historically, people from disparate tribes left (and still leave) their homes to come to the places where strangers benefit themselves by exchanging value for value, whether or not they agree on any other fact, claim, or belief.  That cultural matrix is powerful. Examples of farming communities destroyed by crop failures are easy to find. Harder to uncover are cities that starved. Total war does bring that. Fortunately, such wars are exceptional. Examples from the Dutch wars of liberation from Spain show that when the city rulers attempted to control the price of food, the city went without and fell. Cities that let the price of food rise incentivized smugglers to run the Spanish lines. A farm feeds itself (theoretically), but a city is fed by the whole world.  It does not matter that the Chilean farmer whose grapes are on your table has a religious icon in his home. If you cut yourself off from him - and the global commercial network - you only have the grapes you grow yourself... if you grow grapes, rather than apricots, kiwi fruit, watermelon, coconuts, ...

ALSO ON NECESSARY FACTS
Megacities 
Cities 
City Air Makes You Free  
Vectures: Monetizing Urban Transportation