Ayn Rand and Business – A Book Review

As a special treat for the readership of VeraSage, I present the following book review by my friend and mentor, Howard Hansen. Howard was the vice president of human resources for Great Plains Software in its heyday. Great Plains was featured as one of Fortune Magazine’s Top 100 Companies to Work For for several years and Howard played a big part in that recognition.

I’ve been reading Ayn Rand and Business, a new offering by authors Donna Greiner and Theodore Kinni (Texere). Rand’s theory of objectivism – best articulated in the famous John Galt speech in Atlas Shrugged – has a committed following. Ayn Rand and Business explores objectivism and attempts to tie its principal tenants to contemporary business issues. While objectivism’s rigidity can be uncomfortable – Rand demanded a cult like adherence to her beliefs and followers who strayed were sometimes exiled – there are characteristics of the philosophy which fit well with effective business concepts.

Notable is the power of shared values, a carefully selected and articulated list of behaviors employees are expected to follow in all situations.

Rand believed in always exercising rational thought above and before emotion. She argued that the key values supporting rationality are: Independence, Integrity, Honesty and Justice. Authors of Ayn Rand and Business explore definitions of these terms with interesting insight. I plan to suggest these values for consideration to my clients who use shared values in their organizations and take them seriously enough to review, revise and define them.

There are a couple of more nuggets to explore from this book. One is the view managers must take of employees in the Randian World. Another is how Objectivism and Healing Leadership link together.

The authors write that Rand had ideas about the relationship between employee and employer. She believed in three basic ideas:

  1. Employees work for themselves not their employer.
  2. Mutual respect and voluntary cooperation are foundational to successful employee-employer relationships.
  3. There is only one correct way to judge employee performance and that is on “rational merit”.

The idea that employees work for themselves and not for a company or organization is dramatic. It suggests there is no value in traditional management approaches to improving individuals’ performance. And it certainly defines the still too frequently used method of “management by intimidation” as ineffective at best and harmful at worst. The authors write, “Outright physical violence has largely disappeared as a management strategy (in today’s organizations), but less-overt forms of force are still in evidence. Some managers resort to verbal intimidation and threats to motivate employees.”

Which brings us to Healing Leadership. I have long held that leaders need to see themselves as healers in their organizations. Employees in pain, especially pain created by their experiences as employees, are distracted, unhappy and generally unsuccessful at their work. Bosses need to see these traps and help their employees spring themselves.

Often this unhappiness is driven by fear. This fear can be created by a toxic environment whose ingredients are both obvious and subtle.

The authors of Ayn Rand and Business quote W. Edwards Deming: “Drive out fear so that everyone may work effectively for the company.” This behavior, “driving out fear”, is a rational objective. It is undertaken to create higher performance through the establishment of a “rational, objective atmosphere of trust, mutual respect, and freedom at work.”

Thanks, Howard.

More of Howard’s writings can be found at www.healingleaders.com. Please take a few moments to visit this very different site.


  1. I also thought this exchange between Howard and me on the subject of Randian motivation was worth posting.

    Ed: This is neat. I have been thinking a lot about the concept of motivation. Would it in your opinion be “Randian” management to say that managers/leaders are just not responsible for motivating their teams?

    Howard: I was watching a guy break up the road near our house. It’s a big project going on in our town. Guy runs a machine that breaks up a concrete median between opposing lanes of traffic and dumps the stuff into waiting trucks. As I watched, I understood he was doing a kind of ballet. He had to make dozens of decisions in a minute; what part to break up, how to organize it with the scoop, keeping stuff from shifting into traffic, signaling the truck driving when and how to move to accommodate his position, repositioning his own machine. I thought, “This guy really knows how to do this work.” No one is around to tell him how to do it. He runs the Caterpillar effortlessly. The action of the work itself appeared to be an extension of his knowledge that he was doing a very important job and he was doing it as best he could. A scooper operator! What was his motivation? Money? Maybe. But it also had to be his “flow”. His command of his work illustrated his love of it. Nobody was standing around motivating him. He was motivating himself.

    Ed: This may be due to my connotation about the term motivation. Most people when they ask me, “How do I motivate my people?” are really asking, “How do I get them to do what I want?”

    Howard: Yes, they are. My reply, when I hear the same question is, “How do they get themselves to do what’s best?” Of course, answering that question requires skills at understanding the people they?ve hired. This should have been done during he recruiting, interviewing and selection process. A boss who says. “I can’t get them to do what I want ? they’re not motivated” ? is indicting his/her own selection skills. He/she is also admitting that mission and strategy hasn’t been developed and articulated communally.

    Ed: Leaders/managers are clearly responsible for setting and clarifying the vision, but it would be up to the individual to decide if they feel they are in alignment with that vision.

    Howard: Precisely!

  2. I offer the following comments on Howard Hansen?s review of ?Ayn Rand and Business? with respect and appreciation for an apparently good faith effort to apply her ideas to the realm of business.

    An organization who?s Declaration contains the statement, ?We hold these Truths to be self-evident, that all Value is Subjective,? is bound to misrepresent Ayn Rand?s fundamental principles. After all, she was an Objectivist, not a subjectivist. (Note that ?Objectivism? is a proper noun.)

    All so often with reviews, articles and books claiming knowledge of Ayn Rand?s ideas, it is evident to me that the source of the commentary is based on secondhand information or a cursory reading of her works, but never on a firsthand, in-depth study of Objectivism. Such is the case here.

    The Ayn Rand Institute offers courses and literature on the application of Objectivism to business. Contact me if you?re interested and I?ll be pleased to provide guidance on locating relevant information. For now, please note the following information:

    Visit us at http://www.AynRand.org.

    Business section: http://www.aynrand.org/site/PageServer?pagename=media_topic_business.

    By way of example of the application of Objectivism to business, John Allison, Chairman and CEO of BB&T Corporation ? the nation?s ninth largest bank ? is the preeminent Objectivist businessman. BB&T?s (Allison?s) philosophy can be viewed here: http://www.bbt.com/bbt/about/philosophy.

  3. Mr. Thompson,

    I certainly appreciate your comments. I would like clarification from you on one point.

    We say all value is subjective because that has been the case since the Marginalist Revolution in 1871. We are using “subjective” in the context of economic value only, specifically, to help businesses set prices in accordance with value.

    I don’t believe the use of “subjective” in this context makes it the opposite of “objectivism.”

    I’ve read Ayn Rand, and it seems to me she would agree with businesses charging prices that the market would bear. Those prices are determined, ultimately, by value, which is subjective, since it varies from customer to customer (this is why some people fly coach and others first-class).

    Is this not a proper interpretation of her work? And if it’s not, how would Ayn Rand suggest businesses set their prices?

  4. Dear Mr. Baker,

    Thank you for responding. There is a contradiction between common usage of the word ?subjectivism? and its actual meaning. That usage equivocates between the optional and the arbitrary, between objectivity and whim. The subjective is the arbitrary.

    Observe your statement, ?We are using ?subjective? in the context of economic value only, specifically, to help businesses set prices in accordance with value.? I trust that you mean that consumers have objective choices, e.g., that considerations such as cost are determinants in choosing whether to fly coach or first class. Businessmen do not set prices on whim. Rather, they judge ? objectively ? what the market will bear, as you say, (among other objective criteria) but never on whim.

    More formally, from ?The Ominous Parallels,? by Ayn Rand?s intellectual heir, Leonard Peikoff:

    ?In metaphysics, ‘subjectivism’ is the view that reality (the ‘object’) is dependent on human consciousness (the ‘subject’). In epistemology, as a result, subjectivists hold that a man need not concern himself with the facts of reality; instead, to arrive at knowledge or truth, he need merely turn his attention inward, consulting the appropriate contents of consciousness, the ones with the power to make reality conform to their dictates. According to the most widespread form of subjectivism, the elements which possess this power are feelings.

    ?In essence, subjectivism is the doctrine that feelings are the creator of facts, and therefore men’s primary tool of cognition. If men feel it, declares the subjectivist, that makes it so.

    ?The alternative to subjectivism is the advocacy of objectivity?an attitude which rests on the view that reality exists independent of human consciousness; that the role of the subject is not to create the object, but to perceive it; and that knowledge of reality can be acquired only by directing one’s attention outward to the facts.?

    In the spirit of your Declaration, you might consider the following alternate wording, ?We hold these Truths to be self-evident, that all Value is Objective, the Customer is sole arbiter of the Value which we in the Profession create, and Price determines Costs, not the opposite.?

    However, that presents another problem. Namely, truth is decidedly NOT self-evident. ?Truth is the recognition of reality; reason, man?s only means of knowledge, is the only standard of truth.? (Galt?s speech.) Reason is not automatic. Concepts such as ?truth? and ?value? require in-depth study to formulate and comprehend. The Founders, despite their brilliant achievement, were deficient in this regard. Hence the present state of affairs, both culturally and politically. But that?s a subject for another day.

    Ed Thompson

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