‘The best defense of capitalism ever written’
Tags: Bailouts, Banks, Economy
Mark Hemingway at National Review has a great profile of John Allison, the CEO of BB&T bank in North Carolina that didn’t get caught in the subprime mortgage crisis because it followed the objectivist philosophy. Allison says his bank didn’t give mortgages to people who couldn’t pay them because it was bad for business — as was the now infamous bank bailout.
In retrospect, the wisdom of this approach might seem obvious. However, Allison navigated through the overheated mortgage market and the ensuing banking crisis by relying, in large part, on a philosophy that many others are now turning to: “I got interested in [Ayn] Rand in the late 1960s. I read Capitalism: The Unknown Ideal. I had already been interested in economics, and as I finished college, I got interested in finance. I saw the banking system as central to a capitalist economy.”
Rand’s seminal work, Atlas Shrugged, is currently #42 on the Amazon bestseller list in paperback and #135 in hardcover. That’s pretty remarkable for a novel that was first published 52 years ago. Allison calls it “the best defense of capitalism ever written” and made it required reading at BB&T. Since 2005 the BB&T charitable foundation has given millions of dollars to dozens of universities to establish academic programs devoted to Rand’s philosophy.
Allison also tells Hemingway that Rand’s philosophy is not solely based on greed, but on a code of ethics:
While aspects of Rand’s philosophy might legitimately be called controversial, Allison points out that she is misunderstood more often than not. Rand is often viewed as “extreme” because her defenses of capitalism and “rational self-interest” are seen as promoting greed and selfishness. Yet Allison is quick to note that the strong values and ethics that Rand’s philosophy promotes allowed BB&T to steer clear of shortsighted and greed-driven decisions.
“A lot of people miss the fact that Rand has a very strong ethical system,” he observes. “Rand says you can derive ethics from reality. If anything, Rand is more rigorous in her ethical system than most codes are. If you’re dishonest, you are disconnected from reality, and that has consequences.”
Check out the rest here. It’s definitely worth the read. If only more of our bankers thought the way Allison does.
