Why Do CEOs (Still) Love Ayn Rand?

Last Updated Feb 25, 2009 2:18 PM EST

How did a Russian-born novelist become such an influential "thought
leader" for American CEOs, entrepreneurs, and MBAs — and
even Alan Greenspan? Consider the message behind Ayn Rand best sellers href="http://www.aynrand.org/site/PageServer?pagename=objectivism_fiction_the_fountainhead">The
and Atlas Shrugged, which speaks to anyone with ambition and a big ego: The gifted should do what's
in their self-interest. If you have a sharp mind, it is your moral
responsibility to make yourself happy. The weak are not your problem. "I
am for an absolute laissez-faire, free, unregulated economy," href="http://www.youtube.com/watch?v=7ukJiBZ8_4k">Rand told CBS interviewer Mike
Wallace in 1959. "If you separate the government from economics,
if you do not regulate production and trade, you will have peaceful
cooperation, harmony, and justice among men."

Rand's critics claim that the current financial crisis proves
her theories unrealistic and selfish. "Her economic ideas were never
really relevant or workable," says Rick Wilson, a sociology instructor
at Marshall University in Huntington, W.Va., which offers a class on Rand's
writings. "The time we're living through is just another example of
that." And yet 51 years after Atlas Shrugged was published,
Rand's writing still wields considerable influence in business.

Rand’s Philosophy

Rand’s href="http://www.aynrand.org/site/PageServer?pagename=objectivism_intro">Objectivist
philosophy — which calls for facts over feelings, reason over
mysticism, individual over state, and selfishness before altruism — wouldn’t
have reached the masses if not for her books. Her first best seller, The
weaved those Objectivist beliefs into the speeches of the
book’s hero, architect Howard Roark. Roark, who faces trial for dynamiting a
building that he designed after his architectural plans were changed behind his
back, tells the jury that he lives on his own terms, with no obligation to men
except “to respect their freedom and to take no part in a slave

Drafts of Atlas Shrugged were read by the young
Alan Greenspan, who belonged to href="http://books.google.com/books?id=mBGE9JycgrEC&pg=PA40&lpg=PA40&dq=alan+greenspan+objectivism+age+of+turbulance&source=bl&ots=xouzMP7FTD&sig=WNQ_T6VkalcED8dWuJMUngtiNJY&hl=en&ei=C5mRScrcAsyatwel4ujaCw&sa=X&oi=book_result&resnum=5&ct=result">Rand’s
exclusive “Collective,” a group that evangelized Rand’s
writings and, in Greenspan’s case, politicized them. Greenspan managed the
economic boom of the 1990s on the strength of these ideas, fighting regulatory
controls that threatened the free market. But with the Internet bust and
corporate scandals that followed, even Greenspan relented as economists
scratched their heads over what went wrong. “An infectious greed
seemed to grip much of our business community,” href="http://www.nytimes.com/2002/07/17/business/17PLAC.html?ex=1234414800&en=59cb74c5f157fef5&ei=5070">Greenspan
told The New York Times in 2002. But didn’t Objectivists
believe greed is good?

Rand wasn’t the first to argue that government control
destroys the entrepreneurial spirit. But it was Rand who went a step further to
claim that men are morally obligated to fight for these freedoms.

How She Built a Following

Critics initially slammed Rand’s novels. “Remarkably
silly,” “bumptious,” and “preposterous,”
the href="http://www.nationalreview.com/flashback/flashback200501050715.asp">National
Review wrote of Atlas Shrugged.
But they became best sellers anyway. Readers loved the tart-tongued Rand, with
her severe bob and her dollar-sign broaches, not only for her subversive
message but for her rebel persona. Business students found Rand through word of
mouth, passing around dog-eared copies of Atlas, with its 1,075 pages of
plot twists and turns that portray CEOs as heroes instead of villains.

Hugh Hefner and href="http://www.amazon.com/Clarence-Thomas-Biography-Andrew-Peyton/dp/1893554368">Supreme
Court Judge Clarence Thomas found Rand fascinating. Dallas Mavericks owner
Mark Cuban and Whole Foods CEO John Mackey both cite Rand’s books as influential,
though Mackey has said he doesn’t believe businesses exist solely to make a
profit and selfishness is a virtue. In Silicon Valley, Rand’s ideas appeal to
generations of entrepreneurs who built the computer industry and the Internet.
T.J. Rodgers, CEO of Cypress Semiconductor, is a notorious Rand fan; Patrick W.
Grady named his company Rearden Commerce after the steel magnate Hank Rearden
from Atlas.

John Allison, the former CEO of banking giant BB&T,
has called Atlas href="http://www.npr.org/templates/story/story.php?storyId=90104091">the best
defense of capitalism ever written.” Ironically, the bank has
taken $3 billion in the recent government bailout. Still, BB&T’s
charitable arm donated several million dollars to start classes devoted to Rand’s
philosophy on university campuses. At Marshall University’s Lewis College of
Business, which received
a $1 million BB&T grant
, Cal Kent teaches a course that studies Atlas alongside Adam Smith’s The Wealth of Nations. Kent says the class uses
Rand to compare and contrast economic theories from around the world.

Why She Still Has Fans

In the past year, Rand’s brand of unbridled capitalism has
taken a beating. Greenspan, likely Rand’s most famous follower, admitted in
October 2008 to a “flaw” in free-market ideology, and
Objectivists have since distanced themselves from him. “The bulk of
the blame for this crisis should be on the Federal Reserve,” says
Yaron Brook, president of the Ayn Rand Institute.

Still, sales of Atlas are stronger than ever.
Following media coverage last year of the 50th anniversary of the book’s
publication, sales rocketed to 185,000 copies, an all-time high.

Many executives are taking refuge in Rand’s heroes today — just
as some did in the href="http://www.usatoday.com/money/companies/management/2002-09-23-ayn-rand_x.htm">wake
of the Enron scandal, when suddenly all CEOs were painted as villains by an
angry public. Her books offer reassurance that self-interest makes the most
sense both economically and morally. Entrepreneur Joshua Zader named his two
companies after Rand’s work: Atlas Web Development and Atlasphere, an online
meeting and dating site for Objectivists, which is currently connecting nearly
10,000 admirers of her philosophy. Anne Omrod, CEO of Chicago-based John Galt
Solutions, read Atlas in 1997 and named her company for the novel’s
hero. Omrod says C-level execs, now more than ever, approach her at conferences
to chat about the company name and Rand. She estimates that a third of her
staff of software implementers have read the book and swears she can tell when
they have: They perform better. “We don’t make it a requirement to
read it,” she says. “You can definitely tell the folks who
are reading it. They change their mentality to do good work.”

Another reason href="http://online.wsj.com/article/SB123146363567166677.html?mod=djemEditorialPage">Rand
is as popular as ever: She was right, argue her followers. They say that much
of what she railed against — incompetent CEOs, federal bailouts,
bloated government— has become our economic reality today. But was
Rand right about the solution? If so, it would take nothing short of a John
Galt-inspired strike of the entrepreneurs and the dog-eat-dog capitalists to
save this economy.

Photo courtesy of the Ayn Rand Institute.

  • Kim Girard

    Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.