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Mar 12, 2013

Free Markets Series E3: Ayn Rand and Her Legacy

Ayn Rand suffered through the Russian Revolution before escaping to America at the age of 21. In this illuminating interview, former bank executive John A. Allison discusses how her philosophical novels, most notably Atlas Shrugged, helped him run a successful business and steered him through the recent financial crisis.

Rand gets a lot of flack for advocating selfishness. But the selfishness she promotes is not about taking advantage of other people, which is ultimately self-defeating. Rather, as Allison points out, it’s about asking, “What kind of world would I like to live in? And what would I enjoy doing helping create that kind of world?” Rand’s version of selfishness involves having a sense of purpose, taking care of your body and your mind, and fostering healthy relationships.

John Allison might have been accused of being selfish when, despite government pressure to promote home ownership, he kept his bank from issuing mortgages to clients who could not afford them. But as he told his employees, “Never, ever do anything that you know will be bad for your client, even if you can make a profit in the short term, because it’ll always come back to haunt you in the long term. And if you do the right things for your client, you’ll be successful in the long term.” In the ensuing crisis, of course, many poorer people who got mortgages from other banks ended up losing their homes.

Viewers will hear Allison’s views on regulations and crony capitalism, and will learn why his bank was forced to take TARP funds. Despite many of Rand’s dire predictions coming true, though, he remains optimistic because as she argued, ideas matter.