Friday, November 09, 2007

Question for Tali: Could Atlas Shrug in American Samoa?

Stuart K. Hayashi

I have a question for this blog's owner -- Talifaitasi "Tali" Satele. I have long spoken about how Atlas has been shrugging in the state of my birth, Hawaii.

For readers of this blog unfamiliar with the term "Atlas shrugging," I have described the metaphor as follows:

If a globe symbolizes [the] economy, and Atlas holding the Earth symbolizes the entrepreneurs who keep the economy afloat, the government's perpetual addition of burdens on Atlas's shoulders will eventually make him shrug, causing the "world"/economy to fall and shatter.

That is basically the plot of the Ayn Rand novel Atlas Shrugged. It takes place in a dystopian future United States in which government regulation of for-profit enterprise becomes so burdensome that it becomes terribly difficult for entrepreneurs to remain in business. Most of them roll back on their operations or outright fold their companies. This, of course, leads to economic stagnation and eventual collapse.

Such a cycle has occurred in real life. It happened in the former Soviet Union. It continues to happen in the Third World, as this John Stossel video obviates. As long as the governments of Third World countries continue to abrogate private property rights rather than secure them, then would-be entrepreneurs in these countries have little reason to build up productive, stable industries. Indeed, those who do valiantly try to run productive enterprises find themselves thwarted by arbitrary government edicts anyway.

This has also been the cause of Hawaii's economic travails from the 1980s on to 2002. When Republican Linda Lingle became Hawaii's governor in 2003, prospects improved and Hawaii's economy has begun to recover. The state of my birth now has an unemployment rate lower than the national average. However, Hawaii's regulatory state still creates a horrendous amount of red tape, so Hawaii's economy is not exactly prospering as wonderfully as it could.

So, I ask you, Tali, could Atlas conceivably shrug in American Samoa? What might happen if Hawaiian Airlines becomes so fed up with regulations on its pricing that it cut back on its services to American Samoan air travelers? What if StarKist was hit with a minimum-wage hike so incredibly large that it could no longer economically justify keeping its plants in the region?

What do you think, Tali? Would you recommend this book to people who want to understand why some economies flourish and others falter?


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