Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
Part Two- Chapter 5Account Overdrawn

Part Two- Chapter 5Account Overdrawn

Ratings: (0)|Views: 6 |Likes:
Published by Sameer

More info:

Published by: Sameer on Jan 21, 2008
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

06/14/2009

pdf

text

original

 
Chapter Summaries and Commentaries
 
Part Two: Chapter 5—Account Overdrawn
The United States has no more copper producers. d’Anconia Copper is the lastproducer on earth, but none of its ships can reach America because RagnarDannesjköld sinks them. Consequently, no more electric appliances are beingmanufactured in the United States.
Rearden Steel experiences the first failure in its history. Because he cannot get copper,Rearden can’t deliver the Rearden Metal rail for Taggart Transcontinental’s disintegratingmainline track. As a result, Taggart Transcontinental’s track crumbles, train wrecks proliferate,and shippers go out of business. Virtually no important shippers remain on the Rio Norte Line,and the formerly booming industrial towns in Colorado are now destitute. Finally, Dagny isforced to close that line.James Taggart finds himself squeezed from all sides by the demands of his company andvarious groups that seek to profit from it. Taggart seeks a raise in shipping rates to keep hiscompany afloat, but the shippers demand a rate reduction. The railroad unions demand awage increase, and the government grants Taggart Transcontinental permission to close theRio Norte Line only in exchange for acceptance of the union’s demands. The politicians holdthe threat of reduced shipping rates over the railroad’s head.The government is ready to launch a new piece of legislation, and it wants no trouble fromRearden. Taggart knows that if he has valuable information about Rearden, he can trade theinformation to keep shipping rates steady. Taggart goes to Lillian for help. Lillian discoversthat Rearden’s mistress is Dagny. When Lillian demands that Rearden give Dagny up, Reardenresponds that he would rather see Lillian dead first.In this chapter, Rand shows the cause-and-effect relationships between events in a country’seconomy. Because the politicians previously choked off American copper producers, Rearden isunable to get copper when Ragnar Dannesjköld prevents Francisco’s ships from reachingAmerican ports. Because Rearden cannot procure copper—and because he is prohibited by theEqualization of Opportunity law from mining it himself—he cannot manufacture the ReardenMetal rails needed by Taggart Transcontinental. Because the railroad can’t get the new track,it must keep using its decaying track, which causes endless train accidents. Because of poorfreight service, shippers are unable to get their goods to market, and some go out of business.As a result of business shutdowns, there is no longer freight traffic on the John Galt Line andDagny must close it, ripping up the track to support the transcontinental line. The events of this chapter provide a powerful indictment of the results of a country’s shift from a capitalisteconomy to a socialist one.Augmenting this indictment is the inevitable corruption surrounding the government’s seizureof power. When private individuals aren’t free to set shipping costs and wage rates, theoperation of the law of supply and demand is suspended. Taggart Transcontinental isn’t free tocharge the shipping rates it requires to make a profit, and manufacturers aren’t free to ship byanother railroad if it deems Taggart Transcontinental’s rates too high. Similarly, companiesare not free to offer wage rates based on the value of labor, and workers aren’t free to acceptor reject the proffered wage. When the government takes over an economic system, itdetermines such prices and rates by decree. The government attracts to itself the kind of power-seeking politicians who desire to rule men’s lives, and it then finds itself in the midst of a life-and-death struggle involving warring pressure groups. The railroads, shippers, andunions all clamor for contradictory measures, and the government dispenses favors towhichever group has the most influence, friends, votes, or pull at that moment.

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->