[Editor note: Part II on energy conservationism tomorrow examines the energy conservation faddism of Amory Lovins.]

Richard Nixon (1913–94) got on the wrong side of economic law three years before his Watergate-related resignation from the U.S. presidency. In August 1971, in a surprise decision, Nixon imposed the first peacetime wage-and-price controls in American history.

Businessmen reined in their surprise to pragmatically offer support. John Kenneth Galbraith and Paul Samuelson offered quick congratulations. There was public approval of the ‘temporary’ action that was intended to just quell inflationary expectations (as if the problem was psychological and not the inherent consequence of expansionary money). The inflation rate was then running at about 4 percent per year.

Free-market economist Milton Friedman, knowing that shortages lay ahead, lambasted the move. So did Ayn Rand in the Ayn Rand Letter.…

“The Arab oil embargo was not the cause of the energy crisis in this country: it was merely the straw that showed the camel’s back was broken.” (1)

“There is no ‘natural’ geological crisis; there is an enormous political one.” (2)

– Ayn Rand, “The Energy Crisis,” November 5, 1973.

The highly regulated society depicted by Atlas Shrugged includes many things energy. Her 1957 novel and now movie (Part I out;  Part II and Part III to come) has had relevance for U.S. energy policy ever since.

Atlas Shrugged describes oil shortages (342–44, 475), gasoline shortages (pp. 272–73), and electricity blackouts (pp. 669, 671). When the 1970s energy crisis hit, Rand commented:

Many readers have been asking whether I intended to write about the energy crisis. I would be tempted to answer: “I already have” – but they anticipate me by adding that things are “just as in Atlas Shrugged.”

[Editor note: With the Atlas Shrugged movie (Part I) opening this week, MasterResource is examining the book (Part II–today), the philosophy behind the book (Part III–Wednesday), the moral obligation of capitalists according to Rand (Part IV–Thursday), and Atlas shrugging in the energy market (Part V–Monday).]

Ayn Rand’s first major novel, The Fountainhead, is the story of a lone architect struggling against the altruistic, collectivist norms of his profession. Atlas Shrugged describes the process by which men and women of accomplishment and honor withdraw their talent to defeat a parasitic, collectivist society.

Rand described her major plot device, an anti-Industrial Revolution:

Reverse the process of expansion that goes on in a society of producers: Henry Ford’s automobile opened the way for industries: oil, roads, glass, rubber, plastics, etc.

Atlas Shrugged (Part I) had a strong debut weekend despite the effort of its philosophical critics, including some leading movie reviewers, to pan the effort and to discourage attendance (see the Appendix below where Walter Donway challenges Roger Ebert).

This movie and the classic 1957 book are important for today’s energy debate in a variety of ways, beginning with Enron and continuing with Obama energy policy. And how Rand undressed Richard Nixon with the energy crisis of her day(Part V–see schedule below)!

“Ah, Ha!”: Interpreting Enron/Ken Lay

For me personally, Ayn Rand’s philosophy was the key that unlocked the mystery of Ken Lay and the magical new energy company, Enron. I had once studied Objectivism but lost interest in Ayn Rand, finding it too dogmatic for my taste. (In retrospect, I ‘threw the baby out with the bath water’.)…