Let's look at an example. In 1979 – the year I was born – the dictator of Zambia, Kenneth Kaunda, took out a for $15m from the dictator of Romania to buy some tractors. Most didn't work. But after 20 years of non-repayment, the new democratically elected government of Zambia said it had no way to pay the loan, and negotiations began to cancel it. But a multi-millionaire called Michael Francis Sheehan, whose company Donegal International is based in a British tax haven, had spotted a chance. He bought the debt from Romania for $3m, and took Zambia to court in Britain for the full amount – which had now piled up to $55m.
The Zambian government explained that they don't have the money. A fifth of their people are HIV positive, and there are only 600 doctors covering more than 12m people. Most people are dead before their 38th birthday. The Zambian President's adviser, Martin Kalunga-Banda, explained – and aid groups verified – that if the government had to pay out for the dead dictator's bills, "medicines that would have been available to in excess of 100,000 people in the country will not be available.... [and] in excess of 300,000 children will be prevented from going to school." The people who will go sick or uneducated were not alive when the loan was taken out.
The British judge who heard the case was clearly appalled, but he said the law gave him no choice but to require Zambia to pay $15m, a third of what had been demanded. Virtually all the debt relief the country had received that year – as a result of Jubilee 2000 and Make Poverty History – was wiped out.
What happens to the money once it is redirected? Sheehan – who likes to be known as "Goldfinger" – is fond of vintage Cadillacs, and lives in a mansion in Virginia. Singer used the cash he took to become the biggest donor in New York to George W Bush's 2000 Presidential campaign, and then went on to bankroll Rudy Giuliani's bid in 2008.
She allowed him to run the Nathaniel Branden Institute, a small society dedicated to promoting Objectivism through lectures, therapy sessions, and social activities. The courses, he later wrote, began with the premises that "Ayn Rand is the greatest human being who has ever lived" and "Atlas Shrugged is the greatest human achievement in the history of the world." Rand also presided over a more select circle of followers in meetings every Saturday night, invitations to which were highly coveted among the Objectivist faithful. These meetings themselves were frequently ruthless cult-like exercises, with Rand singling out members one at a time for various personality failings, subjecting them to therapy by herself or Branden, or expelling them from the charmed circle altogether.
So strong was the organization’s hold on its members that even those completely excommunicated often maintained their faith. In 1967, for example, the journalist Edith Efron was, in Heller’s account, "tried in absentia and purged, for gossiping, or lying, or refusing to lie, or flirting; surviving witnesses couldn’t agree on exactly what she did." Upon her expulsion, Efron wrote to Rand that "I fully and profoundly agree with the moral judgment you have made of me, and with the action you have taken to end social relations." One of the Institute’s therapists counseled Efron’s eighteen-year-old son, also an Objectivist, to cut all ties with his mother, and made him feel unwelcome in the group when he refused to do so. (Efron’s brother, another Objectivist, did temporarily disown her.)
Sex and romance loomed unusually large in Rand’s worldview. Objectivism taught that intellectual parity is the sole legitimate basis for romantic or sexual attraction. Coincidentally enough, this doctrine cleared the way for Rand--a woman possessed of looks that could be charitably described as unusual, along with abysmal personal hygiene and grooming habits--to seduce young men in her orbit. Rand not only persuaded Branden, who was twenty-five years her junior, to undertake a long-term sexual relationship with her, she also persuaded both her husband and Branden’s wife to consent to this arrangement. (They had no rational basis on which to object, she argued.) But she prudently instructed them to keep the affair secret from the other members of the Objectivist inner circle.
Now, it is certainly true that working hard can increase one’s chances of growing rich. It does not necessarily follow, however, that the rich work harder than the poor. Indeed, there are many ways in which the poor work harder than the rich. As the economist Daniel Hamermesh discovered, low-income workers are more likely to work the night shift and more prone to suffering workplace injuries than high-income workers. White-collar workers put in those longer hours because their jobs are not physically exhausting. Few titans of finance would care to trade their fifteen-hour day sitting in a mesh chair working out complex problems behind a computer for an eight-hour day on their feet behind a sales counter.[...]The association of wealth with virtue necessarily requires the free marketer to play down the role of class. Arthur Brooks, in his book Gross National Happiness, concedes that "the gap between the richest and poorest members of society is far wider than in many other developed countries. But there is also far more opportunity . . . there is in fact an amazing amount of economic mobility in America." In reality, as a study earlier this year by the Brookings Institution and Pew Charitable Trusts reported, the United States ranks near the bottom of advanced countries in its economic mobility. The study found that family background exerts a stronger influence on a person’s income than even his education level. And its most striking finding revealed that you are more likely to make your way into the highest-earning one-fifth of the population if you were born into the top fifth and did not attain a college degree than if you were born into the bottom fifth and did. In other words, if you regard a college degree as a rough proxy for intelligence or hard work, then you are economically better off to be born rich, dumb, and lazy than poor, smart, and industrious.[...]
Is income really a measure of productivity? Of course not. Consider your own profession. Do your colleagues who demonstrate the greatest skill unfailingly earn the most money, and those with the most meager skill the least money? I certainly cannot say that of my profession. Nor do I know anybody who would say that of his own line of work. Most of us perceive a world with its share of overpaid incompetents and underpaid talents. Which is to say, we rightly reject the notion of the market as the perfect gauge of social value.
Now assume that this principle were to apply not only within a profession--that a dentist earning $200,000 a year must be contributing exactly twice as much to society as a dentist earning $100,000 a year--but also between professions. Then you are left with the assertion that Donald Trump contributes more to society than a thousand teachers, nurses, or police officers. It is Wall Street, of course, that offers the ultimate rebuttal of the assumption that the market determines social value. An enormous proportion of upper-income growth over the last twenty-five years accrued to an industry that created massive negative social value--enriching itself through the creation of a massive bubble, the deflation of which has brought about worldwide suffering.