Analysis: Part One, Chapters III–IV

In the decaying world, business is now done in backroom bars and involves manipulation and deceit. Instead of trading value for value, the looters trade favors. Influence has become a form of currency and a basis for decisions that defy logic. As a result, the weak profit at the expense of the strong. Taggart lost business to Conway’s Phoenix-Durango Line because Conway offered a better service, but Conway will lose anyway because of the involvement of influence peddlers. Similarly, Boyle will profit at the expense of Rearden, although Rearden’s product is far superior. Although the overall harm to the industries seems minimal now, this trend, if left unchecked, may have grave consequences. In sharp contrast, Dagny, Rearden, and Wyatt engage in straightforward and honest dealings. For these industrialists, business transactions depend solely on mutual self-interest. They buy the best goods at the best prices and sell their best products for the highest price they can get. Wyatt’s shock at the straight answers he receives from Dagny when he confronts her about fixing the Rio Norte Line demonstrate how rare this candor has become in an era of evasion and double-speak.

Jim’s actions reveal the corruption behind the so-called altruism of socialist endeavors. He argues publicly that he has built the San Sebastian Line to bring service to the Mexican people, who have no railroads of their own. In fact, he is motivated by the profits he hopes to make from the d’Anconia mines as well as by the desire to improve his stature among his Washington friends by helping the government appear self-sacrificing in regard to the poor Mexicans. Throughout the novel, laws and directives presented by the government as protection for a fragile economy contain similar hidden motives. Behind them all are looters who stand, not coincidentally, to gain in profit and influence.

Rand’s warnings about the effects of socialism begin to build. The book’s characters still regard the nationalization of the San Sebastian Line, along with the creation of “People’s States” all over the world as a faraway event. For most readers, Communism is a similarly remote threat. But Rand had firsthand experience with the effects of nationalization and the creation of a Communist state, and her hatred of the system is more than just ideological. Throughout the novel, threats become more and more immediate. Rights are gradually eroded, and individuals give themselves up to the group until the government gains control of everything and destroys society in the process. The passage of the Anti-dog-eat-dog Rule illustrates the mistakes that occur when individuals submit to majority rule. Dan Conway knows the rule is wrong, morally and economically, but he feels he has no choice but to abide by the majority’s decision. In effect, he surrenders his mind to the group and allows himself to support the destruction of his own business. For Rand, nothing could be worse than the idea that a rational man must subordinate himself to an irrational group.

Some important mysteries are introduced in these chapters. We learn that Francisco has been one of the most successful businessmen of all time. His endeavors are so successful that Jim willingly risks millions of dollars on his unproved mines. When Dagny points out that Francisco is no longer the man he was, having degenerated from unlimited potential to a playboy’s life of decadence, we learn that she has known him well in the past. The questions raised for the reader are: Why would such a man choose to squander his talents? Why do so many talented men like him continue to disappear? Where do they go? Why do they seem to vanish just when they are needed most, as did McNamara the contractor? Who is the man Eddie dines with in the cafeteria, and why is he so interested in Dagny?