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Dagny admires Lillian’s bracelet made of Rearden Metal. When Lillian mockingly complains that she would gladly exchange it for diamonds, Dagny offers her own diamond bracelet, which Lillian is forced to accept. Rearden watches, visibly shaken, but stands by his wife, coldly telling Dagny that her action was not necessary.
The mystery of Francisco deepens as readers learn what he has done. By deliberately investing in worthless mines, he has destroyed his own fortune. What could possibly have motivated him? Dagny’s memory of their affair reveals him to be even more complicated. Clearly, he loved her very much, yet he chose to leave her and pursue a worthless existence, seemingly against his own desires. The question of why he left her and why he is working to destroy her railroad along with his mines is at the heart of the novel. But neither Dagny nor the reader is ready to know the answers just yet.
Lillian’s party guests demonstrate the cynical and hopeless state of the culture. Intellectuals speak aimlessly of the futility of thought, the death of reason, and the supremacy of need. When Francisco tells Jim his mismanagement of the mines was merely putting society’s vague words into action, he begins to demonstrate the absurdity involved in the practical application of socialist ideas. But Jim does not hear him or understand the absurdity. He is too focused on his own losses. Francisco has put the conventional morality into action, with disastrous effect. His comments foreshadow the absurdity to come, as lawmakers create policies that are contradictory and illogical, then wonder at their failure.
The party also serves to bring Francisco and Rearden together. The dignity Francisco shows in approaching Rearden disarms him and makes him open to the strange message Francisco bears. Francisco’s respectful tone is even more surprising and unexpected, given his playboy reputation. This conversation marks the beginning of Rearden’s transformation as he struggles to overcome his dual nature. As Francisco points out, Rearden is an uncompromising egoist who happily follows his own rational self-interest in his work. But in his personal life, he allows others to dictate his morality and accepts condemnation from a family that leeches off of him, offering him no value in exchange. When Francisco points out this duality, Rearden begins to close the gap between his two selves. But he still does not understand why Francisco has told him all this.
Rand uses the bracelet incident to create important contrasts between Dagny and Lillian. Dagny’s love for the bracelet demonstrates that she understands what is important to Rearden and that the same things are important to her. Lillian, on the other hand, hates the bracelet and wears it only to mock Rearden. She does not understand or care for him at all. Although he despises Lillian, Rearden is trapped in an imposed morality and feels compelled to stand by his wife. He assumes that his inability to understand her must be a failure within himself. Although Rearden understands how much he and Dagny have in common and is attracted to her, he treats her coldly in an attempt to resist the attraction and remain loyal to his mocking wife.
The mystery of John Galt continues to grow as the guests discuss the rumor that he discovered the legendary Atlantis, a paradise on Earth. Francisco’s insistence that the story is true creates a possible link between his own mysterious secrets and the answer to the question “Who is John Galt?”
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