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Kakha Bendukidze. Source: Novaya Gazeta – The cover of the first edition of Atlas Shrugged (1957) by Ayn Rand

Atlas Shrugged, a 1957 novel by the libertarian thinker Ayn Rand, is an ode to the free market, the minimalist state and the sovereignty of the individual.[1] It is also a useful text to read if one wishes to understand the worldview of Georgia's most influential policy makers.

The main character in the novel, the engineer John Galt, escapes from an America that has become a breeding ground for socialist ideas. Galt calls on other men and women of talent and ambition to follow him to the remote mountains of Colorado in order to establish a utopia of pure capitalism. For Galt, the engineer, the scientist and the entrepreneur are the true heroes of mankind. In the end, America discovers that it cannot survive without the talents of Galt and his fellow libertarians. They return from Colorado, defeat the collectivist morality of the grey, submissive masses and bring down the oppressive state. As Galt puts it, triumphantly,

"With the sign of the dollar as our symbol – the sign of free trade and free minds – we will move to reclaim this country once more from the impotent savages who never discovered its nature, its meaning, its splendour. Those who choose to join us, will join us; those who don't will not have the power to stop us … "[2]

Ayn Rand's philosophy has for decades made her one of the most popular authors in America and an icon of the American right.[3] Her ideas owe much to her personal experiences as a child in Russia at the time of the 1917 Bolshevik revolution. John Galt's America is in fact reminiscent of the Petrograd of Rand's youth. Her horror of collectivism stems from the memory of her father's shop taken over by communist revolutionaries. She left post-revolutionary Russia for the US in 1926, never to return.

Ayn Rand
Ayn Rand. Photo: unknown

Today, some of Ayn Rand's most committed followers are in fact found very close to Rand's native Russia. Georgia, a republic in the Southern Caucasus, has in recent years styled itself as a modern-day capitalist utopia in Europe's highest mountains. In 2008, Georgia's prime minister was Lado Gurgenidze, who had made his fortune as an investment banker and named his private firm Galt and Taggart, after the two protagonists of Rand's novel. Georgia's president Mikheil Saakashvili recently informed the Georgian parliament that the 19th-century national hero (and saint) Ilia Chavchavadze was in fact "the first Georgian libertarian."[4] Georgia also has its own John Galt, a philosopher-entrepreneur with a mission. His name is Kakha Bendukidze, and this is his story.

Bendukidze's biography offers ample material for a full-length novel. Born in 1956, he spent most of his adult years in Moscow. Making his fortune in Russia in the 1990's, he rose to become one of country's top twenty oligarchs[5] and an influential voice on economic policy. However, by 2004, as Putin's regime tightened its grip on strategic industries, Bendukidze found that his options in Russia were becoming limited. He began disposing of assets and moved to Georgia. In the opinion of Russian oligarch Boris Berezovsky, already in exile,

"Bendukidze does not belong to Putin's circle of friends and he understood sooner than everyone else that everything would be taken away from him … Bendukidze by far hasn't exhausted his potential but right now the Russian authorities do not need such talented people."[6]

At the time, some Russian liberals even hoped that one day Bendukidze, like John Galt, might return, when libertarian ideas regained favour in Moscow. As columnist Vitaliy Tretyakov wrote in Rossiiskaya Gazeta:

"What can be said with absolute certainty is that Russia is highly interested in the success of Bendukidze's truly historical mission … The liberal economic experiment that Kakha Bendukidze will certainly try to carry out in Georgia would (if successful) rehabilitate Russian liberalism (if this is at all possible)." [7]

Bendukidze took up Georgian citizenship and became one of Tbilisi's most influential and effective policy makers. From June 2004 to February 2009, he held three positions in the government: Minister of Economy (June-December 2004), State Minister for Reform Coordination (December 2004 – January 2008), and Head of the Chancellery (January 2008 - February 2009). His experience with Russia's transition shaped the reforms he now set out to implement.

At the same time, Bendukidze also struck up a close relationship with the inventor of the World Bank's Ease of Doing Business Index, Simeon Djankov, currently the Bulgarian minister of finance. Their joint efforts saw Georgia move in this ranking from 100th position in the world into 11th place, an unprecedented rise for a country as poor as Georgia. USAID, which supported Bendukidze's efforts, effusively praised Georgia's reforms as "the broadest, deepest, fastest business climate reforms of any country in the last 50 years."[8] The conservative Heritage Foundation in Washington DC found Georgia to be "mostly free" in 2010, a status which in its view the majority of EU member states have not obtained. During Bendukidze's period, Georgia become the darling of libertarians the world over.

Simeon Djankov
Simeon Djankov. Photo: freeuni.edu

Like John Galt, Bendukidze is articulate about his vision of creating a capitalist paradise. Like Ayn Rand's character, he developed a devoted following of committed libertarians who helped him with his ambitious reforms, and who continue to shape the Georgian policy agenda. Bendukidze is also a polarising figure. The former head of the IMF in Tbilisi told ESI that "the guy is crazy but I happen to love him."[9] There are those in the Georgian opposition who see him as the root cause of Georgia's current malaise, accusing him (as it turns out, wrongly) of selling out the country to Russia. Others stress (rightly) that he promotes a model of reforms incompatible with Georgia's eventual integration with the EU. But nobody, neither friends nor critics, underestimates his ability to set the policy agenda in Georgia, even now that he has left government to return to private business ventures.[10]

One has to go beyond the caricatures drawn by some of his opponents to understand the origins of Bendukidze's ideas, and why Georgia in 2004 proved such fertile ground for his brand of libertarian revolution.

 


[1] Ayn Rand Institute, "A Brief Biography of Ayn Rand"

[2] Ayn Rand, Atlas Shrugged, p. 1067.

[5] Guriev and Rachinsky, "Oligarchs: The Past or the Future of Russian Capitalism?" July 2004.

[6] Alexander Shvarev, "He Is Not Sure about the Russian Authorities" (in Russian), Vremya Novostey, no. 94, 2 June 2004.

[7] Vitaliy Tretyakov, "Bendukidze's Mission" (in Russian), Rossiiskaya Gazeta (Federal issue), no. 3492, 3 June 2004.

[8] USAID, Georgia: Opened for Business, September 2009, p. 3.

[9] ESI Interview with Robert Christiansen, IMF Mission Head, March 2009.

[10] Currently Bendukidze concentrates on building up a private European School of Management in Tbilisi. "Bendukidze on His Dismissal", Civil Georgia, 8 February 2009.

Suggested readings

To learn more about Ayn Rand's philosophy, watch her 1959 interview with CBS's Mike Wallace. The interview, posted on YouTube, is divided into Part 1, Part 2 and Part 3.

Atlas Shrugged (1957) sets out Rand's ideology in 1,200 pages of prose. John Galt, the book's protagonist, captures Rand's philosophy in a speech praising selfishness as the basis of true ethics and explaining why justice requires small government:

"The only proper functions of a government are: the police, to protect you from criminals; the army, to protect you from foreign invaders; and the courts, to protect your property and contracts from breach or fraud by others, to settle disputes by rational rules, according to objective law." (p. 1062)

A survey conducted in the US in 1991 ranked Atlas Shrugged as the second most influential book in print, right after the Bible. With over 12 million copies sold to date, sales increased further in 2008 and 2009, owing in no small part to the onset of the financial crisis.

One expression of renewed interest in Atlas Shrugged is the publication of two recent books examining both the origins and the impact of Rand's ideas. In a 2009 book called Ayn Rand and the World She Made, Anne C. Heller ascribes Rand's hostility to liberal social programs to her years growing up in Bolshevik Russia. Jennifer Burns, in Goddess of the Market – Ayn Rand and the American Right, concludes that the quasi-religious energy pulsating through Rand's work helped her attract a strong following in the US:

"Rand intended her books to be a sort of scripture, and for all the emphasis on reason it is the emotional and psychological sides of her novels that make them timeless. Reports of Ayn Rand's death are greatly exaggerated. For many years to come she is likely to remain what she has always been, a fertile touchstone of the American imagination." (p. 286)

To watch Burns discuss Ayn Rand on the Daily Show with Jon Stewart, please see: www.jenniferburns.org. On Ayn Rand's influence on wealthy Indians, please see "Howard Roark in New Delhi". Heller's and Burns' books were also the subject of a November 2009 discussion at the libertarian Cato Institute in Washington, featured here.

In 2009 the Wall Street Journal published an article by Stephen Moore entitled "'Atlas Shrugged': from Fiction to Fact in 52 Years." Moore praises the key libertarian insight of Atlas Shrugged:

"Politicians invariably respond to crises -- that in most cases they themselves created -- by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs … and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism."

And he suggests:

"If only Atlas were required reading for every member of Congress and political appointee in the Obama administration. I'm confident that we'd get out of the current financial mess a lot faster."

There are many American conservatives today who make comparisons between the events described in Atlas Shrugged and supposed dangers facing the US. Contemporary supporters of Rand's ideas, promoting her books to mass audiences, include libertarian Glenn Beck, who regularly recommends Ayn Rand on his popular show on Fox News:

"Americans are flocking to buy and read Atlas Shrugged because there are uncanny similarities between the plot line of the book and the events of our day, says Yaron Brook, executive director of the Ayn Rand Center for Individual Rights. Americans are rightfully concerned about the economic crisis in government's increasing intervention and attempts to control the economy. No. Ayn Rand understood and identified the deeper causes of the crisis we're facing, and she offered in Atlas Shrugged the principled and practical solution consistent with American values."

Another fervent Rand fan is Rush Limbaugh, who commented on Barack Obama's election in December 2008 by describing the US as having arrived in the world of Atlas Shrugged:

"People who have proved that they can produce tens of millions of cars are going to be led, managed, and directed by people who have never manufactured a single car in their entire lives. People that have produced all of the energy our nation needs to survive and to grow are now going to be led by people who have never found an ounce of oil, drilled for an ounce of oil, refined a single ounce of oil. In fact, I think they're going to be led by people who have no idea where money comes from."

Of course, Ayn Rand is just one of many intellectual heroes of libertarianism, be it in the US or in Georgia. You will find more information on libertarian ideas and thinkers that are influential in Georgia today on the ESI website.

April 2010

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