Statism

Statism is any political system in which the state may dispose of a man's life, property or actions without his consent. Objectivism treats the differences among its forms — socialism, fascism, communism, theocracy, the welfare state — as secondary to the premise they share: that the individual's life belongs to the group, and that the government is the group's agent for collecting on the claim.

“Statism needs war; a free country does not. Statism survives by looting; a free country survives by producing.”
~ Ayn Rand, "The Roots of War", Capitalism: The Unknown Ideal

The essential

Statism is not defined by how large a government is, how it is chosen, or what it says its purposes are. It is defined by whether the government's powers are limited to the protection of individual rights, or extend to disposing of men and their property for ends the government selects.

That distinction cuts across the usual political map. A dictatorship that nationalises industry and a democracy that regulates it differ in degree and in the speed of their consequences, but both rest on the claim that the state may direct a man's productive life. Objectivism therefore does not treat left and right as opposites at the fundamental level: both wings of a mixed economy accept the power and argue about its direction. See Politics and Government.

The root of that claim is collectivism in metaphysics and altruism in ethics. If the group is the real unit and the individual exists to serve it, then a state that enforces the service is not a violation of morality but its instrument. Rand's argument is that the politics cannot be fixed while its base is accepted, which is why she treated political debate detached from philosophy as futile. See Ethics.

Why it does not work

The practical objection follows from the same fact that grounds the moral one: man survives by reason, and reason cannot be commanded.

A man at gunpoint can be made to move but not to think. Force does not defeat a mind; it suspends one. So a system built on compulsion does not redirect production toward better ends — it reduces the amount of production there is to redirect, and it does so invisibly, because what is destroyed is what would have been created. See Initiation of force and Volition.

This is the theme Rand dramatised in Atlas Shrugged: the men whose judgment the system depends on are precisely the ones it cannot conscript, and it collapses when they stop volunteering.

The rule of pull

Rand's most detailed treatment of the mixed economy concerns what happens once a government has the power to grant advantages.

Firms start competing on two tracks. A business under regulation does not accept it passively. It hires lobbyists, courts legislators and funds campaigns, because the return on political influence is now higher than the return on production. Firms begin trying to regulate each other out of existence rather than outcompete each other.
The prize is the power itself. Where wealth can be transferred by law, the contest is over who controls the transfers. The winners of that contest are not the most efficient producers but the best-connected ones. Rand called this "the rule of pull" and treated it as an unavoidable consequence, not an abuse to be reformed away.
Bureaucracy expands by its own incentives. The official best placed to know that his function is unnecessary is the one with the least reason to say so.
The remedy is not more oversight. Agencies created to police the previous agencies enlarge the thing generating the problem. The only measure that removes the incentive is removing the power: to get business out of government, take government out of business.

A mixed economy is therefore unstable on this analysis rather than moderate. Each intervention creates the dislocations that are cited as the reason for the next one, and each pressure group has cause to act before the others do. See Antitrust, Inflation and Exploitation.

Non-objective law

Statism is inseparable from law a citizen cannot predict. When statutes are vague, retroactive, or enforced at an official's discretion, no one can know in advance whether he is complying, and everyone is therefore available for prosecution should it become convenient. Rand regarded the antitrust laws as the clearest American example, since a firm may be charged for pricing above competitors, below them, or the same as them.

The result is not merely unfair. It converts law from a protection into a weapon and makes long-range planning — the distinguishing capacity of a rational being — impossible. See Justice and Constitution.

Common misunderstandings

That opposing statism means opposing government. It does not. Objectivism holds that a government restricted to the police, the courts and the armed forces is a necessity, and should be strong within those functions. See Government and Anarchism.
That statism is a left-wing phenomenon. Fascism and Nazism are treated as statist in the same sense as communism. Rand's analysis of what she called the new fascism was that nominal private ownership under state direction is a difference of bookkeeping, not of principle.
That a democracy cannot be statist. How officials are selected is a separate question from what they may do. Unlimited majority rule places every right at the mercy of a count. See Democracy and Elections.
That some regulation is a moderate middle. A regulation is enforced, at the end of the chain, by armed men. The mixed economy is on this account a transitional state rather than a stable compromise.
That "the welfare state" is a different category. It is milder in its methods and identical in its premise: that a man's earnings are at the disposal of others by right of their need. See Altruism and Sacrifice.

Discussion

References

Rand, Ayn. "The Roots of War", "The New Fascism: Rule by Consensus", "The Pull Peddlers" and "Antitrust: The Rule of Unreason", Capitalism: The Unknown Ideal. New American Library, 1966.
Rand, Ayn. "Man's Rights" and "The Nature of Government", The Virtue of Selfishness. New American Library, 1964.
Peikoff, Leonard. Objectivism: The Philosophy of Ayn Rand, chapter 10.

External links

Statism at the Ayn Rand Lexicon