In society, the interests of men often conflict. The interests, for example, of members of the ruling elite often conflict with the interests of ruled masses. Since there exists no absolute harmony of interests, divisions exist within society that cannot be resolved by “reason.”
Few political thinkers have understood the fact of conflicting interests in society better than America’s founding fathers. As James Madison wrote in The Federalist:
The latent causes of faction are … sown in the nature of man…So strong is this propensity of mankind to fall into mutual animosities, that where no substantial occasion presents itself, the most frivolous and fanciful distinctions have been sufficient to kindle their unfriendly passions and excite their most violent conflicts. But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interest forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government.
According to Madison, factions based on sentiments and interests are part of the human condition. There is nothing that can be done to make them vanish. They will always exist in society.
Objectivism attempts to counter Madison’s view of the inevitably of faction with the assertion “that there are no conflicts of interest between rational men.” [OPAR, 236] Now on the face of it, this seems like a hopelessly naive view. If you are an auto worker making $70,000 a year working in a GM plant, isn’t it in your interest for the government to bail this company out and allow you to continue making your handsome salary until you retire? If so, then your interest conflicts with taxpayers and consumers of automobiles. If you are a company specializing in environmental products, isn’t it in your interest to have the government support legislation which, in effect, forces businesses to become buy your products? If so, then your interest conflicts with consumers, who now have to pay more for products that fall under environmental regulation. If you are unable to afford health care, isn’t it in your interest to have the state force medical facilities to treat you if you are ill? If so, then your interest conflicts with taxpayers and with other consumers of medical goods.
So how does Objectivism deal with such conflicts of interest? By the very simple but controversial strategy of claiming that such interests are not “rational.” According to the implied logic of the Objectivist position, it is not rational for a GM autoworker to support the bailout of the company he works for, even if the only viable alternative for him is to take a low paying service job; nor is it rational for a company specializing an environmental products to support environmental legislation, even though, in the absence of such legislation, the company will almost certainly go out of business and its stockholders will come away empty handed; nor is it even rational for a poor person unable to afford health care to desire forced medical care on his behalf, even if the alternative means death. Consequences are of little importance in determining the rationality of interest. What is important is that individuals do no violate the political and social ideals of Objectivism.
One of the most critical assumptions behind the Objectivist denial of conflicting interests between “rational” men is the notion that it is not in the interest for one individual to exploit or despoil another because, sooner or later, this will lead to a complete despoiling of the productive classes, resulting in impoverishment for every one. While there is always a danger of the despoilers killing the goose that lays the golden egg, there is no guarantee that this will happen. All human societies, past and present, have featured a certain amount of spoliation of the many by the few; yet some of these societies have flourished for hundreds of years.
How is this possible? How can spoliation occur without wiping out wealth altogether? The main reason for this stems from a kind of asymmetry of motivation that exists between the despoilers and the despoiled. As Pareto explains:
It is a curious circumstance, and one meriting attention, that men are often observed to act with much more energy in appropriating the property of others than in defending their own. As we have noted elsewhere, if, in a nation of thirty million, it is proposed to levy one franc per annum on each citizen and to distribute the total to thirty individuals, these latter will work night and day for the success of this proposal, while it will be difficult to get the others to bestir themselves sufficiently to oppose the proposal, because, after all, it is only one franc! Another example: it is proposed to establish a ‘minimum salary’ for the employees of public administration. The people who in consequence of this measure will receive an increase of salary are perfectly aware of the advantage this proposal has for them. They and their friends will exert themselves all they can for the success of the candidates who promise to provide them with this manna. As for the people who are going to have to pay for this salary increase, each of them has great difficulties in working out what this is going to cost him in tax, and if he manages to access it, the amount seems of small significance. In most cases, he doesn’t even think about it…. One of the hardest things to get tax payers to understand is that ten times one franc makes ten francs. Provided the tax increases occur gradually, they can reach a total amount which would have provoked explosions of wrath had they been levied at one swoop.
Spoliation therefore seldom meets with a really effective resistance from the despoiled…. Rules for the distribution of goods … have to be applied by human beings, and their conduct will reflect their qualities and defects. If today there are arbiters who always decide against persons belonging to a certain class and in favor of persons belonging to certain other classes, there will very likely be ‘distributors’ in this society of tomorrow who will share out the loaf in such a way as to give a very little piece to A and a very big piece to B. [Les Systèmes Socialistes, Vol 1, ch 2]
Now while Objectivists may, if they wish, denounce those who engage in spoliation as “irrational,” such condemnations are not likely to prevent the spoliation from taking place. The term “irrational” in this context is merely an epithet of abuse. Objectivists, when using it, are clearly involved in an argumentum ad hominem. If an individual is given the opportunity to enrich himself at the expense of more productive individuals, why is it rational for him to abstain? If selfishness is a virtue, shouldn’t an individual seek to enrich himself in any way he can? As long as runs no great risk of retribution, his self-interest would appear to demand the use of every means at his disposal.
Once we grasp the motivational and situational logic of spoliation in society, it becomes clear that, as Madison warned us, “the latent causes of faction” are in fact “sown” in the nature of man and society. Rand’s assertion that no conflicts exist between rational men is irrelevant nonsense. Because of the asymmetry of interests between the despoilers and the despoiled, it is idle to denounce spoliation as “irrational.” Whether irrational or not, those who benefit from it are not going to give up their ill gotten gains without a fight. This means that in every society there will always exist powerful vested interests that will use every means at their command to support spoliation (and oppose Rand's "laissez-faire"). In short, there will always be factions, including, most ominous of all, factions in support of spoliation. Nor will these vested interests go away merely because Rand claimed she solved the problem of universals. Reality doesn’t work like that.