Bernie Madoff: Not Rationally Selfish, But Self-Destructive

Bernie Madoff is sometimes held up by critics of Ayn Rand's ethics as a poster boy for the evil of self-interest. But far from being an example of Ayn Rand's ethics, Madoff is a type of person that Ayn Rand explicitly condemned, because he undertook an irrational--and therefore self-destructive--scheme.

Self-interest, for Ayn Rand, does not equate to simple monetary gain, or the pleasures of any given moment. Self-interest is defined by achievement of a deeply happy life over as many years as possible. Ayn Rand recognized that it is impossible to build long-term happiness by theft or fraud. One's long-term happiness can only be based on the production of life-sustaining/enhancing values, along with honest dealings with oneself and others.

Do you think Bernie Madoff is happy now, in prison? What about while he was running his scheme? This interview should give you a sense of how much he enjoyed himself while defrauding other people:

Does this sound like a man determined to pursue his own happiness and live his life to the fullest? What must it mean for Madoff to be happier in prison, when he has no freedom and no control over his own life, than during his con? His primary emotion while in the middle of the con scheme was fear, which indicates that he sensed his life was out of control. His lies were constantly threatening to catch up with him, and it was just a matter of time before something slipped and he was caught.

Even under the best case scenario he could have hoped for, where he had escaped to a foreign country that would not extradite him, he still would not have been happy. Everyone would find out about his fraud, and he would never be able to come back to the US. He would be despised by good, honest people everywhere, so if he wanted to have relationships with such people, he would have to manufacture more lies to keep his identity secret. No one could be allowed to know who he was; no one could be allowed to get to know him intimately. If people didn't find out who he was, he would be isolated and lonely, living a lie. If they did find out, he would be isolated from honest people by their contempt for him and fear of his dishonest schemes. Either way, he would end up lonely, or surrounded by scum.

Under this scenario, he would still live with the fear of being identified, or, if he lived openly, with the fear that the country in which he lived would change its extradition policy or make an exception in his case.

A country that would not extradite a fraudster to the US is not friendly to the US, and so is probably not going to be a very free or prosperous country. Also, no honest employer would want to hire him, and the whole alleged point of his scheme was to be able to live without honest work. He wouldn't be able to travel freely and enjoy seeing the world, since every time he traveled, he would have a very well-founded fear of being caught by agents of the US or its allies. So, under this scenario, Madoff would likely be trapped in a poor, statist, corrupt country--far from an ideal place to live--with no ambition, no freedom of travel, no intimate friends, no challenging, satisfying, productive job, and a constant, nagging fear. He would end up a lonely, drunken wastrel, escaping his pain and fear by spending the ill-gotten money on booze. Any sex would be meaningless sex with sluts/prostitutes, or fraudulent sex with some woman he duped (for a while).

Again, I stress: This was the (allegedly) best scenario he could have hoped for; i.e. the scenario where he "got away with it" and wasn't caught.

As Ayn Rand recognized, any man who wages war with reality will lose. Attempting to live without a productive pursuit and without respect for the truth is irrational, and will result in long-term pain, fear and despair, because such an attempt contradicts facts about fundamental human nature. By attempting to perpetrate fraud, someone like Madoff puts himself in conflict with his own basic nature and needs as a human being, and with the rational self-interest of every human being on the planet who comes into contact with him. 

To quote Ayn Rand, "There is a fundamental moral difference between a man who sees his self-interest in production and a man who sees it in robbery [or fraud]. The evil of a robber does not lie in the fact that he pursues his own interests, but in what he regards as to his own interest; not in the fact that he pursues his values, but in what he chose to value; not in the fact that he wants to live, but in the fact that he wants to live on a subhuman level."

To live long, fulfilled, happy lives, human beings need to live by their minds, pursuing rational values by means of the virtues of independence, honesty, productiveness, integrity, justice and pride. They also need to respect the individual rights of other people. Without adherence to these principles, any "self-interested" action is a blind, futile flailing in the dark that will lead to self-destructive consequences of one sort or another.

This is why the heroes of Ayn Rand's novels are ruthlessly honest, relentlessly productive, and concerned with earning their own way through life. Unlike Bernie Madoff, they know what is really in their long-term self-interest.

Here is a link to "selfishness" in the Ayn Rand Lexicon: "Selfishness."

For those who don't have backgrounds in philosophy, but want to learn more about Ayn Rand's moral code, I recommend reading The Virtue of Selfishness by Ayn Rand and Loving Life: The Morality of Self-Interest and the Facts that Support It by Craig Biddle. For those who are more philosophically oriented, I also recommend Viable Values and Ayn Rand's Normative Ethics: The Virtuous Egoist by Dr. Tara Smith.

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 Related Posts:

 The Morality of Rational Egoism: Short Notes Atlas Shrugged, Altruism and Egoism

 What Caused the Financial Crisis: It Wasn't Capitalism or Deregulation

 Related Links:

 "The Unselfish Bernie Madoff" (Ayn Rand Center for Individual Rights)

The Nature of the Morality of Rational Egoism: Short Notes

Some short points about the Objectivist ethics of rational egoism (1):

1. If human beings wish to live, they need morality because only certain types of actions will lead to successful life as a human being, while others will necessarily lead to suffering and toward death; yet human beings do not automatically choose life-promoting actions, and they do not automatically know what is life-promoting for them, especially in the long term.
2. A certain fundamental happiness is the marker of a flourishing life, and the fullest, long-term happiness is an individual's proper purpose in adhering to moral principles. What serves this long-term happiness is what defines an individual's self-interest, (i.e. his proper values.) Interactions with others are part of morality, but are not the central concern; the central concern is the reality of the individual's condition with respect to the attainment of life-sustaining/enriching values.
3. Rationality is the fundamental virtue that subsumes all other virtues. Its being the fundamental virtue means that reason is the means by which an individual discovers what is in his self-interest, and that action based on reason is the only means by which he can achieve his proper values, (thus building happiness.)
4. The six subsidiary virtues that Ayn Rand identified are aspects of rationality. They are: honesty, independence, productiveness, integrity, justice, and pride. Pride is not boastfulness or foolhardiness, but a dedication to excellence and moral self-improvement.
5. Attempting to sacrifice the rational interests of others as a means to one's own happiness, whether done through force or deception, is doomed to fail. One's own happiness cannot be built on the robbery or enslavement of others, because human life depends on the production of values that sustain it. Those on whom the parasite feeds are worn down or destroyed, and find it in their rational interest to sabotage and get rid of the parasite. By using force or deception, the parasite is working to sabotage the victims' motivation and rational judgment, and it is their motivation and rational judgment in the production of values on which he is depending for his livelihood.
6. The rational interests of individuals in everyday life in society do not conflict, because life-sustaining values are not a static quantity to be fought over, but are created by effort based on reasoning, and are thus variable and potentially unlimited.
7. Human beings are a combination of the physical and mental, and an individual's self-interest includes psychological values. Self-interest is not to be reduced to only the physical, such as money. Other people can be of tremendous psychological value (i.e. friends, lovers, children.) That an individual's ultimate standard of value is his own flourishing life does not mean that he disregards others, or that he simply uses them for material gain. He can gain major psychological benefits from contact with other people of good character who reflect his values.
8. Objectivist moral principles allow for a vast range of optional values within their practice. They allow for different career choices, (including full-time parenthood,) different tastes in art (literature, movies, music) and different amounts and types of social contact. One's own emotions about different options are typically among the relevant factors to consider in deciding which optional values to pursue.
9. A basic (non-self-sacrificial) benevolence toward others is in one's own interest in an essentially free society. This typically includes being courteous and respectful to strangers, and considerate to friends. This is due to the fact that others are potential values to oneself, whether as trading partners, friends, lovers, or simply as general innovators whose ideas can improve one's own life. In a free, rights-respecting society, strangers are much more likely to be allies than enemies, in fundamental terms, and it's not in one's interest to push such people away without good reason. (Business competitors are not enemies; see Atlas Shrugged.)
10. Just like principles of physics and free-market economics, principles of morality are contextual absolutes. This means that they are not like Biblical commandments that are supposed to always apply, no matter the situation. Proper moral principles apply only within certain circumstances, but when they do apply, they are absolute, and cannot be violated with impunity. For example, the principle that "the initiation of physical force is immoral/evil (destructive to human life)" does not apply in the face of an immediate physical threat to someone's life. Initiating force to push one's unsuspecting friend out of the path of a bullet is a good act. In ordinary circumstances, when human life depends on the free exercise of each individual's mind, the initiation of force is evil because it destroys and/or paralyzes the minds of victims and subverts the mental functioning of the perpetrator, to the extent it is initiated.

For those who don't have backgrounds in philosophy, but want to learn more about this moral code, I recommend reading The Virtue of Selfishness by Ayn Rand and Loving Life: The Morality of Self-Interest and the Facts that Support It by Craig Biddle. For those who are more philosophically oriented, I also recommend Viable Values and Ayn Rand's Normative Ethics: The Virtuous Egoist by Dr. Tara Smith.

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(1) Dictionary definition of: egoism - 1. the habit of valuing everything only in reference to one's personal interest; selfishness (opposed to altruism). ... 3. Ethics. the view that each person should regard his own welfare as the supreme end of his actions [Random House Dictionary of the English Language, Unabridged, 1973]