Directive 10-289 (May 1, 2019), in Ayn Rand's novel Atlas Shrugged, was an Executive Order drafted by Wesley Mouch, with the willing participation of James Taggart, Orren Boyle, Clem Weatherby, Floyd Ferris, and Fred Kinnon, and signed by Mr. Thompson, Head of State. Its eight points were an attempt to freeze the collapsing economy of the United States at then-current levels. Instead of doing that, it accelerated the decline, strengthened the case of John Galt and his friends, and hastened the ultimate collapse of economy and government.
This Directive was issued on May 1, 2019, in the last full year of the strike of the men of the mind. The economy had been slowly declining for the previous twelve years, a decline that had accelerated in the previous year. Colorado had famously collapsed, and the culmination of that collapse was the defection of Ellis Wyatt and the lighting of his famous Torch, a phrase that referred to his shale oil fields that continued to burn.
In April, Wesley Mouch, Senior Coordinator of the Bureau of Economic Planning and National Resources, convened a meeting with five of the most politically influential men in government, business, and labor, and insisted that he would need wider powers to deal with what everyone now agreed was a crisis. Mr. Thompson was also present, and gave his explicit clearance to the Directive to be known by its number, 10-289. The numbering system, and the specific meaning of those numbers, were never explained.
|“|| In the name of the general welfare, to protect the people's security, to achieve full equality and total stability, it is decreed for the duration of the national emergency that:
Point One. All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment, under penalty of a term in jail. The penalty shall be determined by the Unification Board, such Board to be appointed by the Bureau of Economic Planning and National Resources. All persons reaching the age of twenty-one shall report to the Unification Board, which shall assign them to where, in its opinion, their services will best serve the interests of the nation.
Point Two. All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any and all of their property.
Point Three. All patents and copyrights, pertaining to any devices, inventions, formulas, processes and works of any nature whatsoever, shall be turned over to the nation as a patriotic emergency gift by means of Gift Certificates to be signed voluntarily by the owners of all such patents and copyrights. The Unification Board shall then license the use of such patents and copyrights to all applicants, equally and without discrimination, for the purpose of eliminating monopolistic practices, discarding obsolete products and making the best available to the whole nation. No trademarks, brand names or copyrighted titles shall be used. Every formerly patented product shall be known by a new name and sold by all manufacturers under the same name, such name to be selected by the Unification Board. All private trademarks and brand names are hereby abolished.
Point Four. No new devices, inventions, products, or goods of any nature whatsoever, not now on the market, shall be produced, invented, manufactured or sold after the date of this directive. The Office of Patents and Copyrights is hereby suspended.
Point Five. Every establishment, concern, corporation or person engaged in production of any nature whatsoever shall henceforth produce the same amount of goods per year as it, they or he produced during the Basic Year, no more and no less. The year to be known as the Basic or Yardstick Year is to be the year ending on the date of this directive. Over or under production shall be fined, such fines to be determined by the Unification Board.
Point Six. Every person of any age, sex, class or income, shall henceforth spend the same amount of money on the purchase of goods per year as he or she spent during the Basic Year, no more and no less. Over or under purchasing shall be fined, such fines to be determined by the Unification Board.
Point Seven. All wages, prices, salaries, dividends, profits, interest rates and forms of income of any nature whatsoever, shall be frozen at their present figures, as of the date of this directive.
Point Eight. All cases arising from and rules not specifically provided for in this directive, shall be settled and determined by the Unification Board, whose decisions will be final.
- Point One served two purposes: to establish the Unification Board, and to require that all persons presently employed, stay employed in their present capacities. The age of twenty-one was selected because that was the voting age at the time of writing. (The voting age remained at twenty-one until the first term of the Richard Nixon administration, during which time Amendment XXVI formally set the voting age at eighteen.)
- Point Two was a direct response to the phenomenon of people quitting and vanishing. This was the real reason for the economic decline, as the bureaucrats half suspected, half feared. Under this point, anyone who quit and vanished faced arrest, imprisonment, and expropriation of his assets.
- Point Three provided for the surrender of all intellectual property of any kind to the government. This point actually directed that holders of patents and copyrights voluntary surrender their rights, clearly an oxymoron.
- Point Four simply provided that no new inventions were to be introduced for the duration. Wesley Mouch and his associates regarded new inventions as destructive of people's livelihoods.
- Point Five attempted to freeze all industrial or commercial output at present levels. For the purpose of determining those levels, the Directive declared a very special fiscal year to be the year ending on the date of the Directive, which was May 1.
- Point Six attempted to freeze consumer spending at the levels seen in the fiscal year ending on the date of the Directive, as Point Five had done for business output.
- Point Seven was an indefinite wage and price freeze.
- Point Eight, the "elastic point," vested in the Unification Board the power to decide, finally and not subject to appeal, any question not covered in Points One through Seven.
At the insistence of Fred Kinnon, head of Amalgamated Labor of America, the Unification Board consisted solely of representatives of his federation of labor unions. When the two businessmen (James Taggart and Orren Boyle) protested, Kinnon reminded them that their insistence on Point Three left them unable to argue from any sort of rights.
James Taggart insisted that Point Four required the closure of all university and other research departments. Floyd Ferris relished the thought of being the sole employer of last resort for such persons, desiring research careers, who "proved cooperative."
A critical analysis
The most obvious objection to the Directive is that it is the sort of order that only a dictator would give. It constitutes a "deprivation of property without due process of law" and arguably a denial of "equal protection of the laws." (See Amendment XIV.)This was especially true of the requirement that all persons "report" to the Unification Board for a federally mandated job assignment when they reached the age of majority.
As a practical matter, it was an attempt to interfere with the "creative destruction" that takes place in any system of capitalism, without regard to anyone's cash-flow positions. If those positions were negative, then very likely an individual or businessman would rapidly find himself ever deeper in debt. But instead of dealing solely with a bankruptcy judge, a person in that situation would also have to do with the Unification Board. If "one bad general is better than two good generals who argue," then that is doubly true of courts, boards, or judges.
The only reason that anything like Directive 10-289 could stand would be that the United States of America no longer operated under its present Constitution. That lends further support to the idea that a runaway Constitutional convention provided the excuse to do away with the Constitution. Indeed no such thing as a national judiciary even bears mention in the novel; only a Legislature and a Head of State remain.
Francisco d'Anconia described the Directive best of all: as a "moratorium on brains." Dagny Taggart, in outrage, resigned immediately from the Taggart Transcontinental Railroad, and returned only after hearing of the Taggart Tunnel collapse. One of her first acts was to call Washington, DC and asked to speak to Clem Weatherby, whom she informed that she wanted him to be her sole contact in Washington. She further informed him that she intended to violate any regulation she had to, in order to restore the interrupted service across the Continental Divide.
Henry Rearden planned to resign as well when, as he expected, Floyd Ferris came to collect his signature on a "gift certificate" turning over the secret of Rearden Metal to the public domain. Ferris arrived and proceeded to make a blackmail threat against Rearden and Dagny Taggart if Rearden didn't sign. Rearden did sign, but no one else actually made any Rearden Metal aside from Rearden. The one time anyone tried (specifically, Orren Boyle's Associated Steel Company, at their facility on the coast of Maine), Ragnar Danneskjöld shelled the facility to dust using his ship's weapons.
The "Deputy Director of Distribution" at the Rearden steel mill, the man known variously as "The Wet Nurse" and "Non-Absolute," refused to report any of the "illegal" activities in which Rearden was engaged. The Directive outraged him and began a change in his thinking that culminated in his open rebellion against the system, a rebellion that would cost him his life.
This Directive also provoked the first major acceleration of the quit-and-vanish phenomenon. The most obvious manifestation of this were the "frozen trains" on the TTRR, trains whose crews simply stopped and abandoned them. The second major acceleration, of course, occurred after John Galt made his three-hour speech.
Spoilers end here.
The famous saboteur Ned Ludd, whose name became a household word for resistance to the introduction of new technologies, probably would have crowed with delight at the promulgation of Point Four, if he actually existed and was contemporary to the novel instead of to the American Revolution.
The Nixon Administration
In his first term of office, President Richard Nixon promulgated his famous four-phase plan of economic controls, beginning with his Ninety-day Wage and Price Freeze. This obviously recalls Point Seven, and also recalls Point One, in that Nixon established a Federal Pay Board and Price Commission. The results were disastrous, as Ayn Rand predicted that they would be, but even they did not go so far as to constitute a federal job-placement directorate.
Mr. Darl McBride, head of the SCO Group, attempted to allege, during the tortuous litigation of the case of SCO v. IBM, that the open source movement amounted to an unconstitutional expropriation of intellectual property. This would be similar to Point Three. This was not entirely correct, because the General Public License represents a truly voluntary intellectual common. However, Lawrence Lessig has long argued that patents are counterproductive, because "information wants to be free," including information on inventions.
Benjamin Franklin never asked for any remuneration for any of his inventions or discoveries, all of which he cheerfully placed in the public domain. His theory was that God ordained the principles by which anything, even a thing devised by man, worked, and therefore asserting ownership of an invention was an attempt to assert ownership of God. Were he alive today, Franklin would no doubt be promulgating a General Public License for hardware, just as Richard Stallman promulgates the General Public License for software. Thomas Edison did not think in those terms, and probably holds the record for the highest number of patent applications filed by a single person.
No government has yet tried to promulgate anything as far-reaching as Points Five and Six. Instead, the government attempts to bribe businesses and consumers into maintaining a "current" or "acceptable" level of spending, through the use of subsidies. The total amount of subsidies proposed by the Barack Obama administration is unprecedented in scope, and the arrogance that this administration has thus far shown would lead one to suspect that formal directives quite similar to Points Five, Six, and Seven will be forthcoming. As a further consideration, Point Seven has ample precedent, as described above.
- Rand A, Atlas Shrugged, New York: Random House, 1957. Quoted by Helleson M, "The New Intellectual," 2003. <http://radio.weblogs.com/0104693/stories/2002/11/17/directive10289.html>