Atlas Shrugged Part II, Chapter 3: White Blackmail (Part 1) - Corruption Wearing a Smile
This chapter is called “White Blackmail” and the title is doing a lot of work. Rand is showing us two kinds of blackmail in quick succession, one emotional and one political, and both rely on the same trick: making a productive person feel guilty for being alive.
After the Party
The chapter opens the night of the d’Anconia Copper crash, right after the party where Francisco blew everything up. Rearden and Lillian are in his hotel suite. She’s furious about Francisco. She rants about his irresponsibility, his duty to stockholders. Rearden just wants her to stop talking. She leaves for the train station. He escorts her. She gets out of the cab at Taggart Terminal with a little wave.
And then Rearden gives the cab driver Dagny’s address.
This is one of those quiet scenes Rand does well. No drama, no big speeches. Just a man going to the woman he actually wants to be with. When he arrives, Dagny is lying in bed awake, and what follows is their most honest conversation in the book so far.
The Trader’s Terms
Dagny tells Rearden something that resets their entire relationship. She says she wants nothing from him except what he freely gives. She doesn’t accept sacrifices and she doesn’t make them. If the pleasure of one has to be bought by the pain of the other, there should be no trade at all.
Here’s the thing: she’s applying business ethics to love. And in Rand’s framework, that’s the highest compliment. Don’t do in your personal life what you’d never do in business. Don’t make deals where one side loses. Don’t pay for joy with suffering.
Rearden still can’t shake the guilt, though. He keeps asking who Dagny’s first man was, this question that keeps tearing out of him. And Dagny turns it back: “Do you understand what you’re saying? That you’ve never accepted my wanting you.” She nails it. His problem isn’t jealousy. It’s that he can’t believe anyone should desire him, because somewhere deep in his programming, pleasure is shameful.
Growing up in a culture that inherited a lot of Soviet-era attitudes toward personal happiness, I recognize this pattern. The idea that enjoying your own life is selfish, that wanting things for yourself is somehow wrong. That guilt is proof of decency. Rand is arguing the opposite, and honestly, she’s not wrong.
They also talk about Francisco, and Rearden admits something surprising. He says that despite everything, despite the financial destruction Francisco just caused, he likes the man. More than likes him. He says Francisco makes him feel hope. That in a world where everyone seems made of pain, Francisco and Dagny are the only ones who aren’t.
Dagny warns him: “I think he’s going to hurt you in some terrible way.” But she can’t bring herself to condemn Francisco either. Neither can Rearden. Something about Francisco doesn’t add up, and they both feel it.
Lillian’s Trap
The next morning, Rearden comes back to his hotel in evening clothes at ten forty in the morning. And Lillian is sitting there, waiting for him. She never took the train home. She stayed. She checked with hotel staff and confirmed he hadn’t slept in his rooms for the past year.
What follows is a masterclass in emotional manipulation.
Lillian doesn’t want a divorce. She makes that very clear. A divorce would free Rearden, and that’s the last thing she wants. What she wants is to keep him trapped. She wants him to stay married, to live in her house, to maintain the appearance of respectability, and to face her contempt every single day. She wants him to look at her after every achievement, every success, and remember that she knows his secret, that she considers him a fraud.
“I want you to look at me whenever you feel proud of yourself,” she says. “And to know that you’re no better, that there’s nothing you have the right to condemn.”
This is the “white blackmail” of the title. It’s not about money. It’s not about legal threats. It’s about using someone’s own sense of honor as a weapon against them. Rearden feels guilty because he broke his marriage vows. Lillian knows this. So she doesn’t punish him with consequences. She punishes him by making the guilt permanent.
I want to point out the flaw Rearden himself senses but can’t quite identify. Lillian claims to be the injured party. But she’s not acting like someone in pain. She’s acting like someone who just won. Her punishment isn’t designed to restore anything. It’s designed to destroy his self-respect. That’s not justice. That’s sadism wearing the mask of morality.
Dr. Ferris and Real Blackmail
After the emotional blackmail comes the political kind. Dr. Floyd Ferris from the State Science Institute visits Rearden’s office with a smile and a trap.
Ferris knows that Rearden illegally sold four thousand tons of Rearden Metal to Ken Danagger. This is a violation of the government’s production controls. And Ferris wants to trade: give us the Metal for our secret Project X, and we’ll keep your illegal sale quiet. Refuse, and you go to jail for ten years, and Danagger goes with you.
What’s brilliant about this scene is not the blackmail itself. It’s Ferris’s philosophy of it. He’s not embarrassed. He’s not threatening from the shadows. He lays it all out like a business proposition between equals. He even tries to recruit Rearden into the system: “Get into the big game. We can use you and you can use us.”
And then Ferris says the quiet part out loud. Rearden asks about his law-breaking, and Ferris responds: “Well, what do you think they’re for?”
He explains that laws aren’t meant to be followed. They’re meant to be broken. You pass so many laws that it becomes impossible for anyone to live without being a criminal. And then you cash in on the guilt. “There’s no way to rule innocent men,” Ferris says. “The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them.”
This is one of the most quoted passages in the entire book, and honestly, it holds up. I’ve lived in countries where this was just how things worked. Laws existed not to create order but to create leverage. Everyone was in violation of something. So everyone was controllable. The system ran on selective enforcement and personal connections. If you were useful to someone in power, your violations were overlooked. If you became inconvenient, suddenly the rules applied to you.
Rearden’s Defiance
But here’s where Rearden does something unexpected. Instead of being crushed by Ferris’s revelation, he’s illuminated by it. He sees the whole system clearly for the first time. And he refuses. Put me on trial, he says. Go ahead. He doesn’t blink.
Ferris panics. This wasn’t in the script. The whole system depends on guilt, and Rearden just stopped feeling guilty. The man who accepted Lillian’s punishment that same morning now rejects the government’s version of the same trick.
Rearden buzzes his secretary, Miss Ives, a hundred-pound woman with zero practical qualifications for bouncing anyone, and has her escort Dr. Ferris out. The scene is almost funny. Miss Ives comes back laughing and asks what he’s doing. Rearden leans back with his feet on the desk and says: “I think I’m discovering a new continent.”
And he’s right. The continent he’s discovering is the idea that he doesn’t owe his guilt to anyone. That the system only works if you agree to feel bad about yourself. Lillian’s blackmail and Ferris’s blackmail are the same thing in different packaging. Both require Rearden to accept that he’s done something wrong by living his own life on his own terms.
He’s not all the way there yet. He still accepted Lillian’s terms. But the crack is forming. And what cracks in Rand’s world tends to break wide open eventually.
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Next: Part II, Chapter 3: White Blackmail (Part 2)
This is part of a chapter-by-chapter retelling of Atlas Shrugged by Ayn Rand (35th Anniversary Edition, ISBN: 978-1-101-13719-2). New posts daily.