Rearden doesn't realize that Paul Larkin is part of the corrupt deal brokered by James Taggart and Orren Boyle that is designed to strip him of his mines and extinguish the Phoenix-Durango Railroad. Rearden sells his mines to Larkin because he thinks he's trustworthy, but Larkin is another corrupt businessman who prospers only in a socialist system. However, Rearden does have a trustworthy ally in Ken Danagger. Danagger is a self-made man. He started at the bottom of the coal business as a miner and rose to the top by means of his own ability and indomitable work ethic, like Rearden. As men who make their own way in the world, relying neither on handouts nor government coercion, Danagger and Rearden understand each other.
The actions of Wesley Mouch are, of course, those of a corrupt politician. His betrayal of Rearden and his affiliation with the James Taggart camp are examples of a socialist economy at work. When the government is granted the legal power to control the economy, it has the power to dispense economic favors. A government with such power attracts power-seeking politicians as well as corrupt, incompetent businesspeople who flourish only behind the barrel of the government's gun. Mouch, for example, is an inconsequential nobody. In a capitalist system, where he would have to compete fairly on an open market, he would not succeed. But in a socialist system, where he can manipulate the coercive power of the state, Mouch can rise to a position of influence in the government.
