As Dagny rides west on the train, she encounters a hobo sneaking a ride in the vestibule of her car. She invites him in. His name is Jeff Allen, and he once worked for the Twentieth Century Motor Company. He tells her that he and the factory's other employees first phrased the question, "Who is John Galt?" Twelve years earlier, the company owner died and his heirs took over. The new owners put into practice a plan based on the communist slogan, "From each according to his ability, to each according to his need." The plan enslaved the most able to the unable. The first man to quit the company was a young engineer who said that he would put an end to such irrationality once and for all — he said he would stop the motor of the world. Years passed, factories closed, production declined, and the motors stopped. Jeff Allen and the factory's other workers began to wonder if the young engineer had succeeded in his mission. The engineer's name was John Galt.
The train suddenly comes to a stop, and Dagny learns that the crew members have deserted it. Desertion is becoming a common phenomenon, because men are reaching their breaking points and have no legal way to quit their jobs. Many of Taggart's trains have been "frozen" in this way — abandoned on the tracks for someone else to deal with.
Dagny walks down the tracks and phones for help for the abandoned train. She doesn't return to it, however, choosing instead to walk to a small airfield, where she rents a plane. She flies to Afton, Utah, but the airfield attendant tells her that she has just missed Quentin Daniels. He recently left with a man flying a beautiful plane. Dagny knows instinctively that the man flying the plane is the destroyer, and she decides to follow him. She trails him into the most desolate area of the Colorado Rockies and crashes her plane while attempting to follow the destroyer down.
The story that the hobo tells about the Twentieth Century Motor Company is important for several reasons. First, Rand uses it to demonstrate the consequences of communism in practice. The primary question raised by a communist system is how an individual's needs can be determined. If a group permits each individual to determine his or her own needs, the group faces the daunting task of having to satisfy every person's desires. The problem is not necessarily that people are unscrupulous; the problem is that in such a case, there is no way to achieve objectivity. Does a man need a car or merely desire it? Does a woman require her house to be painted, or is a new coat of paint desirable but nonessential? Does a man need those books or musical recordings that he loves, which add so much meaning to his life? Who should answer such questions, and by what standard could they judge?
Questions of need cannot be answered objectively. Need is a vague and undefinable term in this context. At the Twentieth Century Motor Company, the group voted to decide the needs of each individual, just as the group decided the projected output of each worker based on ability. As a result, each individual was enslaved to the group; his income was determined by his ability to beg rather than by his productive effort. No worker could feel the pride that comes from earning money as a direct result of hard work.
When income is severed from production, incentive necessarily wanes and productivity declines. When the factory's output dropped, the group determined that some people were not working in accordance with their ability. The group sentenced those people to work overtime — without pay, of course, because income is based on need. Not surprisingly, the employees soon started to hate each other and to hide all signs of ability. As a logical consequence, declining production condemned the factory to bankruptcy.
Rand indicates that the worst evil of this communist ideal is that it rewards misery and punishes virtue. It ties a man's income to the number and severity of misfortunes that he and his family experience. It turns his productive ability into a curse, condemning him to ceaselessly toil for the satisfaction of his neighbor's unending desires. The more ability an individual shows, the more he is sentenced to unremitting slavery for the needy, with no gain for his effort. Rand insists that this is the antithesis of a proper moral code, which celebrates the creation of abundance and rewards it by tying income directly to production. Man's life on earth is made possible by virtue of his productivity, not his suffering. Justice and the ability to live successfully require that productive ability be the standard of determining a man's income, not his needs or pain.
The second and more important impact of the story told by Jeff Allen regards John Galt. Dagny now has reason to suspect that there may be a literal John Galt, who is responsible for stopping the motors and draining the brains of the world. If the hobo's story is true, then the destroyer Dagny fears may be this John Galt, who vowed years ago to stop the motor of the world. Dagny has an important clue in her quest to hunt down the destroyer.
The sign of the dollar literally stands for a free country's currency. Here, it makes the deeper point that the mind is the faculty responsible for the creation of wealth, and the mind must be free.