Alan Greenspan is Not an Objectivist

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Larry Breinhart of the Huffington Post and Barrett Sheridan of Newsweek are two of many commentators to use Alan Greenspan’s connection to Ayn Rand and Objectivism as a means to prove that Rand’s philosophy is incorrect and cannot work in the real world. The financial crisis, the argument goes, is directly due to Greenspan’s “full faith in the markets” and his reluctance to regulate the financial sector.

Any attempt, however, to ascribe Greenspan’s actions to Objectivism depends on a fundamental misunderstanding of Rand’s philosophy. Objectivism holds that laissez-faire capitalism is the only moral political/economic philosophy. Laissez-faire capitalism, as Rand stated, demands a complete separation between state and economics. It is incompatible with a Federal Reserve system, in which the government controls interest rates and the money supply by fiat. By running the Federal Reserve, Greenspan wasn’t acting on Objectivist principles–he was betraying them. Worse still, by keeping interest rates artificially low during the first half of this decade, Greenspan was one the principal architects of the current financial crisis. Manipulation of the money supply so often leads to boom and bust cycles, which is one of the many reasons Rand outright opposed the Federal Reserve and any other government intervention in the economy.

Greenspan was at one time a close associate of Ayn Rand. Nonetheless, as Yaron Brook of the Ayn Rand Center for Individual Rights puts it, “any belief Greenspan ever had in truly free markets was abandoned long ago”.

Posted by on December 15, 2008. Filed under Culture, Winter 2008-09. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry
  • http://pulse.yahoo.com/_TIY6PTE2KBHY4RLRMS5LDYHBC4 gb

    Alan Greenspan spent his whole life trying to reduce the role of government in the financial markets. As the Federal Reserve Chair he worked hard to eliminate the Glass-Stegall Act and reduce the SEC’s involvement. i.e, He did work for government in order to reduce the role of government as Ayn Rand would desire. It is no wonder that the Ayn Rand Center would disclaim Alan Greenspan since is policy that the deregulation of derivatives and credit default swaps-that is no government involvement (the goal of Ayn Rand) that caused the problems.
    But of course my discussions with Ayn Rand followers was concerned with the virtues of self interest-A view their is now need to be honest or have ethics. It is primary about selfishness.
    When Alan Greenspan saw how people behaved when given complete freedom in the financial markets. This shows you can be totally smart in one area and be stupid when it comes to the virtues of selfishness especially in financial markets.
    To say that Alan Greenspan had nothing to do with the teachings is Ayn Rand is a person in total denial and void of ethical thinking.

  • BobA

    No one has disputed that he was one of the founding members of the movement, and directly sat at Rand’s feet as a young twenty-something.