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Wednesday, December 03, 2008 Alan Greenspan vs. Ayn Rand and Freedom By Diana Hsieh @ 12:01 AM If you haven't yet read Alan Greenspan vs. Ayn Rand and Freedom by Harry Binswanger, published in Capitalism Magazine, I strongly recommend that you do so. It's a great article to send to people to who claim -- whether honestly or not -- that Alan Greenspan's actions over the last 25 years or so represent Ayn Rand's philosophy in any way, shape, or form. Consider Dr. Binswanger's list of Alan Greenspan's betrayals of Ayn Rand's principles: I can't say I knew Alan Greenspan, though, being an associate of Ayn Rand, I met him a few times in the 1960s. But by 1970--almost 40 years ago--I and a couple of other Objectivists in that circle already realized that Greenspan was compromising on her philosophy. Little did we know how far his anti-Rand journey would take him. As the years rolled on, he was hailed as the man who "saved" Social Security--by extending its confiscatory power, when Bill Clinton's State of the Union address called for socialized medicine, he rose to his feet, standing next to Hillary Clinton in giving a standing ovation to that proposal, he became head of the mammothly anti-capitalist Federal Reserve, directing the government's manipulation of money and credit, he provided a laudatory dust-jacket blurb for a book attacking Ayn Rand (by a woman he had "irrevocably" condemned in print in 1968). Yet he repeatedly refused to contribute to or lend his name to the Ayn Rand Institute, he wrote, in 1995, that government central banking is a necessity: "Only a central bank, with unlimited power to create money can guarantee that such a process ["a cascading sequence of defaults"] will be thwarted before it becomes destructive." (Note that we just witnessed this "cascading sequence of defaults" despite --or, actually, caused by --our central bank.), he wrote in his autobiography about coming to reject Objectivism: "as contradictions inherent in my new notions began to emerge . . . the fervor receded", and now he has blamed free markets (as if we had them!) for his failures at the Fed. In conceding that his "ideology" was wrong, he was understood to be saying Ayn Rand was wrong--even though he had long ago forgotten or evaded every essential of what Ayn Rand stood for. Can it get any worse than that? Yes, it can -- and Dr. Binswanger lays out the case clearly. In essence, "a man who betrays Ayn Rand, and who wrecks the economy of the U.S. in carrying out that betrayal, then succeeds in shifting the blame onto Ayn Rand and capitalism." Lovely, no? Go read the whole thing. And then post a link to it in the comments of every annoying blogger who claims that the current financial crisis is a refutation of Ayn Rand's ideas. Labels: Activism, False Friends of Objectivism, Finance   E-mail Diana Hsieh    PermaLink ()    Comments (New Page)

Comments on "Alan Greenspan vs. Ayn Rand and Freedom"
	Wednesday, December 3, 2008 at 0:54:30 mst Comment ID: #1 Name: madmax "he provided a laudatory dust-jacket blurb for a book attacking Ayn Rand (by a woman he had "irrevocably" condemned in print in 1968)." Who was the woman?
	Wednesday, December 3, 2008 at 2:49:45 mst Comment ID: #2 Name: PTL I would guess it was Barbara Branden since I think Rand broke with the Brandens in 1968. I'm not sure that it was Barbara Branden, though.
	Wednesday, December 3, 2008 at 7:09:02 mst Comment ID: #3 Name: Diana Hsieh E-mail: diana(at)dianahsieh.com URL: http://www.dianahsieh.com/blog Yes, that would be Barbara Branden.
	Wednesday, December 3, 2008 at 8:46:45 mst Comment ID: #4 Name: PMB I also thought this ARI op-ed on Greenspan was very good: http://www.aynrand.org/site/News2?page=NewsArticle&id=21857& ...
	Wednesday, December 3, 2008 at 9:13:19 mst Comment ID: #5 Name: Billy Beck E-mail: wjbiii(at)frontiernet.net URL: http://www.two--four.net/weblog.php For over twenty years I waited for the punchline on the Greenspan joke. I guess that "ideology" crack must've been it.
	Wednesday, December 3, 2008 at 11:24:53 mst Comment ID: #6 Name: Michael Labeit E-mail: logician169(at)yahoo.com URL: http://unit-perspective.blogspot.com Greenspan's transition from Fed hater to Fed lover is staggering. It reminds me of when I knew I was a socialist 5 years ago when I was 15.
	Wednesday, December 3, 2008 at 12:06:58 mst Comment ID: #7 Name: Clint URL: http://dummyfencing.typepad.com As a friend says, "With friends like these, who needs friends?" False friends are doing far more harm than any enemy could ever hope to.
	Wednesday, December 3, 2008 at 14:40:41 mst Comment ID: #8 Name: SurahAhriman E-mail: SurahAhriman(at)gmail.com Michael, I know exactly what you mean. It was less than a decade ago I actually made fun of a complete stranger for reading The Fountainhead publicly. Even aside from my conversion from ignorant critic to admirer and Objectivist, I still feel bad about being such a jerk. At least it gives me a personal anecdote to pull out when someone brings up the tired "Randroids are tools who get self-righteous and act like jackasses after reading Atlas Shrugged" crap.
	Wednesday, December 3, 2008 at 14:47:40 mst Comment ID: #9 Name: Mel McGuire I read the piece and passed it along to a nephew who's a managing director of a company division. It looks like people can't even form a concept of "free markets". So, even if our leash is only a foot long, that counts as "freedom". Thanks for the tip!
	Wednesday, December 3, 2008 at 20:24:59 mst Comment ID: #10 Name: C Andrew E-mail: ca4papen(at)mindspring.com My favorite line from the Binswanger piece. "It turns out that if you wrap bankers from head to toe in regulations, then spin them rapidly around for awhile, they then stagger around and walk into walls. Who'd have thought it? It is on this basis that Alan Greenspan finds a flaw in his ideology." I love the image. And, as with so much regulation, by the time to gummint gets done, you don't know which end is up.
	Wednesday, December 3, 2008 at 20:58:02 mst Comment ID: #11 Name: Anthony It seems to me that, despite what people have taken him to mean by the statement, Greenspan really *did* have a flaw in his ideology. So I don't find his admission of that nearly as bad as the spin that is being placed on his statement. As for the fact that he "looked to the self-interest of lending institutions to protect shareholder's equity", it's not clear what that's supposed to mean. The self-interest of "lending institutions" presumably is, by definition, to protect shareholder's equity. So there's nothing there to be shocked about. What Greenspan seems to be referring to here is his mystical belief that corporations will always *successfully* act in their own self-interest. Finally, I think the banks are being given way too much credit here. I may not be "shocked that lending institutions actually fell for the trap [which was] set for them when [the fed] inflated the money supply", but I do blame them for it. The banks were not innocent victims, they were guilty co-conspirators. Free markets work. That doesn't mean lending institutions can't fail. In fact, in a free market, when a lending institution pretends to have more money than it actually has (i.e. fractional reserve banking), it *should* fail.
	Wednesday, December 3, 2008 at 21:08:10 mst Comment ID: #12 Name: Anthony "It turns out that if you wrap bankers from head to toe in regulations, then spin them rapidly around for awhile, they then stagger around and walk into walls. Who'd have thought it? It is on this basis that Alan Greenspan finds a flaw in his ideology." Why become a bank in the first place? The only real reason to do so is to gain the power to legally create money out of thin air. The bankers may have been wrapped from head to toe in regulations and spun around rapidly, but they submitted to this willingly as part of their initiation.
	Thursday, December 4, 2008 at 15:43:36 mst Comment ID: #13 Name: Richard Watts E-mail: rw1963(at)earthlink.net Clint, "With friends like these, who needs friends?" I like that one! Anthony, "Free markets work." I agree. "The only real reason to do so is to gain the power to legally create money out of thin air." I disagree. Banks offer valuable services, and are compensated for those. Banks safeguard peoples' money and valuables from criminals (except some criminals who are currently in government). Banks help people invest their money profitably, and facilitate future production by lending money to businesses. The fraudulent inflation of the currency is not necessary for banks to make a profit. If we were in a free market and had an inflation-proof currency, there would still be banks. With that said, though, regarding your question "Why become a bank in the first place?", and your statement "...they submitted to this willingly...", people who chose to enter banking did choose to place themselves under whatever regulations were in effect when they entered the field. This is not necessarily the same as *inviting* regulation. Today, one is hard pressed to find a field of work which is not under some type of government control, to one degree or another. But I do think that the more coercive a field becomes, the more the best people in that field will tend to get out, and the more the worst kinds of people will tend to get in, or to rise to the top of that field.
	Saturday, December 6, 2008 at 18:23:35 mst Comment ID: #14 Name: Anthony "Banks offer valuable services, and are compensated for those." What services do banks offer which can't be offered by non-banking institutions? "Banks safeguard peoples' money and valuables from criminals (except some criminals who are currently in government)." You don't have to be a bank to perform that service. "Banks help people invest their money profitably, and facilitate future production by lending money to businesses." You don't have to be a bank to do that, either. "The fraudulent inflation of the currency is not necessary for banks to make a profit." True, but that's not what I said. What I said, was that fraudulent inflation of the currency is the only reason for an institution to become a bank. Well, nowadays there's also the carrot of TARP money, but that's basically the same thing. There's no need to become a bank to borrow and lend. There's no need to become a bank to store people's money. The only reason to become a bank is so that you can claim to be storing people's money when you're really borrowing it and lending it.
	Saturday, December 6, 2008 at 22:34:31 mst Comment ID: #15 Name: Anthony Mirvish E-mail: amirvish(at)hotmail.com Criticizing Greenspan for providing laundatory comments for Barbara Branden's book is irrelevant (and trivializes) any discussion of the changes Greenspan's views with respect to markets have undergone or the degree to which those views are equated to Rand's. Many people, myself included, do not think the Branden book was an attack on Ayn Rand nor does one necessarily take a lessened view of her from reading the book. Moreover, I think the entire Atlas Society, open-system Objectivist adovcates would still agree with Binswanger's criticisms of Greenspan's views on (or record with respect to) market economics/capitalism, and the falseness of equating either Greenspan's record or views with Rand's, all of which are wholly objective. Introducing points like the attitude towards Branden's book or Greenspan's unwillingness to support ARI contributes nothing to the discussion.
	Saturday, December 6, 2008 at 23:16:15 mst Comment ID: #16 Name: Kevin Clark "Introducing points like the attitude towards Branden's book or Greenspan's unwillingness to support ARI contributes nothing to the discussion." It does if you consider Barbara Branden's book harmful to the cause of Objectivism.
	Wednesday, December 10, 2008 at 12:44:54 mst Comment ID: #17 Name: Ron Harris E-mail: rharris_43403(at)Yahoo.com Greenspan sure came a long way from the old days when he wrote about the necessity of the gold standard in one of the old Rand periodicals.
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