“There are two novels that can change a bookish fourteen-year old’s life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.” — John Rogers, Screenwriter
Alan Greenspan, who died at age 100 on June 22, served 18+ years as Chair of the Federal Reserve, presiding over a period when wealth inequality increased dramatically, along with speculative bubbles, ending in a worldwide recession whose aftermath led to a fascist resurgence.
In the early 1950s Greenspan became a member of Ayn Rand’s “Collective,” to whom she read drafts of “Atlas Shrugged” as she was writing it. The book denigrates altruism, celebrates selfishness, and argues that government’s only proper functions of government is to protect individual rights via the police department, the army and the courts (”to settle disputes by rational rules, according to objective law.”)
On publication,Greenspan defended the book, writing, “‘Atlas Shrugged’ is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should.”
By his own account, Greenspan was “a free enterpriser in the Adam Smith sense – impressed with the theoretical structure and efficiency of markets,’ when he met Rand, but “What she did… was to make me think why capitalism is not only efficient and practical, but also moral.”
In an essay he wrote for Rand’s magazine, The Objectivist, “Gold and Economic Freedom,” Greenspan falsely claimed that the pre-World War I gold standard banking system only suffered short-lived recessions, “and the economies quickly reestablished a sound basis to resume expansion.” In reality, the “panics” as they were called, of 1837 and 1873 lasted seven and six years respectively. Greenspan then blamed the Federal Reserve for the severity of the Great Depression.
So it was ironic that he not only went into government—with Rand’s active encouragement—but then instituted policies as Federal Reserve chair that protected reckless investors, producing several bubbles, culminating in the housing bubble that burst shortly after he left office.
Afterwards, he told a House committee “I found a flaw in my model of the world.”
“A flaw, he said, as though it were a leaky pipe, not a total collapse of the intellectual architecture that anointed him Oracle,” former Greek Finance Minister Yanis Varoufakis wrote on X. “For decades, he preached that the self-interest of the predator was the invisible hand of the common good.” When he did admit his error, “He did not, of course, admit to culpability. That would require a moral compass, a device notably absent from his Ayn Randian toolbelt. No, he merely noted the flaw, as a meteorologist might note a gust of wind.”
Greenspan’s behavior over six decades was perfectly consistent with cult membership: he was impervious to facts that went against the cult’s beliefs, blind to contradictions in Rand’s and his own actions, and dismissive of any moral fault when finally had to admit some mistake in the face of overwhelming public evidence—the worst economic catastrophe since the Great Recession, which in turn laid the groundwork for the ongoing resurgence of fascism, not just here in America, with Donald Trump, but across the globe.