Two days ago I wrote that “Communism’s failure to recognize human selfishness was the number one reason for its collapse.” Similarly, if Ayn Rand’s objectivism was ever fully implemented, her failure to recognize the depths of human selfishness will be the number one reason for its collapse.
But, that might have already happened! As you will see, some argue that the world’s present economic meltdown is precisely because her policies have been implemented!
Enter Alan Greenspan.
As I mentioned previously, Greenspan found Rand to be “a stabilizing force” and said that “It hadn’t taken long for us to have a meeting of the minds—mostly my mind meeting hers.”1 And as of 2007 he said he found her “broader philosophy of unfettered market competition compelling, as I do to this day.”2 In other words, he is, or at least was, a fan.
Well, Alan Greenspan was the Chairman of the Federal Reserve Board from 1987 to 2006 and as chairman he worked to implement the Randian ideal of deregulation.
A New York Times article, entitled “Greenspan Concedes Error on Regulation,” related the following exchange of Greenspan’s testimony to Congress:
“You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others,” said Representative Henry A. Waxman of California, chairman of the committee. “Do you feel that your ideology pushed you to make decisions that you wish you had not made?”
Mr. Greenspan conceded: “Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”3
Now to be clear, I’m not an economist and so I’m not qualified to opine regarding the extent of Greenspan’s responsibility for our present economic crisis. However, others do blame him. As the liberal Mother Jones put it:
While Greenspan did defend his various decisions, he admitted that his faith in the ability of free and loosely-regulated markets to produce the best outcomes had been shaken: “I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.” In other words, whoops—there goes decades of Ayn Rand down the drain.4
Even a Forbes writer blamed Greenspan and Rand:
Alan Greenspan’s testimony before congress earlier this week should be looked at as a moment where the way we talk about politics and the economy fundamentally changed. Greenspan, protégé of Ayn Rand and the driving mind behind the notion that risk can be contained by having ever growing numbers of market players taking pieces of that risk, has now admitted that “Those of us who have looked to the self-interest of lending institutions to protect shareholder’s equity (myself especially) are in a state of shocked disbelief.”5
Of course, Randian diehards disagree. For example, Libertarian Harry Binswanger disdains Greenspan as “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.”6 In other words, the economy is in trouble because Greenspan compromised Rand’s principles. Curiously, though, some on both the left and the right agree that Greenspan is culpable for our present economic mess!
Wherever the blame is ultimately placed, as a Christian apologist I can say this with confidence: if you let people do whatever they want, they will! We’ve seen that again and again. Business leaders from Bernie Madoff to the Enron honchos (and who knows how many others) have irreparably injured countless people’s financial futures. The bottom line is that human’s need accountability (not just to the consumer, but to the law) because without accountability, we will only keep reliving Lord Acton’s maxim: “Power corrupts and absolute power corrupts absolutely.”
The reason we have three branches of government is our founding fathers realized that selfish people need “checks and balances.” Surely, there must be a better way than on the basis of Rand’s ideas to preserve economic and political liberty and to encourage people and businesses to be responsible?
Romans 3:10: “There is no one righteous, not even one.”
- From Alan Greenspan’s book, The Age of Turbulence (New York: Penguin, 2007), 51. Read more at: http://www.noblesoul.com/orc/bio/turbulence.html, accessed 7 April 2011. [↩]
- Ibid., 52. [↩]
- Edmund L. Andrews, “Greenspan Concedes Error on Regulation,” The New York Times, http://www.nytimes.com/2008/10/24/business/economy/24panel.html. Accessed 11 April 2011. [↩]
- David Corn, “Alan Shrugged,” Mother Jones, http://motherjones.com/politics/2008/10/alan-shrugged. Accessed 11 April 2010. See also Barrett Sheridan, “Who Is to Blame,” Newsweek: http://www.newsweek.com/2008/12/09/who-is-to-blame.html. Accessed 11 April, 2011. [↩]
- Michael Maiello, “Greenspan Testifies: Our Political Language Just Changed” Forbes.com, 24 October 2008, http://blogs.forbes.com/beltway/2008/10/24/greenspan-testifies-our-political-language-just-changed/. Accessed 11-April, 2011. [↩]
- Harry Binswanger, Capitalism Magazine, “Alan Greenspan vs. Ayn Rand and Freedom,” http://www.capitalismmagazine.com/markets/alan-greenspan/5353-alan-greenspan-vs-ayn-rand-and-freedom.html. Accessed 11 April 2011. [↩]