Via Economic Policy Journal

Alan Greenspan

Viresh Amin emails:

I am always perplexed with the deep state. I think a good example to use is Alan Greenspan who we know understands different economic schools of thought and yet still goes on to inflate money away. The root behind all this is really pure basic human needs where they are social climbers, or power hungry, etc? I can at least understand those that truly believe in a Marxist way of life or whatever, they actually believe they are doing the right thing (as bad a it is), but ones like Greenspan that know better are perhaps worse.

RW response:

People like former Federal Reserve chairman Alan Greenspan are just opportunists, they will sing and dance any song that helps them advance.

Nathaniel Branden in his book My Years With Ayn Rand reports that Rand once asked him about  Greenspan, who was for awhile part of her circle, “Do you think Alan might basically be a social climber?’

Friends have told me that Greenspan was one of the best networkers around. He didn’t get the Fed chairmanship by accident, he knew on a very personal level anyone that had input into the decision on who would become chairman. Curiously he was a skilled networker even though he has a very dead fish personality. I have met him on a couple of occasions and it was remarkable as to how unimpressive he was standing in front of you and the weak handshake he has.

This is what Murray Rothbard had to say about Greenspan on his appointment to head the Fed:

Greenspan’s real qualification is that he can be trusted never to rock the establishment’s boat. He has long positioned himself in the very middle of the economic spectrum. He is, like most other long-time Republican economists, a conservative Keynesian, which in these days is almost indistinguishable from the liberal Keynesians in the Democratic camp. In fact, his views are virtually the same as Paul Volcker, also a conservative Keynesian. Which means that he wants moderate deficits and tax increases, and will loudly worry about inflation as he pours on increases in the money supply.

There is one thing, however, that makes Greenspan unique, and that sets him off from his Establishment buddies. And that is that he is a follower of Ayn Rand, and therefore “philosophically” believes in laissez-faire and even the gold standard. But as the New York Times and other important media hastened to assure us, Alan only believes in laissez-faire “on the high philosophical level.” In practice, in the policies he advocates, he is a centrist like everyone else because he is a “pragmatist.”

As an alleged “laissez-faire pragmatist,” at no time in his prominent twenty-year career in politics has he ever advocated anything that even remotely smacks of laissez-faire, or even any approach toward it. For Greenspan, laissez-faire is not a lodestar, a standard, and a guide by which to set one’s course; instead, it is simply a curiosity kept in the closet, totally divorced from his concrete policy conclusions.

Thus, Greenspan is only in favor of the gold standard if all conditions are right: if the budget is balanced, trade is free, inflation is licked, everyone has the right philosophy, etc. In the same way, he might say he only favors free trade if all conditions are right: if the budget is balanced, unions are weak, we have a gold standard, the right philosophy, etc. In short, never are one’s “high philosophical principles” applied to one’s actions. It becomes almost piquant for the Establishment to have this man in its camp.

BTW, although he once wrote a pro-gold article for the Ayn Rand Letter, he never gave any indication he understood Austrian school economics. Rothbard was right he is just a “conservative Keynesian.”

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Branden wrote in his memoir that he could never get Greenspan to read any economics books. Branden didn’t mention the books but it is very possible they could have been Austrian school books by the likes of Ludwig von Mises or Henry Hazlitt. Rand was supportive of this thinking and these men and Branden would have followed.