Ayn Rand and Greenspan, Soul Mates

Last week Alan Greenspan confessed to having too great a faith in the market’s ability to regulate itself. In reading the article about his testimony, I also learned that he was a devotee of the late author, Ayn Rand. At first this meant little to me.
As a student, back in the Eisenhower years, I read Atlas Shrugged and The Fountainhead like any other student remotely interested in American literature. Working from a Calvinistic philosophy in which man is NOT the measure of all things, I dismissed its fierce individualism as a quaint conceit and moved on.
It never crossed my mind until last week how much damage such a philosophy could do in the hands of a powerful believer. Not until a huge financial house of cards and bad paper came crashing down this month. We have one more—very legitimate—thing to blame: the philosophy of Objectivism.
Most especially if that philosophy profoundly influenced the man who for two decades held our financial fate in his hands – the most powerful central banker in the world. The whole planet bowed to his wisdom, not least, Presidents and Congresses. His ideas were emulated around the globe.
Mr. Greenspan was not just a casual reader of Ayn Rand, someone who became enamored of a book. He was a member of her inner circle. When she formed her intimate circle in 1950—to discuss philosophy and promote her philosophy, young Greenspan was a charter member.
From these discussions he drew his own philosophy that government has no legitimate role in regulating businesses or men who are in pursuit of their own wealth and aggrandizement. Reason could be the only proper moral guide, reason and rational (ized?) self interest.
Pursuit of one’s own happiness is the only proper morality. Government exists only to protect this rational man seeking happiness through its police powers, military forces and courts – which operate only by reason, not by a standard of justice and certainly never by mercy.
Mercy (pity, ruth) had no place in Rand’s cosmos. Laissez faire (the economic philosophy that led to the debacle of 1929) must be the proper rule of government. It has no business giving aid to anyone under any circumstances. The very concept of charity was highly suspect to Ms Rand. The world, as she viewed it, was essentially a ruthless place where only self-interest had any standing.
(One can be somewhat sympathetic to her point of view remembering that she endured the horrors of the Communist Revolution in her native Russia as a young woman. She saw all government control as the dictates of a commissar.)
While one can be sympathetic to her own visceral reaction to what went on in the Soviet Union after the fall of the Tsar, it’s slightly appalling that these same negative feelings about governmental supervision or control became an integral part of the makeup of the man who was to have the biggest say in regulating greedy three year olds on Wall Street.
The Federal Reserve—or for that matter the SEC—are not Bolshevik expropriators. We had a man running the former and influencing the latter who saw it that way. The market, Rand and Greenspan believed, is rational, run by rational men who will supervise themselves.
“I had too much faith in the market’s ability to regulate itself,” Greenspan told Congress last week. He might have remembered that his old mentor had no use for faith of any kind. Where was your rationality, Mr. Greenspan?
I all but forgot Rand’s books because I did not share her rosy view of unregulated humans. I grew up knowing William Henley’s poem, “Invictus”. “… I thank whatever gods there may be For my unconquerable soul. … I am the master of my fate; I am the captain of my soul.”
That—published in 1875—sums up the view of life of the characters in Rand’s books, written decades later. It’s proud, it acknowledges neither right nor need for any regulation of the “captain of my soul.” But Mr. Greenspan and the fallen titans of Wall Street might have paid a bit of attention to a parody of that poem that I’ve always liked.
I am master of my fate; I am captain of my soul. But I—and many stockholders—had more fun when I was cabin boy.