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How Alan Greenspan Learned To Stop Worrying and Love the State Roderick T. Long Alan Greenspan started off his political career, under Ayn Rand’s influence, as a fairly consistent Austro-libertarian, penning articles defending the gold standard and condemning antitrust law. Nowadays, of course, while he still calls himself a libertarian, few would accuse him of excessive purity in that regard. There’s been much speculation as to the when and why of his transition. For what it’s worth, in Greenspan’s recent memoir The Age of Turbulence (which I’ve looked through so you don’t have to – though I haven’t read the whole thing), we hear the story in his own words. There’s not much libertarian meat in the book; the only libertarian or libertarian-ish figures to appear in the index (apart from a brief – and mistaken – reference to Herbert Spencer (pp. 278–79) as “a follower of Charles Darwin”) are Milton Friedman and Ayn Rand. (Well, we also learn that (p. 323) former Putin advisor Andrei Illarionov is an Ayn Rand fan.) Greenspan’s favourite economist is clearly Friedman, on whom he lavishes praise throughout; his favourite political figures, likewise adulated, are Reagan and Thatcher. Despite his early Austrianism, there’s no reference in the index to Mises, Hayek, or any other Austrian economist. (Okay, Benjamin Anderson shows up in a footnote; and Fritz Machlup is mentioned on p. 497 although he’s not in the index.) Greenspan refers (pp. 97–98) to his own early libertarian essay on antitrust, written for The Objectivist – but only in connection with his using it as material for winning Andrea Mitchell’s affections. (I am not making this up!)
Greenspan’s libertarian odyssey begins with his conversion to Ayn Rand’s Objectivism. When he first encountered Rand, he was an adherent of logical positivism, which he describes this way:
The reference to Wittgenstein is an error; the positivists were inspired by a certain interpretation of Wittgenstein’s writings, but it was a deeply mistaken interpretation that Wittgenstein himself never endorsed. (And who doesn’t think that “knowledge can only be gained from facts”?) But never mind. In any case, his introduction to Rand and her salon soon chipped away at his enthusiasm for positivism. The following story is a familiar one in Randian circles, but this is (I believe) the first time we’ve heard it from Greenspan’s own perspective:
This exchange suggests that the young Greenspan was not especially well-versed in the logical positivism he espoused, since the positivists themselves did cover this sort of objection in their writings and could have provided, if not unassailable answers, at least better than no answer.
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