............and this is the woman that Alan Greenspan calls his 'intellectual mentor'. Scary stuff.
Guru of greed: The cult of selfishness
Fifty years after it was first published, Ayn Rand's most influential book offers a vital clueto why so many Americans vote against their economic and social interests.
By Leonard Doyle
10/12/07 "The Independent" -- -- Why is it that millions of ordinary Americans vote for conservative policies that seem inimical to their lives? Why are the politicians who support healthcare reforms to give access to a doctor for the 47 million Americans without insurance branded as closet socialists or worse?
Why, in this upside-down world do so many blue-collar Americans vote Republican, and family farmers support a President whose Wall Street friends would gladly push them off the land?
Why do people shrug and say "tough", when they read that hundreds of thousands of Americans have lost their homes, after falling victims to crooked mortgage salesmen? The most common response is that millions of people who otherwise could never have afforded a home are now enjoying the American Dream.
Perhaps the greatest political riddle of the
If it were otherwise, then surely John Edwards, the telegenic Democratic candidate for President would lead the polls since he has dedicated his campaign to lifting tens of millions out of poverty. Instead it is Hillary Clinton, whose economic policies might as well have been drafted by the editorial board of the Wall Street Journal, who looks a shoo-in for the Democratic nomination.
So what's the matter with
The answer may be contained in the writings of the Russian emigrée and radical libertarian philosopher Ayn Rand. Two decades after her death, she remains the darling of right-thinking Americans and sales of her novels, paens of praise to unbridled capitalism, are even outselling The Da Vinci Code.
More copies of her book Atlas Shrugged are sold now than when she was the literary pied piper of Wall Street. In his early thirties, no less a figure than Alan Greenspan, who married one of her closest friends and went on to become the chairman of the Federal Reserve fawned over her. On Saturday nights he made his way to Rand's deliberately darkened apartment in
"Ayn," Mr Greenspan would say according to those who were also present, "upon reading this, one tends to feel exhilarated!"
Mr Greenspan was already making lots of money as an economics consultant, advising the Wall Street moguls and other captains of industry whom Ms Rand idealised in her books.
At the time Mr Greenspan embraced the Rand dogma, he favoured removing all safety nets from the
To the editor:
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,
Over the years as Mr Greenspan became the World's pre-eminent central banker he slipped from
Some argue that it was
Rand was born in 1905 in
She talked her way onto the set, and got a job as an extra, later becoming a junior screenwriter. There she also met and married the writer Frank O' Connor.
For a few years she wrote screenplays as well as novels that failed to sell. It was only in 1943 that her career took off when word-of-mouth campaign got The Fountainhead noticed and put her on the road to success.
Rand's most influential book, Atlas Shrugged begins in a recession. To save the economy her hero, John Galt, calls for a strike by intellectuals against government interference. Factories, farms and shops close. Riots break out as food becomes scarce.
The book was published into a welter of criticism. The New York Times critic denounced it as "written out of hate" and called it "a triumph of English as a second language". Both conservatives and liberal critics disparaged it, with the right condemning its promotion of a godless ethic and the left condemning its message of "greed is good".
But now she is back in fashion of a sort. Her theories have made inroads into academia. Objectivism is taught at more than 30 universities, with fellowships at several leading philosophy departments. The Ayn Rand Institute has a war chest of over $7m to promote her ideas and more than a million high school pupils are being given free copies of her novels to read.
Now a movie, starring Angelina Jolie in the lead role, is being released next year.
As Forbe's magazine – aka The Capitalist's Tool – breathlessly reported: "Sales on Amazon in the first nine months of this year are already almost double the total for 2006." With the 50th anniversary of its publication today, Atlas Shrugged was ranked 124th on Amazon's sales charts while The Da Vinci Code languished at 2,587.
The book made
Legions of readers, including Hillary Clinton, members of the Supreme Court and of course Mr Greenspan count
It attracted the devotion of
One of the characters in Atlas Shrugged, summarises her philosophy of Objectivism with the following oath: "I swear, by my life and my love of it, that I will never live for the sake of another human being, or ask another human being to live for mine."
Her novels continue to inspire visceral feelings of worship and disgust among readers. Reviewing the newly published memoir of her acolyte Greenspan, the conservative writer Andrew Ferguson complains in The Weekly Standard that "her creepy philosophy of Objectivism, placing the self at the centre of the moral universe, still is embraced by tens of thousands of pimply teenage boys in the dreamy moments between fits of social insecurity and furious bouts of masturbation."
One way or another Rand's ode to American individualism has made her one of the towering figures of
By rejecting altruism and embracing selfishness she rejected the Judaeo-Christian underpinning of the religious right. The only moral obligation a person had was to his or her own happiness. That meant capitalism should be given a free rein with an unregulated market economy.
Her admirers partly credit her revived appeal to an absence of ideas coming from the
"Ayn Rand is the only voice that offers a secular absolutist morality with a positive vision and agenda, for individuals and for society as a whole."
The coming presidential election will reveal the extent to which ordinary poor Americans will proudly vote themselves out of jobs, off the land and ensure that their children can never afford to go to university or afford health care. It happened in the last two presidential elections, and the Ayn Rand Institute is banking that it will happen again.
The Age of Turbulence: Adventures in a New World
The common image of Alan Greenspan is of a brilliant but rather nerdy man, who as the world’s most important central banker developed convoluted, ambiguous language into an art form. Famously, when a listener to one of his speeches began a question by saying “If I have understood you clearly, Mr Chairman”, Greenspan answered wryly that if the listener had understood him clearly then he hadn’t been doing his job properly. And yet, as this admirably lucid and readable memoir-cum-treatise shows, the chairman of America’s Federal Reserve Board from 1987 to 2006 is as talented a communicator as he is an economist and a policymaker.
In fact, the image was always misleading. This grey nerd had his first full-time job as a saxophone player, dated Barbara Walters, the star TV anchorwoman, for many years, and counts a long list of celebrities among his friends. His intellectual mentor, a Russian-American libertarian called Ayn Rand, nicknamed him “the Undertaker” because of his serious demeanour and dark suits, and he is certainly a man who is happiest exploring high intellectual pursuits, yet he also has an appealing grin and a sense of humour sometimes reminiscent of Woody Allen.
Moreover, any journalist who visited Greenspan at the Fed in Washington DC found him accessible, charming and remarkably helpful. He would invariably speak off the record, but his descriptions and explanations of the current state of the American and global economies were always both revealing and penetrating. From his early days as an economist in New York in the 1950s, he has specialised in poring over the minutiae of data, gleaning conclusions from steel inventories or vacuum-cleaner output, yet he also has a fine grasp of the bigger picture, of why things may be happening as well as where they may be heading.
Timing and luck, though, are as important for the central banker as for the baseball players who gave him his first boyhood interest in statistics. Greenspan was able to build his credibility as Fed chairman only months after taking the job from Paul Volcker, when in October 1987 the New York stock market lost more than 20% of its value in a single day. He proved to be cool under pressure, a judicious communicator, and clear-minded about the need for an immediate cut in interest rates and an injection of money to calm the markets down. The Bank of England’s governor Mervyn King, who in brainpower and economics knowledge is Greenspan’s equivalent, fell down over the Northern Rock affair this month on all those counts: his communication was clumsy, and his policy reaction was confused and indecisive.
Greenspan’s timing with his memoirs is also fortunate: they have appeared just when interest in financial turbulence is at its height, which must delight his publisher, which reportedly paid him $8m (£4m) for the book. That very turbulence may, however, end up damaging his own reputation, for having left his job only last year he cannot avoid sharing some of the blame. Once he became convinced during the 1990s that fast productivity growth and the flexibility of the American economy meant that risks could be taken with inflation, he always chose to err on the side of low interest rates and loose monetary policy.
Many critics thought that having warned of “irrational exuberance” in 1996, he should have used dearer money to restrain the dotcom boom on the New York stock market that ended in a bust in 2000. Thankfully avoiding the technical discussion on whether central banks should take asset prices into account when setting monetary policy, a discussion of which economists are inordinately fond, Greenspan argues convincingly that such a policy would not have worked unless he had used truly draconian measures. In the end the consequences of the bust were gentle, even when it was followed by the terrorist attacks of September 11, 2001: America had a slowdown but no slump. That, though, was largely because the Fed responded by slashing interest rates. In effect, the American economy was rescued by the resulting boom in house prices, which made their owners feel richer and able to carry on spending.
As Greenspan acknowledges in The Age of Turbulence, that boom — combined with lax lending standards in many financial institutions — is what led to the collapse in the “sub-prime” (high risk) mortgage market in America over the past few months, and to the generalised credit crunch to which Northern Rock fell victim across the Atlantic. Lax lending standards are not his fault, nor is the drive by banks to create ever more complex and obscure types of debt securities that has now led to a breakdown in trust in the money markets.
He makes abundantly clear, too, that he thinks George Bush’s administration mishandled its side of economic policy by cutting taxes sharply without restraining public spending, though he foolishly allowed himself to be used in the campaign for those very cuts. Despite being a lifelong Republican, Greenspan plainly admired Bill Clinton far more as a president than he does Bush. But if the current problems do result in a severe recession in America and Britain, historians may well conclude that Greenspan’s Fed was also guilty of solving the problems of 2000-01 by deferring and consequently magnifying them. It is too soon, however, to be sure about that conclusion.
For a man who was more or less beatified by financial markets and commentators all over the world, Greenspan presents himself in these memoirs in an agreeably modest manner, stressing how unsure he is about many things in economics and public policy. The book is really two in one, though they fit together quite smoothly: the first half is autobiographical, giving an engaging account of the author’s life and of America’s economic course during the past 50 years; the second is thematic, giving Greenspan’s view of how the world now looks and works, along with some tentative predictions of what things might be like in 2030.
Both parts are worth reading, but surprisingly the memoir turned out to be more interesting to this reviewer than the thematic chapters. Saint Alan’s role and relationships are compelling, but his analysis of issues such as China’s problems, India’s prospects, Latin American populism and the different varieties of capitalism is less so. That part of the book feels more hurried, and less deeply researched, than is the memoir. But perhaps, as Greenspan might say, that is because when telling his own story the author has a tighter grip on the data.
Game of Numbers
“At the age of nine, I became an avid baseball fan. [When] the 1936 World Series was broadcast . . . I developed my own technique of keeping box scores. I always used green paper and recorded each game pitch by pitch, using an elaborate code I made up. My mind, which had been essentially empty to that point, filled with baseball statistics. I learnt fractions doing batting averages: 3 for 11 was .273, 5 for 13 was .385. I was never as good converting fractions over 4 for 10, since few batters hit over .400.
From about age 11, I built a collection of railroad timetables from all over the country. I’d spend hours memorising the routes and the names of towns in the 48 states. But I never discussed this with another soul. Though my mother knew I collected timetables, I’m certain she didn’t realise what they meant to me. It was her world I was escaping.”
Bill Emmott is former editor of The Economist. The Age of Turbulence is available at the Books First price of £22.50 (inc p&p) on 0870 165 8585
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