Alan Greenspan and Ayn Rand
By Bill Bradford
A lan Greenspan's name first appeared in the New York Times
not, as one might expect, in connection with politics or economics, but as the author of a 73-word letter to the editor of the Times Book Review
. The future head of the Federal Reserve wrote to protest a hostile review of Ayn Rand's novel Atlas Shrugged
that had appeared a few weeks earlier.
It was the fall of 1957. By this time, Greenspan had abandoned a career as a jazz saxophonist, earned a degree at New York University's School of Commerce, enrolled in and abandoned the Ph.D. program at Columbia, worked as staff economist with what today would be called a think tank, and become a partner in a Wall Street economic forecasting firm.
Alert readers noticed Greenspan's name in the Times again seven weeks later, this time in Lewis Nichols' column “In and Out of Books.” The subject was a group of admirers of Ayn Rand, who gathered on Saturday evenings in Rand's living room “for discussions of philosophy.” Greenspan is listed among members of the group and identified only as “an economic consultant.”
Nichols described the group as a “class,” though he noted that “uncouth outsiders” were apt to use the language of religion rather than education to describe it. That may have been the last time Rand's following was described as a class; as her acolytes grew in number and devotion, it gradually came to be treated as a religion and, increasingly, as a cult. At its head stood Nathaniel Branden, a psychotherapist 25 years Rand's junior. He lectured on Rand's philosophy of “Objectivism,” co-edited (with Rand) The Objectivist Newsletter (later The Objectivist ), and controlled access to Rand. He recently described the beliefs of the cult in these words: “Ayn Rand is the greatest human being who has ever lived. Atlas Shrugged is the greatest human achievement in the history of the world. Ayn Rand, by virtue of her philosophical genius, is the supreme arbiter of any issue pertaining to what is rational, moral, or appropriate to man's life on earth.”
From its modest origin in the early 1950s, Rand's following grew rapidly. By the mid-1960s, over 20,000 copies of The Objectivist were selling each month, and people in more than 80 cities were gathering around tape recorders to listen raptly to Nathaniel Branden Institute lectures.
But all was not going well. Unbeknownst to everyone but their spouses, Rand and Branden had been having an affair since the mid-1950s, and by now Branden wanted out. This led to a bizarre chain of events, culminating with Rand calling Branden to her apartment, where she slapped him around and cursed him (“If you have an ounce of morality left in you, an ounce of psychological health, you'll be impotent for the next 20 years! And if you achieve any potency, you'll know its a sign of still worse moral degradation.”). In the next issue of The Objectivist , she repudiated Branden “totally, permanently” because of a “disturbing change” in “his intellectual attitude,” to wit, “a tendency toward non-intellectual concerns.” She also charged him with poor management of their jointly owned publishing effort and detailed some of the events that had led to their split. She did not mention he had jilted her.
As I learned in hours of interviews with their associates, Greenspan was a member of Rand's inner circle during this entire period and beyond. He lectured on economics for the Nathaniel Branden Institute. He wrote for the first issue of The Objectivist Newsletter , and when Rand broke with Branden, he signed a public statement condemning the traitor “irrevocably.” When Gerald Ford appointed him to the Council of Economic Advisors, he invited Rand to his swearing-in ceremony, and attended her funeral in 1982.
Greenspan was introduced to Rand by Joan Mitchell, a young woman he was dating. She was a friend of Barbara Weidman, Nathaniel Branden's fiancée and already a member of the group of young admirers who met in Rand's apartment. “I was not really able to interest him in Objectivism,” Joan Mitchell Blumenthal recalls. She and Greenspan married, but quickly discovered they had little in common. It was only after their marriage was annulled that “he started showing up at Ayn's, a strange turn of events.”
Greenspan and Rand didn't hit it off. According to Nathaniel Branden, he was philosophically a logical positivist and economically a Keynesian, both doctrines anathema to Rand. “How can you stand talking to him?” Rand asked Branden. “A logical positivist and a Keynesian? I'm not even certain it's moral to deal with him at all.” (Barbara Branden doesn't remember it that way, and neither does Greenspan. She and Greenspan deny he was ever a Keynesian.)
Nathaniel Branden engaged Greenspan in some “very long and involved philosophical, metaphysical, epistemological, political, economic, and moral conversations,” according to Barbara, which soon “had a profound effect upon him.” He abandoned his positivism and Keynesianism, and soon, along with other members of the Collective (as the Rand's young acolytes ironically called themselves), he was reading chapters of Atlas Shrugged as it was being written.
“Alan became much warmer, more open, more available,” recalls Barbara Branden. “I mean Alan will never be Mr. Warmth, that's just not his personality and nature. But the dourness, the grimness, the solemnity that he had when we first met him practically disappeared, I think, because he accepted us and knew that all of us including Ayn and Frank accepted him. It was like a family, it really was. And he was part of that family.”
Not everyone shared Barbara's opinion. One member of the Collective recalls, “It's simply that he is a very cold person. It's very hard to know what's on his mind. Through those thick Coke-bottle glasses, you can't even tell that he's awake sometimes.”
More than one member of the Collective marveled at his ability to attract beautiful women. “It was incredible how he always had a beautiful woman at his side,” recalls Barbara Branden. “I think it was the attraction of his intellectual power and probably his reserve. You couldn't knock him over by batting your eyelashes at him. He certainly had a profound effect on women.” Another member speculates: “Maybe he was a good kisser, from all those years as a saxophone player.” His ex-wife Joan Mitchell Blumenthal offers a different explanation. “He is very clever, he knows a lot about a million things, and he has a wonderful sense of humor. Alan is charming and always interesting.”
He remained the odd man out. Rand preferred people who were young and (as one member of the Collective remembers) “malleable.” But she cut Greenspan some slack by virtue of his maturity and occupation. “He was her special pet, because he was older, and in the business world,” recalls Edith Efron, who joined the Collective a few years later. “She didn't know anyone else very well who was a businessman. I think this was very important to her…she allowed him more intellectual liberty than she did other people.”
One area where Greenspan was apparently permitted ideological deviation was economics. The “official” Objectivist theory of economics was the Austrian theory of Ludwig von Mises, which, among other tenets, holds that economic forecasting is impossible. The issue apparently wasn't discussed, but Greenspan continued his successful career as an economic forecaster after becoming involved with Rand. And he never, as one Collective member archly points out, “attended Ludwig von Mises seminars at New York University, despite ample opportunity.” (Today, Greenspan describes himself as an “eclectic, free-market forecaster,” who “generally agrees with Austrian economics.”)
“He was different,” Barbara Branden recalls. “Which was very wise of him. He kept his private life to himself, which the rest of us did not do.” Another recalls he “used to come late to everything and leave early. And he had his own relationship with [Rand] which was dignified. And he kept somewhat aloof from everybody, which was a smart thing to do.”
And he remained a puzzle to some. “Alan Greenspan is incredibly terse,” one member told me, as if “everything he sends is a telegram and they're charging by the word. He's deliberately low-keyed and ponderous. On the other hand, he is a musician, so there obviously is a side of him that has passion and emotion, but…I would say he's very guarded. He must be a wonderful poker player.”
Barbara Branden remembers this differently. “Alan had no talent for and no interest in small talk. So if people around him were engaged in small talk they wouldn't get anything from him. I mean that he would simply stand there and have nothing to contribute. But if there was something interesting, then he was very social.”
Greenspan was unique among the Collective's older members. The first to join, he was virtually the only one not to be expelled. In 1957, economist Murray Rothbard read Atlas Shrugged and was enchanted. He wrote Rand an enthusiastic fan letter and was invited into her movement, only to be expelled less than a year later, ostensibly for plagiarism. Philosopher John Hospers, who never bought in to all of Rand's thinking on epistemology and metaphysics but was sufficiently sympathetic with her esthetics, ethics, and politics that he was a frequent guest at Collective gatherings, was expelled instantly in 1962 after he criticized Rand's address to the American Society for Esthetics, which he had arranged. Journalist Edith Efron, who had joined the Collective after she interviewed Rand for Mike Wallace's syndicated column, was expelled without explanation in 1967.
Greenspan's aloofness may have been one reason he survived. Coming to meetings late, leaving early, he wasn't very involved in the battles. John Hospers recalls that “he avoided talk about philosophical issues altogether,” which also helped keep him above the battles. He was certainly aloof from the biggest battle of all, the battle between Rand and Nathaniel Branden in 1968. By this time, he was off working as a policy advisor to Richard Nixon, who was campaigning for president. He'd been recruited to the campaign in 1967 by Martin Anderson, who had become a peripheral member of Rand's coterie after reading Atlas Shrugged in the early 1960s. It turned out that an old friend of Greenspan was also involved in the campaign: Leonard Garment, who had managed the jazz band in which Greenspan had played back in the late '40s, had become Nixon's law partner and was working on the campaign. Greenspan quickly became a domestic and economic policy analyst for Nixon. When Rand and Branden split, Rand asked Greenspan to repudiate Branden publicly. Without ever speaking to Branden, he agreed.
After the 1968 campaign, Greenspan returned to economic forecasting in New York, refusing job offers from the Nixon administration. Six years later, President Ford offered him a position as chairman of the Council of Economic Advisors; Greenspan accepted. With Ford's defeat in 1977 he returned to private life, but was appointed by Ronald Reagan to head a special commission on Social Security in 1981. Since 1987 he has headed the Federal Reserve System.
From the start of his political career, questions have arisen about Greenspan's political beliefs. Shortly after his appointment to the Council of Economic Advisors, he was asked on “Meet the Press” whether he had changed his opinion, published years earlier in a Nathaniel Branden Institute pamphlet, that anti-trust laws ought to be abolished. He replied forthrightly that he continued to believe they should be, but he was well aware that such a move would be politically unpalatable for the foreseeable future.
Greenspan has also taken flack from other Randians for failing to implement policies that would radically free the economy. “Alan Greenspan, whatever his rationalization,” John Ridpath of the Ayn Rand Institute told an interviewer for the Canadian Broadcasting Company, has “abandoned any philosophically principled stance” and “compromised himself and what he learned from Ayn Rand over and over.”
Others accuse him of trying to implement those same policies in a deceitful manner. Journalist Michael Lewis recently wrote that Greenspan “has preserved a hard core of fanaticism, encas- ing it in a shell of pragmatism. No more waiting for everyone to realize that extreme laissez-faire capitalism is the best system: He's taking control of the process himself, ever so quietly.” Only a few months earlier, Greenspan had recommended to a Senate committee that all economic regulations should have fixed lifespans. Senator Paul Sarbanes (D-Md.) accused him of “playing with fire, or indeed throwing gasoline on the fire,” and asked him whether he favored a similar provision in the Fed's authorization. Greenspan coolly answered that he did. Do you actually mean, demanded the senator, that the Fed “should cease to function unless affirmatively continued?” “That is correct, sir,” Greenspan responded. “All right,” the senator came back, “the Defense Department?” “Yes.”
The Senator could scarcely believe his ears. “Now my next question is, is it your intention that the report of this hearing should be that Greenspan recommends a return to the gold standard?” Greenspan responded, “I've been recommending that for years, there's nothing new about that…. It would probably mean there is only one vote in the Federal Open Market Committee for that, but it is mine.” This may be the first time that advocating a policy on a nationally televised Senate committee meeting has been characterized as trying to implement a policy “ever so quietly.”
Greenspan doesn't talk to the press as a matter of policy. But it appears he has tried to implement policy changes coherent with laissez-faire capitalism whenever it was possible, and he has articulated his case when given the opportunity. As Barbara Branden observes, “Alan believes in the art of the possible.” And, as his friend Joan Mitchell Blumenthal has observed, “Alan is very devoted to Ayn. He still thinks of her most kindly.”
R. W. Bradford edits Liberty , a libertarian magazine of politics and culture.