Philosophy: Who Needs It?

20 October 2008 at 10:01 am 2 comments

| Peter Klein |

When Greenspan was appointed Fed chair in 1987 the New York Times Magazine ran a lengthy profile noting, among Greenspan’s other eccentricities, that he was a follower of Ayn Rand, generally regarded as a strong advocate of laissez faire. But Greenspan is doctrinaire only “at a high philosophical level,” wrote Leonard Silk, reassuringly. Murray Rothbard, who knew Greenspan in the 1950s, when both were friends with Rand, got a kick out of that line:

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.” . . .

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.

Today Tyler Cowen, writing on Anna Schwartz’s very good interview with the WSJ, calls Bernanke a person “with libertarian sympathies,” which I find puzzling, since I can’t recall any evidence of this sympathy in Bernanke’s writings or policy actions. Perhaps he is a sympathetic libertarian “at a high philosophical level.”

Entry filed under: - Klein -, Bailout / Financial Crisis, Classical Liberalism, People, Public Policy / Political Economy.

Blame Basel, Not “Deregulation” Judgment, Luck, and Schultz

2 Comments Add your own

  • 1. Michael F. Martin  |  20 October 2008 at 11:53 am

    Yawn. Only “philosophical” libertarians are willing to run vast regulatory bureaucracies. Such a surprise.

    Now if the head of the EPA or NLRB were to display the same “philosophical” sympathies — THAT would be a surprise.

  • 2. Richard O. Hammer  |  20 October 2008 at 9:04 pm

    I am willing to believe that Bernanke has libertarian sympathies because I believe almost everyone has at least one thing they wish government did not do. Bernanke probably thinks that some questions are better decided privately than through the state. That gives him libertarian sympathies. But there may be no advantage to him for exposing those sympathies publicly.

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