Alan Greenspan on Ayn Rand

Alan Greenspan's early intellectual life was deeply influenced by the philosophy of Objectivism, as espoused by novelist and philosopher Ayn Rand. Beginning in the early 1950s, he became a member of Rand's inner circle, known as the Collective, and remained a close friend until her death in 1982. During this period, he was a proponent of her ideas, contributing essays to her 1966 book, Capitalism: The Unknown Ideal, including one supporting the gold standard, and offering lectures on the economics of a free society. His early adherence to these principles was evident when he supported Rand's philosophy, writing that Atlas Shrugged was a celebration of life achieved through rationality and that parasites "perish as they should."

However, Greenspan's tenure as Federal Reserve Chairman led to significant criticism that his application of free-market ideology, stemming from Rand, contributed to economic instability, particularly the mortgage crisis. In a 2008 congressional hearing, he admitted that his faith in self-regulating financial institutions was flawed, stating he was in a "state of shocked disbelief" that their self-interest did not protect shareholders. While he maintained that free competitive markets are the unrivaled way to organize economies, his concession on the limits of self-regulation suggested a departure from the pure laissez-faire tenets of Objectivism, marking an evolution in his public stance regarding necessary compromise in a democracy.