In fact this is a fundamental question regarding our way of interpreting history. There are several options. Let's assume that history is the sequence of past events.
Then what should we call an event, that shaped the world? A common approach is to look at the influence of great personalities, kings, presidents, men of state, scientists, etc.
Another approach could be to look at the ever changing material conditions and situation. For instance the Industrial revolution, the invention of the nuclear bomb, the improving healthcare, etc,
Or we could focus on the dominating ideas in some period: the French revolution, cartesian dualism, colonial political thinking, imperialism, liberalism, etc.
Whatever approach you choose, you always get only a partial explanation of the historical events. Nevertheless, among other things, it is human action which shapes our world, in other world, we can hold someone responsible for how our world looks like.
And in that case we could ask the question: suppose that Ronald Reagan would have appointed a solid conservative successor of Paul Volcker as President of the Federal Reserve Bank in 1987
in stead of a dedicated disciple of Ayn Rand, that is Alan Greenspan? Would there not have been a credit crisis then?
A tricky idea of course, but a fact is that the relation between Rand and Greenspan lasted till her dead in 1982.
And another fact is that Greenspan was absolutely convinced that there was no better economic system than capitalism
and in pure Randian style believed that if everybody only would pursue his own happiness or rational self-interest, the world would be a better place.
Economic ideas were favorable then. In the rising market after 1982 the idea that the fundamental purpose of a publicly owned business is to make money for its shareholders became a basic tenet of capitalist faith: profit maximization.
Most of the information we have about the intimate relation between Greenspan and Rand comes from his autobiography "The Age of Turbulence: Adventures in a New World" (2007).
There he is very clear about the fact that he has his view of society largely due to Ayn Rand. When he was 26 he already became member of her group.
He became an enthusiastic supporter of Objectivism, that pleaded, as he writes himself, for " a capitalism with as less as possible state intervention as the ideal form of social organization".
In March 2008, Greenspan wrote an article for the Financial Times' Economists' Forum about the 2008-financial crisis. And there he still sticks to his unbalanced and immovable Randian ideological suppositions about global capitalism and free competitive markets.
He concluded: "It is important, indeed crucial, that any reforms in, and adjustments to, the structure of markets and regulation not inhibit our most reliable and effective safeguards against cumulative economic failure: market flexibility and open competition."
In Congressional testimony on October 23, 2008, Greenspan finally conceded error on regulation. The New York Times wrote, "a humbled Mr. Greenspan admitted
that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending. ...
Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken."
The Discussion
[13:26] herman Bergson: Thank you... ㋡
[13:26] herman Bergson: The floor is yours...
[13:26] Tessa Zalivstok: Can I start herman?
[13:26] herman Bergson: Sure Tessa ㋡
[13:27] Tessa Zalivstok: I think you know that I have had issues with some of your analysis here
[13:27] herman Bergson: that is ok...I am not all wisdom of the world...
[13:27] Tessa Zalivstok: but I think you're closer to the money so to speak when you mention Greenspan and the GFC in the same sentence
[13:28] herman Bergson: GFC?
[13:28] Tessa Zalivstok: Greenspan was unquestionably responsible for a large part of the GFC
[13:28] Merlin (merlin.saxondale): Oh that is reassuring cos I don't know that either
[13:28] Tessa Zalivstok: but I question whether Rand had anything to do with it
[13:28] Bejiita Imako: well to believe some global financial crisis
[13:28] Bejiita Imako: well rand inspired Greenspan's awful ideas
[13:29] herman Bergson: Oh Rand had certainly an influence in his decision making..also after her death...
[13:29] Merlin (merlin.saxondale): TLA's everywhere
[13:29] Bejiita Imako: at least to a big degree it seems
[13:29] Tessa Zalivstok: the GFC is largely a matter off Greenspan failing to do his job which was to protect the currency
[13:29] Mick Nerido: GFC?
[13:29] herman Bergson: Yes but it was based on his absolute belief of a free market end open competition
[13:29] Merlin (merlin.saxondale): Global Financial Crisis I believe
[13:30] Tessa Zalivstok: and the methods he employed to allegedly prevent the economy from reacting to the fall in the market after the tech boom were quite orthodox
[13:30] Tessa Zalivstok: sorry
[13:30] Tessa Zalivstok: global financial crisis
[13:30] llStopAnimation: Script trying to stop animations but agent not found
[13:30] herman Bergson: Philosophically ...
[13:30] Tessa Zalivstok: I don't see that this has anything to do with Rand except in the nroadest sense
[13:31] Merlin (merlin.saxondale): ooh dissent!
[13:31] herman Bergson: main point here is that Greenspan held believes that were based on the ideas of Rand
[13:31] Tessa Zalivstok: that's fair comment in the broad sense
[13:31] herman Bergson: Greenspan was a co -author of Atlas Shrugged...
[13:31] Tessa Zalivstok: but I don't think Rand has anything to say about sound currency
[13:31] Tessa Zalivstok: which is the real issue here
[13:31] herman Bergson: Rand and he worked two years on the speech of John Galt....
[13:32] herman Bergson: 70 pages long...
[13:32] Merlin (merlin.saxondale): Greenspan was a co -author of Atlas Shrugged...??
[13:32] Tessa Zalivstok: oh I don't deny that they were associates
[13:32] Bejiita Imako: eeeeee ok?
[13:32] herman Bergson: Greenspan was the dedicated Randian...
[13:32] Tessa Zalivstok: she called him the Undertaker
[13:32] Tessa Zalivstok: lol
[13:32] Debbie Dee (framdor): lol
[13:32] Bejiita Imako: was Greenspan on it as well
[13:32] herman Bergson: No....that was in the beginning Tessa.
[13:32] Bejiita Imako: ok
[13:32] Tessa Zalivstok: yes but let's stick to the point
[13:33] herman Bergson: When Rand discovered his intellectual powers she changed the nickname
[13:33] Tessa Zalivstok: what did Ayn Rand say about sound currency
[13:33] Kell Babenco is offline.
[13:33] herman Bergson: He became The Sleeping giant
[13:33] Tessa Zalivstok: which was Greenspan's real job
[13:33] Tessa Zalivstok: nothing I think?
[13:33] herman Bergson: and it was she who was waking up the giant
[13:33] Gemma Allen (gemma.cleanslate) is online.
[13:34] Tessa Zalivstok: I dont think you can skip this point herman
[13:34] herman Bergson: Of course I dont know all details...
[13:34] Tessa Zalivstok: the Fed exists to protect the currency
[13:34] Tessa Zalivstok: Greensppan failed in this
[13:34] Tessa Zalivstok: the questionis was this because of something Rand said?
[13:34] herman Bergson: It was Greenspan that opposed measures against the mortgage bubble….
[13:34] Tessa Zalivstok: I don't think she had anything to say about this
[13:35] herman Bergson: He stated that the market would regulate itself...
[13:35] herman Bergson: that was his consistent policy
[13:35] Gemma Allen (gemma.cleanslate): no but her philosophy of economics influenced his to some extent
[13:35] Tessa Zalivstok: yes but this begs the question of the integrity if the currency
[13:35] herman Bergson: to a large extend Gemma...
[13:35] Gemma Allen (gemma.cleanslate): Yes-ah!
[13:35] herman Bergson: Look at the picture...
[13:35] Tessa Zalivstok: no market can exist without a trusted medium of exchange
[13:35] Bejiita Imako: well to believe that something like that would self regulate is insane
[13:36] herman Bergson: Greenspan and Rand in the White House....
[13:36] Tessa Zalivstok: herman we all know this
[13:36] Mick Nerido: Mortages were to freely given, everyone thought that the prices of houses could only go up
[13:36] herman Bergson: what influence does that lady have on Greenspan?
[13:36] hannes Breda is online.
[13:36] herman Bergson: Why does he take her there and not his wife???
[13:36] Annie Brightstar (anniebrightstar): It wasn't that sort of party?
[13:36] Mick Nerido: The WFC is the correction
[13:37] :: Beertje :: (beertje.beaumont): sorry i have to go...
[13:37] Tessa Zalivstok: and I say that she had nothing to say
[13:37] Tessa Zalivstok: the question is what did Rand actually have to say about the issue that was a major cause of the GFC'
[13:37] herman Bergson: His view of society was due to Ayn Rand completely....
[13:37] Bejiita Imako: yes and then the entire world stopped
[13:37] Bejiita Imako: POOFF
[13:37] Tessa Zalivstok: yes but not his view of the currency
[13:37] Tessa Zalivstok: that was rather orthodox
[13:37] herman Bergson: No…Tessa Rand was dead already...1982....
[13:37] Mick Nerido: But it had to stop somewhere it was a bubble
[13:37] Tessa Zalivstok: now if you said that Friedman influenced his thinking I'd listen carefully
[13:38] herman Bergson: But the brain of Greenspan was filled with her ideas about how society had to be
[13:38] Bejiita Imako: if its a bubble you should always hit the brake
[13:38] Bejiita Imako: and then its a dangerous situation
[13:38] Mick Nerido: hindsight is always better than foresight
[13:38] Tessa Zalivstok: now Friedman wrote extensively in these things
[13:38] Tessa Zalivstok: liberty
[13:38] Tessa Zalivstok: markets
[13:39] herman Bergson: Rand, Greenspan, Hayek, Friedman....all are at the roots of our present economic situation
[13:39] Tessa Zalivstok: he unquestionably influenced Greenspan in the matters that were important
[13:39] Tessa Zalivstok: you see you're running round the point
[13:39] herman Bergson: But let me put all in perspective....
[13:39] Tessa Zalivstok: the real point here is the currency
[13:40] Tessa Zalivstok: take Hayek
[13:40] herman Bergson: The thesis I am defending is that the Idea of a free market is a Utopia...
[13:40] Mick Nerido: how should he have protected the currency?
[13:40] Tessa Zalivstok: he held very similar ideas to Rand on many matters
[13:40] Merlin (merlin.saxondale): I find all this a bit difficult because I do not have the wider knowledge of it all
[13:40] Tessa Zalivstok: but he believed firmly that the currency should be protected
[13:40] herman Bergson: and that this Utopia was described by Ayn Rand in Atlas Shrugged
[13:41] Tessa Zalivstok: Friedman had different ideas and I believe that it was Friedman who greenspan followed
[13:41] Tessa Zalivstok: not Rand
[13:41] Tessa Zalivstok: this is important
[13:41] Bejiita Imako: and as we know an utopia can never happen its an impossible dream and so the free market cant work in a real world
[13:41] herman Bergson: Well Tessa...those are details I would say....
[13:41] Merlin (merlin.saxondale): Tessa sounds as if she knows what she is talking about
[13:41] Tessa Zalivstok: but critical details
[13:41] Bejiita Imako: yet we have it
[13:42] herman Bergson: They all believed in the wonders of the Free Market and the ratioanl huamn being who would handle it
[13:42] Tessa Zalivstok: you can't blame Rand for the crisis
[13:42] Gemma Allen (gemma.cleanslate): :-)
[13:42] herman Bergson: smiles...
[13:42] Tessa Zalivstok: she had absolutely nothing to say about the things that caused it
[13:42] Merlin (merlin.saxondale): I feel some need to understand why Tessa is defending Rand so much
[13:42] Gemma Allen (gemma.cleanslate): I think it is her influence he is blaming
[13:42] herman Bergson: No....she had no economic or political power at all.
[13:42] Bejiita Imako: but she had scary ideas that influenced Greenspan
[13:42] Tessa Zalivstok: if you want to look for somebody on that side of economic philosophy to blame my choice would be Friedman
[13:43] herman Bergson: But with Atlas Shrugged she influenced people who were in power!
[13:43] Lizzy Pleides: she probalby didn't know about her influence
[13:43] Tessa Zalivstok: sure but not about that
[13:43] Gemma Allen (gemma.cleanslate): and he was also influenced by her
[13:43] herman Bergson: people who were evening after evening debating these issues with her
[13:43] Gemma Allen (gemma.cleanslate): friedman that is
[13:43] Merlin (merlin.saxondale): I still have my doubts as Herman says were also expressed by Beertje, that one person can influence so much
[13:43] Tessa Zalivstok: I guess Friedman might have read her
[13:43] herman Bergson: It makes little sense to talk about blaming someone...
[13:44] Tessa Zalivstok: he wasnt close to her like Greenspan was
[13:44] herman Bergson: It is a matter of what caused what...
[13:44] Tessa Zalivstok: well
[13:44] Tessa Zalivstok: if you want to choose people
[13:44] herman Bergson: History isn't about blaming people for whatever...
[13:44] Tessa Zalivstok: I would choose Bush, Greenspan, saddam hussein and Zhou Xiaochuan
[13:44] herman Bergson: It is about pointing out who is responsible for what
[13:45] Lizzy Pleides: Rand was a theorist and Greenspan moved her ideas to reality
[13:45] Tessa Zalivstok: and I forgot Usama bin Laden
[13:45] herman Bergson: and when talking about responsibility...recall what I said...
[13:46] herman Bergson: on the one hand you have historical personalities...
[13:46] herman Bergson: but they are meaningless when material situations and a world of ideas do not fit together....
[13:46] herman Bergson: Like Assad in Syria....
[13:47] herman Bergson: it is not only that single man who causes what is happening there...
[13:47] Bejiita Imako: a bloody masacre
[13:47] Bejiita Imako: terrible
[13:47] Mick Nerido: The military Industrial complex is most to blame...
[13:47] Debbie Dee (framdor): and over consumption
[13:48] Mick Nerido: The over production of arms...
[13:48] herman Bergson: Yes Mick..there are groups in that country that see their interests threatened and thus support Assad...
[13:48] herman Bergson: Our general mistake with history is that we are educated to believe that this or that leader did it all..
[13:49] herman Bergson: In Syria..there are tribes....
[13:49] herman Bergson: religious groups, which are opposing each other...
[13:49] herman Bergson: Like in Afganistan...
[13:50] Merlin (merlin.saxondale): Ugh go away world
[13:50] Mick Nerido: Have to go thanks all
[13:50] herman Bergson: So Greenspan never could have done what he did if there hadn't been a group around him who agreed with him...
[13:50] Merlin (merlin.saxondale): Bye Mick
[13:50] Annie Brightstar (anniebrightstar): Bye Mick
[13:50] Bejiita Imako: ok bye then mick
[13:51] herman Bergson: Nor could the ideas of Rand in Atlas Shrugged have become a bestseller int the US if not the US 'mind' was open to that way of thinking
[13:52] Merlin (merlin.saxondale): Well exactly!
[13:52] Merlin (merlin.saxondale): That is the point about the influence of a single person
[13:52] herman Bergson: Atlas Shrugged got bad reviews...and Greenspan wrote a defense
[13:53] herman Bergson: The free market idea in healthcare....
[13:53] herman Bergson: In my country all hospitals had to be privatized...
[13:54] herman Bergson: That would stimulate competition and increase of quality of care....
[13:54] herman Bergson: The result is disastrous...
[13:54] Merlin (merlin.saxondale): *looks to see who is still here
[13:54] Bejiita Imako: yes
[13:54] Bejiita Imako: the results are rather
[13:54] Bejiita Imako: the rich should live the poor should die
[13:54] herman Bergson: PriPrizes gort up only....
[13:54] Bejiita Imako: really awful that something like this can have happened
[13:55] herman Bergson: Prizes got up only
[13:55] Bejiita Imako: see same things here too
[13:55] Bejiita Imako: really scary
[13:55] Bejiita Imako: it says it self that free market only give rise to own profit with no care of the service it self
[13:55] Bejiita Imako: its only money money in my own pocket
[13:56] Bejiita Imako: for the boss
[13:56] Annie Brightstar (anniebrightstar): So will we discuss if there is a viable alternative at a future class?
[13:56] herman Bergson: Well so much on the utopia of the free market for today , I would say...
[13:56] herman Bergson: Oh Yes Annie...
[13:57] Bejiita Imako: interesting as always
[13:57] Bejiita Imako: ㋡
[13:57] herman Bergson: Thank you all for you vivid participation...
[13:57] herman Bergson: Class dismissed...
[13:57] Annie Brightstar (anniebrightstar): Thank you Herman
[13:57] Bejiita Imako: ok cu soon all
[13:57] Bejiita Imako: ㋡
[13:57] Lizzy Pleides: Thank you for this lesson Herman
[13:57] Tessa Zalivstok: thanks herman
[13:57] herman Bergson: We are not done at all LIzzy....^_^
[13:58] Bejiita Imako: tnx Herman
[13:58] Bejiita Imako: ㋡
[13:58] herman Bergson: So more to come...
[13:58] Debbie Dee (framdor): thenks hermen, and all of you. I will be back for the next class..
[13:58] Gemma Allen (gemma.cleanslate) is online.
[13:59] Lizzy Pleides: Good night everybody
[13:59] Annie Brightstar (anniebrightstar): Night Lizzy
[13:59] Bejiita Imako: cu all
[13:59] Bejiita Imako: bye
[13:59] Annie Brightstar (anniebrightstar): Goodnight all
[13:59] herman Bergson: by eBejiita
[13:59] Merlin (merlin.saxondale): Bye
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