[Market Economy Guide] Alan Greenspan and the Novel

What Would a World Look Like If All Entrepreneurs Disappeared?

The novel *Atlas* awakens us to the meaning of liberty and property rights

When reading books or articles on economics, one often comes across the term “the Greenspan effect.” The Greenspan effect refers to the influence of Alan Greenspan, who served as chairman of the U.S. Federal Reserve (Fed). Greenspan was reappointed four times from 1987 to 2006 and led U.S. monetary policy for an astonishing 20 years. He was accompanied by grand epithets such as “America’s economic president,” “the helmsman of the U.S. economy,” and “the divine hand of monetary policy.”

The Novel That Captivated the Young Greenspan

The first person to appoint Greenspan as Fed chairman was President Ronald Reagan. After that, Presidents George H. W. Bush, Bill Clinton, and George W. Bush each kept Greenspan in the post. As a result, Greenspan set the remarkable record of being reappointed four times.

The reason Greenspan was able to lead the U.S. economy for 20 years was that he won overwhelming trust from many people by ushering in a long economic boom in the United States.

In fact, Greenspan was a late-blooming economist. In his younger days, he lived an ordinary life, working as an itinerant musician and advising his colleagues on tax matters. He actually earned his doctorate from Columbia University in 1977, when he was already 51 years old. Even more surprisingly, Greenspan, who went on to influence not only the U.S. economy but the global economy, was once an apprentice to a novelist. In fact, he was profoundly influenced in his youth by a certain novelist.

In the 1950s, Greenspan was in his fresh young twenties. At the time, he was part of the New York social circle of novelist Ayn Rand. Rand worked across novels, plays, and film, and is best known to us for her epic novel *Atlas*. Until her death, Rand was Greenspan’s friend, mentor, and intellectual guide for about 30 years. Greenspan even said that after meeting Rand, he came to believe in the moral power of capitalism.

The Russian Novelist Who Praised Capitalism

Rand’s representative work, *Atlas*, is a novel that prompts readers to reflect anew on the meaning of liberty and capitalism. It tells the story of a world thrown into chaos by a strike of entrepreneurs who had been oppressed and coldly treated in a society rife with egalitarianism, and of the search for a new order to overcome that crisis. It vividly conveys to readers the bleak future of a society ruled by distribution without production and egalitarianism without progress. It also shows, through fiction, how far humanity can collectively descend along the road to ruin. The corrupt and incompetent politicians wielding power in *Atlas*, along with the economy struggling under chronic recession, are more than enough to sound an alarm for those of us living today.

Through *Atlas*, Rand says, “The best society is one in which the best that a person creates is traded for the best that others create.” For Rand, who directly witnessed and experienced the suppression of individual freedom before the Russian Bolshevik Revolution, liberty must have been a value more precious than life itself.

Through Rand and *Atlas*, Greenspan learned that the economy is shaped by values, attitudes, beliefs, psychology, and other irrational and unpredictable factors. He also said that Rand kept him from becoming a reclusive economist who merely blurted out absurd predictions. To that extent, Rand and her novel *Atlas* had a profound influence on Greenspan and became a driving force that enabled him to help steer the global economy for 20 years. Indeed, in an invited lecture in Calgary, Canada, in 2006, Greenspan said this: “*Atlas* portrayed successful entrepreneurs as epic heroes by virtue of their moral strength.”

The Meaning of Entrepreneurship

For Americans, *Atlas* is said to be the book that has had the greatest influence after the Bible. Even though a long time has passed since its publication, many people still read *Atlas*. Businesspeople and professionals in particular are said to read it in order to revive the true spirit of entrepreneurship. The message of *Atlas* is clear: “You who create wealth, take pride.”

There is no need to newly emphasize how greatly those armed with entrepreneurship have contributed to making society more prosperous and more developed. The insight Greenspan gained through Rand and *Atlas* was likely not very different. What would happen if entrepreneurship were no longer guaranteed in our society and entrepreneurs disappeared? It is something one truly does not even want to imagine. The picture drawn in *Atlas* is bleak enough as it is.

■ Please remember

For Americans, *Atlas* is said to be the book that has had the greatest influence after the Bible. Even though a long time has passed since its publication, many people still read *Atlas*. The message of *Atlas* is clear: “You who create wealth, take pride.”

Sung-no Choi, President of the Center for Free Enterprise (CFE)

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Original title: [시장경제 길라잡이] 앨런 그린스펀과 소설 <아틀라스>

Author: Sung-no Choi

Date: 2019-12-30

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=11&idx=22234