Friday, January 03, 2014

Alan Greenspan: only collectivists want consumer protection

I finally got around to reading some of the collection of essays by Ayn Rand and her friends called Capitalism: the Unknown Ideal. The pieces by Rand herself are ridiculously self-referential. She likes to prove her points by quoting from speeches in Atlas Shrugged, and by mentioning John Galt by name as a source as in the essay "Requiem for Man."
I quote John Galt: "You have reached the blind alley of the treason you committed when you agreed..."
I did find one essay by Rand particularly enlightening. There is a segment of right-wingers who consider "Atlas Shrugged" not only a serious socio-political critique on real-world circumstances, they consider "Atlas Shrugged" to be prophetic - there's even a film called "Ayn Rand and the Prophecy of Atlas Shrugged."

Well thanks to the essay "Is Atlas Shrugging" it turns out the Ayn Rand herself believed "Atlas Shrugged" was prophetic.
As the title of this discussion indicates, its theme is: the relationship of the events presented in my novel "Atlas Shrugged" to the actual events of today's world.
Or to put the question in a form which has often been addressed to me: "Is "Atlas Shrugged" a prophetic novel - or a historical one?"
The second part of the question seems to answer the first: if some people believe that "Atlas Shrugged" is a historical novel, this means that it was a successful prophecy...
...The book was published in 1957. Since then, I have received many letters and heard many comments which amounted, in essence,  to the following: "When I first read "Atlas Shrugged" I thought you were exaggerating, but then I realized suddenly - while reading the newspapers - that the things going on in the world today are exactly like the things in your book."
And so they are. Only more so.
Later on she says:
The purpose of my discussing this today was, not to boast nor to leave you with the impression that I possess some mystical gift of prophecy, but to demonstrate the exact opposite: that the gift is not mystical. 
But the most significant essay in terms of my play DARK MARKET is Alan Greenspan's essay "The Assault on Integrity" in which he comes out against any and all forms of regulation and consumer protection laws. Because, he claims, real businessmen jealously guard their reputations and that is all that is needed to protect consumers. And we can't have regulations to stop businesses from unsafe practices because that's prior restraint:
Moreover “protective” legislation falls in the category of preventive law. Businessmen are being subjected to governmental coercion prior to the commission of any crime. In a free economy, the government may step up only when a fraud has been perpetrated, or a demonstrable damage has been done to a consumer; in such cases the only protection required is that of criminal law.
Ah yes. Objectivists figure that once the naughty businessman has been caught damaging the consumer in some way (presumably including death) he will be caught and punished and that way we'll all be safe from that

Greenspan specifically mentions the uselessness of regulating the stock market:
 The market value of a brokerage firm is even more tied to its good-will assets. Securities worth hundreds of millions of dollars are traded every day of the telephone. The slightest doubt as to the trustworthiness of a broker’s word or commitment would put him out of business overnight.
Presumably that is the kind of thing Greenspan was talking about in the aftermath of the 2008 meltdown when he said:
“In other words, you found that your view of the world, your ideology, was not right, it was not working,” Mr. Waxman said.
“Absolutely, precisely,” Mr. Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”