Greenspan: The Man Behind Money by Justin Martin
A Book Lacking in Critical Analysis
SEPTEMBER 01, 2001 by ALEXANDER FRANCO
Filed Under : Federal Reserve
Perseus Publishing · 2000 · 284 pages · $28.00
Reviewed by Alexander Franco
He has been called the second most important man in America and the nation’s most enigmatic public official. Yet the public knows little of Alan Greenspan’s personal life or of the secretive inner workings of the Federal Reserve System. Justin Martin has provided a biography that promises a “full and fascinating portrait” of the elusive chairman of the Federal Reserve Board (Fed), but, alas, the book fails to live up to its billing. Rather, it provides a portrait that is incomplete and that dodges the really fascinating question about Greenspan, namely his intellectual metamorphosis.
The first half of the book takes us through Greenspan’s uneventful childhood in New York City during the Depression, his musical training at the Juilliard School, his brief stint as a professional jazz musician, and his higher education at New York University’s School of Commerce and Columbia University. Martin also devotes an entire chapter to Greenspan’s decades-long friendship with philosopher and novelist Ayn Rand, a friendship first formed in 1954. Greenspan’s participation in Republican politics, beginning with Richard Nixon’s presidential campaign in 1968 and later with Gerald Ford and Ronald Reagan, is also chronicled.
The second half of the book focuses on Greenspan’s tenure as chairman of the Fed. Martin lucidly describes how monetary policy works and the intricacies of our complicated financial system. He also journeys into tangential but interesting discussions about the history of central banks in the United States, the domestic financial panics of the nineteenth and twentieth centuries, and even the demonetization of silver at the turn of the century, which led to the famous William Jennings Bryan speech about crucifying mankind on a “cross of gold.” Unfortunately, Martin never gets into the case against government management of money.
What is crucially missing in this biography is the essence of Greenspan himself. After finishing the book, one finds him as enigmatic as at the start. What makes the man tick? Those familiar with the literature of liberty know that Greenspan was an unabashed laissez fairist during his years as part of Rand’s inner circle, and we know he penned an essay, “Gold and Economic Freedom” (The Objectivist, July 1966), that assaulted the concept of the Fed and instead advocated the gold standard. Martin fails to explain what triggered Greenspan’s remarkable transformation from Objectivist to chief banker for the welfare state. A thorough understanding of this metamorphosis would have spoken volumes about the essence and character of the man.
The book is lacking in critical analysis, and the author’s writing is hagiographic in both tone and content—one might say that he is irrationally exuberant about his subject. The reader is constantly reminded of Greenspan’s “brilliance” within a superficial discussion that largely avoids the realm of ideas. There are no citations of any of Greenspan’s writings, much less analysis of them. Amazingly, Martin managed to find but two sources of criticism regarding Greenspan’s policies: Steve Forbes and disgruntled Objectivists. Both are treated lightly. Missing entirely is the serious scholarly criticism of central banking generally and Greenspan’s performance in particular. That criticism is out there for any biographer to consult.
A serious focus on Greenspan’s intellectual odyssey, beginning with his early libertarian thinking, should have triggered a discussion of the perils of state intervention in the capital market and the inevitable centralization of economic decision-making by a political class within a state-capitalist system. Instead, we are informed by the fawning author (a member of the cult of Greenspan?) that the chairman works six to seven days a week, starting at 6 a.m. and on into the late evening, to steer the economy. Ironically, the once-champion of the spontaneous order has now become the key locus of central economic planning.
No need for statists to worry about the future, for Senator John McCain provides a solution in the book: “If [Greenspan] would happen to die . . . I would do like they did in the movie Weekend at Bernie’s. I would prop him up and put a pair of dark glasses on him.”
We need a good biography of Alan Greenspan, but Martin’s isn’t it.
Alexander Franco is an adjunct professor at Florida International University College of Urban and Public Affairs.