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The Age Of Turbulence "Introduction"

By Thomas Riggins

14 October, 2008

The melt down of the world financial system is a good back drop for these reflections on the introduction to Alan Greenspan's 2007 memoir. His book THE AGE OF TURBULENCE is subtitled, “Adventures In A New World.” The “New World” that Greenspan now finds himself in is, however, not the world of his dreams but the old world found in the pages of DAS KAPITAL.

Greenspan makes an interesting observation with respect to the brief panic that ensued after 9/11. The worst result of the attack could have been the collapse of the financial system, which he thought “highly unlikely.” He writes that, “The Federal Reserve is in charge of the electronic payment systems that transfer more than $4 trillion a day in money and securities between banks all over the country and much of the rest of the world.” Greenspan was worried because “We’d always thought that if you wanted to cripple the U.S. economy, you’d take out the payment systems.”

Well, Mr. Greenspan didn’t have to worry about al-Qaeda taking out the financial system since it was brought down, unlike the Twin Towers, by an inside job. If he had paid more attention to Karl Marx than to Ayn Rand he would have known that the financial collapse of world capitalism will be brought about by its own internal contradictions (the greatest of which is the private control of socially created wealth) not by attack from without.

Its the economist and political leader Sam Webb, not Alan Greenspan, that hits the nail on the head when he writes, "The prevailing ideologies and practices that have driven U.S. capitalism for the past three decades have run up against their own contradictions and conjured up new and old oppositional forces both domestically and internationally."--PEOPLE'S WEEKLY WORLD, Oct. 4-10, 2008

A few pages further on Greenspan makes this announcement about the 9/11 attacks. “President Bush rallied the nation with what will likely go down as the most effective speech of his presidency. ‘America was targeted for attack because we’re the brightest beacon for freedom and opportunity in the world,’ he said. ‘And no one will keep that light from shining.

What is wrong with this is, besides the fact Bush and his bipartisan Congress are the ones most responsible for dimming the light of freedom, it misrepresents the reasons for the attack. Al-Qaeda listed specific aspects of American foreign policy that led it it to attack the U.S. It objected to our troops being stationed in Saudi Arabia (and Bush moved them out) and it objected to our Middle East policies including our uncritical (except for some window dressing) support of Israel and of unrepresentative dictatorial regimes in the region.

Bush’s speech was vapid propaganda designed to mislead the American people and lay the foundation for invading Iraq, an enemy of al-Qaeda in the region, in order to try and control its oil reserves. With the obliging cooperation of the mass media the American people were in fact misled.

At any rate, Greenspan thinks the post 9/11 world is a "new world." It is "the world of a global capitalist economy that is vastly more flexible, resilient, open, self-correcting, and fast-changing than it was even a quarter century earlier." His book, he tells us, "is my attempt to understand the nature of this new world."

Well, his book came out in 2007 and here we are in 2008 with Greenspan's resilient and self-correcting "new world" pretty much on the scrap heap. In fact we have to go back three quarters (not a quarter) of a century to be able to understand the "global capitalist economy."

Needless to say, when Greenspan tells us that at the end of his book he "will bring together what we can reasonably conjecture about the makeup of the world economy in 2030," he has taken the fatal plunge taken by all utopian thinkers trying to see into the future. If you can't see from 2007 to 2008 I doubt that you have anything to say about 2030. The Oracle has run out of gas.

I don't mean to rub it in, but this "Introduction" still has a lot of juice to squeeze out. He says, for example, "The defining moment for the world's economies was the fall of the Berlin Wall in 1989, revealing a state of economic ruin behind the iron curtain far beyond the expectations of the most knowledgeable Western economists." Careful, Alan, de te fabula narrantur, as the exact same words could be applied to the fall of the American housing and mortgage markets in 2008.

He also tells us, "Central planning was no l,anger a subject for debate.... it was dropped from the world's economic agenda." Well guess what? The debate is coming back. It was lack of planning that led to the current mess and it the lack of some central plan that prevents us from seeing the best way out of it. The international collapse of the financial system has also flummoxed European and Asian powers because they can't agree on a way forward. They seriously need some central planning.

Greenspan is just warming up! We are told, "The reinstatement of open markets and free trade during the past quarter century has elevated many hundreds of millions of the world population from poverty. Admittedly many others around the globe are still in need, but large segments of the developing world's population have come to experience a measure of affluence [he's talking about $2.00 a day] long the monopoly of so-called developed countries."

What a difference a year makes. These gains are being wiped out by the current crisis and the spiraling cost of food. Where the gains remain strongest, and where most of them occurred, is in China whose "socialist market economy" does not qualify yet, by Greenspan's economic philosophy, as an "open market"-- it is too regulated. [He has a whole chapter on China, #14, which I hope to review later.]

"If the story of the past quarter of a century has a one-line plot summary," Greenspan writes, "it is the rediscovery of the power of market capitalism." But this time the past is not prelude, as the story of the next quarter century will be the rediscovery of the power of regulated capitalism, moves towards economic central planning and the growth of socialist and communist parties moving towards the eventual socialization of the means of production as the only way to eliminate global poverty and environmental destruction.

Thomas Riggins is th associate editor of Political Affairs magazine and can be reached at

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