The book review provides context and analysis of Alan Greenspan's book "The Age of Turbulence". The review summarizes that Greenspan's book is not focused on recounting his time as Federal Reserve Chairman, but rather provides historical background on his lifetime during the "age of turbulence". Greenspan is more interested in the formative moments of his career and education that led him to the Federal Reserve, rather than describing the state of the US economy during his time as Chairman. The review analyzes that Greenspan approaches topics like the Cold War and international political economy from the perspective of an academic rather than solely as a central banker.

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BOOK REVIEW
Alan Greenspan (2007). The Age of Turbulence: Adventures in a New World (London:
Penguin Books).
INTRODUCTION
This book is neither an autobiography nor a memoir. It is, as the subtitle proclaims, a
series of ‘adventures in a new world.’ This may be contrary to the reader’s
expectations. Most readers will want a blow-by-blow account of Alan Greenspan’s
term as Chairman at the U.S. Federal Reserve, but that is not the case with this book.
It is not that Greenspan does not refer to his days at the Fed. It is rather the case that
Greenspan is more interested in providing a historical background to the ‘age of
turbulence’ (which is more or less coeval with his lifetime). When the reader goes
through the first few chapters, he might even get the distinct impression that
Greenspan is preparing to become Secretary of the Treasury. That is because
Greenspan was involved in presidential campaigns for Republican candidates. So,
naturally, the impression conveyed is that he might become a member of the
President’s cabinet or join a team of economic advisors to the President. When
Greenspan wound up at the Federal Reserve, it must have been as much of a
surprise for him as it will be for the reader. Despite his many years at the Fed, what
Greenspan wants to share with his reader is how he wound up there rather than
what happened after he got there. In other words, Greenspan is mainly preoccupied
with the ‘formative’ moments of his birth, education, and career and how that
prepared him to assume his responsibilities as Chairman of the Federal Reserve from
1987 to 2006. But, unlike a Fed chairman, he does not focus mainly on describing the
state of the U.S. economy. Instead, he writes like an academic working in the areas of
international political economy, the Cold War, ideological struggles in Europe, the
rise of China and the economic growth of Southeast Asia.
LABS OF POLITICAL ECONOMY
It is interesting to note that Greenspan liked to travel and that the ‘adventures’ that
he refers to basically involve taking a direct look at many parts of the world. These

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adventures mean a lot to him because these nations were labs of political economy. The
experiments that were being conducted in these labs would determine whether
capitalism or communism would prevail as the dominant political and economic
forces in the world. Why is this important? How do we make sense of Greenspan’s
curiosity about the world? The answer relates to the basic federalist assumption in
American politics. The United States, unlike many other parts of the world, has a
federalist system. What this means is that American citizens relate to both federal
law and state law. This shared responsibility between the federal government and
state government means that the culture of American states exhibits a lot of variety.
This variation in patterns of governance that was designed into the Constitution of
the United States makes it possible for American states to function as laboratories. If
a social experiment went off well in a particular state, it might be replicated
elsewhere in the United States or even tried at the federal level. If it did not go off
well, it would be much easier to contain the damage. Likewise, in Greenspan’s
imagination, the preoccupation with the international economy is a way of
conducting experiments on the basic precepts of political economy. These
experiments are also related to a theory of human nature that he found in the work
of political theorists like Ayn Rand. So, for instance, the questions that come up in
this context might be subsumed under the category of freedom. Like Ayn Rand,
economists of Greenspan’s generation were fond of asking what exactly constituted
freedom.1 And, if freedom is important, is it to be construed as a universal value or is
it specific to the United States and the American way of life? Why isn’t the American
craving for freedom more easily visible in different parts of the world? Is there
anything that the United States can do to activate this quest for freedom in others?
So, for instance, should the United States actively encourage freedom movements
around the world? Or, is the march of freedom to be considered historically
inevitable? If the latter should be the case, the United States might prefer not to get
actively involved in freedom movements except when its strategic interests were
directly at stake. What exactly, for instance, should be the goal of U.S. foreign policy?
Those who are interested in the origins of the Cold War and the ideological struggles
that were waged in the post-War era know that these were the questions that
animated the intellectuals of Greenspan’s generation. The impression that the reader
will get from the book is that these questions still haunt Greenspan.
ON AMERICAN EXCEPTIONALISM
In other words, Greenspan is not the taciturn technocrat of monetary policy that we
think him to be. It appears that he came to monetary policy rather late in his career.
Greenspan is basically the last of a generation of American intellectuals who were
1 See, for instance, Anne C. Heller (2009). Ayn Rand and the World She Made (New
York: Doubleday).

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wondering whether it might be possible to answer fundamental questions about
political economy on the basis of theory of human nature. That is akin to saying that
if only we knew what really motivated human beings, then, we will be in a position
to predict who will win the Cold War. For Greenspan it is not enough to merely win
the Cold War. It is even more important to know why the United States and its
European allies won and what exactly that tells us about human nature. Only then
will it become possible to think-through the basic precepts of politics and economics.
Why is this important? It is important precisely because American intellectuals
wanted to find out whether the American way of life had universal content or
whether it should be classified as a form of historical exceptionalism. This choice has
important implications for not only American historiography but also for U.S.
foreign policy; it has practical implications for nation building as well. If the former
should be the case, then U.S. foreign policy should try to replicate American
institutions in different parts of the world. If the latter is the case then it will be
difficult to replicate American institutions abroad because America is the exception –
its success therefore cannot be easily replicated elsewhere. This is an important
question for both liberals and conservatives because the inability to answer this
question will lead to periodic bouts of isolationism or a form of engagement with the
world that lacks conviction in U.S. foreign policy. The United States, for instance,
may decide not to participate in the creation of multilateral institutions if it is not
clear whether it should build these institutions in its own image or in those of others.
This will be true in the first instance of American foreign policy; but, by implication,
in the realms of economic and monetary policy as well in an interconnected world.
This is already a question that is gaining prominence in American legal theory and
legal policy. Should American judges cite precedents from constitutional courts
elsewhere? Or should American law also be classified under the aegis of American
exceptionalism?
ON INSTIUTIONAL OUTCOMES
The twenty five chapters in this book then are not reducible to macroeconomics or
monetary-policy-as-usual. In the language of art theory, we might say that
Greenspan is more interested in the ‘background’ rather than the main ‘figure’ that
animates a picture or a painting. That is all the more unusual since those interested
in the background are more likely to be academics who avoid adventures rather than
a policymaker like Alan Greenspan. Another important theme in Greenspan’s work
is the role played by internal and external shocks to the economy and the role that
the Fed can play in mitigating disruptions caused by these shocks. The book itself
begins with the trauma of 911 and the Fed interventions that became necessary to get
the U.S. economy back on its feet. There is not much of the private Greenspan in this
book though he does talk about his marriages and interest in music. That however

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has less to do with being secretive than with the fact that Greenspan has spent the
better part of his life attending to his work in the private and public sectors. So only
a reader who is empathetic to his workaholic nature will be able to appreciate his
contributions to economics and policy making. Greenspan also describes his
friendships with foreign leaders and the sheer sense of incredulity that he
experienced on encountering economic growth in many parts of the world with no
previous exposure to capitalism. In the attempt to answer the questions that seized
his imagination as a young economist, Greenspan comes out as an institutional
economist – i.e. as a policymaker who believes that in order to replicate the
American model of success you have to be able to build institutions. It is the
interplay of individual freedom with institutional forms of empowerment that will
deliver the desired economic outcomes - be they poverty alleviation or building
wealth and prosperity for the masses. Greenspan concludes the book with a series of
reasonable conjectures of how economic forces and trends will play out in the years
to come.
The sheer simplicity of his prose and the relentless modesty of his approach to a
range of topics in this book can be overwhelming for a first time reader. It is easy to
overlook the fact that Alan Greenspan was and still remains amongst the most
powerful mandarins of the U.S. policy making establishment.
SHIVA KUMAR SRINIVASAN