Adam-Curtis : All Watched Overby Machines of Loving Grace -E1-3- Love and Power-2011

Description: In this episode Curtis tracks the effects of Ayn Rands ideas on American financial markets particularly via the influence on Alan Greenspan.Ayn Rand was born in Russia and moved to America in 1928 and worked for Cecil B. DeMille and realised some of the plot for what became The Fountainhead from this period. Later she moved to New York and set up a reading group called The Collective. On advice from a friend Greenspan (then a logical positivist) joined The Collective.Although critically savaged Rands Objectivist ideas were popular and came to heavily infiltrate California particularly Silicon Valley. The computer utopian belief (Californian Ideology) that computer networks could measure control and self-stabilise societies without hierarchical political control and that people could become Randian heroes only working for their own happiness became more widespread.Rand entered into a affair with Nathaniel Branden another married person in The Collective based purely on logic albeit with the approval of his wife. After several years the affair ended violently and was revealed to rest of The Collective which broke up. Rand ended up alone in her New York apartment although Greenspan continued to visit.Greenspan entered government in the 70s and became Chairman of the Federal Reserve. In 1992 he visited the newly elected Bill Clinton. He persuaded him to let the markets grow cut taxes and to let the markets stabilise themselves with computer technology to create the New Economy. This involved using computer models to predict risks and hedge against them in accordance with the Californian Ideology. However by 1996 the production figures had failed to increase but profits were nevertheless increasing and Greenspan suggested that it wasnt working. After political attacks from all side Greenspan changed his mind and decided that perhaps the New Economy was real but that it couldnt be measured using normal economic measures and so the apparent boom continued.In 1997 Carmen Hermosillo published a widely influential essay online Pandoras Vox: on Community in Cyberspace and it began to be realised that the result of computer networks had led to not a reduction in hierarchy but actually a commodification of personality and a complex transfer of power and information to companies.Although the Asian miracle had led to long-term growth in South Korea and other countries Joseph Stiglitz began warning that the withdrawing of foreign financial investment from the Far Eastern economies could cause devastation there. However he was unable to warn the president being blocked by Robert Rubin who feared damage to financial interests.The 1997 Asian financial crisis began as the property bubble in the Far East began to burst in Thailand causing large financial losses in those countries that greatly affected foreign investors. While Bill Clinton was preoccupied with the Monica Lewinski scandal Robert Rubin took control of foreign policy and forced loans onto the affected countries. However after each country agreed to IMF bailout loans foreign investors immediately withdrew their money leaving the tax payers with enormous debts and triggering massive economic disasters.After his handling of the economic effects of 9/11 Alan Greenspan became more important and in the wake of Enron he cut interest rates to stimulate the economy. Unusually this failed to cause inflation. It seemed that the New Economy was working to stabilise the economy.However in reality to avoid a repeat of the earlier collapse Chinas Politburo had decided to manage Americas economy via similar techniques to those used by America on the other Far Eastern countries by keeping Chinas exchange rate artificially low they sold cheap goods to America and with the proceeds had bought American bonds. The money flooding into America permitted massive loans to be available to those that would previously be considered too risky. The belief in America was that computers could stabilise and hedge the lending of the money. This permitted lending beyond the point that was actually sustainable. The high level of loan defaulting led ultimately to the 2008 collapse due to a similar housing bubble that the Far Eastern countries had previously faced.Curtis ends the piece by pointing out that not only had the idea of market stability failed to be borne out in practice but that the Californian Ideology had also been unable to stabilise it indeed the ideology has not led to people being Randian heroes but in fact trapped them into a rigid system of control from which they are unable to escape.