The longtime Federal Reserve chair inferred from past crises that lightly regulated markets, while prone to excesses, could right themselves sufficiently to avoid imperiling the financial system and the economy. The correct lesson would have been that markets require strict regulation, and that competent technocrats are essential.

BERKELEY—Alan Greenspan, who died this week at the age of 100, was one of the most consequential chairs the Federal Reserve Board has had in its 112 years of existence. But consequential does not mean faultless. One might say that his tenure—the second-longest in Fed history—ultimately vindicated much of what he had opposed.