The Chicago School

Milton Friedman: A Biography
by Lanny Ebenstein
Published 23 Jan 2007

Edward H. Chamberlin had written a chapter on the Chicago School...in 1957, the earliest such explicit essay I have found.”3 Chamberlin’s chapter indicates that the idea of the Chicago school that later became prominent was not fixed in 1957. According to Chamberlin, the Chicago school “believes in ‘competitive theory,’ but such a belief is widely held and would not in itself distinguish a Chicago school. It is distinguished by the zeal with which the theory of monopolistic competition has been attacked.... I shall therefore call it the Chicago School of Anti-Monopolistic Competition.”4 Although criticism of the theory of monopolistic competition—the view that businesses are best considered to be monopolies and are able to obtain monopoly profits and charge monopoly prices—was certainly part of the Chicago school approach, in part through the work of Aaron Director, this was by no means the whole of what the Chicago school later became known for.

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I shall therefore call it the Chicago School of Anti-Monopolistic Competition.”4 Although criticism of the theory of monopolistic competition—the view that businesses are best considered to be monopolies and are able to obtain monopoly profits and charge monopoly prices—was certainly part of the Chicago school approach, in part through the work of Aaron Director, this was by no means the whole of what the Chicago school later became known for. Chamberlin’s chapter indicates that the identity of the Chicago school was not yet fully formed in the popular academic mind in the late 1950s. According to Stigler: “There was no Chicago School of Economics... at the end of World War II.”5 In response to the question of whether there was a “Chicago school of economics” when he taught there, Jacob Viner wrote in 1969: “It was not until after I left Chicago . . . that I began to hear rumors about a ‘Chicago School’ which was engaged in organized battle for laissez faire and the ‘quantity theory of money’ and against ‘imperfect competition’ theorizing and ‘Keynesianism.’

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Writing in his memoirs about the first meeting of the Mont Pelerin Society, a group of libertarian-oriented academics and others, in 1947, he quoted journalist John Davenport as saying that these participants included a “sprinkling of what became known as the Chicago School”13—that is, they were not known as the Chicago school yet. The Chicago school of economics is largely the Friedman school of economics; his positions and views are those associated with the school. Stigler wrote in his autobiography that the “origin of the school can be identified only if the central theses of the school are known.

The Curse of Bigness: Antitrust in the New Gilded Age
by Tim Wu
Published 14 Jun 2018

The 1912 election and the contrasting approaches of it are the subject of much writing, but an accessible and focused look at the antitrust themes of the elections is in Dan Crane’s “All I Really Need to Know About Antitrust I Learned in 1912” in the Iowa Law Review (2015). The best way to learn about the Chicago School of antitrust is by reading Robert Bork’s The Antitrust Paradox (1978). Another lively read is Richard Posner’s “The Chicago School of Antitrust Analysis,” in volume 127 of the University of Pennsylvania Law Review (1979). Among the many critiques and reactions to the Chicago School are Robert Pitofsky’s classic “The Political Content of Antitrust,” in the same volume, and another early and influential critique of the “efficiency interpretation” of the Sherman Act is Robert Lande’s “Wealth Transfers as the Original and Primary Concern of Antitrust,” volume 34 of Hastings Law Journal (1982).

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Ward Author photograph by Miranda Sita Printed in the United States of America The Curse of Bigness Antitrust in the New Gilded Age For Richard Posner, who taught me to think without fear. CONTENTS Introduction Chapter One The Monopolization Movement Chapter Two The Right to Live, and Not Merely to Exist Chapter Three The Trustbuster Chapter Four Peak Antitrust and the Chicago School Chapter Five The Last of the Big Cases Chapter Six Chicago Triumphant Chapter Seven The Rise of the Tech Trusts Conclusion A Neo-Brandeisian Agenda Acknowledgments Further Reading Notes Introduction We are four decades into a major political and economic experiment. What happens when the United States and other major nations weaken their laws meant to control the size of industrial giants?

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Brandeis and the Making of Regulated Competition, 1900–1932 (2009). †Based on the theory, popularized by Bruce Ackerman, that the Constitution undergoes de facto amendments during times of intense popular attention to questions of Constitutional significance. See Bruce A. Ackerman, We the People, Vol. 1: Foundations (1991). Peak Antitrust and the Chicago School It was during the postwar years, over the 1950s and 1960s, that strong antitrust laws became most clearly identified as part of a functional democracy, and in that sense reached the fullest extent of their power, influence, and political support. Reflecting the mood, President Kennedy’s antitrust chief, Lee Loevinger, would testify before Congress as follows: “The problems with which the antitrust laws are concerned—the problems of distribution of power within society—are second only to the questions of survival in the face of threats of nuclear weapons.”

Samuelson Friedman: The Battle Over the Free Market
by Nicholas Wapshott
Published 2 Aug 2021

Hayek imagined his Austrian School dimension would be a natural fit with the rest of the conservatives in the Chicago School. But the logic of Austrian economics was as far from the Chicago School’s reasoning as the Chicago School was from Keynesianism. Inspired by the teachings of von Mises, Hayek believed an economy should be totally free of government intervention, except to ensure the efficient working of the market through light regulation. He thought no one knew enough about the workings of the economy for government involvement to be anything but reckless interference. Friedman, and much of the Chicago School, promoted the virtues of free-market forces but concentrated their energies on determining how an economy works most efficiently, for instance through study of the price mechanism and incentives for growth.

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And it was his intimate knowledge of the Chicago School that gave him the confidence to tweak Friedman’s nose in argument by calling in evidence Friedman’s home team. Samuelson gave full credit to the Chicago School for keeping market forces at the center of economics, even though during the Great Depression free-market forces had failed to prevent—indeed, had contributed to—a worldwide humanitarian disaster. “From 1932–1945, faith in the market-pricing mechanism as the organizer of the economy sold at a discount,” Samuelson wrote. “It was the priceless contribution of Frank Knight and the Chicago School to remind us of the market’s merits.”49 Samuelson was friends with the big personalities at Chicago and knew that they often disagreed with each other.

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Lucas, Richard Posner, Theodore Schultz, D. Gale Johnson, and George Stigler. 15.Frank Hyneman Knight (November 7, 1885–April 15, 1972), one of the founders of the Chicago School of economics, who taught Nobel economics laureates Friedman, George Stigler, and James M. Buchanan. 16.Jacob Viner (May 3, 1892–September 12, 1970), Canadian economist who cofounded the Chicago School of economics. Viner was more skeptical of the virtue of the free market and is therefore often not considered a member of the Chicago School. 17.Henry Calvert Simons (October 9, 1899–June 19, 1946), University of Chicago economist and early exponent of monetarist theory. 18.Paul Howard Douglas (March 26, 1892–September 24, 1976), professor of economics at the University of Chicago and other schools, who served as a Democratic senator from Illinois from 1949 to 1967. 19.Roger E.

The Happiness Industry: How the Government and Big Business Sold Us Well-Being
by William Davies
Published 11 May 2015

But paradoxically, this belief also committed them to certain types of state intervention, namely regulation and competition law, which would ensure that the market maintained its correct form. Coase’s brilliance was to spot within the Chicago School position a final remnant of metaphysical speculation that they themselves were not aware of. Up until this point, the Chicago School still assumed that markets needed to be open, competitive, run according to certain principles of fairness, or else they would become submerged under the weight of monopolies. Markets needed ground rules if they were to match up to the ideal of being a space of individual freedom.

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A reminder comes in the form of the emergency phones, located in white posts on every corner in and around the university, with a blue light on top. Hyde Park is a sanctuary of peace and scholarship, but it is located in Chicago’s South Side, and visitors are advised against straying too far in any single direction on foot. This cocoon in which the university sits was a significant factor in the development of the ‘Chicago School’ of economics, which was instrumental in the design and implementation of the neoliberal policy revolution. Chicago itself is 700 miles from Washington, DC, and 850 miles from Cambridge, Massachusetts, the homes of Harvard and MIT, the original bastions of American economics. Not only were Chicago School economists tightly congregated in Hyde Park, they were also several hundred miles from the core of the political and academic establishments.

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Not only were Chicago School economists tightly congregated in Hyde Park, they were also several hundred miles from the core of the political and academic establishments. They had little choice but to seek debate with one another, and for three decades after the end of World War Two, they engaged in this with a rare fury. The scholars who became known as the Chicago School began to cluster around the leadership of economists Jacob Viner and Frank Knight during the 1930s. By the late 1950s, they had grown into a tight-knit family. In one case, the family ties were quite literal: Milton Friedman married Rose Director, sister of Aaron, who was the linchpin of the post-war Chicago School.

Building and Dwelling: Ethics for the City
by Richard Sennett
Published 9 Apr 2018

All reasons to notice the built environment, yet the Chicago School did not notice; it could not see buildings as bearing on its own investigations, nor connect its own rich sense of cité to a parallel complexity in the ville. ‘The city is not’, Park said, ‘merely a physical mechanism and an artificial construction. It is involved in the vital process of the people who compose it; it is a product of nature, and particularly of human nature.’ The word ‘merely’ is a give-away in this humane manifesto. A city, as the cliché goes, is its people.6 The separation of people and places seeped into the Chicago School’s politics. Louis Wirth, the most theoretically minded of the Chicagoans, wrote in his essay ‘Urbanism as a Way of Life’ that a city is ‘a motley [mixture] of peoples and cultures, of highly differentiated modes of life between which there often is only the faintest communication, the greatest indifference and the broadest toleration, occasionally bitter strife…’ Disconnection from and indifference to the physical city only made the problem of social disconnection seem worse.7 Planning and architecture usually proceed via propositional thinking.

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Charlotte Towle thus obliged her interviewers to learn how to be silent themselves, in order to encourage their subjects to struggle for words; the training in the Chicago School of young interviewers involved letting silences hang in the air. Florian Znaniecki recognized that neophytes are made uncomfortable by the silence of a subject, and are tempted to jump in with statements like, ‘In other words, Mrs Schwarz, what you mean to say is…’. Znaniecki counselled, don’t put words in their mouths; to do so is the cardinal sin of sociology. Since the time of the Chicago School, techniques have evolved for spotlighting meanings which are left inarticulate or contradictory; listening for cognitive dissonances figures in the education of the modern ethnographer.

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It served as a railway hub for the whole United States, and contained much more varied industries than did Manchester in the nineteenth century. European workers found refuge here up to the 1920s, when European emigration declined; in that post-war decade African Americans began migrating up from the old, racially paralysed Confederate states. The Chicago School wanted to find out what it was like to dwell in such a complex place. Its founder, Robert E. Park, worked for twelve years as a crusading journalist, then studied with the philosopher and psychologist William James at Harvard, receiving an advanced degree in 1899. Afterwards he went to Berlin to study with Georg Simmel, seeking to tie the theorist’s views about mentalities to empirical research.

Chokepoint Capitalism
by Rebecca Giblin and Cory Doctorow
Published 26 Sep 2022

The term regulatory capture has a funny history: it came into common parlance through the Chicago School economists, those architects of unregulated, monopoly capitalism. The Chicago School advocated for letting companies buy their way to total market dominance—and observed that once a market was monopolized, the companies in it would shower their surplus cash on the regulators who were supposed to be overseeing their activities. The regulators would become agents of the companies, creating rules intended to punish upstarts that challenged the dominant companies, cementing the incumbent firms’ advantage. The Chicago School called this “regulatory capture” and correctly identified it as a serious problem with monopolized markets.

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The playing field has been tilted so far that a growing number of people are falling off the edge, beset by precarious employment, stagnating wages, high costs for education, housing and healthcare, and economic policies that prize shareholders over people and communities. This great tilting of the playing field, away from workers and toward owners, has a variety of causes, but the biggest is a radical theory of antitrust, driven by jurist and far-right cult-of-personality darling Robert Bork and exported by his disciples at the Chicago school of economics. During the glory years of antitrust—after the New Deal, before Bork—governments set themselves the task of shrinking monopolies on the grounds that they were bad. Very large companies were able to exert undue influence on governments, bribing or coercing them into enacting policies that were good for those companies’ shareholders and harmful to their workers, customers, and the rest of society.

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These unelected titans were able to crush competitors, hold back entire industries, and reorder the economy and civilization according to their whims. Monopoly was viewed as a threat to the very idea of democratic citizenship. After all, firms making huge profits thanks to a lack of competition can launder that money into policy, with the result that policymakers make decisions based on the needs of the few, not the many. Then the Chicago School pulled off a brilliant coup. They promoted an antitrust theory that dispensed with the idea of citizenship altogether; instead, they insisted anti-monopoly regulators should limit themselves to thinking about “consumer welfare,” forgetting all that high-minded stuff about “democracy” and “citizenship.”

Data Action: Using Data for Public Good
by Sarah Williams
Published 14 Sep 2020

Du Bois were working in Chicago, academics at the University of Chicago were also compiling qualitative data on the urban poor, eventually forming what became known as the “Chicago School” of sociology (1915–1935). Led by Robert E. Park and Ernest Burgess, the Chicago School saw the city as its urban laboratory and used the same methods of participatory observation that anthropologists were beginning to use with remote, indigenous populations.50 The Chicago School's methods—which included data analytics, mapping, and qualitative research (figures 1.16 and 1.17)—were not meant to solve the problems of the city, but to try to define and describe the modern city, empirically, creating a “science of society.”

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DuBois used the same mapping techniques as tools to change economic and labor policy. The maps of the Chicago School are controversial because scholars believe they reinforce ideologies steeped in structural racism. What is perhaps more problematic is that even though the Chicago School learned its mapping techniques from Addams and DuBois, it marginalizes their connection to this earlier work by a woman and an African American sociologist.51 1.17 This map accompanies Frederic Thrasher's The Gang: A Study of 1,313 Gangs in Chicago, a text about the Chicago School of Sociology. This map was used to argue that it is not just geography that causes gang behavior but also the breakdown of institutions.

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Chicago: University of Chicago Press, 1927. 1.16 The first hand drawn map of Burgess's famous theoretical model used to explain the social organization within urban areas. The diagram is central to the Chicago School of Sociology's work. Source: Ernest Watson Burgess, “Map of the Radial Expansion and the Five Urban Zones,” n.d., Ernest Watson Burgess Papers, University of Chicago Library. The social work being done to understand the poor in Chicago (by both Addams and the Chicago School of Sociology) influenced fields beyond sociology and was widely adopted by city planners. This work also influenced philanthropic organizations. The Russell Sage Foundation in particular funded extensive surveys on the social conditions in numerous US cities.

The Myth of Capitalism: Monopolies and the Death of Competition
by Jonathan Tepper
Published 20 Nov 2018

The economist John Maynard Keynes once said, “Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.” He should have included defunct law professors. The state we find ourselves in today can be traced back to the economists of the Chicago School. We would not have highly concentrated industries if it were not for Robert Bork and the Chicago School. Like all revolutions, an organized group of ideologues developed the ideas and spread them zealously. The Chicago School, led by Milton Friedman and George Stigler, was the vanguard of attack against antitrust laws. The great irony is that they decried monopolies and concentration of power, but in practice they created all the conditions necessary for them.

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Anything that looks like a monopoly merely dominates industries because of greater “efficiency.” Even if it appears to be a monopoly, you shouldn't be worried about it because it won't persist due to competition. Also, keeping a monopoly is costly and difficult, so therefore impossible. For the Chicago School, if it looks like a monopoly, walks like a monopoly and quacks like a monopoly, it is probably just your imagination. Not only did the Chicago School not believe in monopolies, they didn't believe in practically anything. Collusion between companies? It couldn't happen. There were too many incentives to cheat and avoid cooperation. Even if it did happen, it wouldn't last.

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In particular, the ultra-free-market Chicago School of economics argued that cartels and collusion were almost impossible because it is difficult to coordinate competitors, competitors would be prone to cheat, and new entrants would come in to compete with the cartel. All of these ideas, however, were not based on any evidence and were simply conjured out of thin air by theory. The Chicago School's view on cartels flies in the face of decades of evidence and billions of dollars of fines. According to The Economist, in the past few years, “international conspiracies have been busted in fields as diverse as seat belts, seafood, air freight, computer monitors, lifts and even candle wax.”

Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown
by Philip Mirowski
Published 24 Jun 2013

In an op-ed article in the Financial Times, Rajan defended the upside of financial speculation, blaming the harmful fallout on the Congress and the Fed for distorting market incentives. Elsewhere, the Stanford economist Gregory Rosston was quoted as saying, “I don’t think (recent events are) necessarily a repudiation of the Chicago School of economics as personified by Alan Greenspan, but it definitely shows there is some role for regulation in society.” Actually, all that was revealed was the unabashed ignorance of history on the part of Rosston, since Alan Greenspan was never a member in good standing of the Chicago School, but rather an acolyte of the Ayn Rand cult, who had been awarded a belated PhD by NYU in 1977 after serving as chairman of the Council of Economic Advisors under Gerald Ford, and who subsequently parlayed numerous right-wing political connections into elevation to his position as chairman of the Federal Reserve from 1987 to 2006.

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Nor can one reliably reconstruct it from a small set of “Hayekian encyclicals,” as Jamie Peck so aptly puts it. In fact, if we simply restrict ourselves to Mont Pèlerin itself (and this is unduly narrow), there rapidly precipitated at least three distinguishable sects or subguilds: the Austrian-inflected Hayekian legal theory, the Chicago School of neoclassical economics, and the German Ordoliberals.42 Hayek himself admitted this in the mid-1980s, when he warned of “the constant danger that the Mont Pèlerin Society might split into a Friedmanite and Hayekian wing.”43 An impartial spectator could observe ongoing tensions between them, but also signs that they eventually cross-fertilized each other.

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[is] the remaking and redeployment of the state as the core agency that actively fabricates the subjectivities, social relations and collective representations suited to making the fiction of markets real and consequential.”70 [2] This assertion of a constructivist orientation raises the thorny issue of just what sort of ontological entity the neoliberal market is, or should be. What sort of “market” do neoliberals want to foster and protect? While one wing of the MPS (the Chicago School) has made its career by attempting to reconcile one version of neoclassical economic theory with neoliberal precepts, other subsets of the MPS have innovated entirely different characterizations of the market. The “radical subjectivist” wing of the Austrian School of economics attempted to ground the market in a dynamic process of discovery by entrepreneurs of what consumers did not yet even know that they wanted, due to the fact that the future is radically unknowable.71 Perhaps the dominant version at the MPS (and later, the dominant cultural doctrine) emanated from Hayek himself, wherein the “market” is posited to be an information processor more powerful than any human brain, but essentially patterned upon brain/computation metaphors.72 This version of the market is most intimately predicated upon modern epistemic doctrines, which in the interim have become the philosophical position most closely associated with the neoliberal Weltanschauung.

Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants
by Maurice E. Stucke and Ariel Ezrachi
Published 14 May 2020

The government need not intervene because rational market participants primed to pursue their self-interest will prevent or quickly cure most market failures.27 The Chicago School’s economic theory assures us that the “natural laws of the market are in essence good . . . and necessarily work for the good, whatever may be true of the morality of individuals.”28 Until recently, most economic models of competition assumed that we’re purely selfish creatures—and moreover, that this is fine.29 Companies and consumers exclusively pursue their material self-interest and do “not care about ‘social’ goals per se.”30 As the Chicago School economist George Stigler wrote, when “self-interest and ethical values with wide verbal allegiance are in conflict, much of the time, most of the time in fact, self-interest theory . . . will win.”31 Karl Marx and Friedrich Engels would have agreed that “naked self-interest” would indeed prevail in a capitalist society.32 At the moment, that seems to be what’s happening.

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President Ronald Reagan told the nation in his first inaugural address, “government is not the solution to our problem; government is the problem.” Competition and markets were his answer, and the concept of competition he was espousing was the narrow one espoused by Milton Friedman and his cohorts at the University of Chicago. In touting the power of markets to self-correct, the Chicago School theorists characterized economic competition as relentless zero-sum warfare, where some must lose in order for others to win. The Reagan administration began appointing judges who were indoctrinated with these Chicago School beliefs for important positions on appellate courts—like the US Court of Appeals for the Seventh Circuit and DC Circuit—where they could influence government policy for life.

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They decide many more cases on many more topics than the Supreme Court. These appellate decisions bind not only the parties in the case, but also all the trial courts within their districts. The opinions, which set precedents, also affect the enforcement agencies and other litigants, who rely on these judicial opinions. And so the Chicago School–ed jurists went to work. “Warfare,” wrote Seventh Circuit Judge Frank H. Easterbrook (who got his law degree from the University of Chicago) in one legal opinion, “is competition.”22 Operating on this assumption, competition may involve unfair, even despicable, acts of hatred and greed among competitors.

Free Market Missionaries: The Corporate Manipulation of Community Values
by Sharon Beder
Published 30 Sep 2006

Inequalities of bargaining power, knowledge, and income were brushed aside, and the realities of monopoly, quasi-monopoly, and imperfect competition were treated as either immaterial or nonexistent.15 The Chicago School’s policy prescriptions included maximum freedom of choice for entrepreneurs and producers; minimization of taxation, welfare and government intervention; the removal of tariffs; the privatization of government services; deregulation of labour markets and the denationalization of money. Friedman was credited with being the leader of the Chicago School economists and was taken up and promoted by Hayek-inspired networks: ‘more than anyone else, he was responsible for reviving’ and popularizing free market ideas.16 For many years these free market economic ideas were considered marginal and obsolete in other universities.

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Other influential nations tend to go along with free market policy prescriptions because nations are represented on the IMF by their finance ministers and central banks, and these tend to represent the financial communities and be staffed by people who have had careers, or hope to, with private financial firms and banks. In addition, economists in the bureaucracies of many countries have been trained in neo-classical theory as orthodoxy. Even in the mid-1980s, the Chicago School represented a minority economic opinion in the US. One survey of 200 industrial economists found 68 per cent were opposed to the Reagan government policies that had been promoted by the Chicago School.11 Nevertheless, this doctrine was taught in some of the most elite US universities and the graduates of these, particularly the ‘high-flying graduates 148 FREE MARKET MISSIONARIES from elite US universities such as Stanford, Harvard, and Chicago’, then went on to get government positions and became senior advisers around the world (as in Chile): part of an ‘influential network of strategically placed individuals’.12 Many of the most powerful economic policy-makers in emerging market countries received their training from one of the few top-notch business training grounds for executives in the US.

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Contestability theory, or contestable markets theory, claimed that competition did not have to be real or actual for the market to keep prices down; all that was needed was the potential for competition to ensure that prices and profits did not go too high. So, according to this theory, even a monopoly could be kept in check by the potential of competition.39 Contestability theory, originally formulated by William Baumol and others, was taken up by the Chicago School and then by the Reagan administration. Contestability theory was used to favour deregulation policies for monopolies by a ‘a group of economists, in particular associated with the Bell Lab. of the American Telephone and Telegraph Company, and with the US Civil Aeronautics Board’.40 Contestability was also cited in the UK when British Telecom and British Gas were privatized as monopolies.

Extreme Money: Masters of the Universe and the Cult of Risk
by Satyajit Das
Published 14 Oct 2011

Alan Greenspan (2007) The Age of Turbulence: Adventures in a New World, Allen Lane, London: 124. 30. Fox, The Myth of the Rational Market: 41. 31. MacKenzie, An Engine, Not a Camera: 95. 32. Ibid: 8–12. 33. van Overtveldt, The Chicago School: 67. 34. Dan Gardner (2008) Risk—The Science and Politics of Fear, Virgin Books, London: 53. 35. van Overtveldt, The Chicago School: 291. 36. Quoted in Greenspan, The Age of Turbulence: 55. 37. Quoted in van Overtveldt, The Chicago School: 172. 38. Quoted in Fox, The Myth of the Rational Market: 269. 39. Daniel Altman “Managing Globalization: Q & A with Joseph Stiglitz” (11 October 2006) The International Herald Tribune. 40.

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Philip Mirowski (2002) Machine Dreams: Economics Becomes a Cyborg Science, Cambridge University Press, Cambridge: 203, 204. 10. Johan van Overtveldt (2007) The Chicago School: How the University of Chicago Assembled the Thinkers Who Revolutionised Economics and Business, Agate Books, Chicago: 9. 11. Ibid: 91. 12. Justin Fox (2009) The Myth of the Rational Market: A History of Risk, Reward and Delusion on Wall Street, Harper Business, New York: 252. 13. van Overtveldt, The Chicago School: 85–7. 14. Pierre Bayard (2007) How to Talk About Books You Haven’t Read, Bloomsbury, London. 15. Yergin and Stanislaw, The Commanding Heights: 89.

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Under Niels Bohr, the Nobel-prize-winning Danish physicist, and his German protégé Werner Heisenberg, the “Copenhagen Interpretation” became dominant. Generations of physicists once asked: “What is Copenhagen’s view of this?” Generations of economists now asked: “What is Chicago’s view of this?” As remote from real life as quantum physics, the Chicago School was highly influential for more than 50 years. Dismal Science Thomas Carlyle, the Victorian historian, christened economics the “dismal science.” American satirist P.J. O’Rourke described economics as “an entire scientific discipline of not knowing what you’re talking about.”2 Economics focuses on how production and financial systems work or should work.

The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas
by Janek Wasserman
Published 23 Sep 2019

Eichengreen, Barry, and Peter Temin. “The Gold Standard and the Great Depression.” Contemporary European History 9, no. 2 (2000): 183–207. Ekelund, Robert. Review of Austrian Economics in America by Karen Vaughn. RAE 10, no. 2 (1997): 133–38. Emmett, Ross, ed. Elgar Companion to the Chicago School of Economics. Northampton, UK: Elgar, 2010. ———. Frank Knight and the Chicago School in American Economics. London: Routledge, 2009. ———. “Sharpening Tools in the Workshop.” In Van Horn, Mirowski, and Stapleford, Building, 93–115. Endres, Anthony, and David Harper. “Carl Menger and His Followers in the Austrian Tradition on the Nature of Capital and Its Structure.”

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Rediscovering the Forgotten Vienna Circle. Dordrecht, Germany: Kluwer, 1991. Valdés, Juan Gabriel. Pinochet’s Economists: The Chicago School of Economics in Chile. Cambridge: Cambridge University Press, 1995. van der Linden, Marcel. “Gerschenkron’s Secret: A Research Note.” Critique 40, no. 4 (2012): 553–62. Van Horn, Robert. “Jacob Viner’s Critique of Chicago Neoliberalism.” In Van Horn, Mirowski, and Stapleford, Building Chicago Economics, 279–300. Van Horn, Robert, and Philip Mirowski. “The Rise of the Chicago School of Economics and the Birth of Neoliberalism.” In Mirowski and Plehwe, Road from Mont Pèlerin, 139–79.

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This proposal evolved into the Free Market Study (FMS), a three-year pilot program dedicated to the production of a popular work on free markets and economic freedom. Although Simons died in 1946 and Hayek returned to London, the FMS brought Director and Friedman back to Chicago. The Volker Fund paid Director’s salary at the Law School for five years until he could go up for tenure. One can justifiably say that Hayek laid the foundations for the Chicago School’s postwar success, since Director was the driving force behind Chicago’s economics imperialism.19 The difficulties Hayek faced in securing permanent employment in the United States were nevertheless discouraging. The Volker Fund tried to find a position for Hayek at the Institute for Advanced Studies in Princeton and the Department of Economics at Chicago in 1948, yet both declined, raising concerns about appointments funded by private donors.

Zucked: Waking Up to the Facebook Catastrophe
by Roger McNamee
Published 1 Jan 2019

The rise of Standard Oil and other trusts around the turn of the twentieth century created the impetus for the Sherman Antitrust Act, the Clayton Act, and the Federal Trade Commission Act, which ushered in a long period when both political parties supported efforts to prevent anticompetitive concentration of economic power. A counter philosophy surfaced after the Second World War, which postulated that markets were always best at allocating resources. The “Chicago School” antitrust philosophy emerged as part of this market-driven, neoliberal worldview, arguing that concentration of economic power was not a problem, so long as it did not translate into higher prices for consumers. The Chicago School became official policy with the Reagan administration and has prevailed ever since. Perhaps it is a coincidence, but, as I’ve mentioned, the years since 1981 have seen a massive decline in new company formation (which peaked in 1977), as well as income inequality not seen since the era of Standard Oil.

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Perhaps it is a coincidence, but, as I’ve mentioned, the years since 1981 have seen a massive decline in new company formation (which peaked in 1977), as well as income inequality not seen since the era of Standard Oil. Three internet platforms—Amazon, Google, and Facebook—have benefited enormously from the Chicago School’s antitrust philosophy. The products of Google and Facebook are free to consumers, and Amazon has transformed the economics of distribution while keeping consumer prices low, which has allowed all three to argue successfully for freedom to dominate, as well as to consolidate. The case against Amazon is probably strongest, and it provides a framework for understanding the larger issues.

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Amazon can use its cloud services business to monitor the growth of potential competitors, though there is little evidence that Amazon has acted on this intelligence the way it has leveraged data about bestselling products in its marketplace. Google’s business strategy is a perfect example of how the Chicago School differs from the traditional approach to antitrust. The company began with index search, arguably the most important user activity on the internet. Google had a brilliant insight that it could privatize a large subset of the open internet by offering convenient, easy-to-use, free alternatives to what the web’s open source community had created.

When Work Disappears: The World of the New Urban Poor
by William Julius Wilson
Published 1 Jan 1996

The figures reported in this paragraph for the period 1980 to 1990 are based on tracts with at least 100 black residents. 18 quotation from Jargowsky: Jargowsky (1994), p. 18. 19 quotation from Massey and Denton: Massey and Denton (1993), p. 118. 20 segregation and a group’s overall rate of poverty increase: It should also be pointed out that whereas the growth of concentrated poverty occurred mainly among African-Americans in the large metropolitan areas in the 1970s, in the 1980s “the growth in concentrated poverty was substantially higher among non-Hispanic whites in smaller metropolitan areas like Louisville, Kentucky, and Tulsa, Oklahoma” (Pear [1993]). 21 The Truly Disadvantaged: Wilson (1987). 22 the Chicago School of urban sociology: Representative studies by those identified with the Chicago School include Robert E. Park and Ernest W. Burgess, The City (1925); N. Anderson, The Hobo (1923) and Men on the Move (1940); F. Thrasher, The Gang (1927); L. Wirth, The Ghetto (1928); H. W. Zorbaugh, The Gold Coast and the Slum (1929); R. E. L. Faris and W. Dunham, Mental Disorder in Urban America (1931); E. Franklin Frazier, The Negro Family in Chicago (1932). (These were all published by the University of Chicago Press.) 23 the studies of the Chicago School: I am indebted to O’Connor (1992) for much of the discussion to follow in this section.

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Since the early twentieth century, Chicago has been a laboratory for the scientific investigation of the social, economic, and historical forces that create and perpetuate economically depressed and isolated urban communities. The most distinctive phase of this research, referred to as the Chicago School of urban sociology, was completed before 1950 and was conducted by social scientists at the University of Chicago. Immediately following World War I, the Chicago School produced several classic studies, many of which were conducted under the guidance of Robert E. Park and Ernest W. Burgess over the next three decades. These studies often combined statistical and observational analyses in making distinctive empirical and theoretical contributions to our understanding of urban processes, social problems and urban growth, and, commencing in the late 1930s, the nature of race and class subjugation in urban areas.

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The Chicago social scientists recognized and legitimized the neighborhood—including the ghetto neighborhood—as a subject for scientific analysis. Chicago, a community of neighborhoods, was considered a laboratory from which generalizations about broader urban conditions could be made. The perspectives on urban processes that guided the Chicago School’s approach to the study of race and class have undergone subtle changes through the years. In the 1920s, Park and Burgess argued that the immigrant slums, and the social problems that characterized them, were temporary conditions on the pathway toward inevitable progress. They further maintained that blacks represented the latest group of migrants involved in the “interaction cycle” that “led from conflict to accommodation to assimilation.”

Owning the Sun
by Alexander Zaitchik
Published 7 Jan 2022

For the origins of the drug industry’s longtime working relationship with Chicago economist George Stigler, see Edward Nik-Khah, “Neoliberal Pharmaceutical Science and the Chicago School of Economics” (2014). Neoliberal arguments about drug patents and regulation were trial ballooned during the first decade of The Journal of Law and Economics (1958–1968). A good article on the ideology’s enduring impact on access to medicines is Amy Kapczynski, “The Right to Medicines in an Age of Neoliberalism” (2019). The legacy of the Chicago School’s focus on patents and antirust revisionism is assessed in two volumes of essays: Dieter Plehwe, Quinn Slobodian, and Philip Mirowski, Nine Lives of Neoliberalism (2020), and Robert Pitofsky, How the Chicago School Overshot the Mark: The Effect of Conservative Economic Analysis on U.S.

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When it completed its course in 1951, the “free market” it championed would be transformed and greatly disfigured by the standards of the Austrian School. But by then, those were no longer the standards being used by adherents of what had become known as the Chicago School. The apple-pie version of liberal economic theory contained ingredients not found in the original strudel. The Chicago School developed a tolerance, and then an affection, for cartels, monopolies, and patents. A multidisciplinary laboratory cosponsored by the university’s law school, business school, and economics department had nurtured Hayek’s baby into a new kind of liberalism.

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According to his updated views, anything that emerges from the market is by definition a natural expression of the market and therefore inherently less threatening and coercive than powers granted to government. “Less than five years after the FMS began,” writes Van Horn, Director’s belief that “concentrations of business power were relatively benign . . . became, for the Chicago School, an assertion of fact.” When the Free Market Study expired in 1952, its principal figures were all moving toward accommodating the new Chicago doctrine of benign monopoly. Completing this ideological journey would be the focus of the next Luhnow-funded project at the University of Chicago, called the Antitrust Project.

Radical Uncertainty: Decision-Making for an Unknowable Future
by Mervyn King and John Kay
Published 5 Mar 2020

And it would be at the University of Chicago that the triumph of subjective probability over radical uncertainty would be most enthusiastically celebrated. Many great economists contributed to the creation of the Chicago School, but the figure best known to a wider public was Milton Friedman, Professor of Economics from 1946 to 1977 and one of the most influential economists of the twentieth century. Friedman’s Price Theory – a Provisional Text may be regarded as the primer of the doctrines of the Chicago School. In it he wrote: in his seminal work, Frank Knight drew a sharp distinction between risk, as referring to events subject to a known or knowable probability distribution, and uncertainty, as referring to events for which it was not possible to specify numerical probabilities.

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There could hardly be a sharper contrast of personalities than that between these two, both flag bearers for radical uncertainty and opponents of the application of subjective probabilities. 7 Keynes was a liberal scion of the English upper middle class, who moved effortlessly between the intellectual and agnostic world of Cambridge and the bohemian literary milieu of Bloomsbury; Knight had graduated from a small Christian college in Tennessee before attending the state university, and then completed a PhD at Cornell before taking a teaching post in Iowa. Politically conservative, he moved to the University of Chicago in 1927. Knight is often described as the founder of the Chicago School of Economics, with its resolute focus on individual rational choice and free markets. But there was a contemporary of comparable stature who took a different view. Frank Ramsey, a philosopher and mathematician who also made contributions to economic theory, was a friend and colleague of Keynes at King’s College, Cambridge. 8 His brilliant career was cut short by his death from postoperative complications at the age of twenty-six.

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We may treat people as if they assigned numerical probabilities to every conceivable event. 12 Friedman’s followers distanced themselves – at least in this respect – from Knight’s legacy. They even explained that the revered founder of the school could not have meant what he said. In an article published in 1987 in the Journal of Political Economy , the house journal of the Chicago School, Stephen LeRoy and Larry Singell explained: ‘The received interpretation of Knight’s classic risk-uncertainty distinction – as concerning whether or not agents have subjective probabilities – constitutes a misreading of Knight. On the contrary, Knight shared the modern view that agents can be assumed always to act as if they have subjective probabilities.’ 13 It is impossible to accept this assertion given Knight’s description of uncertainty and entrepreneurship.

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
by Justin Fox
Published 29 May 2009

Libertarians is what we would call them today. Friedman later wrote that the Mont Pelerin meeting was “the beginning of my active involvement with the political process.”6 He had returned to Chicago to teach the year before, as had Director. Stigler made it a decade later. Hayek also moved to Chicago, but never really joined the “Chicago school” of economics he helped spawn. Instead it was Friedman who took the leading role. He built his reputation among his peers with theoretical work, as well as his famous methodology essay. But as the 1950s progressed he increasingly focused on issues of public policy. While working in Paris for a few months in 1950 consulting for the U.S. agency that administered the Marshall Plan, Friedman wrote a memo that recommended ditching the Bretton Woods system of fixed currency exchange rates (devised in part by John Maynard Keynes, who had been almost ruined trading currencies in 1920).

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Friedrich Hayek Austrian economist whose anti-big-government book, Road to Serfdom (1944), inspired Milton Friedman and many other libertarians, and whose 1945 article, “The Use of Knowledge in Society,” helped inspire the efficient market hypothesis. Moved to the University of Chicago in 1950 but never played a big role in the Chicago school. Co-winner of the 1974 economics Nobel. Benjamin Graham Money manager who pioneered careful analysis of stocks and bonds and then, as a part-time professor at Columbia University and coauthor, with David L. Dodd, of the classic text Security Analysis, helped reshape Wall Street after the 1929 crash.

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Hutton, 57 earnings estimates, 280–81 Eastman Kodak, 161 Econometric Society, 36–37 Econometrica (Cowles), 37, 42, 48, 51 Econometrica (journal), 184 “The Economic Role of the Investment Company” (Bogle), 112 Economics (Samuelson), 61, 62–63 “The Economy as an Evolving Complex System” (conference), 302 Edwards, Robert, 68 Edwards, Ward, 177 efficient market hypothesis. See also rational market hypothesis and agency costs, 162 and behavioral finance, 299–300 and the Chicago School, xiii, 101–5 and contrary evidence, 224–25 and corporate finance, 355n. 38 described, 153 and Fama, 97, 206–7 and finance, 202–6 and Friedman, 93 and Graham, 119–20 and information availability, 182 and Jensen, 107 and market anomalies, 304 and market crashes, 228, 232 and Mills, 320 and mutual funds, 125, 130, 131 origin of, 43, 73 and portfolio theory, 54–55, 57 and psychology, 201–2 resistance to, 105–7, 269–70 and risk, 139 and Samuelson, 73 and security analysis, 366n. 29 and Shiller, 196–98 and Shleifer, 247 and stock market bubbles, 315 and takeovers, 166–68 taxonomy of, 101 testing, 190, 194–95 “Efficient Markets: Theory and Evidence” (Fama), 104 Einstein, Albert, 7, 50, 66 Ellis, Charley, 130, 131 Employee Retirement Income Security Act (ERISA), 272, 290 Employee Retirement Security Act, 137–38 endogenous change, 305–6 endowment effect, 294 Engel, Louis, 97–98 Engels, Friedrich, 369n. 1 Engle, Robert, 139 Enron, 267, 283 environmental risk, 185 equilibrium theory and the Arrow-Debreu framework, 77–78 and asset pricing, 87 background of, 9–12 and behavioral finance, 301 and complexity theory, 304–6 and derivatives, 237 and intrinsic values, 193 and Keynesian economics, 35 and mathematics, 49–50 and Pareto’s Law, 349–50n. 2 and Reder, 89–90 and Samuelson, 61 equity risk premium, 141–43, 263–64 Erhard, Werner, 285, 319 Erhard Seminars Training (est), 285 event study method, 102 exchange rates, 92–93, 200, 250 executive compensation, 164–65, 274–79, 279–80, 284–85 expected utility, 51–52, 54, 75, 80, 176–77, 193 experimental economics, 188–90 Fallows, James, 365n. 8 Fama, Eugene, 323 and Alexander, 72 and Asness, 259–60 and behavioral finance, 295–96, 296–97, 298, 299–300 and the Chicago School of Economics, 96 and computing, 99–100 and the efficient market hypothesis, 101, 103–5, 193–94, 204, 206–8 and equity risk premium, 263 and experimental economics, 190 and the Journal of Financial Economics, 201 and Mandelbrot, 70, 134 and market crashes, 232 satirical depiction of, 287–88 and Shleifer, 248, 252 and stock price momentum, 209–10 and value stocks, 225 Fannie Mae, 313 Farmer, J.

Virtual Competition
by Ariel Ezrachi and Maurice E. Stucke
Published 30 Nov 2016

Otherwise, it runs a serious risk of chilling innovation in what are arguably some of the most important industries in our economy.”17 Reflections The Chicago School has not influenced the EU competition policy to the same extent it has influenced U.S. policy. Even in the United States, the Chicago School—before the recent economic crisis—had begun losing its luster. But aside from cases of collusion, the common wisdom that continues to emerge is that the costs and harms of regulatory intervention in online industries will often exceed the benefits. As one FTC commissioner observed, “Where the Chicago School tends to advocate a hands off approach based on an over-riding concern about false positives, one could characterize the post-Chicago scholars as counseling a ‘light touch.’ ”18 Because online markets fueled by pricing algorithms should increase competition by lowering search costs and entry barriers, and increasing information flows and market transparency, market power is transient.

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Unilateral Conduct Working Group, Report on the Objectives of Unilateral Conduct Laws, Assessment of Dominance/Substantial Market Power, and State-Created Monopolies (Moscow: International Competition Network, May 2007), http://www.internationalcompetitionnetwork.org/uploads /library/doc353.pdf. 8. See, for example, Robert H. Bork, The Antitrust Paradox: A Policy at War with Itself (New York: Basic Books, 1978); Richard A. Posner, “The Chicago School of Antitrust Analysis,” University of Pennsylvania Law Review 127 (1978): 925, 933. 9. Posner, “The Chicago School of Antitrust Analysis.” 10. Justin Fox, The Myth of the Rational Market (New York: Harper Business/ HarperCollins, 2009), 89–107. 11. As President Reagan told the nation, “government is not the solution to our problem; government is the problem”; Ronald Reagan, First Inaugural Address (January 20, 1981), http://www.reaganlibrary.com/reagan/speeches /first.asp. 12.

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Government intervention should be limited to clear and sustained instances of market failure, of which “only explicit price fixing and very large horizontal mergers (mergers to monopoly) [are] worthy of serious concern.”9 For some, even then, the government must proceed with caution. The spontaneous free market forces will eventually defeat, through expansion or de novo entry, this temporary market power. Under the Chicago School theory, the government will often cause more harm than good. In attempting to preempt the exercise of market power, the government may chill procompetitive behav ior. The concern is that, unlike market-created impediments, market forces may not readily overcome these government-imposed impediments to competition.

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present
by Jeff Madrick
Published 11 Jun 2012

Talese, 2009). 4 “MONEY WAS ALWAYS A CONCERN”: Friedman gives an account in the book he co-authored with his wife, Rose, Two Lucky People: Memoirs (Chicago: University of Chicago Press, 1998), pp. 20–32. 5 YET THE FAMILY WAS ABLE TO BUY: Author interview with Milton Friedman, November 2003. 6 “FANATICALLY RELIGIOUS”: Ibid. 7 IF HIS FATHER HAD ANY POLITICAL INFLUENCE: Ibid. 8 “SAVE FOR MY PARENTS”: Friedman and Friedman, Two Lucky People, p. 30 9 FRIEDMAN THOUGHT MARSHALL’S MODEL: Friedman’s early devotion to Marshall is evident in an essay, “Marshall’s Demand Curve,” in his book Essays in Positive Economics (Chicago: University of Chicago Press, 1953). 10 “LIKE HIS MENTOR”: Friedman and Friedman, Two Lucky People, p. 32. 11 JONES WAS THE REASON: Ibid., p. 33. 12 IT EMPHASIZED, AS SIMONS PUT IT: Henry Simons private papers, cited by Rob Van Horn and Philip Mirowski, “The Rise of the Chicago School of Economics and the Birth of Neoliberalism,” in The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective, ed. Philip Mirowski and Dieter Plehwe (Cambridge, Mass.: Harvard University Press, 2009), p. 145. 13 THIS APPROACH IN A TIME: H. L. Miller, “On the Chicago School of Economics,” Journal of Political Economy 70 (February 1962): 64–69. 14 “MY TEACHERS REGARDED THE DEPRESSION”: Milton Friedman, “Comments on the Critics,” Journal of Political Economy (September-October 1972): 906–50. 15 “SIMONS FOR EXAMPLE DID NOT EQUATE”: Miller “On the Chicago School of Economics,” p. 70. 16 “ONCE A DEFLATION HAS GOTTEN UNDER WAY”: Henry Simons, Personal Income and Taxation: The Definition of Income as a Problem of Fiscal Policy (Chicago: University of Chicago Press, 1938), p. 222, cited by Esteban Pérez Caldentey and Matías Vernengo, “Fiscal Policy for the Global Economic Crisis,” Challenge, May-June 2001. 17 HE WAS, IN FACT, A MILD PROPONENT: Author interview with Milton Friedman, November 2003; Lanny Ebenstein, Milton Friedman: A Biography (London: Macmillan Palgrave, 2007). 18 FEW INVITATIONS CAME HIS WAY: Friedman did get an offer from the University of Wisconsin, but became embroiled in what he said was an anti-Semitic battle between the economics department and the business school, and he had to leave.

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(New York: Foundation for Economic Education, 1946). 20 ONE CONSERVATIVE STAFFER: Van Horn and Mirowski, “The Rise of the Chicago School of Economics and the Birth of Neoliberalism,” p. 173n58. 21 THERE, PARTLY UNDER THE INFLUENCE: Obituary on his death, 2004, University of Chicago Press Office, http://eh.net/pipermail/hes/2004-September/002496.html. 22 THE FUND ALSO HELPED FINANCE: In the Foreword to Capitalism and Freedom, Friedman acknowledges the Volker Fund’s financing of his book, which many considered the American version of The Road to Serfdom, despite obvious differences. 23 HAYEK WROTE THE PROPOSAL: From Theodore Schultz (a Chicago economist) papers, cited by Van Horn and Mirowski, “The Rise of the Chicago School of Economics and the Birth of Neoliberalism,” p. 152. 24 HE HAD WRITTEN IN 1948: Ibid. See also J. Bradford DeLong, “In Defense of Henry Simons’ Standing as a Classical Liberal,” Cato Journal 9, no. 1 (1990): 601–18. 25 BUT THE MEN WHO RAN: Van Horn and Mirowski, “The Rise of the Chicago School of Economics and the Birth of Neoliberalism,” p. 152. 26 COMPETITION WOULD OFTEN NATURALLY UNDERMINE MONOPOLY: Rob Van Horn, “Reinventing Monopoly and the Role of Corporations: The Roots of Chicago Law and Economics,” in Mirowksi and Plehwe, eds.

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According to Friedman, the Chicago economists also believed that the Depression was the consequence of mistaken government policies, not the financial speculation of the 1920s or any other inherent weakness of free markets. “My teachers regarded the depression as largely the product of misguided policy,” Friedman wrote. “They blamed the monetary and fiscal authorities for permitting banks to fail and the quantity of deposits to decline.” But what became known as the Chicago School was originally not, contrary to conventional wisdom, as pure a free market institution as it became when Friedman was its leading member in the 1950s. “Simons for example did not equate the ideal market with the actual market in this country,” wrote one economist. The older guard also believed that short-term government spending could be necessary in some circumstances to support a falling economy and that monetary policy itself was inadequate at times—ideas that were anathema to Friedman.

The Vanishing Neighbor: The Transformation of American Community
by Marc J. Dunkelman
Published 3 Aug 2014

And the fourth, which had only begun when Mumford was writing his essay, was the exodus of well-to-do city dwellers from the urban core—an evolution propelled by the pull of the single-family homes being constructed on city outskirts around the country. Mumford’s contemporaries in the world of sociology—or, at least, those who came to be known as members of the Chicago School—were largely preoccupied with the effects of that third migration, from town to city. Believing that distinct social environments shaped disparate social outcomes, they worried that the depravity of urban life might breed generations of social misfits.11 They feared that absent the warmth and comity of small-town America, the children of urban factory workers would mature without the decency required to sustain a modern, civilized society.

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The American Dream might eventually be extinguished amid the crime-ridden and poverty-stricken streets of America’s overcrowded cities. By the end of the 1900s, with cities awash in the affluent crowd Richard Florida termed the “creative class” seeming safer and more prosperous, a look back might have concluded that the Chicago School’s concerns were absurd.12 But a snapshot of life back then reveals the roots of their worry. America’s big turn-of-the-century metropolises were nasty places. The nation’s new mills and factories polluted the surrounding areas. Crime was rampant—at least by the imagined standards of idyllic small-town life.13 The political issues of the day were largely understood through that prism: the push for prohibition, for example, was at heart an effort by the nation’s more staid rural population to impose a sense of decorum on raucous and unhinged masses.14 As New York University historian Thomas Bender noted in an important book published decades later, a subtler change was also at work: the growing separation between home and neighborhood.

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As reported at the time, even as Genovese screamed for help in an alley, none of the thirty-eight people within earshot took the trouble to call the police.18 The horror of the attack, and the blithe decision of those nearby to turn away rather than help, suggested that inhabitants of America’s cities had been stripped of the innately human instinct to be their brother’s keeper. Genovese’s story, however apocryphal, reinforced what sociologists associated with the Chicago School had argued decades earlier: urban America was a place where few people knew your name.19 The Industrial Revolution, the sociologists concluded, hadn’t simply changed the sorts of professions driving the economy—it had disrupted the very fabric of American community. Americans had moved to cities, taken jobs on assembly lines, and begun to raise their children in the hustle and bustle of city life.

No Shortcuts: Organizing for Power in the New Gilded Age
by Jane F. McAlevey
Published 14 Apr 2016

Chicago’s students and teachers became the guinea pigs for a relentless barrage of efforts to “reform” both education and unions—few of which changed actual outcomes in student achievement or teachers’ morale.12 In 1988, on the heels of the 1987 strike, the first of a series of legislative changes was approved: the Chicago School Reform Law. The law was sold as a pro-community decentralization effort, and in many respects it was. It resulted in several key changes to longstanding policy: Local school councils (LSCs), consisting of one principal, six parents, two teachers, and two community members, were created and empowered to hire school principals and make budgetary decisions; principals no longer received tenure; and principals were empowered to hire and fire teachers.

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Additionally, the grassroots reform groups who had been proponents of the 1988 Chicago School Reform Act concluded that the law hadn’t led to greater parental involvement, one of their goals. Finally, a fiscal crisis—which some in the union allege was completely manufactured—prompted a new effort in the state legislature to “fix” Chicago’s schools—one more sweeping and more explicitly aimed at weakening the union. In 1995, the Amendatory Act, aimed at amending the Chicago School Reform Act, had its bull’s-eye the teachers and their union.17 In the name of the alleged fiscal crisis, and with Illinois having trifecta Republican control—the governor and both legislative chambers belonged to the same conservative party—permitted privatization within the Chicago public school system for the first time, encouraging the private subcontracting of many functions, including the cafeterias, janitorial services, and more.

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The difference between the slate she ran in her failed bid in 1998 from her slate in 2001 was Howard Heath, a black teacher she picked as her number two. The addition of Heath, along with the mounting chaos being created by Vallas, all but assured PACT’s election success. One month later, Mayor Daley would nominate Arne Duncan, Vallas’s chief of staff, as the new CEO of the Chicago school system. Duncan was a Harvard grad who had been playing professional basketball in Australia for four years. His experience in the field of education was minimal: He’d once been the director of a small nonprofit that worked on educational achievement issues.21 Duncan’s strategy with the union was to foster collaboration with Lynch, its new leader—courting her, calling her often, and immediately bringing her into his fold.

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
by Steven D. Levitt and Stephen J. Dubner
Published 11 Apr 2005

Just as the scientist might randomly assign one mouse to a treatment group and another to a control group, the Chicago school board effectively did the same. Imagine two students, statistically identical, each of whom wants to attend a new, better school. Thanks to how the ball bounces in the hopper, one student goes to the new school and the other stays behind. Now imagine multiplying those students by the thousands. The result is a natural experiment on a grand scale. This was hardly the goal in the mind of the Chicago school officials who conceived the lottery. But when viewed in this way, the lottery offers a wonderful means of measuring just how much school choice—or, really, a better school—truly matters.

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As Malloy saw it, all his troubles stemmed from the one fight in which he took a dive. Otherwise, he could have had class; he could have been a contender. If cheating to lose is sport’s premier sin, and if sumo wrestling is the premier sport of a great nation, cheating to lose couldn’t possibly exist in sumo. Could it? Once again, the data can tell the story. As with the Chicago school tests, the data set under consideration here is surpassingly large: the results from nearly every official match among the top rank of Japanese sumo wrestlers between January 1989 and January 2000, a total of 32,000 bouts fought by 281 different wrestlers. The incentive scheme that rules sumo is intricate and extraordinarily powerful.

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“For instance, students in cheating classrooms are likely to experience unusually large test-score gains in the year of the cheating, followed by unusually small gains or even declines in the following year when the boost attributable to cheating disappears.” Levitt used test-score data from the Chicago schools that had long been available to other researchers. There were a number of ways, he realized, that a teacher could cheat. If she were particularly brazen (and stupid), she might give students the correct answers. Or, after the test, she might actually erase students’ wrong answers and fill in correct ones.

Don't Be Evil: How Big Tech Betrayed Its Founding Principles--And All of US
by Rana Foroohar
Published 5 Nov 2019

It’s what we’ve been taught to think of as normal, thanks to the ideological triumph of the Chicago School of economic thought, which has, for the past five decades or so, preached—among other things—that the only purpose of corporations should be to maximize profits. The notion of “shareholder value” is shorthand for this idea.12 The maximization of shareholder value is part of the larger process of “financialization,” which I covered in my previous book, Makers and Takers.13 It’s a process that has risen, in tandem with the Chicago School of thinking, since the 1980s, and has created a situation in which markets have become not a conduit for supporting the real economy, as Adam Smith would have said they should be, but rather, the tail that wags the dog.

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“While the rank and file in Silicon Valley is liberal, the top people at the top firms tend to believe that greed is good.” How could they not? Ever since the 1980s, most of American business has been subscribing to the trickle-down “markets know best” doctrine popularized by the so-called Chicago School of economics. The Internet platforms in particular have benefited enormously from the Chicago School’s antitrust philosophy, which maintains that as long as products are cheap or free, there’s no monopoly issue. As McNamee outlines in his own book, Zucked, “Google leveraged its dominant market position in search to build giant businesses in email, photos, maps, videos, productivity applications, and a variety of other apps.

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“I think that’s an important test and a good guidepost for a lot of us as we look to the type of practices that are happening with a Google or with anyone else.” A Price on Data? The big question now is how policy should shift, and on what basis new antitrust and monopoly cases should be argued. There are some who believe the Chicago School’s consumer pricing philosophy could actually be used to curb the power of the tech titans. “As data becomes more and more important, you get more efficient products for consumers, but you also get certain barriers [to competition],” says Delrahim. “There should be competition to create and collect data,” he says, hinting at the notion that choice—and not just price—should be part of the consumer welfare metric.33 SEC commissioner Robert Jackson has said he believes that companies should have to report the value of their data on their filings, just as they would any other material holding.

What Would the Great Economists Do?: How Twelve Brilliant Minds Would Solve Today's Biggest Problems
by Linda Yueh
Published 4 Jun 2018

In the face of Hella’s objections, it was granted in 1950 via a court in Arkansas, where he was a visiting lecturer at the time and where the divorce laws were permissive. Helene was recently widowed, and a few weeks later the couple were married in Vienna. Hayek resigned from the LSE and the newlyweds moved stateside to start a new life in Chicago. The Chicago School of economics was a school of thought based on free-market economics and a libertarian philosophy. It was not quite the same thing as the actual economics faculty within the university. Although the Chicago School was happy to identify with Hayek, given how well he fitted with their approach, he was not coveted by the Economics Department itself. The Road to Serfdom was recognized as an important book, but still mainly treated as a popular rather than a scholarly text.

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Throughout his long life Friedman remained an advocate of the free market and even initially considered the establishment of America’s central bank, the Federal Reserve, to have been a mistake. Although he later accepted that the Fed was necessary to control the money supply, he insisted it should be confined to that role, and not be an activist institution. Unsurprisingly, he disagreed with the Keynesian view that fiscal policies have a lasting impact on the economy. Part of the Chicago School of economics, in 1963 Friedman co-wrote with Anna Jacobson Schwartz one of the most influential books on monetary policy: A Monetary History of the United States, 1867–1960. They revisited the causes of the Great Depression to understand what happened and why it took so long to recover from the 1929 stock market crash.

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This was one of the criticisms of Keynes. It’s why governments have been reluctant to borrow to invest. They fear bond investors will ask for higher returns to lend them money, increasing the borrowing costs for a country that could jeopardize its economic growth. The verdict is far from settled. The Chicago School of monetarists say that Keynes’s counter-cyclical policies are bound to fail since their effects will be anticipated, either immediately or after a short lag. Harvard economist Robert Barro argues that future tax rises to pay for government deficit spending are figured into long-term interest rates by investors and savers.

The Great Economists: How Their Ideas Can Help Us Today
by Linda Yueh
Published 15 Mar 2018

In the face of Hella’s objections, it was granted in 1950 via a court in Arkansas, where he was a visiting lecturer at the time and where the divorce laws were permissive. Helene was recently widowed, and a few weeks later the couple were married in Vienna. Hayek resigned from the LSE and the newlyweds moved stateside to start a new life in Chicago. The Chicago School of economics was a school of thought based on free-market economics and a libertarian philosophy. It was not quite the same thing as the actual economics faculty within the university. Although the Chicago School was happy to identify with Hayek, given how well he fitted with their approach, he was not coveted by the Economics Department itself. The Road to Serfdom was recognized as an important book, but still mainly treated as a popular rather than a scholarly text.

…

Throughout his long life Friedman remained an advocate of the free market and even initially considered the establishment of America’s central bank, the Federal Reserve, to have been a mistake. Although he later accepted that the Fed was necessary to control the money supply, he insisted it should be confined to that role, and not be an activist institution. Unsurprisingly, he disagreed with the Keynesian view that fiscal policies have a lasting impact on the economy. Part of the Chicago School of economics, in 1963 Friedman co-wrote with Anna Jacobson Schwartz one of the most influential books on monetary policy: A Monetary History of the United States, 1867–1960. They revisited the causes of the Great Depression to understand what happened and why it took so long to recover from the 1929 stock market crash.

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This was one of the criticisms of Keynes. It’s why governments have been reluctant to borrow to invest. They fear bond investors will ask for higher returns to lend them money, increasing the borrowing costs for a country that could jeopardize its economic growth. The verdict is far from settled. The Chicago School of monetarists say that Keynes’s counter-cyclical policies are bound to fail since their effects will be anticipated, either immediately or after a short lag. Harvard economist Robert Barro argues that future tax rises to pay for government deficit spending are figured into long-term interest rates by investors and savers.

Heat Wave: A Social Autopsy of Disaster in Chicago
by Eric Klinenberg
Published 11 Jul 2002

The location of the heat wave makes the event an especially rich empirical resource for assessing the methodological and theoretical tools of urban sociology, and particularly the legacy established by the Chicago school of urban research. For Chicago, with its famously divided segments, its infamous segregation, and its stark inequality, is not only the quintessential American city of extremes. It is also the city in and through which scholars founded and developed the American approach to urban studies, creating an agenda for investigation in the urban environment that shaped much of twentieth-century urban social science. Although in recent decades scholars associated with the new urban sociology have levied compelling criticisms of the Chicago school’s “urban ideology”—most notably its failure to call attention to the political and economic production of inequality and domination in the city—the Chicago techniques for exploring the social fabric of the city offer rich possibilities for discovery.

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Although in recent decades scholars associated with the new urban sociology have levied compelling criticisms of the Chicago school’s “urban ideology”—most notably its failure to call attention to the political and economic production of inequality and domination in the city—the Chicago techniques for exploring the social fabric of the city offer rich possibilities for discovery. The marks of both the first and second waves of the Chicago school are evident throughout this analysis of the heat wave: the case study; the emphasis on physical and social space; the focus on community and public life; the investigation of ethnoracial differentiation; and the assessment of the city as a total social system—all at the heart of the Chicago school problematic—are central to this project. Ironically, though, this analysis of the solitary deaths in the living laboratory of Chicago breaks from the school’s traditional approach to the issue of social isolation in the city, one of the key concerns of the American sociology.

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There has never been much evidence that urban regions are isolated as separate social worlds in the ways that the early Chicago sociologists described, and in retrospect, it appears that their method of focusing attention on one community or neighborhood oriented urban theory toward problems of segmentation rather than sources of contact and connection. But the heat wave helped to show that under contemporary conditions certain urban residents suffer from forms of literal isolation, the consequences of which can be dire. Assessing the social processes and spatial patterns that foster such isolation requires exchanging the Chicago school’s biotic vocabulary for describing urban social processes with concepts and categories that recognize the significance of socially engineered inequality and difference. Moreover, it demands a method of investigation capable of comprehending the city as a complex system, where nature, culture, and politics conspire to determine the fate of its inhabitants.

Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes
by Mark Skousen
Published 22 Dec 2006

Both Friedman and George Stigler were graduate students at the time. Director's laissez-faire philosophy failed to take in the youthful reformist Samuelson, who enjoyed being an intellectual heretic in a conservative institution and who was influenced by a father known as a "moderate socialist." Moreover, during the depression, most of the leaders of the Chicago school advocated deficit spending and other government activist policies as temporary measures. Samuelson did inherit one concept from Chicago that he carried with him until he encountered Keynes—monetarism. He called himself a "jackass" for having been taken in (Samuelson 1968, 1). Alvin Hansen Switches Sides to Become the "American Keynes" After Chicago, Samuelson immediately went to Harvard, where he witnessed an amazing transition.

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The spirit of Keynes, and even Marx, dominated the political and intellectual atmosphere. Milton Friedman Leads a Monetary Counterrevolution However, by the early 1960s, a counterrevolution had begun that went a long way toward restoring the virtues of free markets and classical economics. The primary force behind this revolt against Keynesianism was the Chicago school of economics, led by Milton Friedman (1912-2006). His fierce, combative style and ideological roots were ideally suited for the task of taking on the Keynesians. Moreover, he had impeccable credentials in technical economics to command respect from the profession. Friedman earned his Ph.D. in economics from Columbia University; he won the highly prestigious John Bates Clark Medal two years after Paul Samuelson won it; and he taught economics at one of the premier institutions in the country, the University of Chicago.

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He declares that market imperfections and market failures are so pervasive and so serious that the market is always inefficient and requires government correction. Imperfect information exists in labor, products, money, trade, and capital markets.1 Serious unemployment 1. Neo-Keynesians have contributed extensively to the new field of "behavioral economics," which questions the efficiency/rational expectations model of the Chicago school, and proposes ways to counter the tendency of individuals to make financial mistakes, such as undersaving, over-consuming, and undeipeiforming the stock market averages. See, for example, Richard Thaler (2004) andRobert Shiller (2005). However, not all behavioral economists are Keynesian. See Jeremy Siegel (2005).

Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor
by John Kay
Published 24 May 2004

Real business-cycle theory takes the assumptions of rationality in business decisions to the same extremes as Becker's description of family life. 14 The Chicago School also recognizes the merits of the market system as a pluralist process of experiment and discovery. Some of the most compelling formulations of the arguments of chapters 9 and 10 have been presented by Chicago economists such as F. H. Knight and more recently by Almar Alchian. 15 But the much stronger claim of the Chicago School is that competitive markets have efficiency properties unattainable under any other form of economic organization. Indeed this is now the belief of many mainstream economists.

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Hayek, von Mises, and some other Central European economists of the early to mid twentieth century are sometimes described as "the Austrian school." 6 Hayek was actually an isolated figure, and the Nazi destruction of the intellectual life of Central Europe prevented the development of any continuing tradition. More recently, the conservative baton has transferred to Chicago. The Chicago School ••••••••••••••••••••••••••••••••••••• Almost from its foundation by John D. Rockefeller, the University of Chicago was a center of conservative economic thought? Gary Beckern encapsulates that philosophy: "The combined assumptions of maximizing behavior, market equilibrium, and stable preferences, used relentlessly and unflinchingly, form the heart of the economic approach." 8 As well as Becker and Friedman, Chicago figures such as George Stiglern and Richard Posner have played an active part in policy debates.

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In 2001, Stiglitz, along with George Akerlof and Michael Spence, was awarded the Nobel Prize for work on markets and imperfect information. That award was a formal recognition ofhow far modern economics had moved from the simplified theoretical framework of Arrow-Debreu and the simplified policy prescriptions of the Chicago School. Stiglitz became an increasingly public and controversial figure. I return to this controversy in chapter 28. In the remaining chapters of this part of the book, I review successively various assumptions explicit or implicit in the ArrowDebreu framework: What happens if individuals are not self-regarding utility maximizers?

Keynes Hayek: The Clash That Defined Modern Economics
by Nicholas Wapshott
Published 10 Oct 2011

The Pèlerinos who ascended the funicular railway to the Hôtel du Parc, a resort more used to hikers than intellectuals, were a disparate group brought together by a shared sense of righteous isolation and noble persecution. As the historian George H. Nash17 put it, “The participants, high in the Swiss Alps, were only too conscious that they were outnumbered and without apparent influence on policymakers in the Western world.”18 Among those present were Mises; Robbins; Frank Knight; George Stigler,19 the Chicago School economist; Fritz Machlup, the Austrian School economist who fled to America in 1933; John Jewkes,20 the British antiplanning economist; Karl Popper,21 the LSE scientific philosopher; Henry Hazlitt, whose laudatory review of The Road to Serfdom in the The New York Times helped ensure the book’s success in America; William Rappard, head of the École des Hautes Études in Geneva; Wilhelm Röpke, of Geneva, who was to reform the German currency; and Veronica Wedgwood,22 the Oxford-educated English Civil War historian who wrote pieces for Time and Tide.

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Friedman’s championing of Hayek’s libertarian approach to the economy and politics ignored the Austrian “stages of production” notions in favor of government regulation of the supply of money, a process that the Austrians thought anathema. And while Hayek believed that the free market held a monopoly of virtue, Chicago scholars such as Frank Knight believed it could be equally as inefficient as government intervention. However, the fact that both the Austrian and the Chicago School believe that prices hold the key to understanding the economy, and that the free market is preferable to intervention, has meant that the competing traditions are commonly deemed to be synonymous. Friedman’s breakthrough in economics, determining the link between unnecessary constrictions in the money supply and recessions that follow, showed how profoundly Chicago’s economists could differ.

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Unlike Hayek and Mises, who thought economic activity too complex to quantify and that averages were misleading indicators of how individuals set prices, Friedman’s research took as a given the Keynesian notion of observing the economy as a whole and using averages to determine the cause and effect of economic changes. While careful never to criticize Hayek’s Austrian School notions too harshly, Friedman remained unconvinced of their merit. Hayek’s venture into doomsday prognostication in The Road to Serfdom was also cited as evidence that he lacked the intellectual rigor expected at the Chicago School. According to John Nef, chairman of Chicago’s Committee on Social Thought, some Chicago economists believed The Road to Serfdom “too popular a work for a respectable scholar to perpetrate. It was all right to have him at Chicago so long as he was not associated with the economists.”42 In the fall of 1950, at the suggestion of Nef, Hayek became professor of social and moral science in the Committee on Social Thought, a chair funded in part by the Volcker fund.

How Markets Fail: The Logic of Economic Calamities
by John Cassidy
Published 10 Nov 2009

But to claim that free markets always generate good outcomes is to fall victim to one of three illusions I identify: the illusion of harmony. In Part I, I trace the story of what I call utopian economics, taking it from Adam Smith to Alan Greenspan. Rather than confining myself to expounding the arguments of Friedrich Hayek, Milton Friedman, and their fellow members of the “Chicago School,” I have also included an account of the formal theory of the free market, which economists refer to as general equilibrium theory. Friedman’s brand of utopian economics is much better known, but it is the mathematical exposition, associated with names like Léon Walras, Vilfredo Pareto, and Kenneth Arrow, that explains the respect, nay, awe with which many professional economists view the free market.

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The two most important of these evangelists were Friedrich Hayek, a well-bred Austrian who was born in Vienna in 1899, and Milton Friedman, a voluble New Yorker who was born in Brooklyn in 1912. In the late 1940s, both Hayek and Friedman moved to the University of Chicago, where they helped to create the “Chicago School” of economics. Friedman, who died in 2006, remains a household name, but even among economists, Hayek, who died in 1992, is a much less well-known figure. When I began studying economics at Oxford during the early eighties, Hayek was widely seen as a right-wing nut. True, he had received the Nobel Memorial Prize in 1974, but that was viewed within the economics profession as a political sop, with Hayek’s name added to balance that of his co-winner, Gunnar Myrdal, a left-wing Swedish economist.

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Since time doesn’t run backward, the future is unknown and businesses, investors, and consumers are compelled to make decisions on the basis of best guesses about what might happen. Sometimes these guesses turn out to be fairly accurate. Often, they don’t, and when this happens resources tend to get misallocated. (In adopting the rational expectations hypothesis, the members of the Chicago School sidestepped this problem.) Having raised the issues of uncertainty and information, which pose fundamental problems for any economic theory, Bator turned to areas that are more amenable to traditional analysis. Even in a world of perfect foresight, he argued, there would be at least three other sources of market failure.

The Economists' Hour: How the False Prophets of Free Markets Fractured Our Society
by Binyamin Appelbaum
Published 4 Sep 2019

And as consumption replaced work as the quintessence of American identity, one consequence was a growing intolerance for public policies that aimed to preserve the welfare of producers. Judges wanted to believe Bork, too. They were struggling to deal with increasingly complex antitrust cases, and the “Chicago School” approach of Director and his disciples offered a clear and consistent standard, even for more liberal jurists. Stephen Breyer, the future Supreme Court justice, wrote in 1983, while serving on the First Circuit Court of Appeals, that economics “offers objectivity — terra firma — upon which we can base decisions.”61 The year after Bork’s book was published, the Carter administration intervened in an antitrust lawsuit against a hearing aid maker, Sonotone, to assert that the legality of corporate conduct should be based on consumer welfare.

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His subject was the “progressive ossification” of the British economy, which he attributed to “an almost unanimous abandonment of price competition.”43 During his graduate years, he also worked for a series of government agencies, laying the groundwork for his long career at the intersection of academia and public policy. He briefly served in the army and then landed at Cornell, where he remained for more than six decades, singing in student productions of light operas as often as he was invited onstage. As a scholar of regulation, Kahn stood in the mainstream, rejecting the ideas being raised by the Chicago School. He subscribed to the conventional view that large companies were bad for the economy. In a 1940 paper, he warned that industrial giants like General Electric were taking advantage of patent laws to prevent the rise of potential competitors. The “great research laboratories are only incidentally technological centers,” he wrote.

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Stigler was hired by W. Allen Wallis, who had been a friend of both Stigler and Friedman in graduate school, as well as their boss at Columbia during the war, and was then serving as dean of the Chicago business school. 30. Edward Nik-Khah, “George Stigler, the Graduate School of Business and the Pillars of the Chicago School,” in Building Chicago Economics: New Perspectives on the History of America’s Most Powerful Economics Program, ed. Robert Van Horn et al. (Cambridge, Eng.: Cambridge University Press, 2011), 121. 31. In this view, he had good company, including the Nobel Prize committee, which cited the paper prominently in making Stigler a laureate in 1982. 32.

Strategy: A History
by Lawrence Freedman
Published 31 Oct 2013

Mary Jo Deegan, Jane Addams and the Men of the Chicago School (New Brunswick: Transaction Books, 1988). 40. Don Martindale, “American Sociology Before World War II,” Annual Review of Sociology 2 (1976): 121; Anthony J. Cortese, “The Rise, Hegemony, and Decline of the Chicago School of Sociology, 1892–1945,” The Social Science Journal, July 1995, 235; Fred H. Matthews, Quest for an American Sociology: Robert E. Park and the Chicago School (Montreal: McGill Queens University Press, 1977), 10; Martin Bulmer, The Chicago School of Sociology. 41. Small, cited by Lawrence J. Engel, “Saul D. Alinsky and the Chicago School,” The Journal of Speculative Philosophy 16, no. 1 (2002): 50–66.

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Francesca Polletta, “Freedom Is an Endless Meeting”: Democracy in American Social Movements (Chicago: University of Chicago Press, 2002). 29. Lawrence J. Engel, “Saul D. Alinsky and the Chicago School,” The Journal of Speculative Philosophy 16, no. 1 (2002). 30. Robert Park, “The City: Suggestions for the Investigation of Human Behavior in the City Environment,” The American Journal of Sociology 20, no. 5 (March 1915): 577–612. 31. Engel, “Saul D. Alinsky and the Chicago School,” 54–57. One of Burgess’s courses taken by Alinsky was on the “pathological conditions and processes in modern society,” which included “alcoholism, prostitution, poverty, vagrancy, juvenile and adult delinquency.”

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Orthodox economics had faced a crisis during the great depression of the 1930s. This led to greater empirical rigor backed by improved statistical analysis. Many key figures had learned the analytical techniques in wartime operational research. Even where there were important differences in emphasis and approach, as for example between the Chicago School and the Cowles Commission (which had been set up in 1932 to improve the collection and statistical analysis of economic data), they had much in common. Notably, they were rooted in the neoclassical tradition, going back to Walras and Pareto, and assumed that the safest assumption was of individual rationality.

Cities Are Good for You: The Genius of the Metropolis
by Leo Hollis
Published 31 Mar 2013

The forgotten father of sociology, he is now remembered for his philosophy of money; however at the time it was his 1903 essay, ‘The Metropolis and Mental Life’, which highlighted the ills of urbanity, identifying the struggle between the individual’s need to be free and the demands of the ‘socio-technical mechanism’ of the city. Simmel’s work soon made its way across the Atlantic and in the 1920s was adopted as a bible by the Chicago School of Sociology. The group, which included Nels Anderson, Robert E. Park and Ernest Burgess, gained fame for their ‘ecological’ approach to studying urban life: that the city was a place of differences, and the environment was a key factor in determining human behaviour. In particular, they were fascinated by the relationship between cities and their anti-social or marginal communities, and how this could endanger or stimulate a community.

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As Park, who had studied with Simmel in Berlin and later translated his work, wrote: ‘The city magnifies, spreads out and advertises human nature in all its various manifestations. It is this that makes the city interesting, even fascinating. It is this, however, that makes it of all places the one in which to discover the secrets of the human heart, and to study human nature and society.’9 The Chicago School saw the city was a problem, a place that forced people into new behaviours. Park himself was interested in the process of immigrant assimilation into cities, and the resultant racism that met new arrivals. Similarly, Nels Anderson wrote about the hobo, highlighting the problem of homelessness; Ruth Shonle Cavan in 1929 wrote a book about young women coming to Chicago to work and the opportunities and problems that they faced.

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Similarly, Nels Anderson wrote about the hobo, highlighting the problem of homelessness; Ruth Shonle Cavan in 1929 wrote a book about young women coming to Chicago to work and the opportunities and problems that they faced. Meanwhile the black researcher Edward Franklin Frazier contextualised the issues of life within an African-American family in The Negro Family in Chicago. The Chicago School not only gained attention because of the subject matter of their work but also as a result of their method: promoting close and systematic observation rather than philosophical speculation on the formation of human nature or what people want. This scientific study of where cities went wrong went hand in hand with a reformist agenda: exploring not just how the city did not work, but also how it could be fixed.

The Finance Curse: How Global Finance Is Making Us All Poorer
by Nicholas Shaxson
Published 10 Oct 2018

The argument when it started was simply about high rents, but by the end it had developed into something bigger: a grand and influential new theory about how states and nations ‘compete’ with each other. The two colleagues got on well enough as friends, but Tiebout was irritated that Burstein had become one of the fast-growing band of what he called Friedmaniacs, a group that blindly followed Milton Friedman, the Chicago School economist who was then on his way to becoming America’s financial godfather of the right. Tiebout was ‘one of the funniest guys I have ever known’, said Lee Hansen, one of his only surviving close friends. Tiebout would imitate academic bigwigs in his classes, give them silly nicknames and turn up to meetings in dungarees despite the university’s suit and tie convention.

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Tiebout was referring to Revealed Preference Theory, which the US economist Paul Samuelson had created in 1938. The basic idea was that while you can’t insert psychological probes directly into people’s minds to figure out their consumer preferences, you can have the next best thing: if you study their buying habits you can reveal their preferences and plug this data into the Chicago School’s elegant mathematical models and graphs. This data will allow you to study the effects of government policies, and subject it all to the penetrating analyses of market economics. By the 1950s the theory was already quite widely used for understanding consumer behaviour. But when you switched away from consumers and markets and tried to apply the model to public services like schools, roads or hospitals there was a snag, which Samuelson himself had laid out in a paper in 1954.

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And it was a biggy: the so-called free-rider problem. People will happily consume public services, Samuelson explained, but they like to dodge the taxes that pay for these things. The free-rider problem means that you can’t get people to reveal their preferences regarding taxes and public services, so you can’t shoehorn this stuff into the Chicago School’s elegant mathematical models to determine optimal levels of taxes and public spending. Government and democratic politics had to step in and deal with this one, and the economists wouldn’t get a look-in. Ouch. Tiebout’s 1956 paper claimed to have found the riposte.5 There was a way to envisage a market for public services and taxes after all, he explained, and here’s how.

Undoing the Demos: Neoliberalism's Stealth Revolution
by Wendy Brown
Published 6 Feb 2015

He notes that the Ordo School was reacting C h a r t in g N eo l ib e r a l P o l i t i c a l R at i o n a l i t y 59 to Nazism and fascism, while the Chicago School was reacting to New Deal Keynesianism, and he elaborates their distinctive intellectual positions on the nature of the economy, state, and freedom. Among the most important of these is the Ordoliberals’ deep appreciation of the state’s role in facilitating competition and the Chicago School’s development of the theory of human capital. The Ordoliberals, according to Foucault, also provide more latitude for state governance of the social, for protecting “warm moral and cultural values” antithetical to the “cold mechanism of competition.”27 (Ironically, this makes for greater conviviality between neoliberalism and neoconservatism in its European variant, yet it is in America that neoconservatism and neoliberalism became so thickly entwined in the 1980s.) 28 Foucault describes American neoliberalism as “more complete and exhaustive” in its promulgation of competition for every sphere, its unlimited extension of the market to every endeavor, activity and problem. 29 There is much more separating the European and American schools of neoliberalism, but given the extent to which these separate intellectual inf luences have now intersected and even fused — for example, the Ordo emphasis on extending the formal rationality of the market and the Chicago emphasis on extending its concrete mechanisms have come together in a contemporary governing rationality that features both — I will not on dwell further on these differences.

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For Foucault, neoliberalism was born not from crises of capitalist accumulation, as David Harvey and other Marxists would have it, but of liberal governmentality.25 Foucault’s Neoliberalism Foucault introduces the intellectual history of neoliberalism with an appreciation of its twin birthplaces separated by two decades, an ocean, and a world war. There was, first, the Ordoliberal or Freiburg School, comprising sociologists, economists, and philosophers, which emerged in Germany and Austria in the mid-1930s and gained serious traction at the close of World War II. On the other side of the Atlantic, the Chicago School of economics emerged in the 1950s. Foucault identifies F. A. Hayek as a critical intellectual link between the two schools and chief inspiration of “American anarcho-capitalism”; Hayek was raised on Ordoliberalism, but after spending time in the United States in the 1950s was eventually appointed at the University of Freiburg in 1962, “thus closing the circle.”26 Foucault devotes much of lecture 5 to the major differences between the two schools.

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Political rationality does not originate or emanate from the state, although it circulates through the state, organizes it, and conditions its actions. Political rationality also differs from a normative form of reason, although the former emanates from and is suffused with the latter. Neoliberalism might have remained only a form of reason generated by Ordoliberalism and the Chicago School, without ever becoming a political rationality. Indeed, this seemed its likely fate at midcentury, although Foucault (and Daniel Stedman Jones, in his history of neoliberal thought) insist that postwar Germany was already organized by it.5 Political rationality could be said to signify the becoming actual of a specific normative form of reason; it designates such a form as both a historical force generating and relating specific kinds of subject, society, and state and as establishing an order of truth by which conduct is both governed and measured.

The Great Economists Ten Economists whose thinking changed the way we live-FT Publishing International (2014)
by Phil Thornton
Published 7 May 2014

Like Hayek he made some of his most significant contributions to the wider political debate as well as to the development of modern macroeconomics by arguing that Keynes was wrong. Out of this critique emerged an alternative economic theory that became known in the public arena as ‘monetarism’. He is also widely regarded as the leader of the Chicago School of monetary economics, which highlights the importance of the quantity of money as a tool of government policy and as a determinant of business cycles and inflation. Friedman taught for three decades at the University of Chicago, wrote extensively throughout his life and was one of the first academics to embrace television and the popular press.

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The permanent income hypothesis is one of those, as it is seen as the best way for economists to think about spending and saving patterns among households. The NAIRU has been used as a tool for guiding the setting of interest rates by central banks over the last few decades. The significant role and power that the Chicago School of economics has in the current macroeconomic debate can be traced back to the amount of effort Friedman put in to establishing the monetarist doctrine at the University of Chicago. In late 2013 two more economists from the university, Eugene Fama and Lars Peter Hansen, who had carried out separate research into the behaviour of asset prices in a way that followed Friedman’s logic, won the Nobel Prize.

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His citation for the 1992 Nobel Prize for economic sciences, which was awarded to him alone that year, referred to his work in extending ‘the domain of microeconomic analysis to a wide range of human behaviour and interaction, including non-market behaviour’. His analysis is rooted in the idea that human behaviour is rational and that people respond to incentives in a way that maximises their own happiness. People respond to incentives in a way that maximises their own happiness. Becker is steeped in the Chicago school of thinking and has taught at the University of Chicago, where he also completed Chapter 9 • Gary Becker195 his doctorate in 1955, since 1968. In 1967 he won the John Bates Clark Award for the American economist under the age of 40 judged to have made the most significant contribution to economic thought and knowledge.

On the Move: Mobility in the Modern Western World
by Timothy Cresswell
Published 21 May 2006

Before the general use of these instruments of precision in time, there was a wider RT52565_C001.indd 17 4/13/06 7:21:44 AM 18 • On the Move margin for all appointments, a longer period was required and prepared for, especially in travelling—coaches of the olden period were not expected to start like steamers or trains, on the instant— men judged of the time by probabilities, by looking at the sun, and needed not, as a rule, to be nervous about the loss of a moment, and had incomparably fewer experiences wherein a delay of a few moments might destroy the hopes of a lifetime.59 Early American sociologists at the Chicago School of Sociology also placed mobility at the center of their understanding of the world. Robert Park had studied with Simmel in Heidelberg. He inherited many of his ideas about the mobile nature of urban life. Mobility was used by Park’s student, Nels Anderson, to differentiate the city from the country.

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“The mobility of the city” he wrote, “detaches and undomesticates the urban man” and “with this independence comes a loss of loyalty.” This loss of loyalty imbues the city dweller with his freedom, but only “at the cost of his locus.”38 Mobility, then, plays a central role in the work of Burgess, Robert Park, Nels Anderson, and others at the Chicago School. It is the disorder produced by mobility (among other things) that was at the heart of their view of society. It is certainly not all bad. Mobility is, after all, what separates the city from the country. Mobility is connected to civilization, progress, and freedom as well as deviance and destitution.

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Its purpose is to diagnose a pathology—future shock—a sense of disorientation and overload that modern man needs to react to quickly. The prevalence of mobility in modern life is, to Toffler, most definitely a problem. In this sense, his anxieties sit snugly beside those of his sociological forebears at the Chicago School. Indeed, mobility presents itself as a problem in many of the sociological texts of the twentieth century such as William Whyte’s The Organization Man and the Lynds’ Middletown.46 Sedentarism Made Material If the metaphysics of sedentarism were limited to the internal scribblings of geographers, sociologists, and cultural theorists, it could be considered harmless enough.

The Divide: A Brief Guide to Global Inequality and Its Solutions
by Jason Hickel
Published 3 May 2017

Boyce, ‘Congo’s odious debt: external borrowing and capital flight in Zaire’, Development and Change 29, 1998, pp. 195–217. 32 ‘“We hereby commit ourselves to …”’ This passage represents small portions of the text of the ‘Common Man’s Charter’ with some sentences truncated and merged. 33 ‘The elite – those whose wealth …’ The argument that the elite class was looking for a solution to Keynesianism has been made compellingly by David Harvey in A Brief History of Neoliberalism. 34 ‘Share in national income … 1913–1998’ David Harvey, A Brief History of Neoliberalism, (Oxford: Oxford University Press, 2005), p. 17. 35 ‘These policies were improving people’s …’ Klein, The Shock Doctrine, p. 53. 36 ‘Before long, the Chicago School …’ Klein, The Shock Doctrine, p. 56. 37 ‘Juan Gabriel Valdés, a Chilean …’ Juan Gabriel Valdés, Pinochet’s Economists: The Chicago School in Chile (Cambridge: Cambridge University Press, 1995), p. 13. Classes were also held at the Catholic University of Santiago, which partnered with the University of Chicago. 38 ‘His victory was an impressive …’ The International Telephone and Telegraph Company (ITT) paid out $700,000 to Alessandri, and the company’s president paid an additional $1 million to the CIA to help manipulate the elections.

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And neoliberalism abandoned any pretence to neutrality in favour of a more politically charged agenda: it was against subsidies and protections for the working class and regulations that supported unions, but was quite comfortable with subsidies and protections for the rich and regulations that supported large corporations. During the 1970s, neoliberal ideas were celebrated by the upper classes and the corporate world, who were thrilled to have an academic mouthpiece – in the form of Friedman and the University of Chicago – to lend their economic agenda an aura of legitimacy. Before long, the Chicago School was flush with corporate donations.36 There was only one problem: there was no way that ordinary citizens were going to buy into it, since Keynesianism had delivered them such monumental gains. It was not possible to acquire the political capital necessary to make these radical changes in the US or Europe.

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* From the 1950s through the 1970s, Western powers had struggled to prevent the rise of developmentalism in the South. What they failed to accomplish through piecemeal coups and covert intervention, the debt crisis did for them in one fell swoop. The SAPs pushed the very same policies that the Chicago School had tested out in Chile, but instead of being imposed through violence, they were imposed by leveraging debt. Debt became a powerful mechanism for pushing neoliberalism around the world, and for rolling back the developmentalist agenda Washington found so threatening – more powerful, even, than the coups that had been used in the past, and without the embarrassing inconvenience of dictators and torture chambers.

Termites of the State: Why Complexity Leads to Inequality
by Vito Tanzi
Published 28 Dec 2017

From different perspectives, that benevolent view came to be criticized by scholars associated with the School of Public Choice (of which James Buchanan and Gordon Tullock were major exponents in the United States, and Alan Peacock in the United Kingdom), and by scholars associated with the Chicago School (mostly connected with Milton Friedman, George Stigler, R. H. Coase, and some others). The work of Hayek and of other economists of the Austrian School also played some role. However, that work was in some ways distinct from that of the Chicago School, and it is 314 Termites of the State a bit difficult to place the full work of Hayek and of the Austrian School, which remained less known to the general public in the United States, especially at the more popular level, even though Hayek spent many years at the University of Chicago.

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The debate that followed 62 Termites of the State was, in some significant aspects and with due changes, a preview of the one that would follow the financial crisis of 2007. Milton Friedman and some of the economists around him at the University of Chicago (who came to be identified as members of the “Chicago School”), as well as economists associated with James Buchanan in Virginia (the “School of Public Choice”), had found weaknesses not only in the prevailing Keynesian countercyclical policy but also in the view that a growing government role would necessarily promote the public interest and general welfare.

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As the recent and ongoing debate on developments in Greece and in other member countries of the European Monetary Union has highlighted, the absence, or the nonobservance, of good rules can create difficulties for the role that the government plays in a market economy (see Tanzi, 2013b). The government failures that (especially) critics from the School of Public Choice and the Austrian School (and to some extent those of the Chicago School) believe to be natural are, in part, of a different nature than the failures caused by an absence of competent administrators. They attribute the failures not so much to the low quality of the employees in the public administration, but to more fundamental issues that could not be corrected by simply hiring more and better-trained administrative staff.

The Shifts and the Shocks: What We've Learned--And Have Still to Learn--From the Financial Crisis
by Martin Wolf
Published 24 Nov 2015

Paradoxically, their defeat in academe liberated Austrian economics. It has become politically influential, principally in the US, where Austrian economics has become a favourite economic ideology of libertarians and so of parts of the modern Republican Party: former Congressman Ron Paul is a devotee. The reason for this appeal is that, unlike the Chicago School, in which the late Milton Friedman was the dominant post-war figure, the Austrian economists see no case for a government role in managing the market economy, including even the money supply. Many contemporary ‘Austrians’ favour a return to the gold standard. Naturally, they are opposed to every element of the new (or old) orthodoxy on monetary and financial policy.

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Henry Simons and the Chicago Plan Mises concluded that the ability of private institutions to create debt-backed money out of thin air, as a by-product of their lending (as discussed above), needed to be brought under control, via 100 per cent reserve banking – that is, a system in which deposits are backed by central-bank reserves, one to one. The Chicago School – another group of free-market economists – came to the same conclusion in the 1930s, for the same reason: they concluded that the bank-based monetary system (which we still have today) was itself unstable and so destabilized the economy. The economists involved were hugely distinguished and respected: Frank Knight (1885–1972), who pioneered the crucial distinction between calculable risk and uncertainty; Henry Simons (1899–1946), author of the most complete version of the Chicago monetary plan; Irving Fisher (1867–1947), the most famous pre-Second World War American economist; and, after the war, Milton Friedman (1912–2006).40 Again, as with the Austrians, these free-market economists concluded that the ability to create credit-backed money had to be ended if the market economy was to be protected from ruinous crises.

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To this should be added savings on government-debt interest (on the assumption that these would not be interest-earning deposits) and the earnings on any money lent to the private sector. Also dramatic would be the implications for the operation of monetary policy. The central bank would have direct control over the money supply. It could be told to follow a strict rule, as the Chicago School proposed, which would include a precise inflation target. The central bank could set any interest rate it liked, including negative rates, up to the point that people preferred to hold cash instead of deposits. The stabilization of the economy would become a relatively simple challenge because the main obstacle to it would have been eliminated.

Globalists: The End of Empire and the Birth of Neoliberalism
by Quinn Slobodian
Published 16 Mar 2018

which is the nearest ­thing to the practice of magic that occurs among professional economists.”32 He said that he always felt he should have written a critique of Milton Friedman’s Essays in Positive Economics, “­every bit as dangerous as that of Keynes.”33 Unlike the Chicago School, the Geneva School opposed the mathematization of economics and thus foreclosed the possibility of extensive forecasting and modeling of the economy. It rejected both rational expectations and perfect competition and held the claim of determining “efficiency” or “optimal” outcomes to be both quixotic and hubristic. In recent years Petersmann has even laid the blame for the financial crisis of 2008 at the feet of the “efficient markets hypothesis” of the Chicago School that “market prices reflect all relevant information.”34 As represented by Petersmann’s own advocacy for the WTO as a “worldwide economic constitution,” what I call the Geneva School combined the Austrian emphasis on the limits of knowledge and the global scale with the German ordoliberal emphasis on institutions and the moment of the po­liti­cal decision.35 To disavow the existence or visibility of “economies” themselves intentionally makes proj­ects of social justice, equality, or re­distribution unthinkable.

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GENEVA SCHOOL, NOT CHICAGO SCHOOL In 1983 one of Hayek’s students, the leading international economic ­lawyer Ernst-­Ulrich Petersmann, wrote, “The common starting point of the neoliberal economic theory is the insight that in any well-­functioning market economy the ‘invisible hand’ of market competition must by necessity be complemented by the ‘vis­i­ble hand’ of the law.” He listed the well-­k nown neoliberal schools of thought: the Freiburg School, birthplace of German ordoliberalism, and home to Walter Eucken and Franz Böhm; the Chicago School, identified with Milton Friedman, Aaron Director, Richard Posner, and ­others; and the Cologne School of Ludwig Müller-­Armack. Then he cited a virtual unknown: the Geneva School.41 Who or what was the Geneva School? The following chapters pres­ent a narrative about a strain of neoliberalism that has been neglected by 8 GLOBALISTS historians.

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Most histories of the neoliberal movement begin in continental Eu­rope with the meetings in the 1930s and 1940s but shift their gaze to the United States and ­Great Britain ahead of the neoliberal breakthrough of Reagan and Thatcher in the 1980s. This shift is accompanied by a pointed focus on the Chicago School, and Friedman in par­tic­u­lar. Even though some welcome attention is now being given to the field of law and economics and the public choice theory of James M. Buchanan and ­others of the ­Virginia School, the overall tendency has been ­toward an understanding of neoliberal thought that tilts ­toward the Anglo-­American side.42 What this misses is the importance of the contributions of ­those who remained in continental Eu­rope or who, like Hayek, returned to Eu­rope.

Hubris: Why Economists Failed to Predict the Crisis and How to Avoid the Next One
by Meghnad Desai
Published 15 Feb 2015

It shifted the policy focus away from fiscal policy and toward money supply, and linked the budget deficits with loss of control over money supply. At Chicago, Friedman had inaugurated a research program in the demand for money and the study of hyperinflations through history. This was to undermine the weakness in the received Keynesian theory. The Chicago School argued that the quantity theory was a theory of the demand for money based on the use of money for transactions and precautionary purposes. This linked the Chicago tradition to the pre-General Theory Cambridge tradition of Marshall and Pigou and their work on the holding of money balances. Using this tradition, the demand for money was substantially linked to nominal income.

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Short-term expectations determined the output decisions of the producer, and long-term expectations influenced by “animal spirits” determined investment. Keynes had not translated these ideas into algebra; indeed he believed long-term expectations could not be determined by rational procedures. The Chicago School used the idea of “adaptive expectations” to study people’s reaction to inflation. Adaptive expectations are predicated on the idea that our expectations of what will happen tomorrow are based on an average of today’s events and those of the recent past. If inflation has been creeping up, we would expect it to go on rising further.

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If the market always gets it right, as the investors and the regulators had been told, then why were people surprised by the sudden collapse in equity prices and capital values of previously profitable firms? Alan Greenspan, as Chairman of the Federal Reserve from 1987 to 2006, had presided over the financial revolution, globalization and the long boom. He believed in free markets and had accepted the theories emanating from the Chicago School of economics. Once the boom collapsed, he recanted. In his testimony to a committee of the US House of Representatives, he explained what happened. The exposition is illuminating: It was the failure to properly price such risky assets [mortgage backed securities and collateral debt obligations] that precipitated the crisis.

Makers and Takers: The Rise of Finance and the Fall of American Business
by Rana Foroohar
Published 16 May 2016

Educated at both Chicago and Columbia, Friedman gained exposure to the McNamara-style systems analysis via a stint at the US Navy–sponsored Statistical Research Group (which operated at Columbia during the war). Two other young economists he worked with there, George Stigler and W. Allen Wallis, also went on to become professors at Chicago. Together they developed what became known as the Chicago School of economics. Its antigovernment, antiregulation, fanatically pro-market ideology has dominated American economics and business education ever since. With the support of major business foundations like Ford, Chicago began pulling in the biggest economic names in the field. The Walgreen Foundation, which had been a longtime supporter of the school, shifted its financial grants to the business program.

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The result was a very finance-driven approach to business education, in which the central questions were no longer about companies, but about markets—a way of thinking that one recent account describes as “free-market-oriented and interested only in the predictive power of theory, irrespective of the realism of assumptions.”32 This new approach may have been more theoretical than practical, but it was quickly embraced and became de rigueur for anyone who wanted a career in corporate America or the finance industry. MAXIMIZE VALUE—BUT FOR WHOM? The key assumption of the Chicago School, one that Milton Friedman himself upheld devoutly, was that the purpose of the corporation was to maximize financial value. As Friedman famously said back in 1970, “the social responsibility of business is to increase its profits.”33 This went hand in hand with another idea, which was that the share price of a firm always perfectly reflected all known information, and thus stock prices were the best overall measure of corporate value.

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The other 90 cents (which varied in dollar amounts depending on credit and growth conditions) primarily went to shareholder payouts.28 That means that far from funding the economy that you and I live and work in, stock markets now basically fund payouts to the wealthy. This “shareholder revolution,” based on the Chicago School notion that maximizing shareholder value is the purpose of corporate America (as covered in chapter 3), is the single most important reason why high corporate profits and unprecedented cash hoards have failed to translate into jobs, wage growth, and innovation. All of this raises a profound question: What is a company for?

People, Power, and Profits: Progressive Capitalism for an Age of Discontent
by Joseph E. Stiglitz
Published 22 Apr 2019

Government attempts to interfere with the wonderful workings of the market—even curbing monopolies—were both unnecessary and likely to be counterproductive. Thus, enforcers of antitrust laws worried more about the downside risk of finding a practice noncompetitive when it was really a reflection of the complex ways in which efficient markets often worked than about the risk of allowing a noncompetitive practice to persist.66 The Chicago School had a disproportionate influence on our politics and our courts. It led to the weakening of antitrust, as courts simply assumed that markets were competitive and efficient, and any behavior that might seem anticompetitive was in fact nothing more than efficient responses to new market complexities.

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Indeed, our corporate leaders have even figured out how to exploit their own shareholders, taking advantage of deficiencies in our rules of corporate governance to pay themselves outsized compensation.89 Our economy has changed a great deal since our antitrust laws were first introduced and even since the Chicago School interpretations came to prevail; our understanding of economics has changed too; and today we can better grasp the failures of the existing legal framework. But the underlying political and economic concerns about power and exploitation that drove the original legislation are still present—even more so.

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Traditionally, antitrust has focused on mergers within an industry, and presumed that vertical mergers are not anticompetitive. But with the recognition that in many markets competition is limited, vertical mergers are now understood to have “horizontal” effects and to reduce competition even further. The continuing influence of the Chicago School, which begins with the presumption that markets are basically competitive, can be seen in recent court decisions, e.g., in allowing the merger of AT&T and Time Warner (currently under appeal). See also “Brief for 27 Antitrust Scholars as Amici Curiae in Support of Neither Party,” United States Of America, Plaintiff-Appellant, v.

Vulture Capitalism: Corporate Crimes, Backdoor Bailouts, and the Death of Freedom
by Grace Blakeley
Published 11 Mar 2024

But in the US, policymakers were far more concerned with “government failure” than they were “market failure,” influenced by the “Chicago school” of neoliberalism.53 They claimed that state action to promote competition was permissible only where there was likely to be a clear and lasting impact on prices. In fact, competition authorities have consistently failed to act to prevent mergers—even where there is clear evidence that the merger would lead to higher prices.54 Milton Friedman went so far as to argue that antitrust laws tend to undermine competition, and that “we would be better off if we didn’t have it at all.”55 Ultimately, the Chicago school became a “mouthpiece for pro-monopoly interests.”56 When it came to the labor market, however, more flexible nostrums are adopted.

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Over time, the power of German multinationals grew and the balance of power within Germany—and Europe as a whole—came to resemble much more closely that in the US.59 What’s more, the imperial power of the US—wielded through its own multinationals as well as the state’s dominance over the laws that govern the world economy—was used to discourage restrictive approaches to competition policy.60 Everywhere, backed up by the power of the US state and corporations, the Chicago school view came to dominate. The law is not some neutral apparatus that is shaped by technocratic considerations. The kinds of laws a society passes reflect the balance of power within that society, which reflects the dynamics of global capitalism.61 This poses a real problem to neoliberal theory, which purports to decry the influence of “vested interests” over public policy (particularly where these interests are those of organized labor).

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But the US used its sway within these institutions to influence the nature of the “support” being offered to these countries, forcing them to adopt policies that would align with US interests in exchange for emergency financial assistance.151 In this way, “the international debt crisis was methodically leveraged to advance the Chicago School agenda.”152 The World Bank and the IMF, with US support, offered loans to poor countries on the condition that these struggling states remove capital and exchange controls, privatize state-owned industries, and remove subsidies for necessities like fuel and food, among other things. Neoliberal economists claimed that these “structural adjustment programs” (SAPs) would encourage growth by replacing inefficient import-substituting industrialization programs with a strategy of “export-led growth.”153 Many believed that shifting from protectionism to free trade, while liberalizing domestic markets, would allow low-income countries to achieve the kind of “takeoff” predicted by Walt Rostow.

Inventing the Future: Postcapitalism and a World Without Work
by Nick Srnicek and Alex Williams
Published 1 Oct 2015

While the economic crisis of 2008 has upset the blind belief in neoliberalism, it nevertheless remains an entrenched part of our worldview – so much so that it is difficult even for its critics to picture coherent alternatives. Yet this ideology of neoliberalism did not emerge fully formed from the minds of Milton Friedman or Friedrich Hayek, or even the Chicago School, and its global hegemony did not arise inevitably from capitalism’s logic. In its origins, neoliberalism was a fringe theory. Its adherents found it difficult to gain employment, were often untenured, and were mocked by the Keynesian mainstream.1 Neoliberalism was far from being the world-dominating ideology it would eventually become.

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A chance meeting with a Swiss businessman in 1945 gave Hayek the financial means to put his ideas into action.17 Thus was born the Mont Pelerin Society (MPS): a closed intellectual network that provided the basic ideological infrastructure for neoliberalism to ferment.18 It is no exaggeration to say that almost all of the important figures in the postwar creation of neoliberalism were in attendance at its first meeting in 1947, including the Austrian economists, the UK liberals, the Chicago School, the German ordoliberals and a French contingent.19 From its beginnings, the MPS was consciously focused on changing political common sense and sought to develop a liberal utopia.20 It explicitly understood that this intellectual framework would then be actively filtered down through think tanks, universities and policy documents, in order to institutionalise and eventually monopolise the ideological terrain.21 In a letter to those he had invited, Hayek wrote that the purpose of the MPS was to enlist the support of the best minds in formulating a programme which has a chance of gaining general support.

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Newspapers such as the Wall Street Journal, Daily Telegraph and Financial Times paralleled this effort, shaping the public’s perspective by invoking neoliberal policies at every opportunity.43 Business schools and management consultancies also began to adopt and spread neoliberal ideas about corporate forms, and the Chicago School became a global beacon of neoliberal thought.44 Such institutions were crucial for the spread of neoliberal hegemony, since they were often the training grounds of the global elite.45 Individuals would come to these neoliberal US schools and then return to their own countries with the neoliberal ideology inculcated in them.

Basic Economics
by Thomas Sowell
Published 1 Jan 2000

What could be followed, however, was the slow erosion of the Keynesian orthodoxy, especially after the simultaneous rise of inflation and unemployment to high levels during the 1970s undermined the notion of the government making a trade-off between the two, as suggested by the Phillips Curve. When Professor Milton Friedman of the University of Chicago won a Nobel Prize in economics in 1976, it marked a growing recognition of non-Keynesian and anti-Keynesian economists, such as those of the Chicago School. By the last decade of the twentieth century, a disproportionate share of the Nobel Prizes in economics were going to economists of the Chicago School, whether located on the University of Chicago campus or at other institutions. The Keynesian contribution did not vanish, however, for many of the concepts and insights of John Maynard Keynes had now become part of the stock in trade of economists in all schools of thought.

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From more or less isolated individuals writing about economics there evolved, over time, more or less coherent schools of thought, people writing within a common framework of assumptions—the medieval scholastics, of whom Thomas Aquinas was a prominent example, the mercantilists, the classical economists, the Keynesians, the “Chicago School,” and others. Individuals coalesced into various schools of thought even before economics became a profession in the nineteenth century. THE MERCANTILISTS One of the earliest schools of thought on economics consisted of a group of writers called the mercantilists, who flourished from the sixteenth through the eighteenth centuries.

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By mid-century, it was the prevailing orthodoxy in the leading economics departments of the world—with the notable exception of the University of Chicago and a few other economics departments in other universities largely staffed or dominated by former students of Milton Friedman and others in the “Chicago School” of economists. To the traditional concern of economics with the allocation of scarce resources which have alternative uses, Keynes added as a major concern those periods in which substantial proportions of a nation’s resources—including both labor and capital—are not being allocated at all.

The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead
by David Callahan
Published 1 Jan 2004

In the field of economics, a new generation of free-market scholars launched an assault on prevailing liberal orthodoxies about the need for active government intervention in the economy. These attacks were spearheaded by the Chicago School of economics, so named because its leading luminaries—including Friedrich von Hayek and Milton Friedman—taught at the University of Chicago. These economists argued that market solutions would create more individual opportunity than government approaches in nearly every case—from broadly promoting the prosperity of the economy to ensuring affordable housing and health care for all. By the 1980s, the ideas of the Chicago School—and students and disciples—had fanned out across the entire discipline of economics.11 Free-market philosophy also found fertile ground in the battles over social policy.

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On Webster Hubbell's problems and rationales, see Ellen Joan Pollock, "Hubbell Receives 21-Month Prison Sentence for Bilking His Law Firm and Clients," Wall Street Journal, 29 June 1995, B4; and Adam Liptak, "Stop the Clock? Critics Call the Billable Hour a Legal Fiction," New York Times, 29 October 2002, G7. [back] 10. Schiltz, "On Being a Happy, Healthy, and Ethical Member of an Unhappy, Unhealthy, and Unethical Profession," 807. [back] 11. For a good summary of the Chicago School's rise, see Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle for the World Economy (New York: Simon & Schuster, 1998/2002), 123–31. [back] 12. Charles Murray, Losing Ground: American Social Policy, 1950–1980 (New York: Basic Books, 1995). See also Myron Magnet, The Dream and the Nightmare: The Sixties Legacy to the Underclass (New York: William Morrow, 1993).

Under a White Sky: The Nature of the Future
by Elizabeth Kolbert
Published 15 Mar 2021

The reversal of the Chicago was the biggest public-works project of its time, a textbook example of what used to be called, without irony, the control of nature. Excavating the canal took seven years and entailed the invention of a whole new suite of technologies—the Mason & Hoover Conveyor, the Heidenreich Incline—which, together, became known as the Chicago School of Earth Moving. In total, forty-three million cubic yards of rock and soil were gouged out, enough, one admiring commentator calculated, to build an island more than fifty feet high and a mile square. The river made the city, and the city remade the river. But reversing the Chicago didn’t just flush waste toward St.

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Notes Down the River 1 “the grimmest and most dead-earnest of reading matter”: Mark Twain, Life on the Mississippi, reprint ed. (New York: Penguin Putnam, 2001), 54. “Going up that river”: Joseph Conrad, Heart of Darkness and The Secret Sharer, reprint ed. (New York: Signet Classics, 1950), 102. Water in Chicago River: The New York Times (Jan. 14, 1900), 14. became known as the Chicago School of Earth Moving: Libby Hill, The Chicago River: A Natural and Unnatural History (Chicago: Lake Claremont Press, 2000), 127. an island more than fifty feet high and a mile square: Cited in Hill, The Chicago River, 133. transformed more than half the ice-free land on earth: Roger LeB.

Class Warfare: Inside the Fight to Fix America's Schools
by Steven Brill
Published 15 Aug 2011

When the school itself was shut down in 1996, Rodgers and Duncan reopened it as a turnaround school. Three years later, Duncan went to work for the then-head of the Chicago schools, Paul Vallas—who would ultimately join TFA’s Sarah Usdin and Louisiana education superintendent Paul Pastorek in the post-Katrina drive to create a new school system in New Orleans. When Vallas left and Duncan was picked by Mayor Richard M. Daley to run the Chicago schools in 2001, he pushed hard to close failing schools and replace them with new, smaller turnaround schools or charters. It was during this time that Duncan, via Rogers, became friends and basketball buddies with State Senator Barack Obama.

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More than that, her application gave him the chance to implement a plan that would forever shift the ground in the business model for charters and the debate over their effectiveness: Weingarten had needed a place for her new school, and Klein gave her permission to “co-locate” it in a space he made room for in a conventional Brooklyn public school. Co-location had started with the move to break up the large high schools. The new, smaller ones to be run by groups like New Visions would be co-located in the old, big school. (Arne Duncan, who would become Obama’s education secretary, had done much the same thing when he was running the Chicago schools.) Then, Klein had quietly allowed Levin’s KIPP and some other charters to share space in the schools where, as with Levin in the Bronx, they had initially launched as a program within the school, not as a full-fledged charter school. Now Klein had bigger plans. “I got $250 million [of city/state money] put into my capital budget in 2005–2006 for the work necessary to do co-location,” Klein recalls.

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We provided all that, along with a full, annotated org chart.” The October 26 draft, which was circulated by Williams to about two dozen DFER insiders, stopped short of making a firm recommendation for the most important job, education secretary. Schnur was listed as a possible secretary, as were Duncan (who ran the Chicago schools), Bersin (from San Diego), and former North Carolina governor Mike Easley. Eli Broad, who was heavily behind this effort, urged Williams and Barone to add former secretary of state Colin Powell, but they didn’t. • • • On election night, the reformers were, of course, euphoric. However, by the next afternoon, word whipped around their network about whom president-elect Obama had just chosen to head his education transition team.

Arguing With Zombies: Economics, Politics, and the Fight for a Better Future
by Paul Krugman
Published 28 Jan 2020

And in the wake of the crisis, the fault lines in the economics profession have yawned wider than ever. Lucas says the Obama administration’s stimulus plans are “schlock economics,” and his Chicago colleague John Cochrane says they’re based on discredited “fairy tales.” In response, Brad DeLong of the University of California, Berkeley, writes of the “intellectual collapse” of the Chicago School, and I myself have written that comments from Chicago economists are the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten. What happened to the economics profession? And where does it go from here? As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.

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Rather, they sounded like people who had no idea what Keynesian economics was about, who were resurrecting pre-1930 fallacies in the belief that they were saying something new and profound. And it wasn’t just Keynes whose ideas seemed to have been forgotten. As Brad DeLong of the University of California, Berkeley, has pointed out in his laments about the Chicago School’s “intellectual collapse,” the school’s current stance amounts to a wholesale rejection of Milton Friedman’s ideas, as well. Friedman believed that Fed policy rather than changes in government spending should be used to stabilize the economy, but he never asserted that an increase in government spending cannot, under any circumstances, increase employment.

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But it was inevitable that freshwater economists would find themselves trapped in this cul-de-sac: if you start from the assumption that people are perfectly rational and markets are perfectly efficient, you have to conclude that unemployment is voluntary and recessions are desirable. Yet if the crisis has pushed freshwater economists into absurdity, it has also created a lot of soul-searching among saltwater economists. Their framework, unlike that of the Chicago School, both allows for the possibility of involuntary unemployment and considers it a bad thing. But the New Keynesian models that have come to dominate teaching and research assume that people are perfectly rational and financial markets are perfectly efficient. To get anything like the current slump into their models, New Keynesians are forced to introduce some kind of fudge factor that for reasons unspecified temporarily depresses private spending.

The Rise of the Quants: Marschak, Sharpe, Black, Scholes and Merton
by Colin Read
Published 16 Jul 2012

Remarkably, given that Friedman had a well-deserved reputation as a ruthless and convincing debater, Black held his own, even if he brought what he knew, from Cambridge’s Keynesian roots and Modigliani’s influences, into the epicenter of anti-Keynesian theory. It must have been a remarkable spectacle to watch the two titans argue their perspectives. Despite or perhaps because of his notorious debates with Friedman, who was by then the Chicago School patriarch, Black thrived and managed to extend his stay. Black also encouraged Scholes to join him, which Scholes did in 1973. However, his shift from the three-piece suits of financial consulting to the elbow-patched life of a university professor did not sit as well with Black’s wife, Mimi.

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But, while Merton’s derivation is the most elegant and general of the three approaches, and while he was encouraged to publish his results immediately, he declined to do so until Black and Scholes had successfully published their derivation. Assumptions for Merton’s derivation Merton’s intuition took a leaf out of the book of the Chicago School. In the absence of transaction costs, the correct combination of any two of the following instruments should be able to predict the third if arbitrage exists: the risk-free rate of return, a stock price, an option written on the stock price. In this case, his dynamic (continuous) trading strategy using just the stock and the risk-free rate of return should price the option as predicted by the Black-Scholes equation in the absence of arbitrage opportunities.

Move Fast and Break Things: How Facebook, Google, and Amazon Cornered Culture and Undermined Democracy
by Jonathan Taplin
Published 17 Apr 2017

In 1984, while Bork was a judge in the United States Court of Appeals for the District of Columbia Circuit, I was a vice president for mergers and acquisitions at Merrill Lynch’s investment banking division. We helped Gulf Oil merge into Standard Oil of California, thus creating Chevron and cutting the number of major oil companies from seven to six. During the whole process, the question of antitrust problems never came up. Bork centered his interpretation of antitrust laws in the Chicago school libertarian economic theories of Milton Friedman. Bork came to the University of Chicago in the late 1940s as a true believer in Roosevelt’s New Deal politics and started dating a similarly liberal undergraduate, Claire Davidson. But as he began to get attracted to the intersection of economics and law, the conservative professors who dominated the Chicago faculty discouraged any belief that government could or should play a role in regulating business.

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But as he began to get attracted to the intersection of economics and law, the conservative professors who dominated the Chicago faculty discouraged any belief that government could or should play a role in regulating business. The free market needed to function, unencumbered by government regulation. Whether they were motivated by a desire to advance in academia or a true change in belief, both Bork and Davidson (whom he married in 1952) came under the sway of the Chicago school and subscribed to its theories. From that point on he fought government regulation and continued to fight it for the rest of his life. As the New York Times noted in his obituary, this stance cost him a seat on the Supreme Court: “He also wrote a fateful article for The New Republic in 1963—one that played a key role in his 1987 confirmation defeat—condemning the public accommodation sections of the proposed 1964 Civil Rights Act aimed at integrating restaurants, hotels and other businesses.

Once the American Dream: Inner-Ring Suburbs of the Metropolitan United States
by Bernadette Hanlon
Published 18 Dec 2009

Traditional urban theory tends to explain the socioeconomic transformation of neighborhoods in terms of the in- and outmigration of different groups. This is rooted in ecological models of city neighborhood change. Based on examinations of ethnic and racial areas in Chicago, urban sociologists of the Chicago School propose a theory of invasion and succession, where one group “invades” a city neighborhood and “succeeds” over the existing group of residents (Park, Burgess, and McKenzie 1967). Borrowing from ecological studies of the natural system, they examine the settlement patterns of newly arriving immigrants to the city, suggesting that these in-migrants entered specific neighborhoods in inner core areas of the city and displaced the previous population.

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Is increasing minority population in the suburbs leading to changes in suburban political leadership? How are nonwhite suburbs different from white suburbs along specific political, economic, and social dimensions? An additional research area surrounds the recent emergence of suburbs as the new immigrant gateways in the United States. Studies of immigrant clusters stretch back to the Chicago School and ecological models of neighborhood change. More recent theoretical debates focus on the sociospatial behavior of immigrant communities in the United States (Zelinsky and Lee 1998). Questions emerge about the assimilation process for immigrants settling in suburbs. The traditional model of assimilation suggests that 158 / Chapter 10 immigrants, initially settling in the inner city, eventually shift outward to the suburbs as they progress economically.

Evicted: Poverty and Profit in the American City
by Matthew Desmond
Published 1 Mar 2016

McKenzie, “The Ecological Approach to the Study of the Human Community,” in Park, Burgess, and McKenzie, eds., The City, 63–79, 78. The most influential perspective on residential mobility—the residential attainment model—is deeply influenced by the Chicago School’s vision of mobility and neighborhood sorting. But those working within this tradition substitute the Chicago School’s emphasis on sentimentality and morality with one focused on instrumentality and economic advancement. The residential attainment model perceives mobility as a result of social climbing and views the city not as a patchwork of isolated moral worlds but as a geography of advantage and disadvantage.

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If the surnames match, he considers the applicant a single mother by a single mother—and usually turns her down. 9. This is a very different way of understanding how certain people get sorted into certain neighborhoods, compared to conventional perspectives—one that pays attention to the people doing the sorting: the landlords. For the Chicago School, the city was a space of sentiments and its pattern of physical and social segregation primarily the result of tens of thousands of individual decisions based on where one best fits. “In the long run,” wrote Robert Park, “every individual finds somewhere among the varied manifestations of city life the sort of environment in which he expands or feels at ease.”

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right
by George R. Tyler
Published 15 Jul 2013

Donations from executives were helpful in the political career of Ronald Reagan and contributed to the Chicago School’s success in promoting deregulation. Friedman allowed his ideology to be exploited by executive suites, providing a fig leaf of respectability for their emerging narcissism. Writer Naomi Klein explains Friedman’s role in resurrecting laissez-faire economics this way: “If Friedman’s close friend Walter Wriston, head of Citibank, had come forward and argued that the minimum wage and corporate taxes should be abolished, he naturally would have been accused of being a robber baron. And that’s where the Chicago School came in. It quickly became clear that when Friedman, a brilliant mathematician and skilled debater, made those same arguments, they took on an entirely different quality.

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But voters didn’t knowingly vote to give this gift. Weary of stagflation, they accepted the assurance of President Reagan and his team in 1980 that Reaganomics would lead to prosperity. And the two most important figures behind this narrative were economist Milton Freidman and philosopher and novelist Ayn Rand. Milton Friedman and the Chicago School The late Milton Friedman is rightfully considered one of America’s leading monetary economists. Drawing on Irving Fisher’s influential work, University of Chicago economists Friedman and Anna Schwartz popularized the role of money in creating and establishing price stability as an important precondition for economic growth.

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It quickly became clear that when Friedman, a brilliant mathematician and skilled debater, made those same arguments, they took on an entirely different quality. They might be dismissed as wrongheaded, but they were imbued with an aura of scientific impartiality. The enormous benefit to having corporate views funneled through academic, or quasi-academic, institutions not only kept the Chicago School flush with donations, but, in short order, spawned the global network of right-wing think tanks to churn out Reaganesque propaganda.”45 President Reagan was an American success story of the first order, a self-made man who harbored strong sentiments for working class families by drawing on his own troubled childhood.

The Spirit Level: Why Greater Equality Makes Societies Stronger
by Richard Wilkinson and Kate Pickett
Published 1 Jan 2009

Israel recognized for a long time. In the 1940s, sociologists of the Chicago School described how some neighbourhoods had persistent reputations for violence over the years – different populations moved in and out but the same poor neighbourhoods remained dangerous, whoever was living in them.223 In Chicago, neighbourhoods are often identified with a particular ethnic group. So a neighbourhood which might once have been an enclave of Irish immigrants and their descendants later becomes a Polish community, and later still a Latino neighbourhood. What the Chicago school sociologists drew attention to was the persistent effect of deprivation and poverty in poor neighbourhoods – on whoever lived there.

A Brief History of Neoliberalism
by David Harvey
Published 2 Jan 1995

The National Security Strategy of the United State of America can be found on the website: www.whitehouse.gov/nsc/nss. 8. M. Fourcade-Gourinchas and S. Babb, ‘The Rebirth of the Liberal Creed: Paths to Neoliberalism in Four Countries’, American Journal of Sociology, 108 (2002), 542–9; J. Valdez, Pinochet’s Economists: The Chicago School in Chile (New York: Cambridge University Press, 1995); R. Luders, ‘The Success and Failure of the State-Owned Enterprise Divestitures in a Developing Country: The Case of Chile’, Journal of World Business (1993), 98–121. 9. R. Dahl and C. Lindblom, Politics, Economy and Welfare: Planning and Politico-Economic Systems Resolved into Basic Social Processes (New York: Harper, 1953). 10.

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United Nations Development Program, Human Development Report, 1996 (New York: Oxford University Press, 1996). ——Human Development Report, 1999 (New York: Oxford University Press, 1999). ——Human Development Report, 2003 (New York: Oxford University Press, 2003). Valdez, J., Pinochet’s Economists: The Chicago School in Chile (New York: Cambridge University Press, 1995). Vasquez, I., ‘The Brady Plan and Market-Based Solutions to Debt Crises’, The Cato Journal, 16/2 (online). Wade, R., Governing the Market (Princeton: Princeton University Press, 1992). ——and Veneroso, F., ‘The Asian Crisis: The High Debt Model versus the Wall Street–Treasury–IMF Complex’, New Left Review, 228 (1998), 3–23.

The Great Inversion and the Future of the American City
by Alan Ehrenhalt
Published 23 Apr 2012

In the past decade, that began to change. By 2007, the school was 27 percent white. It was in the process of conversion to magnet status, as a Montessori school in the lower grades and an International Baccalaureate program in the higher grades, with neighborhood residents guaranteed a place. This move generated criticism that the Chicago school system was mainly trying to make Mayer more attractive to affluent white families living around it, luring them away from private schools. That has been borne out only in a selective way. There are white majorities in kindergarten and first grade, and sizable numbers of white pupils through the early primary school years.

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In 2005, it is estimated, 4.4 million immigrants went to suburbs and 2.8 million to cities. This is far less dramatic than what has happened in metropolitan Atlanta, but it is a powerful statistic nevertheless. It essentially violates the theories of immigration and living patterns that were developed by Ernest Burgess and the Chicago school of sociologists in the early twentieth century and were rarely questioned for decades after that: Foreigners came to this country, found marginal places to live in the center of big cities, close to the industrial core, and then gradually moved farther out as their savings enabled them to purchase or rent property separated from the noise, dirt, smells, and dangers of the inner city.

A Little History of Economics
by Niall Kishtainy
Published 15 Jan 2017

Economists are different, you might assume: they deal with strictly economic topics to do with industries and firms, prices and profit. In the 1950s, Gary Becker (1930–2014) broke down the divide between the ‘economic’ and the ‘social’. He was a leading economist at the University of Chicago, whose department of economics became so famous that people talk of the Chicago school of economic thought. Chicago’s philosophy was that markets and prices are the basis of how society works. Becker took this further than most. At work, shopkeepers calculate costs and benefits to earn the most profit. At home they’re busy calculating costs and benefits too, thought Becker. They make the children turn off the television and do their homework because children who do their homework end up earning more when they’re adults, and adults with money are better able to look after their elderly parents.

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Friedman believed that the problems of the 1970s were the result of too much government, not too little. Like Keynes, he didn’t want to think up economic theories just for the sake of it – he wanted to change the world. Eventually, Friedman’s economics conquered the Keynesian way of thinking. Friedman was one of the most famous champions of capitalism and the leading economist of the Chicago school of economics, which held that the principles of markets should govern society. In his book Capitalism and Freedom he criticised many kinds of government interference in the economy: for example, controls on rents and the setting of minimum wages should go. At first, economists dismissed him and his followers as oddballs.

The State and the Stork: The Population Debate and Policy Making in US History
by Derek S. Hoff
Published 30 May 2012

Individual households rationally maximize their numbers of children, and the end result is a socially optimal population. Since the 1960s, perhaps the single leading figure in the economics of American fertility has been economist Richard Easterlin. Building on the consumption theories of Milton Friedman, the dean of the “Chicago School”—and, in particular, the argument that expected lifetime earnings, not immediate income, guide an individual’s consumption habits—Easterlin posited a cyclical theory of American fertility based upon “relative expectations” or “potential income.” Members of a large cohort face stiffened labor market competition, and as a result they have fewer babies than their parents did.81 Easterlin’s emphasis on “intergenerational relative income” differed from Becker’s emphasis on household consumption, but the thrust of both was that population growth rates naturally adjust to the economic and social environment, a conclusion that cuts against overpopulation concerns.82 True to the broader philosophy of the “Chicago School,” any externalities associated with children (e.g., pollution effects) were deemed marginal.

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Members of a large cohort face stiffened labor market competition, and as a result they have fewer babies than their parents did.81 Easterlin’s emphasis on “intergenerational relative income” differed from Becker’s emphasis on household consumption, but the thrust of both was that population growth rates naturally adjust to the economic and social environment, a conclusion that cuts against overpopulation concerns.82 True to the broader philosophy of the “Chicago School,” any externalities associated with children (e.g., pollution effects) were deemed marginal. Apart from their work on fertility, the new household economists also praised the broader economic virtues of population growth.83 Whether they focused on population growth’s inducement of harder work, technological innovation, or reduced fertility, all of these economists stressed the motivations and initiative of the individual, a stress that dovetailed with the ascendant New Right’s stress on the entrepreneur.84 This is not to say that MKBD became dominant in the late 1960s.

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For example, Simon Kuznets believed that the ability of societies to invest in human capital upset traditional assumptions about the effects of population growth on capital formation. See his “Population and Economic Growth,” Proceedings of American Philosophical Society 111 (June 1967): 178–84. 77. The original human capital theorists were conservative labor economists associated with the “Chicago School,” but their findings ironically provided theoretical support for the Great Society’s social investment. See Alice O’Connor, Poverty Knowledge: Social Science, Social Policy, and the Poor in Twentieth-Century U.S. History (Princeton: Princeton University Press, 2001), 140–43. Less well known is that human capital theory was closely connected to population debates.

Economic Dignity
by Gene Sperling
Published 14 Sep 2020

Yet for decades, there has been too little openness to considering whether antitrust law and competition policy should also incorporate values of economic dignity. The Chicago School revolutionized antitrust by establishing the premise that antitrust should be solely focused on judging whether economic concentration will lead to higher consumer prices. Since adherents held an idealized assumption that the threat of new entrants would hold down prices, only in the rarest cases—like cartels—did the Chicago School believe even massive economic concentration and monopolies would fail this test of higher consumer prices. This perspective became conventional wisdom and has dominated the courts for decades.

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It is not even a principle that is deeply rooted in our history or even legal traditions. As scholars like Lenore Palladino and the late Lynn Stout, journalist Binyamin Appelbaum, and others have written, the idea of shareholder primacy became dominant only during the 1970s, as part of the rise of free-market economic ideologies pushed by economist Milton Friedman and others in the Chicago School.28 Today, there is a renewed willingness to ask, if corporations are creations of laws made by the people, should their end goal be something larger than shareholder maximization? There is increasingly a movement to go beyond shareholder primacy to a “stakeholder test”—one that allows corporations to consider the interests of employees, communities, suppliers, customers, and the environment on equal footing with shareholders.

The Politics of Bitcoin: Software as Right-Wing Extremism
by David Golumbia
Published 25 Sep 2016

The idea that inflation is a “destruction of value” and that the U.S. dollar has lost most or all of its purchasing power over the course of a hundred years has long been a staple of conspiracy theories, in no small part used by demagogues like Alex Jones to drive the unsuspecting toward purchases of gold and other precious metals (on inflation conspiracy theories in general see Aziz 2014 and Krugman 2011; for Ron Paul’s use of inflation conspiracy theories see Foxman 2012). The extremist characterization of inflation may have found its way into some parts of popular discourse via its promulgation in JBS and other right-wing propaganda, but it was a theory developed and cultivated by the architects of neoliberal doctrine associated with the Chicago School of economics and the Mont Pelerin Society. Chief among these was MPS founding member and early 1970s president and University of Chicago economics professor Milton Friedman. Since at least the 1950s Friedman preached a very specific point of view about inflation, summarized in his famous (Friedman 1963) dictum that “inflation is always and everywhere a monetary phenomenon.”

The New Urban Crisis: How Our Cities Are Increasing Inequality, Deepening Segregation, and Failing the Middle Class?and What We Can Do About It
by Richard Florida
Published 9 May 2016

Terry Clark, Richard Lloyd, Kenneth Wong, and Pushpam Jain, “Amenities Drive Urban Growth,” Journal of Urban Affairs 24, no. 5 (2002): 493–515; Richard Florida, “The Economic Geography of Talent,” Annals of the Association of American Geographers 92 (2002): 743–755; Edward Glaeser, Jed Kolko, and Albert Saiz, “Consumer City,” Journal of Economic Geography 1, no 1 (2001): 27. 5. See Robert Owens, “Mapping the City: Innovation and Continuity in the Chicago School of Sociology, 1920–1934,” American Sociologist 43, no. 3 (September 2012): 264–293; Martin Bulmer, The Chicago School of Sociology: Institutionalization, Diversity, and the Rise of Sociological Research (Chicago: University of Chicago Press, 1986). 6. Robert Ezra Park, Ernest W. Burgess, and Roderick D. McKenzie, The City (Chicago: University of Chicago Press, 1925).

The Unknowers: How Strategic Ignorance Rules the World
by Linsey McGoey
Published 14 Sep 2019

The evenhandedness of their 18th and 19th-century heroes – thinkers such as Smith and Tocqueville who saw that both ‘big’ government and ‘big’ industry can lead to despotic concentrations of power – fell to the wayside of the economics academic mainstream. That is, until recently. Jacob Viner’s concern is just one of countless examples over the years of a growing counter-challenge to the doctrinaire tenets within neoclassical economic theory, and especially the anti-regulation approach of the Chicago School. These challengers argue that the Chicago School economists have strayed too far from the discipline’s early roots as an empirical social science, committed to studying actual economic processes. At the forefront of this new awakening is a broad, interdisciplinary group of economists, philosophers and sociologists studying the relationship between regulation, tax policies, capital flows and growing inequality.

Capitalism: A Ghost Story
by Arundhati Roy
Published 5 May 2014

David Ransom, “Ford Country: Building an Elite in Indonesia,” in The Trojan Horse: A Radical Look at Foreign Aid, ed. Steve Weissman with members of the Pacific Studies Center and the North American Congress on Latin America (Palo Alto, CA: Ramparts, 1975), 93–116. 45. Juan Gabriel Valdés, Pinochet’s Economists: The Chicago School of Economics in Chile (New York: Cambridge University Press, 1995). 46. Rajander Singh Negi, “Magsaysay Award: Asian Nobel, Not So Noble,” Economic and Political Weekly 43, no. 34 (2008): 14–16. 47. Narayan Lakshman,“World Bank Needs Anti-graft Policies,” Hindu, September 1, 2011, http://www.thehindu.com/todays-paper/tp -international/world-bank-needs-antigraft-policies/article2416346.ece.

The Price of Inequality: How Today's Divided Society Endangers Our Future
by Joseph E. Stiglitz
Published 10 Jun 2012

For instance, a new and powerful branch of economics called game theory explained how collusive behavior could be maintained tacitly over extended periods of time. Meanwhile, new theories of imperfect and asymmetric information showed how information imperfections impaired competition, and new evidence substantiated the relevance and importance of these theories. The influence of the Chicago school should not be underestimated. Even when there are blatant infractions—like predatory pricing, where a firm lowers its price to force out a competitor and then uses its monopoly power to raise prices—they’ve been hard to prosecute.34 Chicago school economics argues that markets are presumptively competitive and efficient.

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It appears that the banks worked to rig the rate, enabling them to make still more money from others who were unaware of these shenanigans.) Of course, even when laws that prohibit monopolistic practices are on the books, these have to be enforced. Particularly given the narrative created by the Chicago school of economics, there is a tendency not to interfere with the “free” workings of the market, even when the outcome is anticompetitive. And there are good political reasons not to take too strong a position: after all, it’s antibusiness—and not good for campaign contributions—to be too tough on, say, Microsoft.43 Politics: getting to set the rules and pick the referee It’s one thing to win in a “fair” game.

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Stiglitz, “Technological Change, Sunk Costs, and Competition,” Brookings Papers on Economic Activity 3 (1987), pp. 883–947; and P. Dasgupta and J. E. Stiglitz, “Potential Competition, Actual Competition, and Economic Welfare,” European Economic Review 32, nos. 2–3 (March 1988): 569–77. 33. For discussion and examples of conservative foundations’ contribution to the Chicago school law and economics programs, see Alliance for Justice, Justice for Sale: Shortchanging the Public Interest for Private Gain (Washington, DC: Alliance for Justice, 1993). 34. The Department of Justice brought a case against American Airlines in the early years of this century. I thought the evidence that American Airlines had engaged in predatory behavior was especially compelling, but the judge didn’t need to look at the evidence: the Supreme Court had ruled that there was just too strong a presumption against the existence of predatory pricing to make prosecution possible. 35.

From Bauhaus to Our House
by Tom Wolfe
Published 2 Jan 1981

The old Beaux-Arts traditions became heresy, and so did the legacy of Frank Lloyd Wright, which had only barely made its way into the architecture schools in the first place. Within three years, every so-called major American contribution to contemporary architecture—whether by Wright, H. H. Richardson, creator of the heavily rusticated American Romanesque, or Louis Sullivan, leader of the “Chicago School” of skyscraper architects—had dropped down into the footnotes, into the ibid. thickets. Wright himself was furious and, for one of the few times in his life, bewildered. It was hard to say what got under his skin more: the fact that his work had been upstaged by the Europeans or the fact that he was now treated as a species of walking dead man.

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay
by Guy Standing
Published 13 Jul 2016

This is what platform corporations want, and what neo-liberals have always wanted, because they depict all collective bodies as distorting the market and preventing market clearing.30 The platforms are reducing the rental income gained by those inside occupational communities and transferring that to themselves, further reducing the returns to labour and work. One of the least analysed aspects of the neo-liberal agenda has been the re-regulation of occupations, including all the great professions. Milton Friedman, an architect of the Chicago school of economics, wrote his first book (with Simon Kuznets) in 1945 on the medical professions, criticising their rent seeking through restricting the supply of doctors, imposing high standards, controlling fees and so on. When the neo-liberals achieved domination of the economics profession and economic policymaking in the 1980s, they launched an onslaught on occupational self-regulation.

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Right now the central bank presidents of Chile, Argentina and Israel were my students, and the immediate former central bank presidents in Argentina, Chile and Costa Rica were also my students.5 Many of his former students were in prominent positions in the lead-up to the financial crash in 2008, and by the time he spoke to the MPS conference in Lima in 2015 he could doubtless have embellished his boast. He and Friedman groomed Chile’s ‘Chicago boys’ to help Pinochet put their neo-liberal model into effect after the coup. With Hayek and von Mises, they forged what became the hegemonic doctrine, known colloquially as the Chicago school of law and economics. No fewer than seventeen winners of the Nobel Prize for Economics between 1980 and 2008 were from the University of Chicago or were educated there. The academic discipline of ‘economics’ became a creature of an ideological paradigm.6 ‘Business schools’ partially displaced economics departments and critics of neo-liberalism found themselves disenfranchised.

#Republic: Divided Democracy in the Age of Social Media
by Cass R. Sunstein
Published 7 Mar 2017

Many of those who know most about the underlying technology and what is becoming possible often display a kind of visceral, unreflective libertarianism—a belief that all that matters is that people are allowed to see what they want and choose what they like. The commitments to free markets and perfecting them are no less intense than what can be found in the ideas of the Chicago school of economics, most famously captured in the work of Milton Friedman. As a longtime professor at the University of Chicago, where I taught from 1981 until 2007, I confess a great deal of fondness for the Chicago school; in my view, it is mostly right, and certainly more right than wrong. For consumer goods—such as sneakers, cars, soaps, and candy—it provides the right foundation for analysis. But when we are speaking of politics and the democratic domain, it misses a great deal.

The Physics of Wall Street: A Brief History of Predicting the Unpredictable
by James Owen Weatherall
Published 2 Jan 2013

For instance, one consequence of the hypothesis is that there can’t be any speculative bubbles, because a bubble can occur only if the market price for something becomes unmoored from the thing’s actual value. Anyone who remembers the dot-com boom and bust in the late nineties/early 2000s, or anyone who has tried to sell a house since about 2006, knows that prices don’t behave as rationally as the Chicago School would have us believe. Indeed, most of the day-to-day traders I’ve spoken with find the idea laughable. But even if markets aren’t always efficient, as they surely aren’t, and even if sometimes prices get quite far out of whack with the values of the goods being traded, as they surely do, the efficient market hypothesis offers a foothold for anyone trying to figure out how markets work.

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The short seller was perceived as a blatant speculator, gambling on market moves rather than investing capital to spur growth. Worse, he had the nerve to take a financial interest in bad news. This struck many investors as déclassé. Views on short selling changed in the 1970s and 1980s, in part because of Thorp’s and others’ work, and in part because of the rise of the Chicago School of economics. As those economists argued at the time, short selling may seem crude, but it serves a crucial social good: it helps keep markets efficient. If the only people who can sell a stock are the ones who already own it, people who have information that could be bad for the company often don’t have any way of affecting market prices.

Paper Promises
by Philip Coggan
Published 1 Dec 2011

By the early 1980s, with Margaret Thatcher in power in Britain and Ronald Reagan in America, Friedman’s influence was at its peak. The government role in the economy was to control inflation and to ensure the rule of law and property rights. Otherwise, markets should be given free rein to allocate resources, which they would inevitably do in a more efficient way than bureaucrats. The Chicago school also argued that lower taxes would result in a ‘supply-side boost’ to economic activity, as businessmen and workers were given incentives to work harder. The same critics argued that the government had interfered too much in the private sector by nationalizing industries and raising taxes.

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It was not for Alan Greenspan to second guess the decisions of smart fund managers – the Howard Roarks of their day – who had spent their lives analysing the data. This analysis reflected the general reaction against the Keynesian consensus of the post-war period, which seemed to end in significant parts of industry being under government control. An academic fight back was led by Milton Friedman of the Chicago school of economics, who argued that governments were poor at allocating capital. The free market view certainly had some justification; government projects are often marked by bloated spending and ‘white elephants’ such as Concorde. Bureaucrats are unlikely to devise such popular products as the iPod or the Nintendo Wii.

The Great Reversal: How America Gave Up on Free Markets
by Thomas Philippon
Published 29 Oct 2019

This set of ideas and principles came to be known as the Harvard School of antitrust. The Chicago School brought a counterrevolution in the 1970s which tried to put economic efficiency at the center of antitrust policy. Robert Bork’s highly influential book, The Antitrust Paradox, marked a shift in policy in 1978. As IO economists John Kwoka and Lawrence White (2014) explain, “the skepticism and even some hostility toward big business that characterized the initial period of antitrust have been replaced by current policy that evaluates market structure and business practices differently.” For instance, an idea from the Chicago School is that high concentration does not necessarily imply market power as long as the threat of entry is real, that is, as long as the market is contestable.

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet
by Klaus Schwab
Published 7 Jan 2021

Regional pharmacy chains like Eckerd and Happy Harry's have been swallowed by national giants.49 It would be wrong to ascribe this evolution merely to technology or globalization, economists such as Philippon, and legal scholars such as Wu and Lina Khan also argued. Technology did of course allow these companies to continue their global growth. It created the tools for them to entrench their market positions. But it was the state which allowed this to happen. How? First, by focusing its antitrust actions in the technology sector on consumer prices, as the Chicago School had argued for a few decades earlier, it missed the broader picture of what was happening. In the case of services such as Facebook and Google, the consumer price stopped being the relevant yardstick. The consumer effectively became the product. The use of many services was free, but the flip side was that users were targeted by personalized ads.

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As I wrote in a contribution to TIME Magazine:1 Shareholder capitalism first gained ground in the United States in the 1970s, and expanded its influence globally in the following decades. Its rise was not without merit. During its heyday, hundreds of millions of people around the world prospered, as profit-seeking companies unlocked new markets and created new jobs. But that wasn't the whole story. Advocates of shareholder capitalism, including Milton Friedman and the Chicago School [of economists], neglected the fact that a publicly listed corporation is not just a profit-seeking entity but also a social organism. Together with financial-industry pressures to boost short-term results, the single-minded focus on profits caused shareholder capitalism to become increasingly disconnected from the real economy.

Stakeholder Capitalism: A Global Economy That Works for Progress, People and Planet
by Klaus Schwab and Peter Vanham
Published 27 Jan 2021

Regional pharmacy chains like Eckerd and Happy Harry's have been swallowed by national giants.49 It would be wrong to ascribe this evolution merely to technology or globalization, economists such as Philippon, and legal scholars such as Wu and Lina Khan also argued. Technology did of course allow these companies to continue their global growth. It created the tools for them to entrench their market positions. But it was the state which allowed this to happen. How? First, by focusing its antitrust actions in the technology sector on consumer prices, as the Chicago School had argued for a few decades earlier, it missed the broader picture of what was happening. In the case of services such as Facebook and Google, the consumer price stopped being the relevant yardstick. The consumer effectively became the product. The use of many services was free, but the flip side was that users were targeted by personalized ads.

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As I wrote in a contribution to TIME Magazine:1 Shareholder capitalism first gained ground in the United States in the 1970s, and expanded its influence globally in the following decades. Its rise was not without merit. During its heyday, hundreds of millions of people around the world prospered, as profit-seeking companies unlocked new markets and created new jobs. But that wasn't the whole story. Advocates of shareholder capitalism, including Milton Friedman and the Chicago School [of economists], neglected the fact that a publicly listed corporation is not just a profit-seeking entity but also a social organism. Together with financial-industry pressures to boost short-term results, the single-minded focus on profits caused shareholder capitalism to become increasingly disconnected from the real economy.

Thinking, Fast and Slow
by Daniel Kahneman
Published 24 Oct 2011

A famous example of the Chicago approach is titled A Theory of Rational Addiction; it explains how a rational agent with a strong preference for intense and immediate gratification may make the rational decision to accept future addiction as a consequence. I once heard Gary Becker, one of the authors of that article, who is also a Nobel laureate of the Chicago school, argue in a lighter vein, but not entirely as a joke, that we should consider the possibility of explaining the so-called obesity epidemic by people’s belief that a cure for diabetes will soon become available. He was making a valuable point: when we observe people acting in ways that seem odd, we should first examine the possibility that they have a good reason to do what they do.

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Citizens know what they are doing, even when they choose not to save for their old age, or when they expose themselves to addictive substances. There is sometimes a hard edge to this position: elderly people who did not save enough for retirement get little more sympathy than someone who complains about the bill after consuming a large meal at a restaurant. Much is therefore at stake in the debate between the Chicago school and the behavioral economists, who reject the extreme form of the rational-agent model. Freedom is not a contested value; all the participants in the debate are in favor of it. But life is more complex for behavioral economists than for tru S th17;e believers in human rationality. No behavioral economist favors a state that will force its citizens to eat a balanced diet and to watch only television programs that are good for the soul.

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For behavioral economists, however, freedom has a cost, which is borne by individuals who make bad choices, and by a society that feels obligated to help them. The decision of whether or not to protect individuals against their mistakes therefore presents a dilemma for behavioral economists. The economists of the Chicago school do not face that problem, because rational agents do not make mistakes. For adherents of this school, freedom is free of charge. In 2008 the economist Richard Thaler and the jurist Cass Sunstein teamed up to write a book, Nudge, which quickly became an international bestseller and the bible of behavioral economics.

Raising Lazarus: Hope, Justice, and the Future of America’s Overdose Crisis
by Beth Macy
Published 15 Aug 2022

“handing out marijuana cigarettes”: Police Chief Tim Jones’s earlier rejection of needle exchange was reported by Henri Gendreau, “Needle program backed by chief,” Roanoke Times, April 14, 2019. “change has always been driven”: Dr. Sam Snodgrass, author interview, January 25, 2021. “Any positive change”: The Chicago School, “Any Positive Change,” The Chicago School of Professional Psychology, February 21, 2019. it’s irrefutable: Dr. Tami Olt, author interview, August 20, 2021. “the only thing that kept assholes”: Chris Schaffner, author interview, September 17, 2020. (sites established in Canada): Canadian harm reduction: See: Garth Mullins interview; also Mottie Quinn, “Safe Drug Injection Sites Are Coming to America.

Moscow, December 25th, 1991
by Conor O'Clery
Published 31 Jul 2011

Indeed what is remarkable is the number of Americans who gather around the deathbed for the obsequies for communist power. Never before or since are Russian and American interests so intertwined. The distrust and enmity of the long Cold War dissolves into a remarkable dalliance between the competing nuclear powers. Americans from the International Monetary Fund and from the Chicago School of Economics are to be found in Moscow collaborating with Russian policymakers on a new direction for the Russian economy. Their guiding hands are at the elbow of Yeltsin’s ministers as they embark on a mission unprecedented in economic history: the dismantling of the communist model and its substitution with the raw capitalism of neoliberal economics.

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They also sought advice from Harvard economics professor Jeffrey Sachs, who assisted the Polish government with its shock therapy.4 Sach’s attitude, according to Chernyaev, was “If you don’t become like us, you’ll get no dollars.” Gorbachev vetoed the plan, and no dollars were forthcoming. Having persuaded the Russian parliament to give him special powers, Yeltsin is ready to make the leap to capitalism. He has given the task to a small and radical group of young economists, led by Gaidar, a devotee of the Chicago school of monetarist economics. Short, chubby, intellectually gifted, and nicknamed Guboshlyop because of the way his lips flap when he talks, the thirty-five-year-old Gaidar is to be found on the evening of December 25, 1991, in the long, whitewashed Hall of Meetings, where a drugged and distressed Yeltsin was brought from his hospital bed four years ago to be shamed by party leader Mikhail Gorbachev for daring to challenge his leadership and privileges.

Multicultural Cities: Toronto, New York, and Los Angeles
by Mohammed Abdul Qadeer
Published 10 Mar 2016

This brings up the question of the cultures of a city and what are their bases. Theoretical interest in the culture or cultures of cities has a long history. At the dawn of the modern period, theorists such as Max Weber, Emile Durkheim, and Georg Simmel were occupied with exploring the cultural elements of city life. The Chicago School of urban sociology in the early twentieth century identified urbanism as a distinct way of life and urban social organization as the embodiment of its culture and social relations. Urban theory continues to command interest in the culture of cities right up to the present time, as reflected in the writings of David Harvey, Manuel Castells, Anthony Giddens, and the purveyors 12 Multicultural Cities of the theory of postmodern urbanism, sometimes called the Los Angeles school of urbanism, namely, Michael Dear, Edward Soja, Allen Scott, and others.

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To understand how ethno-racial differences affect the internal structure and inject pluralism into it, I will begin with a brief review of those theories and models. The most common image of a city is that of a circular built-up area, divided into residential zones of decreasing densities from the centre to the periphery. At the centre of this built-up area is a high-density district of commercial-business activities. This image owes its origin to the Chicago school’s Ernest Burgess, whose concentric zone hypothesis (1923) conceived the city as a product of ecological processes.2 Other classical models include (1) Homer Hoyt’s sector theory (1939), envisioning the city as made up of pie-shaped sectors differentiated by high, medium, and low rental housing, which corresponded to the residences of the associated social classes; and (2) Chauncy Harris and Edward Ullman’s multiple-nuclei hypothesis (1945), which postulates the city as structured around multiple centres that serve as the anchors of its development and expansion.3 From these models the analytical parameters of urban structure can be deduced, that is, functions (residential, commercial, industrial), socioeconomic characteristics of residents, density of development, locations of activities, and interrelations.

Extreme Economies: Survival, Failure, Future – Lessons From the World’s Limits
by Richard Davies
Published 4 Sep 2019

Larrain, F., and Meller, P. (1990), ‘The Socialist-Populist Chilean Experience, 1970–1973’, in Dornbusch, R., and Edwards, S. (eds.), The Macroeconomics of Populism in Latin America (Chicago: University of Chicago Press). Mander, B. (2017), ‘Leftwing Bloc Upends Chile’s Traditional Balance of Power’, Financial Times, 24 November. Miller, H. L. (1962), ‘On the “Chicago School of Economics”’, Journal of Political Economy, 70 (1), 64–9. Montero, R., and Vargas, M. (2012), Economic Residential Segregation Effects on Educational Achievements: The Case of Chile. OECD (2010), OECD Economic Surveys: Chile (Paris: OECD). ———— (2011), Divided We Stand – Why Inequality Keeps Rising (Paris: OECD). ———— (2018), Divided Cities: Understanding Intra-urban Inequalities (Paris: OECD).

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Solimano, A. (2012), Chile and the Neoliberal Trap – The Post-Pinochet Era (Cambridge: Cambridge University Press). Stokes, J. M. (1956), ‘The International Cooperation Administration’, World Affairs, 119 (2), 35–37. United Nations (2018), World Urbanisation Prospects – Key Facts (New York: United Nations). Valdés, J. G. (1995), Pinochet’s Economists: The Chicago School of Economics in Chile (Cambridge: Cambridge University Press). Vallejo, C. (2016), ‘On Public Education in Chile’, OECD Yearbook 2016 (Paris: OECD). Weissbrodt, D., and Fraser, P. (1992), ‘Report of the Chilean National Commission on Truth and Reconciliation’, Human Rights Quarterly, 14 (4), 601–22.

The Extreme Centre: A Warning
by Tariq Ali
Published 22 Jan 2015

They had been prepared to take that risk because, while the Soviet Union persisted, it seemed as if there was no other effective way to shore up the frayed postwar capitalist system. But when the Soviet Union self-destructed and was dismantled, new problems arose, partially political, but mostly social and economic. With the victory of Hayek and the Chicago School came the birth of what became known as neoliberalism. Accordingly, the European Union began to determine the social and economic policies of its member states. This meant ending state control of industries, and slowly but inexorably dismantling the social welfare state by bringing the market into what had until now been the most hallowed domains of social provision.

Misbehaving: The Making of Behavioral Economics
by Richard H. Thaler
Published 10 May 2015

In other words, the Coase theorem worked in theory, when trading for tokens redeemable for cash, but it did not work in practice, when trading for real-world objects like coffee mugs. Questioning the Coase theorem at a law and economics workshop! That was high treason. One of the unfortunate aspects of the University of Chicago at that time, one that is thankfully no longer the case, was that there was an undue tolerance for scholars who would spout the Chicago School traditional lines, loudly and frequently. One example was the economist John Lott, who had strung together a series of visiting appointments allowing him to be at the university for several years. Lott is most famous for writing a book entitled More Guns, Less Crime. As the title suggests, the thesis of the book is that if we just made sure every American was armed at all times, no one would dare commit a crime, a claim that other researchers have strongly disputed.§ Lott was a frequent attendee and active participant at workshops.

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In not a single case did the parties even attempt to negotiate after the court had issued its order. In addition to the Coase theorem, the other part of the paper that got people’s blood boiling was something we left for the very end of it—the topic of paternalism. The core principle underlying the Chicago School’s libertarian beliefs is consumer sovereignty: the notion that people make good choices, and certainly better choices than anyone else could make for them. By raising the specters of bounded rationality and bounded self-control, we were undercutting this principle. If people make mistakes, then it becomes conceivable, at least in principle, that someone could help them make a better choice.

The Attention Merchants: The Epic Scramble to Get Inside Our Heads
by Tim Wu
Published 14 May 2016

Crumb,” as one observer remarked, Robbin would become a professor at New York University in the 1950s.3 He would spend the following decade building first-generation computer models to predict things like where urban riots were likely to occur, the same way you might predict the weather.4 Robbin’s models were based on observations of the Chicago School of Sociology, which aimed to understand American communities like ecosystems. Neighborhoods, the sociologists thought, could be seen as super-organisms with lives of their own apart from those of the individuals living in them; they would mature and grow or shrink and disappear over time, like a rainforest.5 The aim of better understanding communities dovetailed with “the politics of recognition,” a major strain of 1960s and 1970s countercultural thought.

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Along with related liberation movements, the 1970s saw a surge in popular interest in marginalized groups, like women, or subcultures, like African Americans, Latinos, gays, Native Americans, and so on. It all fit the spirit of individualism.6 Robbin’s models brought computational rigor to the Chicago School’s methods, which were empirical and qualitative. At the height of a progressive movement to acknowledge and empower neglected groups—African Americans most prominently—Robbin worked on what he called “cluster analysis,” by which one could understand more precisely what kind of people lived in any neighborhood based on the “principle that residents living near each other are likely to have similar demographic, socio-economic and lifestyle characteristics.”7 His public-spirited but academic goal to gain a better understanding of what the nation really looked like.

A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History
by Diana B. Henriques
Published 18 Sep 2017

Those opportunistic bargain hunters certainly would not come from the rapidly growing community of index funds, who bought only those shares that helped their portfolio track some index such as the S&P 500. Firmly believing markets were rational and efficient, index fund investors weren’t going to be looking for bargains when LOR’s clients needed to sell. Indeed, as stock prices fell, the index funds might well be selling, too, to cover redemptions from nervous retail investors. Indeed, if the “Chicago School” was right—if markets were rational and efficient, and current prices reflected all the information known to all rational investors—how could such bargain hunters survive? In a truly efficient market, they would soon go broke. And if that happened, it was not clear who would buy stock from LOR’s clients in a falling market.

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Economists Joseph Stiglitz and Sanford Grossman, both at Stanford in the mid-1970s, were especially trenchant in posing this puzzle. As they saw it, if market prices perfectly reflected any new information available, “those who spent resources to obtain it would receive no compensation” and would soon stop gathering new knowledge. Ergo, markets were not perfectly efficient, as the Chicago school’s adherents insisted. But, Justin Fox noted, other scholars largely shrugged off their argument. “The overwhelming majority of research in finance in those days was no longer concerned with the question of whether markets were efficient. One just assumed that they were, and proceeded from there.”

The Production of Money: How to Break the Power of Banks
by Ann Pettifor
Published 27 Mar 2017

And as worrying, sections of the so-called Left are channelling anger at bankers into neoclassical economic policies for resolving the crisis. Some of these proposals for ‘reform’ of the banking system are also discussed in this book. They take the form of ‘fractional reserve banking’, the nationalisation of the money supply and the pursuit of ‘balanced budgets’ for governments. These are policies which owe their origins to the Chicago School and to Friedrich Hayek and Milton Friedman. They would have devastating impacts on the working population and those dependent on government welfare. So this book challenges the flawed, if well-meaning, approaches of civil society organisations that are steering many on the Left into, to my mind, an intellectual dead-end.

Inflated: How Money and Debt Built the American Dream
by R. Christopher Whalen
Published 7 Dec 2010

They go further, however, and state that “the collapse from 1929 to 1933 was neither foreseeable nor inevitable.”50 All of these arguments may seem quite reasonable from the perspective of an economist, especially revered economic researchers such as Milton Friedman and Anna Schwartz, but when their conclusions are viewed from the point of view of a credit officer or trader, a different analysis emerges. Economists from the Chicago School such as Friedman have long believed that the market price of a security and the intrinsic value of a security in a long-term sense are equivalent, but this view seems to ignore the transient factors such as the availability of credit, which can greatly affect demand for stocks. The market action in the later part of the 1920s had all of the attributes of a nineteenth century speculative market movement where the only real driver was the irrational exuberance of the participants and particularly their belief that prices would move higher.

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If you do not recognize the difference, the fundamental difference between price and value, then you are doomed. Now it didn’t really matter in corporate finance because the two were supposed to remain equal forever. Who has been telling us that? These people do not live in New York. They live in Chicago. The Chicago School of Economics has been telling us for a century that price and value are identical, i.e., they are the same number. What this means is that there is no such thing as a good deal, there is not such a thing as a bad deal, there are only fair deals.51 As already noted, many “investors” during this period had already dispensed with the old fashioned idea of using fundamental factors such as profits or earnings to assess the relative value of a security.

Profiting Without Producing: How Finance Exploits Us All
by Costas Lapavitsas
Published 14 Aug 2013

For macroprudential regulation, see Claudio Borio, ‘The Macroprudential Approach to Regulation and Supervision’, VoxEU.org, 14 April 2009. 37 This is a view that has made considerable headway in the UK, see, for instance, John Kay, ‘Narrow Banking: The Reform of Banking Regulation’, Centre for the Study of Financial Innovation, 2009. Kay has called the approach ‘narrow’ banking but this is a misnomer which confuses 100% reserve banking (the traditional meaning of ‘narrow’ banking) with commercial banking in general. The original proposal for ‘narrow’ banking occurred in the US and is associated with the Chicago School, notably Henry Simons et al., ‘Banking and Currency Reform’, in Research in the History of Economic Thought and Methodology, Archival Supplement 4, ed. Warren J. Samuels, Greenwich, CT: JAI Press, 1933; and Irving Fisher, ‘100% Money and the Public Debt’, Economic Forum, April–June 1936. In the post-war period, the idea received strong support from Milton Friedman (‘A Program for Monetary Stability’, New York: Fordham University Press, 1960).

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In a nutshell, if commercial banks operated with 100% reserves formed out of state fiat money, there would be no bank runs, the supply of money would be fully controlled, the capacity of banks to create credit would be curtailed, and public debt would be dramatically reduced as the state would acquire fiat claims on circulation. This notion has been recently revived in an IMF paper that curiously combines the monetarism of the Chicago School with the chartalism of radical anthropology; see Jaromir Benes and Michael Kumhof, ‘The Chicago Plan Revisited’, IMF Working Paper WP/12/202, International Monetary Fund, August 2012. ‘Narrow’ banking profoundly contradicts the nature of both money and banking in advanced capitalism. If the state did indeed transform the vast bulk of modern money into fiat along the lines suggested by Benes and Kumhof, capitalist banking as it has been known for centuries would come to an end; the state would also emerge as the arbiter of circulation in command of vast stocks of fiat money.

Accelerando
by Stross, Charles
Published 22 Jan 2005

Oh, and he's promised to invent three new paradigm shifts before breakfast every day, starting with a way to bring about the creation of Really Existing Communism by building a state central planning apparatus that interfaces perfectly with external market systems and somehow manages to algorithmically outperform the Monte Carlo free-for-all of market economics, solving the calculation problem. Just because he can, because hacking economics is fun, and he wants to hear the screams from the Chicago School. Try as he may, Manfred can't see anything in the press release that is at all unusual. It's just the sort of thing he does, and getting it on the net was why he was looking for a CIA stringer in the first place. He tries to explain this to her in the bath as he soaps her back. "I don't understand what they're on about," he complains.

…

Well, let me show you my library, my friend," he says, standing up. "This way." Gianni ambles out of the white living room with its carnivorous leather sofas, and up a cast-iron spiral staircase that nails some kind of upper level to the underside of the roof. "Human beings aren't rational," he calls over his shoulder. "That was the big mistake of the Chicago School economists, neoliberals to a man, and of my predecessors, too. If human behavior was logical, there would be no gambling, hmm? The house always wins, after all." The staircase debouches into another airy whitewashed room, where one wall is occupied by a wooden bench supporting a number of ancient, promiscuously cabled servers and a very new, eye-wateringly expensive solid volume renderer.

Multitude: War and Democracy in the Age of Empire
by Michael Hardt and Antonio Negri
Published 1 Jan 2004

Keynesianism, putting an end to the naturalist illusion, opened an insolvable problem that political economy would have to face. By the 1970s Keynes’s rethinking of economics was showing negative results. With the expansion of the cold war, Keynesianism was first scaled back by Paul Samuelson to resemble the old mainstream neoclassical doctrine, and then Milton Friedman and the Chicago School arrived to undermine it completely, proposing to establish certain measures of equilibrium by confiding every power of regulation to money, that is, to the market. We were thus taken back, one might say, to the science of economics—but what a strange science! It is now based on a kind of “monetary essentialism” in which the standards of measure no longer have any relationship with the real world of production and exchange, except according to the norms that the Central Bank or the Federal Reserve dictate.

…

While we wait for an Imre Lakatos or a Paul Feyerabend to overturn economics, it is interesting to note how even though the discipline is lost in its dogmatic slumber some economists reach conclusions close to what we suggest here. Take Gary Becker, for example, who for a half century has been asking the same question: what can it mean to ask if humans can be content or fulfilled in purely economic terms without investing the entire field of biopolitical existence? Surely, the methodological individualism of the Chicago School cannot solve such problems, even if they add new concepts like human capital and cognitive capital. The dismal science, as Thomas Carlisle called it, however, is not doomed. It can be reborn when it takes stock of the new common anthropology and the intellectual and affective power of productive labor, and when it can in addition to capitalists and wage laborers account for the poor and the excluded who nonetheless always constitute the productive articulations of social being.

Good Economics for Hard Times: Better Answers to Our Biggest Problems
by Abhijit V. Banerjee and Esther Duflo
Published 12 Nov 2019

As a result, economics in recent years has had to reckon with preferences, and we have gained some useful insights about how we might be able to get out of this mess. DE GUSTIBUS NON EST DISPUTANDUM? In 1977, in a famous piece titled “De Gustibus Non Est Disputandum” (usually translated as “There Is No Accounting for Tastes”), Gary Becker and George Stigler, Nobel Prize winners and founders of the Chicago school of economics, made an influential case for why economists should avoid getting entangled in trying to understand what lies behind preferences.2 Preferences are part of who we are, Becker and Stigler argued. If, after we go over all the information we have, two of us still disagree on whether vanilla is better than chocolate or polar bears are worth saving, the presumption ought to be this is something intrinsic to who we each are.

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GIVE ME A LEVER26 It was a combination of the evidence that many poor countries were not growing and the Solow model’s inability to say something useful about how to affect long-term growth that eventually made economists look elsewhere. They desperately wanted to be able to say something about what could help countries grow. As Robert Lucas, one of the doyens of the Chicago school of anti-Keynesian macroeconomics and one of the most influential economists of our times, confessed in his much quoted Marshall lecture in 1985, he would like to know “if there is some action a government of India could take that would lead the Indian economy to grow like Indonesia’s or Egypt’s?

Security Analysis
by Benjamin Graham and David Dodd
Published 1 Jan 1962

Thus individual losing investments need not give rise to penalties if the fiduciary’s decisions and results were acceptable in toto. • As part of the development of the finance theory that is attributed to the “Chicago School,” in the 1950s Harry Markowitz contributed the notion that, based on an understanding of correlation, the addition of a “risky asset” to a portfolio could reduce the portfolio’s overall riskiness by increasing its diversification. • Finally, the ultimate contribution of the Chicago School came through the assertion that the “goodness” of an investment—and of a performance record—had to be evaluated based on the relationship between its risk and its return.

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They famously analogized the market to a voting machine, producing results that are the product partly of reason and partly of emotion, rather than an exact and impersonal weighing machine. (p. 70) The authors relied on a “twofold assumption: first, that the market price is frequently out of line with the true value; and, second, that there is an inherent tendency for these disparities to correct themselves.” (pp. 69–70) Before anyone from the Chicago School has a coronary, let’s hear some more from Graham and Dodd on the first assumption: “As to the truth of the former statement, there can be very little doubt—even though Wall Street often speaks glibly of the ‘infallible judgment of the market’ and asserts that ‘a stock is worth what you can sell it for—neither more nor less.’”

Nature's Metropolis: Chicago and the Great West
by William Cronon
Published 2 Nov 2009

The result was the invention of the “skyscraper.” By the time of the World’s Fair, Chicago had become famous for the height of its downtown office buildings. Men like William Le Baron Jenney, John Root, Dankmar Adler, Louis Sullivan, and Daniel Burnham were soon recognized as leading exponents of the “Chicago School of Architecture.”30 The fire accelerated an ongoing rearrangement of Chicago’s internal geography that paralleled changes in the city’s regional hinterland. “The great fire,” wrote a guidebook author in 1884, “modernized the city, leveling the ground and rendering possible the uniform elegance of the business portion.”31 By the time people arrived to view the fair, almost every part of the city, not just the burned-over district, had been significantly rebuilt.

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The general trends nontheless pointed in the direction of taller, more expensive, non-wooden structures in the downtown district, with wooden working-class housing, single-family residences, and fire-prone industries moving farther out toward the periphery. For a thorough analysis of changing property values in the wake of the fire, see Hoyt, Land Values in Chicago, 101–95. 30.Carl W. Condit, The Chicago School of Architecture: A History of Commercial and Public Building in the Chicago Area, 1875–1925 (1964); “Architecture and the City,” special theme issue of Chicago History 12, no. 4 (Winter 1983–84): 1–72; and John Zukowsky, ed., Chicago Architecture, 1872–1922: Birth of a Metropolis (1987). For a visual sense of the emerging Chicago cityscape of the late nineteenth century, see David Lowe, Lost Chicago (1978); and for an excellent guidebook that surveys the city’s modern neighborhoods and discusses their historical backgrounds, see Dominic A.

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The Era of the Civil War, 1848–1870. Vol. 3 of The Centennial History of Illinois. Springfield: Illinois Centennial Commission, 1919. Collingwood, G. H., and Warren D. Brush. Knowing Your Trees: 51 Tree Edition. Revised and edited by Devereux Butcher. Washington, D.C.: American Forestry Association, 1964. Condit, Carl W. The Chicago School of Architecture: A History of Commercial and Public Building in the Chicago Area, 1875–1925. Chicago: Univ. of Chicago Press, 1964. Conzen, Kathleen Neils. Immigrant Milwaukee, 1836–1860: Accommodation and Community in a Frontier City. Cambridge: Harvard Univ. Press, 1976. Conzen, Michael P.

Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa
by Dambisa Moyo
Published 17 Mar 2009

The experience of the newly industrializing economies of Asia gave these market-based ideas a popularity boost in policy circles in the United States and Europe. The Asian tigers seemed to have achieved high growth rates and unprecedented poverty reduction with free-market policies and an outward orientation. As free-market proponents, Milton Friedman and the Chicago School of Economics had great influence on the policies and thinking of the US President, Ronald Reagan, and the UK’s Prime Minister, Margaret Thatcher. The policies that ensued (Reaganomics and Thatcherism) bore all the hallmarks of an economic revolution, and there was little room for compromise; so too in Africa, where these free-market polices were packaged and sold as the new development agenda.

"They Take Our Jobs!": And 20 Other Myths About Immigration
by Aviva Chomsky
Published 23 Apr 2018

Although those programs are associated (rightly) with the Democratic Party, the Democrats of the late twentieth and early twenty-first centuries have retreated from the social welfare orientation of their predecessors, at least at the national level. Internationally, the new consensus is sometimes (not very accurately) called globalization. The philosophy behind it can be seen in the Chicago School of Economics–inspired program implemented in Chile in the 1970s, in the Structural Adjustment Programs (or SAPs) mandated by the World Bank and the International Monetary Fund for the Third World in the 1980s, and in the so-called Washington Consensus prescribed for Latin American and other Third World economies in the 1990s.

Pity the Billionaire: The Unexpected Resurgence of the American Right
by Thomas Frank
Published 16 Aug 2011

Among that institution’s celebrated champions of efficient market theory, the Nobel laureate Robert Lucas was reported in 2008 to be doubting his former belief in bank deregulation.4 The Nobel laureate Gary Becker confessed in 2009, “There are a lot of things that people got wrong, and I got wrong, and Chicago got wrong.”5 But the most astonishing conversion was that of Richard Posner, another knight-errant of the Chicago school. His 2009 book, A Failure of Capitalism, placed the blame for the cataclysm squarely on his former comrades in the deregulation movement. The collapse “hit economic libertarians in their solar plexus,” he wrote, because it had discredited their free-market philosophy so utterly, so undeniably.6 In 2010, Posner called for the revival of thirties-era banking rules and penned the unthinkable: an homage to John Maynard Keynes, the genius of deficit spending and the bête noire of the free-market crowd.

Humans Need Not Apply: A Guide to Wealth and Work in the Age of Artificial Intelligence
by Jerry Kaplan
Published 3 Aug 2015

It’s a mystery to me why we seem to treat occupational skills differently than other assets, like some sort of medieval barter system, at great cost to society. If major-league sports figures can securitize their future earnings, why can’t the average person do the same?44 My specific concept of a job mortgage might be new, but the basic approach certainly isn’t. Milton Friedman, leader of the Chicago school of economics, wrote an essay entitled “The Role of Government in Education” in 1955, in which he draws a distinction between “general education for citizenship” and “vocational or professional education.” He recommends that the latter should be subject to analysis as an investment, similar to physical assets, and that government policies be put in place to facilitate investment (as opposed to subsidies) in such training.

Work in the Future The Automation Revolution-Palgrave MacMillan (2019)
by Robert Skidelsky Nan Craig
Published 15 Mar 2020

The ancient contempt for work could not survive the decay of slavery, though vestiges of it have lingered in all aristocratic societies. This explains not just the high approbation of leisure by the elite of Keynes’s day, all whom were educated in the classics, but also the hostility to the ideal of leisure by the majority who associated with it not just the idleness of the rich, but with unemployment. The Chicago School notion that being out of work represents a ‘choice for leisure’ is the conceit of economists who have never experienced a day’s unemployment in their lives. With Judeo-Christianity the story gets more complicated. Work is the ‘primal curse’, the punishment by God for Adam’s sin of eating the forbidden fruit of knowledge; but at the same time it is a divine injunction to cultivate the fruits of the earth God has bestowed.

This Is Not Normal: The Collapse of Liberal Britain
by William Davies
Published 28 Sep 2020

Since the 1950s, American neoliberal thinkers have sought to expand the reach of economics into areas of human life that were otherwise governed by social and political norms.9 Gary Becker’s theory of ‘human capital’ represented education and child-rearing in terms of their future financial returns. The public choice theory of the Virginia School aimed to represent democracy and public office in terms of the calculated self-interest of those involved.10 The Chicago School did the same in relation to law and economics. This amounts to what I’ve termed the ‘disenchantment of politics by economics’.11 It also generates an attitude in which the purpose of social relations is to provide data and revenue to some third party. Threaded through the technologies of the credit derivative and the platform is a neoliberal rationality which expands the reach of financial calculation into areas previously governed by social norms.

Aerotropolis
by John D. Kasarda and Greg Lindsay
Published 2 Jan 2009

Worse, there appeared to be no alternatives—no fuels to replace it, in Jevons’s estimation—and any increases in the steam engine’s efficiency would only make it cheaper and easier to use, thus stoking greater demand and faster depletion. These were not the ravings of a fringe theorist. Jevons was as sober and as mainstream an economist as any Nobel-winning member of the Chicago School today. His suggestion made its way onto the floor of the House of Commons, where no less than future prime minister William Gladstone—then chancellor of the exchequer—referred to the looming peak coal crisis in his budget speech of 1866. A “coal panic” ensued, leading to the appointment of a blue-ribbon royal commission.

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Details on Ørestad are mostly drawn from the Port & City Development Corporation’s report “Urban Development—in Ørestad and in the Harbour Areas of Copenhagen.” 5: The Aerotropolist John Kasarda most closely identifies with the intellectual tradition of the University of Chicago’s urban sociologists. Influential figures of the Chicago School include Robert E. Park and Ernest Burgess, who developed the concentric ring model of urban growth in such works as “The Growth of the City” in The City. One of their intellectual heirs was Roderick D. McKenzie, who studied metropolitan growth and urban hierarchies in The Metropolitan Community.

Bourgeois Dignity: Why Economics Can't Explain the Modern World
by Deirdre N. McCloskey
Published 15 Nov 2011

Yet it is often claimed that a modern city, nourishing and nourished by the Great Enrichment, is fatally unable to form connections. The claim is part of the almost universal belief that trading somehow damages intimacy. Neither seems to be true, and both are versions of the pastoral. The leader of the Chicago School of urban sociology, Robert Park, offered with his colleagues the conventional antimodern analysis in 1925: “A newspaper cannot do for a community of 1,000,000 inhabitants what the village did spontaneously for itself [but wait: little American cow towns would have four newspapers] through the medium of gossip and personal contact.”24 Who says?

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Each sector of the public will therefore demand services from intellectuals favorable to the interests of that sector.”10 That part of the argument is identical to Antonio Gramsci’s on the role of the intellectual: “Every social group . . . creates together with itself, organically, one or more strata of intellectuals.”11 But Gramsci the Italian Marxist (1891–1937) was less of a historical materialist than was Stigler the Chicago School economist. Gramsci believed in a role for rhetoric and the Party, as Lenin did too, and was opposed to an “economism” such as Stigler advocated in his old age, the cynical half-truth that the interests will always win out. The European Civil War of 1914–1989 showed how nineteenth-century theories hatched by the clerisy could kill off liberty and prosperity, and tens of millions of people to the bargain.

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Men, elders, union plumbers, millionaires, officials, whites, Americans, middle-aged people, citizens, bosses, and privileged burghers of the town to this day lord it over women, minors, non-union workers, paupers, subjects, blacks, foreigners, the young, illegals, workers, and rednecks. Hierarchy is nasty indeed, leading, for example, to protection for the jobs of middle-class and middle-aged people, and therefore to massive unemployment among young people in Spain and South Africa. We of the Chicago School of economics in the 1970s agreed with the New Left historians of the time in noting, and detesting, the Bad Old Golden Rule: Those who have the gold rule. But after the Bourgeois Revaluation such hierarchy less commonly trumped the outcome of trade, and especially the hierarchy did not in the crucial matter of betterment.

Plenitude: The New Economics of True Wealth
by Juliet B. Schor
Published 12 May 2010

To unpack the growth imperative, we can start by differentiating among households, firms, and the economy as a whole. Households (or individuals) are the easiest case. In its most abstract form, mainstream economic theory centers on the idea that people maximize their well-being, and that they do so through exchanges with others. The influential formulations of Gary Becker and the Chicago school hold that this economic approach to human behavior can be applied to anything. People can decide that what matters most to them is preserving nature, raising children, or having a leisurely work environment. Income growth is in no way integral to or even implied by the model. Evidence of widespread downshifting, or voluntary trade-offs of money for time, makes clear that maximizing income is by no means a universal desire.

Cogs and Monsters: What Economics Is, and What It Should Be
by Diane Coyle
Published 11 Oct 2021

He wrote, referring to leading American academics: [I]n the wake of the crisis, the fault lines in the economics profession have yawned wider than ever. [Robert] Lucas says the Obama administration’s stimulus plans are ‘schlock economics,’ and his Chicago colleague John Cochrane says they’re based on discredited ‘fairy tales’. In response, Brad DeLong of the University of California, Berkeley, writes of the ‘intellectual collapse’ of the Chicago School, and I myself have written that comments from Chicago economists are the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten (Krugman 2006). The consequences have been regrettable. Simon Wren-Lewis noted that macroeconomists argue now for their ‘school of thought’ rather than on the merits of the case.

The System: Who Owns the Internet, and How It Owns Us
by James Ball
Published 19 Aug 2020

‘I’ve always said the problem with big tech was that you got the engineering model of Stanford University lashed to the economic model of Chicago University,’ she explains. ‘You basically got the free-market Friedmanites as an economic model, and then you have a theory of zero latency engineering.’ Bell is referring to the ultra-free-market reasoning that grew out of the Chicago School of Economics – a school of thought that came to dominate the world and influence the economic policies of Ronald Reagan in the US and Margaret Thatcher in the UK. This economic theory reasoned that markets were the best source of information and of value, and so obstacles to them – regulation, competition policy and other barriers – were usually impediments to that.

What's Wrong With Economics: A Primer for the Perplexed
by Robert Skidelsky
Published 3 Mar 2020

This is because they treat the economy as a closed system, like a game of draughts. The financial system is explicitly theorised this way by Chicago economists: the risks of all assets are said to be ‘correctly priced on average’. The collapse of 2007– 2008 was therefore impossible. Even economists who reject the full rigour of the Chicago school are professionally constrained to use the language of risk whenever they talk about forward-looking choices. People have ‘risk profiles’; interest rates measure ‘appetite for risk’; government bonds are ‘risk-free’ (except if they are Greek!), asset prices measure risk aversion and rational expectation and so on.

The End of Growth
by Jeff Rubin
Published 2 Sep 2013

Simon and Ehrlich came from completely different academic disciplines, which clearly shaped their attitudes to the issue of population growth. Simon completed his doctoral degree in economics at the University of Chicago in 1961. In his research, he was drawn to exploring the economic effects of population change. His free-market upbringing at the Chicago School clashed with Ehrlich’s stance on demographics. Ehrlich, now head of Stanford’s Center for Conservation Biology, did his graduate work in entomology at the University of Kansas, studying with renowned bee researcher Charles Michener. Along the way, Ehrlich’s ecological interests dovetailed with demographics and the study of population.

Mythology of Work: How Capitalism Persists Despite Itself
by Peter Fleming
Published 14 Jun 2015

A good deal of ideological effort had to be conducted to pave the way for people like James to make an appearance in the world. The branded self or the ‘I, Job’ function is an intense fantasy in the neoclassical mindset. As Foucault (2008: 28) noted in his lectures on the birth of biopolitics, ultra-right-wing economists of the Chicago School like Gary Becker attempted to create a social prototype that would allow economic reason to ‘generalize the enterprise from within the social body … the individual’s life itself – must make him into a sort of permanent and multiple enterprise’. In the United Kingdom, following the rise of coercive-state, Thatcherism and the barbarism of subsequent neoliberal governmental reform programmes, we now see the true consequences of this desire to transform us all into little one-person corporations.

How to Speak Money: What the Money People Say--And What It Really Means
by John Lanchester
Published 5 Oct 2014

Tim Harford is a riveting expositor of the field, lively and fair-minded, and his books The Undercover Economist and its macroeconomic companion piece The Undercover Economist Strikes Back are excellent places to start, both because they are so interesting in themselves and because they give a good initiation in how economists think and study these sorts of questions. Freakonomics, by Steven D. Levitt and Stephen J. Dubner, is a highly successful study of a number of contentious political and social questions from a microeconomic perspective. The work of the Chicago school of economists on areas such as rational choice is worth a look too, perhaps starting with Gary Becker’s Nobel Prize lecture, “The Economic Way of Looking at Life.” Behavioral economics, which has a particular interest in how people think and act, has grown out of microeconomics. You Are Not So Smart, by David McRaney, is an introduction to cognitive mistakes—though that makes it sound a lot drier than it is.

The Trouble With Billionaires
by Linda McQuaig
Published 1 May 2013

Tawney eloquently put it: ‘So merciless is the tyranny of economic appetites, so prone to self-aggrandizement the empire of economic interest, that a doctrine which confines them to their proper sphere, as the servant, not the master of civilization may reasonably be regarded as…a permanent ‌element in any sane philosophy.’5 • • • Perhaps the most potent argument put forward by the anti-tax movement in recent years has been the notion that taxes are unduly coercive, that they amount to an assault on freedom. Yet it was the lack of coercion involved in taxation that led the late Henry Simons, a founder of the Chicago School of Economics, to endorse the progressive income tax system. Simons’ arguments on the subject have largely been ignored in recent years, but they are worth considering briefly here. Simons, who considered himself a libertarian and is still revered by many conservatives, defended progressive taxation as part of his strong belief in the merits of capitalism.

When to Rob a Bank: ...And 131 More Warped Suggestions and Well-Intended Rants
by Steven D. Levitt and Stephen J. Dubner
Published 4 May 2015

When Brian Jacob and I investigated teacher cheating in Chicago schools, which we described in Freakonomics, we didn’t use erasure analysis. Rather, we developed new tools for identifying strings of unlikely answers. You might ask why we didn’t use erasures, when it is such an obvious approach. The answer: unlike the D.C. schools, the Chicago schools did not farm out grading of the test exams to a third party. What got the D.C. schools in trouble is that the third party routinely analyzed erasure patterns. The internal group that scored the exams in Chicago did not routinely look for erasures; that was only done when there were suspicions about particular classrooms.

Nine Crises: Fifty Years of Covering the British Economy From Devaluation to Brexit
by William Keegan
Published 24 Jan 2019

As a Keynesian, Dow was very suspicious of monetarism. Monetarism was a very old economic doctrine whose proponents held that the conquest of inflation was essentially a matter of controlling the money supply. In its modern version it was associated with the American economist Milton Friedman, of the Chicago School. We Keynesians always held the view that controlling inflation was much more complicated than Friedman and his disciples maintained. There was a great debate in the columns of Newsweek in the 1970s between Friedman and the eminent American Keynesian Paul Samuelson. Samuelson once said that Milton Friedman was ‘the eighth or ninth wonder of the world depending on how you score the Grand Canyon’.

Mastering the Market Cycle: Getting the Odds on Your Side
by Howard Marks
Published 30 Sep 2018

Why take the extra risk associated with the startup if no potential increase in return is offered to compensate for the incremental risk? Well, that’s the point: most people would prefer a sure 7% over a possible 7%. In other words, most people are risk-averse. That’s the essential assumption that underlies the “Chicago school” of finance. To describe risk aversion, I say most people prefer safety and disprefer risk—even though I’ve never seen the word “disprefer” in a dictionary. (There’s a big difference of opinion regarding the propriety of that word, with the linguistic establishment railing against it, but I think it’s a great word.

The Greed Merchants: How the Investment Banks Exploited the System
by Philip Augar
Published 20 Apr 2005

But although it was gaining ground, it was not yet a national powerhouse: that change required the major shift in political and economic philosophy that occurred in the last two decades of the twentieth century when free market ideas found favour in Washington. Drawing on the ideas of the eighteenth-century Scottish philosopher Adam Smith, the Chicago School of economists led by Milton Friedman argued that restrictions on trade and business held back growth, heavily influencing the Reagan and subsequent administrations. Deregulation became the order of the day in the 1980s and 1990s. Many industries – airlines, trucking, utilities, energy, banking, telecommunications in the Telecommunications Act of 1996 – were transformed as governments stood back and exposed them to market forces.13 In parallel, following the work of Professor Alfred Rappaport at the North Western University Business School, creating ‘shareholder value’ was elevated above other goals for management.

The Great Tax Robbery: How Britain Became a Tax Haven for Fat Cats and Big Business
by Richard Brooks
Published 2 Jan 2014

Offshore plc While the exploitation of industrial tax breaks was taking serious avoidance from Mayfair to the City, outside the tax advisers’ and inspectors’ offices the era of late-twentieth century economic liberalization was dawning. From 1979 Margaret Thatcher’s government began implementing the monetarism and financial deregulation advocated by the ‘Chicago school’ of economic theory and championed here by the new prime minister’s favoured think tanks such as the Institute for Economic Affairs. Her first and perhaps most significant move was the abolition of exchange controls, the system of currency regulation designed to prevent destabilizing inward and outward flows of finance.

Affluence Without Abundance: The Disappearing World of the Bushmen
by James Suzman
Published 10 Jul 2017

To him, the idea that primitive people with no interest whatsoever in labor productivity or capital accumulation and with only simple technologies at their disposal had already solved the “economic problem” would have seemed preposterous. The notion that hunter-gatherers might not endure a constant struggle to survive was first proposed at the University of Chicago in 1966—home, ironically, to Keynes’s fiercest critics and the most enthusiastic advocates of unbridled, free-market economics. But this time it wasn’t the Chicago School economists who would be pouring cold water on Keynesian doctrine. It was a group of anthropologists, specialists in an obscure branch of the discipline, the study of hunter-gatherers. They had gathered at the university for a conference during an unseasonably cold April to share data they had collected among the few remaining groups of autonomous hunter-gatherers scattered across the globe.

How to Fix Copyright
by William Patry
Published 3 Jan 2012

If those who stand the most to benefit from the assertion and who are in the position to know whether the assertion is true fail to provide any data, how, in the absence of any relevant data, are policymakers to make effective policy? The economic models typically used for such matters are not only so theoretical as to be practically worthless, but they assume away the very issue to be proved. Harold Demsetz, a major figure in the Chicago school of economics, whose pioneering work in property rights provided a key foundation for the law and economics movement, argued in 2009 that the dominant neoclassical approach had sought to understand the exploitation of privately owned resources wholly in terms of prices.151 Meaningful creativity, he wrote,“necessarily involves differences between a new work and old works, and this implies that the new and the old are imperfect substitutes.”152 Neoclassical economics is centered, however, on perfect competition, and therefore “does not and cannot embrace creative activity.”153 In plain English, Professor Demsetz was admitting that neoclassical economics can’t measure creativity, yet neoclassical economics underlies much of the current economic copyright theorizing.

Capitalism: Money, Morals and Markets
by John Plender
Published 27 Jul 2015

Nuances may have been lost in the translation, but this embrace of capitalist values by a hardened veteran of the Communist struggle definitively put the big battalions behind the materialist side of the moral argument and appeared to draw down the curtain on the socialist backlash. It is no coincidence that Deng’s conversion broadly coincided with the ascendancy of the Chicago school of economics and the presidency of Ronald Reagan, who oversaw the conclusion of the Cold War. Reagan lauded ‘the magic of the market’. Like Margaret Thatcher in Britain, he ushered in an era of liberalisation and neo-conservatism, policies favoured by economists at the University of Chicago.

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril
by Satyajit Das
Published 9 Feb 2016

. ——, Easy Money: The Greatest Ponzi Scheme Ever and How It Is Set to Destroy the Global Financial System, Sage Publications, 2014. Stephen D. King, When the Money Runs Out: The End of Western Affluence, Yale University Press, 2013. Graeme Maxton, The End of Progress: How Modern Economics Has Failed Us, John Wiley, 2011. Johan van Overtveldt, The Chicago School: How the University of Chicago Assembled the Thinkers Who Revolutionised Economics and Business, Agate Books, 2007. John Quiggin, Zombie Economics: How Dead Ideas Still Walk among Us, Princeton University Press, 2010. Raghuram G. Rajan, Fault Lines: How Hidden Fractures Still Threaten the World Economy, Princeton University Press, 2010.

The Internet Trap: How the Digital Economy Builds Monopolies and Undermines Democracy
by Matthew Hindman
Published 24 Sep 2018

Retrieved from https://reason .com/archives/2004/08/01/john-perry-barlow-20. Downs, A. (1957). An economic theory of democracy. New York: Harper. Dyson, F. (2004). A meeting with Enrico Fermi. Nature, 427, 297. Earl, J., and Kimport, K. (2011). Digitally enabled social change: activism in the Internet age. Cambridge, MA: MIT Press. Easterbrook, F. H. (2008). The Chicago School and exclusionary conduct. Harvard Journal of Law and Public Policy, 31, 439. Ehrenberg, A.S.C. (1968). The factor analytic search for program types. Journal of Advertising Research, 8(1), 55–63. Ellis, J. (2012, May). The Guardian: yep, it was “major changes” by Facebook that caused drop in social reader traffic.

Volt Rush: The Winners and Losers in the Race to Go Green
by Henry Sanderson
Published 12 Sep 2022

In almost every media article he was still mentioned as Pinochet’s son-in-law in a country that has a complicated relationship with the man who ruled Chile brutally for almost two decades before being deposed in 1990. More than 3,000 people are estimated to have been killed during Pinochet’s rule, which began with a military coup in 1973. It was under Pinochet that SQM had been privatised, due to the influence of a group of Chilean economists nicknamed ‘the Chicago boys’, after the Chicago school of free market economics where many of them had studied. Like the Russian oligarchs who grew rich with the privatisations of the 1990s after the dissolution of the Soviet Union, Ponce Lerou had also ended up with control by buying up shares that had originally belonged to the workers. It seemed bitterly unfair to people that one of the main people set to cash in on the lithium boom was Ponce Lerou, the yerno (son-in-law).

Economists and the Powerful
by Norbert Haring , Norbert H. Ring and Niall Douglas
Published 30 Sep 2012

Support for communism grew and it was considered a very acute challenge for the Western economic model even among leading economists (Amadae 2003). Joseph Schumpeter (1943/2003), famous for describing entrepreneurship as a process of creative destruction, expressed his conviction that “a socialist form of government will inevitably emerge from an equally inevitable decomposition of capitalist society.” Frank Knight of the Chicago School, which later became famous for its uncompromising support of free markets, also expressed serious doubts. “Economics and politics based on competitive mass selling is bankrupt and it is only the question of a successor to bid in the effects of the defunct at a nominal figure,” he wrote in 1933 and argued that elites under communism might be well suited to provide the government control that markets needed (Amadae 2003).

Zero-Sum Future: American Power in an Age of Anxiety
by Gideon Rachman
Published 1 Feb 2011

Chile’s policies of slashing tariffs and taxes, inflation fighting, privatization, and pension reform were regarded as a model by free-market reformers around the world. But they took place against a background of the imprisonment, torture, and murder of dissidents. General Pinochet’s embrace of the market and assault on inflation came in 1975, after a visit by Milton Friedman, the doyen of the Chicago school of economists, who was to receive the Nobel Prize for economics the following year. Under the Pinochet government, Friedman’s “Chicago boys,” many of them Chilean economists who had trained at the University of Chicago, were given a whole country as their canvas.9 Margaret Thatcher was a strong admirer of both Friedman and Pinochet.

Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism
by George A. Akerlof and Robert J. Shiller
Published 1 Jan 2009

He was eventually tapped by President Gerald Ford to be the director of the Council on Wage and Price Stability. He later returned to Princeton, where he became provost, and finally he served as president of the Alfred P. Sloan Foundation. Shortly before his death, Rees wrote a paper for a conference in honor of his old friend Jacob Mincer, also a distinguished labor economist of the Chicago School. (Rees himself had been honored by a similar conference three years earlier.) He used this occasion to look back on his former life as an economist. He made a remarkable confession: that in his later life as an administrator he discovered a devastating omission from his earlier analyses. As an administrator he constantly had to decide what was and was not fair.

Data and the City
by Rob Kitchin,Tracey P. Lauriault,Gavin McArdle
Published 2 Aug 2017

The ecological and physical understanding of cities that we find in the new science of cities is not completely new. The beginning of the twentieth century already witnessed scientists like the evolutionary biologist Patrick Geddes starting to map cities in order to gain an ‘objective’ understanding of them. Likewise, the sociologists of the Chicago School in the 1920s were inspired by evolutionary theories, and sought to understand the ‘human ecology’ of cities as a complex A city is not a galaxy 19 system (Sennett 1969; Park 1969). A second wave of this approach emerged with the rise of cybernetics after the Second World War. The social problems of cities, it was believed by, amongst others, the newly founded United States Department of Housing and Urban Development (HUD), could be tackled by modelling cities with the aid of computers.

Winners Take All: The Elite Charade of Changing the World
by Anand Giridharadas
Published 27 Aug 2018

Of course, there was waste involved: A lot of capital was not put to the most efficient use. And then in the 1970s and ’80s, as ascendant neoliberalism spawned changes in law and culture, it came to be viewed as the first duty of a business to maximize value for shareholders. “The social responsibility of business is to increase its profits,” the Chicago School economist Milton Friedman declared in the New York Times Magazine in the fall of 1970. Wall Streeters trained in the protocols saw their influence rise as their way of evaluating a company, and their degree of say in how it should be run, gradually took over. Porter watched this phenomenon, which is often called “financialization,” turn companies into the servants of their owners, to the detriment of other considerations.

Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis
by Scott Patterson
Published 5 Jun 2023

But a fascination with the growing field of computer programming lured him back to academia, and he enrolled in the economics program at the University of California, San Diego, which gave him access to the school’s computers. It was there that he met his future wife, Mary, who decided soon after to move back to her home in Minnesota. He followed, enrolling in the University of Minnesota’s economics department. It was dominated by professors who worshipped at the altar of the Chicago School of Economics and all that entailed—the free and open markets of Milton Friedman and George Stigler, the efficient markets of Eugene Fama. While working at the university’s computer center, he answered students’ questions about programming and supported the university’s statistical software packages.

The Devil's Derivatives: The Untold Story of the Slick Traders and Hapless Regulators Who Almost Blew Up Wall Street . . . And Are Ready to Do It Again
by Nicholas Dunbar
Published 11 Jul 2011

According to the Basel market risk amendment, which was now part of U.S. banking regulations, BofA could in principle hold four times this VAR as trading risk capital, a tiny fraction of the 8 percent of loan value in risk capital it would have held as a lending bank. The only caveat was that regulators had to approve the VAR model, and Alfriend’s team rejected it. The Richmond Fed staffers argued that a year’s worth of loan price data didn’t reflect what was likely to happen to the debt in a full recession. The BofA officials responded by channeling the Chicago school of market-efficient economics, insisting that market prices reflected all possible information about the loans, including their potential for default. Alfriend’s team held their ground, doubting that BofA had any intention of trading the loans it was holding. The Fed examiners also spotted an analogous case where VAR was inconveniently big for Bank of America.

The Paypal Wars: Battles With Ebay, the Media, the Mafia, and the Rest of Planet Earth
by Eric M. Jackson
Published 15 Jan 2004

Taped to it was a copy of a commentary he had penned for The San Francisco Chronicle extolling the virtues of firms that empower young employees by giving them stock options and letting them do informal things like play ping pong. The engineers gleefully noted that since they had never actually seen the Chicago School of Law graduate set foot in the ping pong room, they wanted to help Sacks out by bringing the game to him. My unnerving hiring experience and disorderly first day on the job suggested that Confinity wasn’t exactly a structured environment. While a young company with few resources devoted to HR and IT can be forgiven for not planning an orientation session for its new employees, this apparent chaos was still a little unsettling.

Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire
by Bruce Nussbaum
Published 5 Mar 2013

What can we all do, in our lives and our businesses, to promote Indie Capitalism? Introducing uncertainty into our economic model may appear difficult because it is so unfamiliar to our thinking but, surprisingly enough, the foundation for an economy that centers around innovation and creation might well lie in the ideas of the man whose thinking paved the way for the Chicago School of Economics. Though he’s best known for work on risk and options theory, which helped establish the foundation for financial capitalism and the efficient market theory, Chicago economist Frank Knight also did important research on the role of uncertainty and the entrepreneur in economic growth.

Priceless: The Myth of Fair Value (And How to Take Advantage of It)
by William Poundstone
Published 1 Jan 2010

He had gone into statistics on the advice of John von Neumann himself. Visually, the most remarkable thing about him was his eyeglasses. Their lenses packed enough diopters to reveal the space behind his head. At Chicago, Savage had acquired a second mentor, Milton Friedman—founding father of the Chicago school of economics, future Nobel laureate, and veritable saint to Reagan-era capitalists. Friedman knew quite a bit of statistics for an economist. He and Savage had begun a peripatetic collaboration. Savage was attempting to devise a theory of how people make decisions. The decisions that concerned him tended to be about money.

The Nanny State Made Me: A Story of Britain and How to Save It
by Stuart Maconie
Published 5 Mar 2020

Here she developed her core beliefs: the virtue of self-reliance, the sanctity of private profit and enterprise, a loathing and mistrust of the state and the public sector. These were the deep tribal roots of what became Thatcherism overlaid on which was an intellectual and theoretical framework taken from Friedrich Hayek’s The Road to Serfdom and the Chicago School of Economics as developed by Milton Friedman. Essentially, Friedman espoused that the free market should be allowed to operate as it sees fit with minimal or no government interference. His doctrine was called ‘monetarism’ and meant strict control of the money supply and inflation even if this brought hardship, job losses and cuts in public spending.

The Dangerous Case of Donald Trump: 27 Psychiatrists and Mental Health Experts Assess a President
by Bandy X. Lee
Published 2 Oct 2017

This task proved to be quite difficult, as we therapists were left with similar feelings of helplessness and, perhaps due to our professional training, more concern given the characterological issues we saw in Trump’s behavior and personality. Jennifer Contarino Panning, Psy.D., is a licensed clinical psychologist and owner of Mindful Psychology Associates, a small group practice in Evanston Illinois. She received her doctorate in clinical psychology from the Chicago School of Professional Psychology in 2003, and completed training at Northern Illinois University and Northwestern University. Panning opened her private practice in 2004, and now has three psychologists and a postdoctoral fellow on staff. She specializes in the treatment of mood disorders, eating disorders, college student mental health, stress, and trauma using an integrative approach of cognitive behavioral therapy, mindfulness, and dialectical behavioral therapy, and is also trained in clinical hypnosis.

Bean Counters: The Triumph of the Accountants and How They Broke Capitalism
by Richard Brooks
Published 23 Apr 2018

It was a measure of just how deeply the Big Four had worked their way into the fabric of the establishment. 8 GREAT BRITAIN, LLP THE BEAN COUNTERS MARCH DOWN WHITEHALL The same late-twentieth-century economic forces that transformed the big accountancy firms into ‘professional services’ businesses making most of their money from consulting also turned taxpayers into their most lucrative clients. But since the consultants generally have their own rather than the public’s interests at heart, it is a relationship that comes with a heavy price. The Chicago School-inspired shrinking of the state gave Britain its 1980s wave of privatizations. But once these had run their course and the windfalls had been spent, the low taxes that were here to stay demanded yet more ‘efficiency’. There was nowhere better to find this, ran the orthodoxy, than in the methods of the market.

Making It in America: The Almost Impossible Quest to Manufacture in the U.S.A. (And How It Got That Way)
by Rachel Slade
Published 9 Jan 2024

While U.S. corporations, including ITT, used their private army of spies and police to intimidate Allende’s supporters, corporations like IBM and Exxon, along with the CIA, granted young Chilean economists full scholarships to the University of Chicago’s school of economics, where Milton Friedman held court. Other acolytes of the “Chicago School” were sent to teach at Chilean universities. After a couple of years spent fomenting a free market revolution, the Nixon administration gave General Augusto Pinochet the green light to invade the capital city of Santiago and seize control of the government. In the wake of a bloody military coup, hundreds of thousands of lives were destroyed.

Arrival City
by Doug Saunders
Published 22 Mar 2011

Should they be encouraged and promoted, or should governments find ways, if they can, to prevent the great migration from forming enclaves of newcomers in their less-popular urban spaces? To embrace the arrival city is to put aside generations of thinking, which held that success is measured by dispersal. The original theory of urban assimilation, developed by the sociologist Robert E. Park and his colleagues of the Chicago School, beginning in the 1920s, is built around the earliest understanding of the arrival city. Based on an analysis of U.S. cities (especially Chicago) during a period of heavy rural-origin migration, Park concluded that immigrants start out in highly concentrated populations in rented quarters in poor inner-city areas with low property prices but become integrated and successful only as they leave the ethnic enclave behind and disperse into integrated mainstream society.

The Quants
by Scott Patterson
Published 2 Feb 2010

He could often be seen typing away on his Compaq Deskpro 386 computer, obsessively entering notes into a program called Think Tank as he swigged bottle after bottle of water kept in an office credenza. His job was simple: figure out how to turn his quantitative theories into cold hard cash for Goldman. There was something of a problem, however. Black hewed to the Chicago School notion that markets are efficient and impossible to beat. In one of his first attempts to trade, he lost half a million for the firm. But he soon realized, watching Goldman’s traders make millions of dollars from an endless cycle of inefficiencies, that the market might not be quite the perfect humming machine he’d thought back in his ivory towers in Cambridge and Chicago.

Platform Revolution: How Networked Markets Are Transforming the Economy--And How to Make Them Work for You
by Sangeet Paul Choudary , Marshall W. van Alstyne and Geoffrey G. Parker
Published 27 Mar 2016

However, in countries with more accountable governments, such as those seen in northern Europe, higher levels of regulation appear to be relatively free of such corruption, which reduces the level of regulatory capture. In these circumstances, Shleifer argues, regulation can be compatible with promotion of social welfare and economic growth. Shleifer notes, moreover, that the reliance of the Chicago School on litigation as an alternative to regulation assumes and depends upon the existence of an independent and honest judiciary. This ignores the fact that judges and lawyers are just as subject to manipulation and capture as other government employees.13 More broadly, Shleifer’s argument is consistent with the argument made by Laffont and Tirole in favor of regulation that is specific to countries and technologies.14 In general, the historical record doesn’t support the arguments of people who favor no regulation of business.

Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism
by Kevin Phillips
Published 31 Mar 2008

Milton Friedman, a conservative economist whose work combined emphasis on the nation’s money supply as the key to inflation with a staunch belief in the market as a self-correcting mechanism, began to sell these positions within the Republican Party. So did other colleagues from the academic seat of American free-market economics, the University of Chicago. From Barry Goldwater and Ronald Reagan in the United States to Margaret Thatcher in Britain, conservatives harked to Friedman’s and the Chicago School’s essential message: that government interference with the operation of the market was ill-advised and doomed to failure. They also took quiet and secondary comfort from his defense of speculators and greed, a tolerance welcomed by party contributors. By the end of the 1970s, Friedman was probably the world’s most famous economist, and two of his admirers, Thatcher and Reagan, were on the cusp of power.

The Blockchain Alternative: Rethinking Macroeconomic Policy and Economic Theory
by Kariappa Bheemaiah
Published 26 Feb 2017

Whether we use Traditional structural models, Rational expectations structural models, Equilibrium business-cycle models, or Vector Auto Regression (VAR) models (See Notes ‘Types of Macroeconomic Models’), the base parameters on which these models are build are assumptions, estimations and equilibrium. Secondly there is not real inclusion of the financial market. The family of DSGE macroeconomic models, which we have rapidly covered, emerged as a synthesis between the Chicago school of thought and the new Keynesian approach over the period of the Great Moderation (1983‐2008). This was a period during which the relative stability of the economy allowed for policy approaches that could only rely in the use of monetary policy (i.e.: the rate of interest). This was because the Chicago led thought considered that all that was needed to face business cycles and/or recessive trends was an active monetary policy.

Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist
by Kate Raworth
Published 22 Mar 2017

‘Economics is the study of how society manages its scarce resources,’ it declares – erasing the question of ends or goals from the page altogether.8 It is more than a little ironic that twentieth-century economics decided to define itself as a science of human behaviour, and then adopted a theory of behaviour – summed up in rational economic man – which, for decades, eclipsed any real study of humans, as we will see in Chapter 3. But, more crucially, during that process, the discussion of the economy’s goals simply disappeared from view. Some influential economists, led by Milton Friedman and the Chicago School, claimed this was an important step forward, a demonstration that economics had become a value-free zone, shaking off any normative claims of what ought to be and emerging at last as a ‘positive’ science focused on describing simply what is. But this created a vacuum of goals and values, leaving an unguarded nest at the heart of the economic project.

Prosperity Without Growth: Foundations for the Economy of Tomorrow
by Tim Jackson
Published 8 Dec 2016

There are some rather strong arguments in favour of changing the existing debt-based money system and returning a greater degree of control over the money supply to government. The so-called Chicago plan – which calls for 100 per cent backing of bank deposits with government-issued money – was first put forward in the 1930s by the US economist Irving Fisher and supported most notably by the Chicago School economist Milton Friedman.38 There have been a number of recent calls to revive this idea – perhaps most surprisingly from the International Monetary Fund. A recent IMF working paper identifies several clear advantages to the plan, including: its ability to better control credit cycles, the potential to eliminate bank runs, and the effect of dramatically reducing both government debt and private debt.

The Innovation Illusion: How So Little Is Created by So Many Working So Hard
by Fredrik Erixon and Bjorn Weigel
Published 3 Oct 2016

Similarly, the dominant thinking in big companies is not just that they can but that they should plan and operationalize in a completely predictable way. Planning, however, does not guarantee predictability – but it turns uncertainty into risk. Converting uncertainty into risk is essential for modern companies and a central part of growing corporate managerialism. The Chicago school theorist Frank Knight made the distinction between risk and uncertainty in his classic tract Risk, Uncertainty, and Profit.43 Knight differentiated between two worldviews, mechanical and organic cognition, defining the first as a machine-like idea of predictable human behavior, whereas the latter was subject to change and new iterations for development.

It's Better Than It Looks: Reasons for Optimism in an Age of Fear
by Gregg Easterbrook
Published 20 Feb 2018

Friedman favored ending corporate taxes, with unrestricted capital movement across borders; he opposed most regulations on business and was ahead of the wave in blasting “powers concentrated in Washington.” If people voluntarily agree to work for peanuts in exploitive sweatshops, he said, government should not interfere with that choice: Nike paying $3 a day in Indonesia would have been fine with him. No one did a better job than Friedman in espousing the Chicago School notion that economic freedom and personal liberty are the same thing. Yet Friedman also thought that because market-based economies are tempestuous, there should be income guarantees to ensure that a job loss, illness, or other setback would not bring poverty at the low rungs of the ladder.

The Great Divide: Unequal Societies and What We Can Do About Them
by Joseph E. Stiglitz
Published 15 Mar 2015

In that odd world of economics, unemployment (if it existed) was the fault of workers. One Chicago School economist, the Nobel Prize winner Robert E. Lucas Jr., would later write: “Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution.” Another Nobel laureate of the Chicago School, Gary S. Becker, would attempt to show how in truly competitive labor markets discrimination couldn’t exist. While I and others wrote multiple papers explaining the sophistry in the argument, his was an argument that fell on receptive ears. Like so many looking back over the past 50 years, I cannot but be struck by the gap between our aspirations then and what we have accomplished.

The Job: The Future of Work in the Modern Era
by Ellen Ruppel Shell
Published 22 Oct 2018

Milton Friedman, the leading monetary economist of the twentieth century, famously declared that companies that invested in their employees and communities beyond the absolute minimum were derelict in their duty to provide investors with income and customers with good deals. He and his contemporaries in the Chicago school of economics forged an indelible link in the public mind between free markets and freedom itself. But Friedman did not mistake the invisible hand for a perfect legal instrument. In his writings he outlined the nation’s responsibility to “establish a framework of law” by which business would be held accountable, and he insisted that people harmed by the externalized costs of doing business be compensated, arguing that market forces, though powerful tools of progress, cannot ensure a distribution of income that guarantees all citizens a decent life.

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis
by Anatole Kaletsky
Published 22 Jun 2010

Although some business leaders and politicians continued to proclaim the slogans of the Thatcher-Reagan era—“you can’t buck the market,” “we can’t spend our way to prosperity,” “the market is always right”—the repetition was mechanical and lacked conviction. The remaining free-market zealots, whether in the Chicago School, in the Republican Party, or on talk radio and in the conservative blogosphere, were like Wile E. Coyote or the septuagenarian Russian communists who parade every May in Red Square. Their belief in themselves was immoveable, but the world had moved on. Market fundamentalism had entered what George Soros, in his analysis of boom-bust cycles, calls the Twilight Period.

Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase
by Duff McDonald
Published 5 Oct 2009

That was more than Bank of America paid but less than Citigroup did—a fact that is not surprising, given Citigroup’s much greater need for government support. He also made no secret of his support for Obama during the presidential race. He was an informal adviser to the candidate in the lead-up to the election, and his wife is close to Secretary of Education Arne Duncan through her work in the Chicago school system. (At one point, Dimon referred to the acquisition of Bear Stearns as a “mission not accomplished,” an unsubtle dig at then-president George Bush and his premature declaration of victory in Iraq.) After Obama’s victory, the media and the blogosphere were awash in conjecture as to whether Dimon was on Obama’s short list of candidates for secretary of the treasury.

The Master Switch: The Rise and Fall of Information Empires
by Tim Wu
Published 2 Nov 2010

By “add[ing],” the Court found, “to the monopoly of a single copyrighted picture that of another copyrighted picture which must be taken and exhibited in order to secure the first.”34 Most economists who have studied block booking since the 1960s, however, have tended to defend it as harmless and in some ways efficient. Most famously, in 1963 George Stigler, a Nobel Prize–winning star of the Chicago school of economics35 disputed the idea that bundling could “extend” a monopoly, arguing it did not confer any advantage or leverage a firm holding copyrights didn’t already have.36 In 1983, the economist Benjamin Klein suggested as justification the avoidance of “oversearching”—the time and expense of bargaining over particular films, which he called “goods of uncertain and difficult to measure quality.”37 Stigler and Klein might be right that block booking cannot, by itself, extend or expand the monopoly power of a particular copyright, and that selling by giant lots can be efficient for a studio supplying thousands of theaters.

The Future of Ideas: The Fate of the Commons in a Connected World
by Lawrence Lessig
Published 14 Jul 2001

Salop, “Equilibrium Vertical Foreclosure,” American Economic Review 80 (1990): 127 (integration across multiple products permits competitor to exclude uninte-grated rival). See also Louis Kaplow, “Extension of Monopoly Power Through Leverage,” Columbia Law Review 85 (1985): 515 (expressing early skepticism about the Chicago school analysis). See also Dennis W. Carlton and Michael Waldman, “The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries” (September 1998 working paper) (arguing that tying deters entry in primary tying markets in addition to providing leverage into tied markets). 23 See Douglas Abell, “Pay-for-Play,” Vanderbilt Journal of Entertainment Law & Practice 2 (2000): 52. 24 See 17 U.S.C. §111 (2000).

Stacy Mitchell
by Big-Box Swindle The True Cost of Mega-Retailers and the Fight for America's Independent Businesses (2006)

Yet, the “extreme judicial skepticism” of the existence of predatory pricing continues to be the law of the land, with federal courts following the dictates of Brooke Group and enforcement agencies highly reluctant to pursue cases given the monumental evidentiary requirements. “By making it extremely di‰cult for a plaintiƒ to succeed in a predatory pricing case, the Chicago school has taken away one of the most important tools for protecting small businesses’ ability to compete on a level playing field,” contended Foer.40 Just four months after the Brooke Group decision, in November 1993, a state court in Arkansas ruled against Wal-Mart in a suit concerning predatory pricing.

Adam Smith: Father of Economics
by Jesse Norman
Published 30 Jun 2018

Part of the point of this book has been to recover these and still other sides to Smith, and integrate them into a fuller picture: that is, to give an introduction not merely to Smith’s economics, but to his vastly wider intellectual project. The fad for selective interpretation has even, perhaps especially, included economists themselves. In the words of the Chicago School economist Jacob Viner on The Wealth of Nations, ‘Traces of every conceivable sort of doctrine are to be found in that most catholic book, and an economist must have peculiar theories indeed who cannot quote from The Wealth of Nations to support his special purposes.’ So it has proven. One example of this tendency will suffice, and from Viner’s most famous student no less.

The Hype Machine: How Social Media Disrupts Our Elections, Our Economy, and Our Health--And How We Must Adapt
by Sinan Aral
Published 14 Sep 2020

If we focus on breaking up Facebook as a cure-all, we will distract ourselves from legislating and regulating the root causes of the harms created by the Hype Machine. Since the 1970s, U.S. antitrust law has been dominated by a “consumer welfare” perspective—defined by Yale law professor and appellate judge Robert Bork and promoted by the Chicago School of Economics—that narrowly interprets consumer harm from uncompetitive markets as the result of higher prices (and secondarily from restricted output and reduced quality). But this narrow view misses Facebook entirely. Facebook is free. Consumers aren’t harmed by Facebook’s ability to charge higher prices because Facebook doesn’t charge consumers to begin with.

Visions of Inequality: From the French Revolution to the End of the Cold War
by Branko Milanovic
Published 9 Oct 2023

This theory states that the marginal propen sity to consume varies with income—and some have argued it even varies with wealth. 85 And once that idea is accepted, it leaves open a back door through which we can introduce differentiation of income by class, the role of inequality in aggregate demand and business cycle, and ultimately a class structure, in what is essentially a macro model. It is therefore not surprising that one of the attempts of the Chicago school to undermine the relevance of income redistribution was to claim that the marginal propensity to consume (out of long-term or “permanent” income) is constant across the entire income distribution. The construct of the “permanent” income, and the set of parameters contained in the constant that links consumption to permanent income, 86 can be varied at will so that consumption always remains proportional to “permanent” income.

Titan: The Life of John D. Rockefeller, Sr.
by Ron Chernow
Published 1 Jan 1997

This last step, a brainchild of Harper, envisioned a string of colleges throughout the West sharing common management with the Chicago university. Warming to the project, Rockefeller planned to visit Cornell on an inspection tour and court three Baptist professors for Chicago. In eloquent testimony to his commitment, Rockefeller told Harper of his readiness to give three million of the first four million dollars needed by the Chicago school. On December 3, 1888, the ABES formally endorsed the plan to found a new school in Chicago; ABES would be the official channel for Rockefeller’s contributions. Then suddenly, in early 1889, Rockefeller grew aloof toward William Rainey Harper, who had committed the classic error of promoting his cause too assertively.

…

“In parting with me,” Gates reported to Harper, “he said that his mind worked slowly in these matters, but he was glad to have had this opportunity for extended conversation, and closed by saying, ‘I think we are in the way of progress.’ ”34 An important upshot of the lunch was that Rockefeller invited Gates to accompany him on a train trip to Cleveland. Gates saw that a low-key approach was the perfect antidote to Harper’s rousing oratory, and he decided to let Rockefeller initiate discussion about the Chicago school aboard the train. “I think this was soon perceived by Mr. Rockefeller,” Gates said in his memoirs, “that it surprised and pleased him, and that he amused himself by putting my sense of propriety to the test.” Though the train left New York at 6 P.M., the two men never referred to what was uppermost in their minds.

The Great Turning: From Empire to Earth Community
by David C. Korten
Published 1 Jan 2001

They differ among themselves mainly on their views of the extent to which it is appropriate for government to subsidize private corporations or to provide safety nets to cushion the fall of the losers in the market’s relentless competition. Neoliberal Elitism Economist Milton Friedman, the leader of the Chicago school of monetary economics, and technological futurist George Gilder played leading roles in legitimating and popularizing the neoliberal story. They were favorites of President Ronald Reagan (1981–89), who presented both with presidential awards. Friedman’s most influential work, Capitalism and Freedom, first published in 1962, argues that individual freedom is the inviolate moral absolute of economic life and that it is best secured through markets that guarantee the freedom of persons of wealth to use their money and property in whatever way they consider most beneficial to their individual interest.

No Such Thing as Society
by Andy McSmith
Published 19 Nov 2010

The loss-making steelworks in Shotton, North Wales, was also closed at the immediate cost of 6,000 jobs, driving male unemployment in the nearby town of Flint up to 32 per cent.21 Corby in Northamptonshire fared only marginally better, losing 7,000 jobs by 1981, pushing the unemployment rate above 21 per cent. More jobs went later. By 1987, the town’s population had fallen from 54,000 to 50,000. Against this background, it is not difficult to see why some Conservative radicals were drawn to the new ideology called ‘monetarism’. Milton Friedman and other members of the ‘Chicago School’ argued that governments should not have prices or incomes policies, which only interfered with the free market. A government’s first and almost its only economic duty was to make sure that the currency was sound: stabilize the pound, and leave prices and incomes to the market. In 1974, there had been no monetarists in the leadership of the Conservative Party.

The Default Line: The Inside Story of People, Banks and Entire Nations on the Edge
by Faisal Islam
Published 28 Aug 2013

The summit witnessed the birth of a hyperpower, yes, but also the beginning of a hyperbubble, as, in a mood of triumphalism, borrowing, debt and deregulation all swelled to unsustainable dimensions – hence the scale of the subsequent financial calamity. In the official photographs from the Reagan–Gorbachev summit there was a third man. This was the then mayor of Reykjavik, Davíð Oddsson, who was playing host to the two superpowers. A decade later, Oddsson – now prime minister – had followed the Chicago-school formula for growth and had stopped most regulation of Iceland’s banks. Two decades on came my uncomfortable interview with a man in denial about the coming financial collapse of his institution, his financial system – and his nation. Meet Davíð Oddsson, the Forrest Gump of the financial crisis.

Goddess of the Market: Ayn Rand and the American Right
by Jennifer Burns
Published 18 Oct 2009

Hayek’s prize also brought attention and prestige to his overlooked mentor, Ludwig von Mises, who remained a favorite of Rand’s, and gave a boost to the fourth-generation Austrian School clustered around NYU. During this time the libertarian-inflected law and economics movement, an outgrowth of the Chicago School, made inroads at several important law schools.65 In 1975 libertarians won another coveted prize when Harvard Professor Robert Nozick was awarded the National Book Award for Anarchy, State, and Utopia, a philosophic defense of the limited state. Nozick had been introduced to libertarianism through Murray Rothbard and cited both Rothbard and Rand in his pathbreaking book.

A Crack in the Edge of the World
by Simon Winchester
Published 9 Oct 2006

The proposed epicentre of it all, City Hall, remained unbuilt, a ruin, for years; and even today, though immense in scale and tricked out with acanthus leaves in marble and fineries of gold leaf, it has dark alleys beside it full of unfortunates, lacks charm and grandeur, and possesses little sense of once having been central to something great, imperial and intended to last for all time. And without Burnham, without a settled sense of urban purpose, the city allowed itself to grow organically, with neither direction nor design. Architects today mourn the fact that no San Francisco school of architecture was ever allowed or encouraged to flourish – in the way that the Chicago School, with Burnham one of its members, did so energetically in the aftermath of that city’s destruction by fire in 1871. The city-centre’s commercial buildings were hastily put back up, with very few of them either nobly or loftily made; and the houses that were then crowded into the outer boroughs were made less lovely than they might have been, their architectural styles often merely sentimental, nostalgic or plain faux.

The Cigarette: A Political History
by Sarah Milov
Published 1 Oct 2019

On the right, see Samuel P. Huntington, “The Marasmus of the ICC: The Commission, The Railroads, and the Public Interest,” Yale Law Journal 61, No. 4 (1952): 467–509; Marver H. Bernstein, Regulating Business by Independent Commission (Princeton: Princeton University Press, 1955). For the classic formulation of the “Chicago school” approach to public choice economics, see George J. Stigler, “The Theory of Economic Regulation,” Bell Journal of Economics and Management Science 2 (1971): 3–21. 30. Scenic Hudson Preservation Conference v. Federal Power Commission, 354 F.2d 608 (2nd Cir. 1965). 31. Schiller, “Enlarging the Administrative Polity.” 32.

American Girls: Social Media and the Secret Lives of Teenagers
by Nancy Jo Sales
Published 23 Feb 2016

More than twenty years after the passage of the Violence Against Women Act, which imposed federal penalties for acts of domestic violence, it “continues to be normalized through its comedic portrayal via news outlets, magazines, advertisements, and television shows,” according to a 2014 study by researchers at the Chicago School of Professional Psychology; and you could add to that list social media. The average American girl or boy is likely to have seen one of the domestic violence jokes and memes which crop up regularly online, such as the one of a smirking man saying, “WHAT DO YOU DO WHEN YOUR DISHWASHER STOPS WORKING?

The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era
by Gary Gerstle
Published 14 Oct 2022

Already in the 1940s, a group of neoliberals, based in Freiburg, Germany, and calling themselves ordo-liberals, were pioneering this form of analysis. They would become influential in setting social and government policy in postwar West Germany.35 In the 1950s and 1960s, this kind of thinking spread to the United States and in particular to elements of that part of the Chicago School of Economics developing under the leadership of Gary Becker. Becker was among the first to subject to economic analysis aspects of human existence, most famously the family, that until that time were thought to belong to a private sphere of life insulated from the hurly-burly character and contractual imperatives of the marketplace.36 Not surprisingly, turning private life into a branch of behavioral economics divided scholars and critics.

Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right
by Jane Mayer
Published 19 Jan 2016

“Law and Economics is neutral, but it has a philosophical thrust in the direction of free markets and limited government. That is, like many disciplines, it seems neutral, but it isn’t in fact.” The Olin Foundation’s route into the country’s best law schools was circuitous. The foundation began by financially supporting an early leading figure in Law and Economics, the libertarian Henry Manne, an acolyte of the Chicago school of free-market economics. Brilliant, impolitic, and an ideological purist, Manne “was considered a marginal, even eccentric character in the legal academy,” according to Teles, when the Olin Foundation first started funding him in the early 1970s. To the frustration of the foundation, though, he didn’t teach at high-prestige schools.

Who Stole the American Dream?
by Hedrick Smith
Published 10 Sep 2012

“Few trends could so thoroughly undermine the very foundations of our free society as the acceptance by corporate officials of a social responsibility other than to make as much money for their stockholders as possible,” Friedman asserted. Ghoshal disagreed. Employees as well as shareholders create value, he argued, and they should share more equally in corporate gains. But Friedman’s views turned out to be much more influential than Ghoshal’s. The aggressive management notions of the Chicago school of economists took root at prominent East Coast business schools, causing Ghoshal to complain years later, after the Enron and WorldCom scandals, that “many of the worst excesses of recent management practice have their roots in a set of ideas that have emerged from business school academics over the last 30 years.”

Strange Rebels: 1979 and the Birth of the 21st Century
by Christian Caryl
Published 30 Oct 2012

The main intellectual alternative to the reigning consensus in global economics emerged from the so-called Chicago School, a term that was first applied in the 1950s to a group of free-market economists who came together at the University of Chicago. Their most famous theoretician was Milton Friedman, a founding member of the Mont Pèlerin society and a gifted polemicist for the cause of economic liberalism. The Chicago School did not content itself with merely generating ideas. It also turned out an enormously influential crop of international economists who later played direct roles in the process of economic reform in their home countries.23 Friedman and his colleagues did much to prepare the way for Thatcher’s economic counterrevolution by promoting the new thinking during the 1970s.

To Save Everything, Click Here: The Folly of Technological Solutionism
by Evgeny Morozov
Published 15 Nov 2013

If, like some of the most prominent adherents of Internet-centrism, we believe that Steve Jobs was the greatest enemy of freedom or creativity, we risk misunderstanding—and even understating—the enemy. To talk about gamification without also discussing B. F. Skinner’s behaviorism or to talk about digital preemption without bring up rational-choice theory and the Chicago school of economics seems misguided; the nearly universal excitement about “the Internet,” mobile phones, and Wikipedia distracts us from noticing that many of the underlying phenomena are anything but new. As someone who grew up in the final years of the Soviet Union, even I remember the penchant that Soviet managers had for gamification: students were shipped to the fields to harvest wheat or potatoes, and since the motivation was lacking, they too were assigned points and badges.

Manias, Panics and Crashes: A History of Financial Crises, Sixth Edition
by Kindleberger, Charles P. and Robert Z., Aliber
Published 9 Aug 2011

In panic after panic, crash after crash, crisis after crisis, the authorities or some ‘responsible citizens’ try to halt the panic by one measure or another. The authorities may be unduly alarmed and the position might correct itself without serious harm. The authorities may be stupid and unable to learn. (The Chicago School assumes that the market participants are always more intelligent than the authorities, in large part because the authorities are motivated by short-term political objectives.) The uneven distribution of intelligence cannot be tested against crisis management because the authorities and leading figures in the marketplace both exert themselves to halt the spread of falling prices, bankruptcy, and bank failures.

There Is Nothing for You Here: Finding Opportunity in the Twenty-First Century
by Fiona Hill
Published 4 Oct 2021

They forged an era of increasing consensus on stimulating growth through free-market economic policy, enhanced competition, free trade, and lower taxes. Their policies were shaped by the celebrated University of Chicago economist Milton Friedman, who became an adviser to both. Inspired by Friedman and others from the Chicago school, Thatcher and Reagan broke with post–World War II economic and industrial principles. They espoused minimal state intervention, market liberalization, deregulation, and the privatization of public services. In the UK, Margaret Thatcher was a trailblazer and a revolutionary. She reprivatized the so-called commanding heights of British industry, pushed unprofitable coal mines, steelworks, and factories to close, broke the backs of trade unions that had paralyzed the country with labor disputes in the 1970s, and liberated or tore individuals (depending on your perspective) from the confines of their traditional workplace-oriented communities.

The Origins of the Urban Crisis
by Sugrue, Thomas J.

The poorest tracts were all well removed from the higher-income areas, clustered in the oldest section of the city, close to downtown. As one moved outward from the downtown area, black median income by tract rose. The process of the outward movement of Detroit’s black population seems in many respects to resemble in microcosm the solar model of urban population succession developed by the Chicago School. Detroit’s black population was distributed in concentric circles by economic status, the center containing the poorest and most immobile population, and each succeeding ring containing a progressively wealthier population.36 Map 7.2 (a). Detroit’s Black Population by Median Income, 1950.

Owning the Earth: The Transforming History of Land Ownership
by Andro Linklater
Published 12 Nov 2013

In 1986, President Ronald Reagan signaled his own conversion to the Austrian outlook in his much-quoted quip, “The nine most terrifying words in the English language are ‘I’m from the government, and I’m here to help.’ ” But under his administration, Hayek’s philosophy of deregulation was bundled up with the conceptually different monetarist theories of Milton Friedman and the Chicago School of Economics. Monetarism, which aimed to control inflation by regulating the supply of money, both cash and credit, gave rise to the austere banking policies pursued by Paul Volcker, Greenspan’s predecessor in charge of the Federal Reserve in the early 1980s. Volcker pushed interest rates to Himalayan heights in order to bring inflation under control.

Money and Government: The Past and Future of Economics
by Robert Skidelsky
Published 13 Nov 2018

Along the second curve views stretch from whether the framework of institutions, rules and policies needed to maintain self-adjustment is simple, natural and easy to bring about, or very complex and nearly impossible to set up. And finally, there is the historical evidence: does history show that optimal self-adjusting processes are normal or exceptional?1 Simplifying, if we consider just neo-classical and Keynesian economics, we find near one end of all three curves the Chicago School, and near the other end the Keynesian School. Chicago School proponents believe that smooth and rapid selfadjustment to full employment is normal within a framework of rulebased monetary policy and ‘light touch’ regulation. Keynesians deny that a market system has an automatic tendency to full employment.

Slouching Towards Utopia: An Economic History of the Twentieth Century
by J. Bradford Delong
Published 6 Apr 2020

Richard Clarida, Chicago: University of Chicago Press, 2007, 339–375, available at National Bureau of Economic Research, www.nber.org/system/files/chapters/c0127/c0127.pdf. 14. Keynote address to the Center for Research in Security Prices (CRSP) Forum, Gleacher Center, University of Chicago, quoted in John Lippert, “Friedman Would Be Roiled as Chicago Disciples Rue Repudiation,” Bloomberg, December 23, 2008, available at “John Lippert on the Chicago School,” Brad DeLong’s Egregious Moderation, blog, December 30, 2008. 15. Brad Setser, “Bernanke’s Global Savings Glut,” Council on Foreign Relations, May 21, 2005, www.cfr.org/blog/bernankes-global-savings-glut. 16. The best overview is, I believe, Barry J. Eichengreen, Hall of Mirrors: The Great Depression, the Great Recession, and the Uses—and Misuses—of History, New York: Oxford University Press, 2015. 17.

The Making of Global Capitalism
by Leo Panitch and Sam Gindin
Published 8 Oct 2012

But all this indicated the extent to which the Fed was by now “pursuing several, often incompatible, objectives simultaneously.”58 The inability to stem the inflationary pressures and balance-of-payments deficits of the mid 1960s, combined with the impact on US gold reserves of the British devaluation in late 1967, finally pushed the Johnson administration into imposing statutory controls on the outflow of capital in 1968, for the first time since World War II. Once again, not only the Chicago School but also many Keynesian economists vociferously opposed this on the grounds that it undermined the liberal international economic order that Bretton Woods had been designed to foster. Writing in the Wall Street Journal, John Kenneth Galbraith declared: “[T]he fruits of great strenuous private efforts and of the most carefully conceived public policy extending over the last several decades are about to be extinguished.”59 Although Galbraith complained of the weakness of American business in failing to stop the controls program, Wall Street’s reaction to them (like that of the central bankers in Europe) was to demand instead higher American interest rates to cope with the problem, and these were indeed instituted in the Fed by 1969, as we shall see in the next chapter.

Roller-Coaster: Europe, 1950-2017
by Ian Kershaw
Published 29 Aug 2018

A new economic philosophy, discarding the Keynesian imperatives that had held the ring since the end of the Second World War, was coming to be seen as the only way to combat the malaise. The theoretical work that was beginning to find new converts especially in the United States and in Great Britain was Capitalism and Freedom, published in 1962 by the eminent economist Milton Friedman, a leading figure in the Chicago School of Economics. It amounted to a frontal rejection of Keynesianism. State intervention in the economy to stimulate demand was ruled out in this thinking. So was state regulation of markets through fiscal policy. Friedman advocated instead an economy self-regulated by the forces of the free market.

Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State
by Paul Tucker
Published 21 Apr 2018

Questions like that, which also arise for anticompetitive agreements and the deployment of market power, prompted one of twentieth-century America’s great public policy debates, with the Harvard School’s presumption that mergers and competitor agreements were bad (and so per se illegal) eventually giving way, in the 1970s and 1980s, to the Chicago School’s insistence that the test should be whether consumer welfare would be enhanced.11 This reflected developments in economics, and within a couple of decades was itself adapted to keep up with innovations in game-theoretic analysis of cooperation and collusion and the economics of imperfect information.12 For us, the significance of these momentous changes is not whether they were grounded in good economics but that each occurred without any amendments to the governing legislation.

1,000 Places to See in the United States and Canada Before You Die, Updated Ed.
by Patricia Schultz
Published 13 May 2007

A Vast Open-Air Museum CHICAGO’S ARCHITECTURE Chicago, Illinois After the Great Chicago Fire of 1871 reduced a huge swath of the city to cinders, architects seized the opportunity to create one of the world’s great centers of innovative buildings by literally reaching for the heavens. Individually, their names are legendary in American architecture: William Le Baron Jenney, Louis Sullivan, Daniel Burnham, John Wellborn Root, William Holabird, and Martin Roche; together, they created the style known as the Chicago School. One of its hallmarks was the use of a new technology, steel-frame construction, which enabled designers to push buildings to unprecedented heights and gave birth to a new form: the skyscraper. The first high-rise anywhere was Jenney’s 10-story Home Insurance Building, built in 1884–85. It is long gone, but others of its era still stand, such as the Rookery and the Fisher Building.

…

Whether he achieved his goal is debatable, but his transformative influence is not. And it all started in the Chicago suburb of Oak Park. In 1889, the self-taught wunderkind was just 22, newly married, and newly employed by the esteemed partnership of Dankmar Adler and Louis Sullivan, leaders of the Chicago School of architecture (see p. 485), when he designed and built a house in which to raise his family. He made numerous changes to the original shingle-style structure as his ideas (and family) developed, including a two-story bay and a barrel-vaulted playroom with a grand piano installed in the wall.

The Stack: On Software and Sovereignty
by Benjamin H. Bratton
Published 19 Feb 2016

See also Methaven's “ultraminimal state” and its Facestate project: Andrea Hyde, “Metahaven's Facestate,” Walker Art Center, December 13, 2011, http://www.walkerart.org/magazine/2011/metahavens-facestate. 41.  The confusion this sows is readily apparent in both attempts to curtail Google under the rubric of a trust “monopoly” and in the awkward rationales for why Google is actually not a monopoly. See judicial “originalist” Robert Bork's back-bending “What Does the Chicago School Teach About Internet Search and the Antitrust Treatment of Google,” Robert H. Bork and J. Gregory Sidak, Journal of Competition Law & Economics 8 (2012): 663–700. 42.  In a way, geopolitical reality is only catching up with the anticipations of the science fiction that has already explored the proliferation and institutionalization of data havens and data infrastructures, “community clouds,” cloud-based microreligions and macrostates, and others.

The End of the Cold War: 1985-1991
by Robert Service
Published 7 Oct 2015

He dispensed folksy charm and liked to appear an ordinary guy. If ever disagreements became intense, he dispelled them with one of his many Irish jokes. He spoke simply and avoided long words. The people around him knew the reality to be different from the image. Milton Friedman, founder of the Chicago school of economics, enjoyed his company and conversation.9 His spokesman Mike Deaver recalled that Reagan, when beyond the public gaze, was an eager reader of serious books on ‘foreign policy, economics, social issues’.10 Pete Hannaford, an adviser, was in no doubt about Reagan’s studiousness before he became President after seeing him devour the National Review, the American Spectator and Human Events.

Public Places, Urban Spaces: The Dimensions of Urban Design
by Matthew Carmona , Tim Heath , Steve Tiesdell and Taner Oc
Published 15 Feb 2010

The nature of decentralisation differed: in North America, Japan and Australia, it took the form of massive and sprawling suburbanisation, and in Europe it involved both suburbanisation of larger cities and towns and the growth of smaller towns and villages, partly as a result of green belts around larger cities (Breheny 1997: 21) (Figure 2.2). FIGURE 2.2 Burgess’s concentric zone model (Image: Knox & Pinch 2000: 216). For much of the early twentieth century, the most influential ideas about, and explanations of, urban form and structure came from the University of Chicago’s urban sociology department, subsequently known as the ‘Chicago School’. Chicago was a new city, having grown rapidly and owing much of its growth to industrialisation. Models of urban structure – most famously Burgess’s concentric zone model – were based on research on the city. The ‘typical’ mature industrial city had a dominant city centre or central business district (CBD), relatively homogeneous zones of land use and social groups, and a monocentric structure focused on the CBD – the most accessible point and focus of the transport network and system.

Digital Empires: The Global Battle to Regulate Technology
by Anu Bradford
Published 25 Sep 2023

The bipartisan anti-tech crusade may therefore never amount to a genuine shift in US policy, maintaining the US–EU regulatory differences in place. There is also grave uncertainty as to whether US courts will buy into the new “antitrust revolution” or whether the revived agency action targeting tech companies will end up faltering in courts that remain guided by the Chicago school orthodoxy and entrenched techno-libertarian ideals. Yet even if no significant regulatory alignment will occur in practice, there is reason to think that the US’s criticism of the EU’s digital policy will be toned down given its own attempts to reevaluate the market-driven foundations of the American regulatory model.188 To institutionalize their commitment to closer cooperation, the US and the EU established a Trade and Technology Council (TTC) in June 2021.189 The purpose of the TTC is both to mitigate the US–EU horizontal regulatory conflict and to strengthen the Transatlantic alliance to jointly counter China’s market-distortive policies and the use of technology toward illiberal ends.

Ashes to Ashes: America's Hundred-Year Cigarette War, the Public Health, and the Unabashed Triumph of Philip Morris
by Richard Kluger
Published 1 Jan 1996

Among his first accounts had been the Minnesota Valley Canning Company, for whom Burnett’s agency had created the symbol of a jolly green giant. The image worked so well that the company changed its name accordingly and stayed on ever after as a client while Burnett became the embodiment of the “Chicago school of advertising,” which in contrast to New York-style slick-ness stressed what its roly-poly exponent called “finding the inherent drama in the product and writing the ad out of that drama rather than using mere cleverness. … You have to be noticed, but the art is in getting noticed naturally, without screaming and without tricks.”

From Peoples into Nations
by John Connelly
Published 11 Nov 2019

Though portraying themselves as advocates of the poor, in 1995, the government under former Communist Gyula Horn—who had opened Hungary’s border in September 1989—cut child-care, introduced tuition, devaluated the currency (by 9 percent), and put a brake on cost-of-living adjustments for public-sector employees.28 Yet as in Poland, after an initial drop in productivity (and a loss of 10 percent real income for wage earners and pensioners in the first year of austerity), the economy grew steadily.29 The reform package was the work of Finance Minister Lajos Bokros, an adherent of the neoliberal orthodoxy of the “Chicago school” of Milton Friedman. Basic economic facts had forced him to act: an inflation rate of 30 percent annually, a balance of payments deficit of $4 billion, and foreign debt of $30 billion. In 1995, 70 percent of the economy was still controlled by the government. With austerity measures and accelerated privatization, it hoped to attract investment and make industry more competitive.30 Horn and the Hungarian government were pressed by the International Monetary Fund to “meet Western standards and requirements.”

USA Travel Guide
by Lonely, Planet

Its modest bungalows, such as the Gamble House in Pasadena, California, featured locally handcrafted wood- and glasswork, ceramic tiles and other artisan details. Reaching for the Sky By the 1850s, internal iron-framed buildings had appeared in Manhattan, and this freed up urban architectural designs, especially after the advent of Otis hydraulic elevators in the 1880s. The Chicago School of architecture transitioned beyond beaux-arts style to produce the skyscraper – considered the first truly ‘modern’ architecture, and America’s most prominent architectural contribution to the world at that time. In the 1930s, the influence of art deco – which became instantly popular in the US after the Paris Exposition of 1925 – meant that urban high-rises soared, becoming fitting symbols of America’s technical achievements, grand aspirations, commerce and an affinity for modernism.