Thursday, January 7, 2010

Now They Want to Kill Off the Term 'Chicago School'

Justin Fox reports on a new John Cassidy piece (online to subscribers only) at the New Yorker:

...the old-school Chicago economists (a group that in Cassidy's telling includes Judge Richard Posner) who have adapted their thinking in various degrees to recent events. Posner has become a sort-of Keynesian, albeit a sort-of Keynesian who continues to drive real Keynesians bonkers. Posner's buddy and co-blogger Gary Becker hasn't gone quite that far, but does manage to sound pretty moderate and reasonable in Cassidy's article. Robert Lucas refused to talk to Cassidy, but has established a fence-straddling record of sounding moderate when e-mailing with the likes of me and unrepentant when talking with the likes of Amity Shlaes.

Finally, there's the majority of today's Chicago economics faculty, an assortment of behavioral economists, freakonomists, financial-plumbing specialists and others who, while perhaps a bit more free-market-oriented than their counterparts at Harvard or MIT, no longer really constitute an ideological bloc. Posner says at the end of Cassidy's piece that "probably the term 'Chicago School' should be retired," and probably he's right. Chicago has become just another top economics department, as it was before Milton Friedman, George Stigler & Co. turned it into a "School" in the 1950s. Which is sort of a mixed blessing. Chicago economics has become more reasonable. But its very reasonableness may render it less influential.

In one sense, Posner is more off the charts than the GMUers. At least the GMUers realize, I think, that the 'Austrian School' is a tradition and method of thinking about economics and not related to a geographic point on the map. Likewise, despite its many internal inconsistencies, 'Chicago School' is more about a tradition and method of thinking about economics than it is about a geographic location that now appears to be inhabited by a new species.

Or is Posner saying, in stark contrast to the Austrians and Ludwig von Mises, that Milton Friedman and crew have lost the battle and have no more followers?


1 comment:

  1. It looks like someone has already picked up the ball and filled the void that the "coordination problemists" left: