Chicago school of economics

"Chicago is not a place, it is a state of mind." - Paul Samuelson, American neoclassical economist

The Chicago school of economics is a school of thought favouring free-market economics practiced at and disseminated from the University of Chicago in the middle of the 20th century. Its most well known members leaders were recipients of the Nobel prize for economics including George Stigler and Milton Friedman.

It is associated with neoclassical price theory and free market libertarianism, the refutation and rejection of Keynesianism in favor of monetarism (until the 1980s, when it the theory was quickly shown to be mistaken), and the rejection of regulation of business in favor of laissez-faire.

The term was coined in the 1950s to refer to economists teaching in the Economics Department at the University of Chicago, and closely related academic areas at the University such as the Graduate School of Business and the Law School. They met together in frequent intense discussions that helped set a group outlook on economic issues, based on price theory. The 1950s saw the height of popularity of the Keynesian school of economics, so the members of the University of Chicago were considered outcast. Leading neoliberal theorist the Austrian economist Friedrich Hayek (founder of the Mont Pelerin Society) was teaching there because that is the only place he could find employment at the time.

People

• Gary Becker
• Frank Knight
• Henry Simon,
• Milton Friedman
• George Stigler
• Albert Rees
• H. Gregg Lewis

Resources

• Edward Herman The Chicago School excerpt from The Politicized "Science"' in Edward S. Herman Triumph of the Market: Essays on Economics, Politics and the Media, Boston: South End Press, 1995, p. 34-37. Reproduced by permission of the author.
• Milton Friedman by Edward S. Herman
• George Stigler by Edward S. Herman