Marginal Revolution: The Chicago School

November
S	M	T	W	Th	F	St
1	2	3	4	5	6	7
8	9	10	11	12	13	14
15	16	17	18	19	20	21
22	23	24	25	26	27	28
29	30

The Chicago School

The basic characteristics of this Chicago Tradition are: a strong work ethic, an unshakable belief in economics as a true science, academic excellence as the sole criterion for advancement, an intense debating culture focused on sharpening the critical mind, and the University of Chicago's two-dimensional isolation. Much of the credit for the creation of this Chicago Tradition has to go to the University's first president, William Rainey Harper.

That is from Johan van Overtveldt's The Chicago School: How the University of Chicago Assembled the Thinkers Who Revolutionized Economics and Business. I enjoyed this book very much. Instead of stopping at Friedman, Coase and Director, it also offers a comprehensive treatment of such neglected figures as Herbert Davenport, Laurence Laughlin, H. Gregg Lewis, Albert Rees, Theodore Yntema, and Jim Lorie, in each case noting their roles in the broader story.

There is a separate chapter on each the business school and the law school. And yes Friedman (among many others) really didn't want Hayek in the economics department. I wish this book had more analysis of how Chicago succeeded in changing the policy world, but it is a landmark in the history of economic thought. I can't recommend it to non-specialists, or for that matter anyone who doesn't intrinsically care about Theodore Yntema, but for some of you this book is a must. Here is one review.

Posted by Tyler Cowen on June 5, 2007 at 05:40 AM in Books, Economics, Education | Permalink

Comments

What do you think he means by "the University of Chicago's two-dimensional isolation"? Very curious statement.

Posted by: John S. at Jun 5, 2007 7:24:06 AM

He surely means literally. Have you ever been to Hyde Park?

Posted by: James at Jun 5, 2007 8:12:52 AM

"I can't recommend it to non-specialists, or for that matter anyone who doesn't intrinsically care about Theodore Yntema"

Nicely done Tyler. That could well be the worst review any piece of printed material has ever gotten.

Posted by: kevin grier at Jun 5, 2007 8:21:13 AM

"I wish this book had more analysis of how Chicago succeeded in changing the policy world..."

Does such a book exist? If so, please share...

Posted by: Ryan Stowers at Jun 5, 2007 9:45:28 AM

when i think of "The Chicago School", John Dewey immediately comes to mind.

Posted by: thehova at Jun 5, 2007 10:57:23 AM

".....sharpening the critical mind".
This I doubt.
Most of them believe in monoeconomics.

Posted by: GVV at Jun 5, 2007 12:03:02 PM

Johan Van Overtveldt is a dear friend of mine, and my cycling buddy. This website is my favourite economics website.
So I am very pleased, and positively surprised, to find out that Johan's book has made it to this blog.
Kind regards from Belgium!

Posted by: Geert Noels at Jun 5, 2007 5:09:13 PM

Did you leave out George Stigler from your list for a reason?

Posted by: ben at Jun 5, 2007 9:14:24 PM

GVV, what the heck is "monoeconomics"? Who is someone who believes in "multieconomics"?

Posted by: TGGP at Jun 5, 2007 9:28:15 PM

Ok, I just read Radicals for Capitalism, but I can't remember specifics on the rift between Friedman and Hayek. Why the animosity? Was it purely methodological? Any insights?

Posted by: CT at Jun 5, 2007 9:38:15 PM

CT,

Mostly methodological. Friedman and the econ dept. at Chicago were
neoclassicals of the Marshallian tradition, later to be succeeded
by neoclassicals of the Walrasian tradition, e.g. Lucas. They
believe(d) in the importance of static equilibrium analysis.

The Austrians, certainly at least Hayek in his later years (after
about 1940 or so), downgraded the analysis of equilibrium in favor
of more dynamic process analysis with an emphasis on dispersed and
uncertain information, in constrast with the tendency of the Chicagoans
to assume (near) perfect or rational expectations. This is one of
the reasons that the Austrian school is viewed as one of the heterodox
schools of economic thought, if probably the only one that tends more
to be pro-laissez faire and on the political right.

Posted by: Barkley Rosser at Jun 6, 2007 2:17:13 PM

The Hayek fight was a skirmish in a fight over academic control between the economics department and University President Robert Hutchins. Hutchins backed a "Thomist" view of the humanities and social "sciences" advanced by Mortimer Adler, who rose to academic power at Chicago developing a "Great Books" program. The Chicago economists had the fantasy that they were created a new "positivist" science of economics, inspired by positivist philosophers of science and imported mathematics from the real sciences and from statistics. It was Hutchins' idea to privately finance Hayek's chair -- and to get his appointed to the eocnomics department. Hayek was viewed -- laughingly falsely -- as a Thomistic ally of Adler in the war between the "Great Books" Thomists and the "real science" math jock economists at Chicago. Hayek was the victim of this war between Hutchins / Adler and the science want-to-be's in Chicago economics department.

Friedman always claimed that he did NOT vote against Hayek, although Friedman showed repeatedly that he had no understanding of Hayek's more truly scientific -- and more truly empirical -- pproach to economic explanation.

The positivist picture of science held by the Chicago economists in the 40s and 50s is now rightly viewed as a joke, and much of the econometrics and mathematical economics has not stood up to the test of time. Friedman himself long taught at least one of Hayek's most important economic papers in his graduate classes.

Posted by: PrestoPundit at Jun 11, 2007 1:55:57 AM

More about the Hayek vote can be found in the John Nef papers and the records of the Department of Economics, both of which are in the University of Chicago archives. David Mitch has been writing about this, and you will find some material in the papers presented at a session of the History of Economics Society at George Mason in June 2007. Nef (a member of the econ department) was the chair of the Committee on Social Thought, and happy to have Hayek join the University. Ironically, Nef was also in the Thomist camp with his friend Hutchins.

One thing to remember is that the department of economics didn't have up-or-down votes on individuals at this time. They ranked a number of potential hires, and then the ones that came out with the highest pooled rankings were pursued. Hayek did not get ranked high enough to pursue.

Posted by: Ross Emmett at Jul 12, 2007 4:33:59 PM

Regarding van Overveldt's book: it has a lot of great stuff in it, but it is largely a journalist treatment. Despite the use of the word "how" in the title, there is little explanatory force to the material. The real reasons for Chicago success lie in in the way it put together its smart people and great ideas. That "way" was a particular institutional structure: the Chicago workshops. That's what I write about these days.

Posted by: Ross Emmett at Jul 12, 2007 4:37:08 PM

We are professional cheap kids shoes online store .We provide Nike shoes cheap ,Nike air jordan,cheap kids clothing
cheap womens clothing,Nike shoes online store,Nike shoes cheap,Nike shoes for kids,air jordan sneakers,nike air jordan,air jordans,brand shoe,shoes brand, dropship Nike shoes , brand clothes,brand clothes ,shoes brand,cheap kids clothing for cheap wholesale Air Jordans shoes for kids & women.