The Chicago School, Hayek and the Mont Pelerin Society
2010; Issue: 65 Linguagem: Inglês
ISSN
1839-3675
Autores Tópico(s)Economic Theory and Institutions
ResumoCraig Freedman Chicago Fundamentalism: Ideology and Methodology in Economics Singapore & Hackensack, NJ: World Scientific Publishing, 2008, 472 pp., $130.95. Philip Mirowski & Dieter Plewhe (eds.) The Road from Mont Pelerin: the Making of the Neoliberal Thought Collective Cambridge, Mass: Harvard University Press, 2009, 480 pp., $62. Many people have heard of the 'Chicago School of Economics' and would have a superficial awareness of its character. It is reputedly a haven of 'free-market' economics and its best known exponent is the ubiquitous Milton Friedman, who died in 2006. Its critics see it as being at the core of the vast neoliberal ideological and political project that has seen the state re-engineered in the interests of capital over the last three decades. The detractors have been joined by the mainstream economist turned popular columnist Paul Krugman, who recently criticised the Chicago school in an extended article in the New York Times (Krugman, 2009). (1) It was never obvious how a school with a semblance of coherence could have evolved out of an Economics Department then comprising big-named, often 'Right-wing' but idiosyncratic intellectuals (Paul Douglas, Frank Knight, Jacob Viner, Theodore Schultz, etc.). The two books reviewed here give the answer. The rise of the Chicago school is important in itself but merely one component of a larger project comprising intellectuals/ideologues and vested interests whose efforts were directed to countering those attempting to reform capitalism. A key origin of the intellectual/ideological wing is to be found in the Privatseminar of Ludwig von Mises, then secretary of the Vienna Chamber of Commerce, in the early 1920s. Thus was born the Austrian school of economics, home of a purist advocacy of individualism and the 'free market', its most famous member being Friedrich Hayek. The spark that placed this mentality in the public domain was the publication of Hayek's Road to Serfdom in March 1944. The book was speedily reproduced in Australia in July (Hayek, 1944) and in the US by the University of Chicago Press in September, having previously been rejected by three US publishers (Caldwell, 2008: p.15). Hayek travelled to the US in April 1945 to proselytise his book and was introduced to one Harold Luhnow, a Kansas City Missouri-based businessman in furniture and window-shades who was pathologically opposed to the transformations of the American polity associated with the New Deal introduced by the incoming Roosevelt Administration after 1933. Luhnow appropriated a fund designed to help Kansas City residents to further his political agenda; Hayek formed a long term (if uneasy) relationship with Luhnow to finance his own ideological crusade. Other like-minded businessmen and corporate executives would subsequently bring funding to this worthy cause. Thus was born the Free Market Study (FMS) Project at the University of Chicago in late 1946, following a year of halting negotiations (M&P, Ch.4). Thus was born the Mont Pelerin Society, which first met in an obscure Swiss location (hence the Society's name) in April 1947. The Chicago Economics Department did not initiate, nor did it ever monopolise, what came to be known as the Chicago School of Economics. The groundwork was done by Hayek (then still at the London School of Economics) and the economist Henry Simons, curiously located in the Chicago Law School, and confidant of the Chicago President Robert Hutchins. Simons, with no prior indication of distress, committed suicide in June 1946. His classical liberal commitment to strong regulation to ensure a competitive business regime (M&P, p.142) would not survive him. What became known as the Chicago school was a hydra-headed endeavour with a pragmatic division of labour, involving the FMS project, located in the Law School, the Law School itself (its importance grows with time), and the Economics Department. …
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