Chicago and LSE founders rejected the new market advocates’ politicized rhetoric

Evidence

Although the new generation of market advocates would succeed spectacularly in cultivating pop u lar and professional support for their ideas, their approach never gained the ac cep tance or endorsement of their pre de ces sors. The architects of the economics departments at the University of Chicago and the London School of Economics expressed increasing discomfort with the philosophical and rhetorical shifts initiated by their colleagues and students. Edwin Cannan passed away in 1935, but he had already become wary of Hayek and suspicious of his infl uence on the school. The recent arrival “has corrupted them all, and ought to be deported,” he wrote in private correspondence with characteristic acidity. The ideas Hayek had imported from Austria, Cannan worried, were turning his colleagues into a “gang of defeatists.” Viner repeatedly refused to affi liate himself with Hayek’s efforts to form institutions in defense of the free market. Late in his life Frank Knight expressed growing dissatisfaction with what he perceived to be the rhetorical excesses of the new generation of market advocates. They were, he wrote to a former student, “hurting the cause by going to extremes.” Cannan, Viner, and Knight remained dispositional conservatives, inclined to distrust both novel attempts at social engineering and excessive credulousness in regard to the workings of the market. They were suspicious of po liti cal engagement and the effects it could have on the quality and complexity of academic analysis. Their support for the price mechanism was born more of dismay at the alternatives than of admiration for its moral, cultural, or informational effects. Although their mea sured approach proved in effec tive in preventing the rapid expansion of the state, that was not the standard by which they hoped to be judged. In the midst of the Great Depression, they saw the points where politics and economics intersected less as a source of opportunity than as a cause for regret. — Angus Burgin, The Great Persuasion, 141

Categorization

• XREF: This generational split inside the liberal tradition resonates with mid-chapter tensions over what the Market took from the war economy — both complicate the idea of one coherent ‘Chicago school.’ — connects to: Chicago economists shared LSE hostility to New Deal and Keynesian policy — Angus Burgin, The Great Persuasion: Reinventing Free…, 88