Chicago economists resisted Hayek’s Austrian methodology, demanding empirical research instead.

Evidence

Director’s assessment was rather pessimistic, however. Most of the conclave attendants had concurred with Simons’s memo in principle, but all had registered disagreement with Simons’s more elaborate vision of a twenty-year project that aimed to advance the tradition of liberal economic doctrines and influence public policy. There was, for instance, some hesitation about Hayek’s “Austrian” methodological proclivities. Instead, Director and the others “would assign more importance than he does to a certain amount of empirical investigation—directed of course to the central issue of maintaining competitive conditions. An investigation of the economies of scale and inevitability of monopoly suggest itself as an illustration. An incidental advantage of the inclusion of empirical work is greater ‘saleability’ so that it would not be necessary to insist on as on a period as twenty years. Assured existence for 8 to 10 years—perhaps even 5 or 6 years—might in fact imply some assurance of an extension to the maximum period of twenty years.” — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 734

Categorization

• XREF: Previews the later methodological divide between Chicago empiricism and Hayek’s Austrian a priorism that shaped neoliberal economics. — connects to: The Austrian school rejected state intervention and economic mathematization alike — Mark Blyth, Austerity: The History of a Dangerous…, 383; Schmölders rejected Hayek’s deductive economics in favor of empirical social-science methods — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 329; Chicago economists rejected Hayek because Road to Serfdom was too popular a work — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 786
• SEED: The methodological compromise — empiricism as ‘saleability’ versus Austrian theory — is a usable angle for a piece on how ideology gets packaged for funding.

Broader Connections

• Chicago economists rejected Hayek because Road to Serfdom was too popular a work #responds-to (0.90) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 786