The Chicago economists ignored contract terms where political goals mattered more

Evidence

For putative believers in the sanctity of contract, the Chicago cadre was amazingly cavalier about the terms of their agreement. This was no simple imperative to produce a text on time and within budget, or so it seemed; there were no penalties for default. Most notably, Aaron Director did not fulfill his original contractual obligation to finish the American Road by the spring of 1952, nor did he ever. Yet it is important to note that the Volker fund did not withdraw its funding out of dissatisfaction with Director; nor was Director expelled from Chicago for violating the original terms of his employment. Here we observe that, at least for the Chicago players, politics proved stronger than “the market.” — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 792

Categorization

• XREF: Connects to the broader irony of free-market thinkers relying on patronage funding and ignoring market discipline — parallels the gift-relationship scholarship I’ve encountered elsewhere.