26 October 2009

Apostasy in Chicago

I recently received my copy of The University of Chicago Magazine. It contains this puff piece about a self-congratulatory conference of the economists there. The article was incredibly annoying for a couple of reasons. In the first place, the author never managed to actually talk to anyone who disagrees with the market fundamentalists in Hyde Park. He quotes some critics of the Chicago School. But he mostly let the true believers run on about how great they are; the consequence is that they end up caricaturing their critics and denying that they themselves have been wrong, ever, about anything. One upshot of that - and this is truly irritating - was that they were able to rationalize their (specifically Milton Fridman, Arnold Harberger and their acolytes) complicity in the murderous Pinochet dictatorship. The defense amounts to acknowledging that just maybe rates of economic inequality were higher under Pinochet but that his "reforms" (let's not use the word coup!) nevertheless ushered in economic progress on the continent. That is a howler given that the real problem is that Pinochet murdered his opponents in very large numbers. The complicity of Friedman et. al lies in having lent intellectual legitimacy to a murderous regime. It would be refreshing to have the Chicago economists acknowledge that their much loved "free markets" too often are instituted through the barrel of a gun. It pains me to see the alumni magazine of a great university celebrating ideologues.

Having said that, there is some evidence of active brain waves in Hyde Park. I recommend this essay ~ "How I Became a Keynesian" ~ by Richard Posner in The New Republic. Posner has not, I suspect, become a convert. He has simply demonstrated that it is easy to learn from those with whom one disagrees, if only one reads them first.

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