The Revival of Laissez-Faire in American Macroeconomic Theory

The Revival of Laissez-Faire in American Macroeconomic Theory

A Case Study of the Pioneers

Sherryl Davis Kasper

This book provides the definitive account of this watershed and traces the evolution of laissez-faire using the cases of its proponents, Frank Knight, Henry Simons, Friedrich von Hayek, Milton Friedman, James Buchanan and Robert Lucas. By elucidating the pre-analytical framework of their writings, Sherryl Kasper accounts for the ideological influence of these pioneers on theoretical work, and illustrates that they played a primary role in founding the theoretical and philosophical use of rules as the basis of macroeconomic policy. A case study of the way in which interwar pluralism transcended to postwar neoclassicism is also featured.

Acknowledgements

Sherryl Davis Kasper

Subjects: economics and finance, austrian economics, economic psychology, history of economic thought

Extract

In the course of this research, a number of scholars have assisted me generously. I have cited their contributions in the endnotes, but undoubtedly I have omitted some intellectual debts incurred over the long course of writing this book. I express a general thanks to the scholars whose ideas and support have contributed to the completion of this project. In particular, I am indebted to Professor Hans E. Jensen. Throughout my professional career, he has been a constant source of sound counsel, and he has continued to provide unstinting support and friendship during the writing of this book. At several points in its evolution, he gave the text a critical reading, and it was with his enthusiastic encouragement that I took this project beyond a dissertation. I also thank other professional associates who commented on ideas in and drafts of this manuscript. Anne Mayhew, William E. Cole, James R. Carter and Scott Brunger read early versions and provided helpful suggestions for its improvement. Ross B. Emmett read early work on Frank Knight and contributed indispensable comments that improved that chapter and provided more general insights about Chicago economics during the interwar period. William J. Barber, Bradley Bateman, Robert W. Dimand, J. Daniel Hammond, and Mary S. Morgan supplied helpful comments on early work on Henry Simons. Finally, Ingrid H. Rima provided valuable comments on the chapter on Robert E. Lucas, Jr and more generally has encouraged my development as a historian of economics. Whatever errors remain in my work, however,...

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