Table of Contents

The Elgar Companion to the Chicago School of Economics

The Elgar Companion to the Chicago School of Economics

Elgar original reference

Edited by Ross B. Emmett

Many know the Chicago School of Economics and its association with Milton Friedman, George Stigler, Ronald Coase and Gary Becker. But few know the School’s history and the full scope of its scholarship. In this Companion, leading scholars examine its history and key figures, as well as provide surveys of the School’s contributions to central aspects of economics, including: price theory, monetary theory, labor and economic history. The volume examines the School’s traditions of applied welfare theory and law and economics while providing a glimpse into emerging research on Chicago’s role in the development of neoliberalism.

Chapter 1: The Development of Post-war Chicago Price Theory

J. Daniel Hammond

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

Extract

J. Daniel Hammond Introduction Within a short time after the end of the Second World War the University of Chicago economics faculty was transformed. Jacob Viner, who along with Frank H. Knight personified Chicago price theory from the 1920s through the war years, decamped for Princeton. Though Knight remained at Chicago, he was less involved in the department’s graduate program than he had been before the war. Henry Schultz, who brought his pioneering work on empirical estimation of demand to Chicago in 1926, died in an automobile accident in 1938. The native Pole, Oscar Lange, replaced Schultz teaching economic theory and mathematical economics, but in 1945 Lange was named Polish Ambassador to the United States and departed Chicago. Henry Simons died in June 1946. Paul Douglas, famous for the Cobb–Douglas production function, took leave from the university to join the Marine Corps during the war and afterwards withdrew from teaching and research to take up a political career. These people were replaced by a cast of new faces. Theodore Schultz and D. Gale Johnson arrived from Iowa State in 1943 and 1944. Jacob Marschak came to Chicago when the Cowles Commission moved there from Colorado Springs in 1943. He recruited Tjalling Koopmans in 1944. Both had appointments in the Economics Department in addition to Cowles. Marschak was Director of the Cowles Commission from his arrival until 1948 when Koopmans replaced him.1 H. Gregg Lewis was a graduate student when Henry Schultz died in 1938. When Lange was brought in...

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