Austrian School of Economics: Revisionist History and Contemporary Theory

7. The Political Economy of the Chicago School: Libertarian or Jacobin?

06/10/2005 Joseph T. Salerno

The founder of the Chicago School, Frank Knight, was an avowed egalitarian. Rousseau was his influence. Jacobins believed in mass democracy and politics as the only way to implement their ideas. They hated aristocrats and religious leaders. Knight believed in progressive taxation. He wanted neocon social democracy.

Milton Friedman was part of the Chicago school. His Capitalism & Freedom contains much of his thought. He was more pro-freedom than Knight. But, he introduces the concept of externalities and approves of the welfare state. Education (public-private schools with vouchers), poverty (charity will not suffice, thus massive welfare systems needed) and the monetary system (monetarism) were his focus.

Lecture 7 of 10 from Joseph Salerno’s Revisionist History and Contemporary Theory.

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