Free and Unfree Markets at the University of Chicago

Some University of Chicago professors are objecting to a plan for a Milton Friedman Institute there. I’ve followed the debate with great interest because I’ve been writing a book, off and on, about the Chicago School of Economics.

The University of Chicago critics are correct to object to this line in the proposal: "Following Friedman's lead, the design and evaluation of economic policy requires analyses that respect the incentives of individuals and the essential role of markets in allocating goods and services.”

Adam Kissel of FIRE argues that this is the same as Chicago’s history department expressing a commitment to "interdisciplinary and comparative history." Clearly, that’s not true. First of all, the Friedman Institute “requires” this analysis and says a certain ideological view of markets is “essential,” and the history department does not. Secondly, there is a fundamental distinction between a category of study (“interdisciplinary”) and an ideological answer (“essential role of markets”). It’s entirely proper to study markets; it’s entirely improper to allow only a conservative analysis of markets.

All that being said, I think that the Friedman Institute should be approved, ideally with some minor changes to assure that intellectual freedom. The reality is, there are ideological tinges to various academic programs, and there’s nothing wrong with that.

I disagree with the critics who invoke the Kalven Report, because I think the Kalven Report is a terrible policy that misunderstands and restricts academic freedom, and it should be repealed. As Kissel notes, the Kalven Report gets misinterpreted by the administration to prevent, for example, divestment from foreign countries (but not lobbying by the University for controversial funding).

The best approach at the University of Chicago would be for these faculty to create an institute that questions the Chicago School orthodoxy about markets.