I need some clarification here. I recently read that David D. Friedman aligns himself with the Chicago School, and not the Austrian School. He seems to have a...I don't know how else to put it other than a dislike for Rothbard. How is it possible to subscribe to the Chicago School (which, correct me if I'm wrong, employs statist functions) when you are, at the same time, anarcho-capitalist? His legal system seems to be much more anarchist than Rothbard's, though.
Maybe this would help
He's much more nihilistic than Rothbard in his morality. He adheres to the Chicago School economically, this does not mean that you don't necessarily think that government failure is a much bigger problem than market failure. This is why I think that public choice theory, when combined with even straight up neo-classical economics can lead to anarchism.
If you're lucky Friedman himself will answer your question. He shows up on these forums once and a while which I think is mega awesome.
Chicagoites don't believe in many things critical to the Austrian way of thinking, such as the business cycle.
Correct. So what?
Milton Friedman argued very firmly that the Federal Reserve caused one of the single greatest economic catastrophes in the history of man: the Great Depression. He also advocated abolishing the Federal Reserve.
And why was that?
i think a lot of it also has to do with dealing with the realities of the world. Even Greenspan said he thought the gold standard was better and believed in free markets yet look at his actions. Same goes for Milton and the Chicago school. If the government is going to act, this is the way they should act. So I believe they were just willing to make deals with the slave masters, either help them make the best decisions possible or go the Mises' route and call them all a bunch of socialists.
It just seems to me that the Chicago School is moderate, and that the only real anarchistic school of economic thought is provided by the Austrians.
i think you are considering they are moderate for my reason. They are willing to make adjustments in government action for the good of the country, where the Austrian school doesnt. I think if Mises would of bent a knee and helped government we would be looking at the Austrian School being very similar to the Chicago school.
There are ways to tax people to lessen the burden of an economic downturn, so Milton was willing to help find those ways. Where Austrian's call them a bunch of socialists.
"The stock of money, prices and output was decidedly more unstable after the establishment of the Reserve System than before. The most dramatic period of instability in output was, of course, the period between the two wars, which includes the severe (monetary) contractions of 1920-1, 1929-33, and 1937-8. No other 20 year period in American history contains as many as three such severe contractions. This evidence persuades me that at least a third of the price rise during and just after World War I is attributable to the establishment of the Federal Reserve System... and that the severity of each of the major contractions — 1920-1, 1929-33 and 1937-8 is directly attributable to acts of commission and omission by the Reserve authorities... Any system which gives so much power and so much discretion to a few men, [so] that mistakes — excusable or not — can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic — this is the key political argument against an independent central bank... To paraphrase Clemenceau, money is much too serious a matter to be left to the central bankers."
"The Federal Reserve definitely caused the Great Depression by contracting the amount of money in circulation by one-third from 1929 to 1933"
-Milton Friedman
How can a school of thought be inherently moderate or radical? These are relative terms. And how can a school of economic be inherently "anarchistic" or even support any ideology as such?
Neodoxy: "The Federal Reserve definitely caused the Great Depression by contracting the amount of money in circulation by one-third from 1929 to 1933" -Milton Friedman
Implying the Federal Reserve has complete control over the size of the money supply... If I recall correctly, Bob Murphy refers to the Fed figures in his Politically Correct Guide to the New Deal that the Fed more than doubled its treasury holdings within the first month and pursued an expansionary stance, apparently not expansionary enough in the face of bankruptcies and the shrinking of money supply on the 'private' end.
The Anarch is to the Anarchist what the Monarch is to the Monarchist. -Ernst Jünger
Chicagoism, aside from its neoclassical influences, also incorporates Keynesianism and tries to turn it on its head. Between Austrianism and Chicagoism I see no reason really to opt for the latter, but petty squabbles over which brand of economics is more "anarchist" are pointless. For methodological reasons, I don't see Chicagoans as any different to other mainstreamers. They get a lot of things right, but not necessarily for well-argued assumptions. Nor does Chicagoism pretend otherwise, being an instrumentalist school of economics. So it's useful, to a degree, but in my view obsolete.
Freedom of markets is positively correlated with the degree of evolution in any society...