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    I have many friends who are followers of both the Austrian school and Chicago school, or, as they often write, “Austro-Chicagoan.” I am puzzled as to what they truly mean, and why they do not consistently adhere to one school or the other. Is it a matter of, sadly, them relying partially on empiricism rather than always using praxeology? Do they treat economics as a positive science, like Milton Friedman? I am confused, so any clues to as what they mean would be greatly appreciated.


    They likely mean that theses are the two most prominent free-market schools (at least Chicago once was). But, as you point out, method is crucial. A model is a foundation of sand (as the decline of the Chicago school as a proponent of the free market illustrates) and leaves one open to the charge that one’s economic theory is just a scientific fig leaf for covering up one’s unseemly libertarian prejudice.

    Liberty Magazine published a piece on the “Austro-Chicagoan Empire” in 2005:


    Hello SinardN,

    You bring up an interesting question. That I even have an interest in economics can be traced back to my discovery of Milton Friedman on youtube. From there I clicked on a Tom woods video in the suggested videos section. Thank you Chicago school. The similarities in their general message left me with the question of, where are the two schools different? I don’t know why your friends think of themselves as Austro-Chicagoans but there are plenty of Chicagoans I like, despite differences of opinion I may have. Ronald Coase , a heavyweight of the economics profession, seems to differ largely with both schools yet is well regarded by each of them.

    Here is a Bob Murphy article comparing the two schools. You may want to challenge your friends on whether it is consistent to commingle the two schools beyond supporting free-markets.

    In reference to the article presented by professor Herbener, Here is Richard Ebeling on Skousen’s book.


    Thanks for the pdf.
    Also, didn’t you switch from the Chicago school to the Austrian school? Why did you switch?
    Edit: That was directed at the professor.


    During my college education as an economics major and then graduate student, none of my professors, save one, ever mentioned an Austrian school economist. I knew about the Chicago school from my undergraduate days and studied under a student of Milton Friedman’s in graduate school, but never considered myself a member of the Chicago school. In microeconomics, the free-market implications of general-equilibrium models were plain enough and reinforced my philosophical attachment to liberty. Friedman was fine in this realm, but his macroeconomics was a mess. Being dissatisfied with neoclassical economics after finishing my PhD, I started to read the Austrians, first Hayek, then Mises, then Rothbard. The power of their ideas convinced me.

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