Where Economics Went Wrong: Chicago’s Abandonment of Classical Liberalism

Translated from the English by Andrey F. Vasiliev. – Moscow: Gaidar Institute Press, 2025. – 384 p. 

ISBN 978-5-93255-687-0

Milton Friedman had a prediction that one day advances in economic science would settle the debate over whether raising the minimum wage was sound economic policy. Decades later, Friedman's prediction has not come true. In this book, David Colander and Craig Freedman argue that it will never come true. Why? Because economic policy, when pursued properly, is an art and a craft. It is not and cannot be a science. The authors explain why classical liberal economists understood this essential distinction, why modern economists have abandoned it, and why now is the time for the profession to return to its classical liberal roots. In discussing economics' loss of its former landmarks, the authors look in detail at the development of welfare economics in relation to economic science, alternative voices within the Chicago School, and where exactly Friedman went wrong.

The authors call for a return to the separation between science and policy prescriptions and make a strong case for the need for more subtle and thoughtful analysis of economic policy.