Law and Order in the Economy: The End of a Paradigm and the Rebirth of an Old One

It started and ended in Chile! This might be the introductory sentence to an economic history of our times. After the 1973 military coup the “Chicago Boys”, a group of Chilean economists educated by Milton Friedman at University of Chicago, took control of Pinochet’s economic policy. A type of policy which later on entered government offices in the UK and the US together with Margaret Thatcher and Ronald Reagan. Today protesters on the streets of Santiago seeks to tear down the core pillars of the paradigm installed by the Chicago boys. Looking at broader developments, the essential driver of change over the past four decades have however not been an economic one but rather a legal one. Or rather the essential change has been the economics discipline acting as an invasive species entering into the realm of law though the law and economics paradigm.