# Think Tank > Austrian Economics / Economic Theory >  Chicago vs. Austrian School

## Rael

In a nutshell, what is the difference between Milton Friedmans Chicago School vs Mises Austrian School?

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## CryLibertyOrDeath

Monetarists (Chicago School) believe in the real effectiveness of monetary policy.

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## low preference guy

Austrians blame the great depression on printing too much money.
Chicago boys blame the great depression on printing too little money.

Austrians prefer to have no central bank.
Friedman wanted a computer to run monetary policy (lol).

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## TCE

This particularly interests me, since I am going to be forced to read The Shock Doctrine and I know virtually all of it will be crap. Is it basically Mises>Friedman>Keynes?

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## low preference guy

this looks like a good book on the subject:

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## hugolp

Some austrians even say that Chicago school can be considered a branch of keynesianism.

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## Disconsolate

Main difference is their stance on the federal reserve.

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## Austrian Econ Disciple

The largest difference is methodological. We use axioms and a priorism to deduce economic phenomena. Chicagoites use complex formulae, econometrics, etc. to deduce economic phenomena. Chicago School also has no theory about business cycles whereas ABCT is central in Austrianism. Probably the largest differences.

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## TCE

> The largest difference is methodological. We use axioms and a priorism to deduce economic phenomena. Chicagoites use complex formulae, econometrics, etc. to deduce economic phenomena. Chicago School also has no theory about business cycles whereas ABCT is central in Austrianism. Probably the largest differences.


So, it is better than Keynesian economic theory, but not by much? The business cycle is a huge part of Austrian Economics and without it, I can't see the Chicago school being that great. Why then is Friedman so famous while Mises is never discussed?

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## Sola_Fide

In a nutshell, Freidman thought that monetary policy was a tool that could be used to influence markets, whereas Mises thought that the markets should dictate money and credit entirely.













Mises was right.

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## Sola_Fide

> The largest difference is methodological. We use axioms and a priorism to deduce economic phenomena. Chicagoites use complex formulae, econometrics, etc. to deduce economic phenomena. Chicago School also has no theory about business cycles whereas ABCT is central in Austrianism. Probably the largest differences.



Good point.  ^^^

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## Legend1104

Yeah this reminds me of something that happened recently. I read Rothbard's "Great Depression" and then immediately read FDR'S Folly (not knowing it was based on the Chicago School). I could see the difference. In Rothbard's book, he claimed that Hoover was trying to inflat like crazy yet the banks, businesses, and people were actually doing the right thing at first by hording the money and creating deflation. Then eventually Hoover got his way. In Folly it claimed that the Fed, at first, sought a policy of deflation and it was disastrous. It seems to me that the Chicago school still likes inflation and hates deflation. That book continually blasted deflation.

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