Economic Calvinism?

For Knight, a sort of economic Calvinist, labor was not a mere disutility but gave life purpose. People did not always act out of self-interest, nor were their preferences somehow generated internally, nor were those preferences consistent over time. Where he and so many others saw a breakdown in the market order, or of "bourgeois society," Knight alone attributed it to a breakdown in people's morals. To him, social problems are almost always moral in nature, not structural or political. Ultimately, Knight supported the market on moral grounds, not efficiency ones; he believed freedom was itself the ultimate good, enabling people to trade with one another irrespective of their religious or cultural differences, based on their reasoning as to what is important and worth pursuing. What was missing from defenses of free markets, he thought, was a fundamental, moral brief supporting this social arrangement. He believed economists had failed to provide one because their concerns and methods did not allow them to see that their attempt to be "value free" was a sophisticated delusion driven by scientism.[4]

As Stigler writes about the place of economics in Knight's view of the world, its primary function "is to contribute to the understanding of how by consensus based on rational discussion we can fashion liberal society in which individual freedom is preserved and a satisfactory economic performance achieved. This vast social undertaking allows only a small role for the economist, and that role requires only a correct understanding of the central core of value theory."

Legacy of the Chicago School

Knight is clearly the intellectual godfather of the Chicago school. Even students who disagreed with him on many issues relate that he was the professor who most influenced them during their days at the University of Chicago. The Chicago school is far from some monolithic set of beliefs to which all its members subscribe. Knight's extreme skepticism and lack of slavish deference to authority became the twin pillars of the school's long and storied approach to theory and policy, and that is Knight's enduring legacy.

— Robert L. Formaini

Senior Economist

The Direct Approach....

Like David Hume, he rejected the view that the solution of social problems is to be found by the direct approach to them. And like Adam Smith, he had little hope that social reformers or "do-gooders" would solve problems and he thus was willing to allow the markets to solve them.-Ransom & Breit

Ethics and Economics

The competitive economic order must be partly responsible for making emulation and rivalry the outstanding quality in the character of the Western peoples who have adopted and developed it. The modern idea of enjoyment as well as achievement has come to consist chiefly in keeping up with or getting ahead of other people in a rivalry for things about whose significance, beyond furnishing objectives for the competition itself, little question is asked. It is surely one function of ethical discussion to keep the world reminded that this is not the only possible conception of value and to point out its contrast with the religious ideals to which
the Western world has continued to render lip-service-a contrast resulting in fundamental dualism in our thought and culture.

Stocks will rally?

Wall Street has never been more sure that stocks will rally in 2011, even as lower-than-estimated data on manufacturing and service industries fueled concern that the nation will slip back into a recession. Chief strategists at 13 banks from Barclays Plc to UBS AG see the S&P 500 surging 17 percent through Dec. 31, according to the average estimate in a Bloomberg survey. Their projection that the index will reach 1,401 hasn’t budged in four weeks.