Description:
This paper depicts the co-evolution of the political economies of the "Old Chicago" and Freiburg Schools. These communities within the "laissez-faire within rules" research program and the long-standing "thinking-inorders" tradition emerged in the 1930s and culminated in the 1940s into a surprisingly coherent stream of institutional economic thought, crystallizing around the personalities of Henry C. Simons and Walter Eucken. We show how, in an age of disintegration of national and international orders of economy and society, the political economists at Chicago and Freiburg underwent a double transition: From students of equilibrium to students of order, as well as from students of various positive orders to defenders of a specific normative order. The normative order of the economy on both sides of the Atlantic was the competitive order and its rules-based framework. Along with shared angst amid disintegrating orders, personal transatlantic connections between the two communities are identified, starting in Berlin during the 1920s. We highlight the special role of Friedrich A. Lutz who, from the mid-1930s to Eucken's passing in 1950 and beyond, served as a lifeline between the isolated Freiburg School and US economists. Lutz's activities are embedded in a narrative of transatlantic conversations around Friedrich A. Hayek and the early meetings of the Mont Pèlerin Society.