Chicago neoliberalism versus Cowles planning: Perspectives on patents and public goods in Cold War Economic Thought

Abstract

In post-Sputnik America, when many policymakers and social scientists feared the Soviet Union had a technological advantage over the United States, assessing the relative importance of patents for inventive activity and examining whether scientific research constituted a public good were paramount concerns. The neoliberals of the University of Chicago and the planners of the Cowles Commission both spoke to these issues. This paper sheds light on their views on patents and public goods in the late 1950s and early 1960s by examining representatives of Cowles and Chicago, Kenneth Arrow and Ronald Coase, respectively. Furthermore, it evaluates whether their views on patents and public goods clashed with the interests of RAND, at which both Arrow and Coase worked at some point during this time period. The paper argues that the Chicago-neoliberal position of Coase undermined the interests of RAND, while the Cowles-planning conclusions of Arrow furthered those interests.