Expecting Robert Lucas: Revisiting the Relationship between American Keynesianism and Neoliberalism

Abstract

As the paragon of Chicago school macroeconomics in the late twentieth century, Robert Lucas is closely associated with the collapse of Keynesian hegemony in the 1970s and with neoliberalism more generally. This article explores Lucas’s changing political commitments using previously unexploited archival evidence. It shows that although he often articulated his views in the form of anti-Keynesian polemic, he had a deeply ambiguous relationship with the Keynesian project. Lucas upends interpretations of neoliberalism that emphasize ignorance in the face of the market, as his research program is premised on the hope that states and scholars can make the economy visible, and hence controllable, through stable policy rules. He was impressed by Keynesian successes and the technocratic worldview they made intelligible, but he remained suspicious of economists’ close collaborations with government.