|Does the recent financial crisis signal the end of free-market economics? [Reuters]
Nestled within the leafy campus of the University of Chicago, stands a brownstone building known currently as the Chicago Theological Seminary Building.
But the building's new occupants have more worldly pursuits than the study of God.
It is now the planned site for what will be the Milton Friedman Institute for Research in Economics.
The new $200m establishment will be dedicated to the Nobel prize-winning economist viewed as the pioneer of neo-liberal economic thought and founder of the so-called "Chicago School" of economists, whose policies have shaped world markets for decades.
However, those who commissioned the establishment could not have picked a more inauspicious time for its launch – as Friedman's policies, which influenced so many within US politics, are widely being blamed for the current global financial turmoil.
At a time when the world is beginning to view tighter regulation and oversight of markets as the only way out of the crisis, many people are questioning whether the 'Chicago school' of ideology itself has any future.
The Chicago School of Economics is less of an actual department than a school of thought – shaped by Friedman and his colleagues working across the economics department and the nearby law and business schools in the 1950s.
Friedman and his allies rejected Keynesianism – the popular economic theory of the time which espoused belief in the state's role in stimulating economic growth and stability in the private sector through interest rates, taxes and public works – in favour of "laissez faire" capitalism and deregulation.
|The 'Chicago School' influenced
governments around the world
"In the 1950s and 1960s there was only a small isolated minority who believed in methological individualism – the preference of individuals - as opposed to institutions,' says Gerald Friedman (who is not related to the late Milton), the professor of economics at the University of Massachusetts at Amherst.
"But time passed until, by the 1980s, the Chicago School came to dominate US economic thought."
But, although feted by many, critics argued that much of the Chicago School's ideas were best implemented by undemocratic states – pointing in particular to the infamous "Chicago Boys" of 25 Chilean economists trained by Friedman at the school who then returned to Chile to impose free-market policies under General Augusto Pinochet's rule - a period marked by his brutal repression and atrocities against human rights.
And just last month, as the US financial markets crumbled and protesters marched down New York's Wall Street, even Alan Greenspan, the former chairman of the US Federal Reserve, made the extraordinary admission to a US house committee on the crisis that he had "found a flaw ... in the model that I perceived is the critical functioning structure that defines how the world works" - the very basis of the free-market school of thought itself.
But Robert E Lucas, a professor of economics at Chicago University and a member of the original Chicago School, rejects claims that the ideology is responsible for the current financial turmoil, saying that the late Friedman and his colleagues have been made into "scapegoats".
"We have a free-markets tradition, but I personally don't believe [that the school is responsible]," he says.
"It doesn't mean anything – why don't you ask these guys [critics] what should be done specifically and what should be done now?
"People like [Josef] Stiglitz [the US economist and critic of free markets] use name-calling instead of just diagnosing the problem and saying what should be done.
"Should there have been regulation to prevent this? Well sure, but what sort of regulation? Let them spell out what regulation we should have in place."
But Gerald Friedman says that many people within the financial community feel it is the flawed methodology of the Chicago school which has facilitated the crisis.
"There is a lot of anger towards the Chicago school and the people on Wall Street feel betrayed,” he says.
"Deregulation has been a complete disaster for them."
"I think [the Chicago School] changed the direction of economics, but it’s over now and completely discredited."
The question of the economy proved central in recent weeks on the US presidential election campaign trail.
Democrat Barack Obama, the victor and new president of the US, has Austan Goolsbee, a professor of economics at the Chicago Business school and Cass Sunstein, a legal scholar who taught at the Chicago University’s Law school for decades.
His defeated rival, Republican John McCain, had Jack Kemp, a fellow Republican and proponent of the Chicago school ideology.
McCain had been swift to seize on Obama's economic plans as "evidence" of what he called "socialism" during the race.
He's accused Obama of wanting to "spread the wealth" and of aiming for the role of "redistributor-in-chief" while Sarah Palin, his vice-presidential running mate, told a rally in Ohio that "now is not the time to experiment with socialism".
Obama, who was favoured by voters as being the best choice to deal with the economic crisis, assured voters he "loves the markets", causing some left-wing commentators to refer disparagingly to the Illinois senator's own advisers as "Chicago Boys".
But Gerald Friedman says that Sunstein, seen as a relative progressive, is viewed as the man who will shape president Obama's policies and he will be much more "aggressive" in finding a solution to the crisis.
"McCain's guys had the very conventional old-school aspects of [economics] which were 20 years out of date," he says.
"[With Obama] it's not New Deal, big government but, on the other hand, it's certainly – for first time since the 1970s - that we ... have a government that's a significant step [away] from the Chicago School."
However, if the Chicago School's philosophy is perceived by some to be finished, this is not a message that has so far trickled down to everyone.
On the university campus, students at the Chicago School of Business's sleek, glass-panelled school are still scurrying to classes - albeit in smart suits more befitting of a bank boardroom meeting than economics 101 classes - and meeting friends for coffee in the building’s cavernous hall.
They are the next generation of business leaders and the influence of the Chicago School of Economics looms large.
Many of them told Al Jazeera they had applied to study at the university purely for the prestige of attending classes still taught by the founding fathers of the free-market movement.
Nikolai, a young MBA (Masters of Business Administration) student from Germany who did not want to give his last name, said many of his friends had thought of switching their degrees from finance because of concerns over market conditions and fears of not being able to get jobs once they graduate.
But he still retains confidence in the school's tenets.
"Maybe it's just for the time being, this downturn," he ventures.
"Right now there are some arguments against it - but I’m still a believer in free markets."