<i>And they make pretty terrible predictions.</i><p>That&#x27;s a fair criticism, as far as it goes: it&#x27;s been said (of Austrians, anyway) that they&#x27;ve predicted 8 of the last 3 recessions.<p>The thing is, qualitatively, we can say that &quot;old school Keynesian-style aggregate models&quot; are just as bad. The difference is that, rather than modeling based on coldly-rational actors, they&#x27;re modeling based on (and I quote) &quot;animal spirits&quot;. And those models told us that the end of WWII and curtailing war spending was going to usher in a new depression worse than the Great Depression; and that the Sequester and &quot;fiscal cliff&quot; were going to plunge us back into the depths of 2008.<p>The fact is that both approaches like to pretend that they understand what&#x27;s happening, but neither really do. Anybody claiming they have an accurate model of macroeconomics is trying to sell you something.<p>HOWEVER, this is all talk about Macro.<p>If you take a look at the Micro world, you&#x27;ll see that Chicago really are the winners. Microeconomics is a solved problem, at least to a first approximation. And the progenitor of that was pretty much Gary Becker - from University of Chicago.<p>So it&#x27;s not fair to criticize Chicago when (a) in the micro world, they really have been triumphant; and (b) in the macro world, they&#x27;re just a different kind of wrong than Keynesianism.