05/11/2010 05:12 am ET Updated May 25, 2011

Is Richard Posner Destroying the Chicago School of Economics?

In law school many of my professors had erotic tones in their voices when uttering the name "Richard Posner". But is Posner sleeping around while still living at home?

Posner was one of the biggest proponents of the Chicago School of economic thought. He was a neoclassical economic thinker who is credited with projecting economic theory into the realm of jurisprudence. However, since former Fed Chairman Alan Greenspan's light bulb went off during the global economic meltdown, Posner has become a zealous inquisitor of extremist free market thought.

Although Posner still walks the intellectually gutted halls of the University of Chicago, he has no reservation helping tear their remaining ruins down from within. In less than a year, Posner has dropped a new book, The Crisis of Capitalist Democracy,to follow up his surprising dissection of the crisis A Failure of Capitalism.Business Week summarizes the new book:

[T]he prolific federal judge and University of Chicago economist argues that competitive forces inspire financiers to take irrational gambles--especially when they're betting other people's money. We cannot trust them to put the common good ahead of profits, says Posner. As a result, government must step in to limit the risks bankers take and, occasionally, repair the damage they inflict.

The Chicago School and all its powerful acolytes blundered, Posner writes, "by persuading themselves that markets were perfect, which is to say self-regulating, and that government intervention in them almost always made things worse."

Posner's change of tune is worth noting. He is a serious thinker whose career has been especially impacted by his passion for free market theories. His admission of error is no less forceful than high priest Alan Greenspan's. Like Pink Floyd's Judge, Posner appears to be screaming, "Tear down the wall!" of the Chicago School of economic thought.