Hayek thought that negotiations had flagged because Director had wanted to be granted permanent tenure and that negotiation had only regained steam after the Volker Fund offered to pay Director’s law school salary for the first five years. Director later publicly admitted: “It was earlier decided that Chicago was the only place that was likely to accept such a project, and it was also decided that the law school was the only part of the University of Chicago that would accept such a project” (Kitch 1983, 181). Thus, while Hayek depicted the Law School as the intellectually ideal location in correspondence, it was in fact the only serious prospective location for the American Road Show; other universities tended to balk at the level of control that Volker sought to exert as a condition of funding. But this would later prove significant, since it illustrates the important fact that the subsequent “Chicago Schools” of both economics and the law were jointly incubated—one did not simply give rise to the other.

Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, loc. 741