Paul Krugman wrestles with this question in last Sunday’s New York Times Magazine. His answer: They are very often completely enthralled by the market. That explains why they were blindsided by the catastrophic market failure last fall.

Other distinguished economists have also addressed this question. Nobel laureate Joseph Stiglitz is working on a book that will focus in part on “why the economics profession failed so badly” in predicting the crisis, as he told me. (The interview is in the October issue.)

And John Kenneth Galbraith dealt with this question at some length. The profession “combines those who pursue the truth with those who pursue the rewards of orthodoxy and those who pursue what is comfortable to the rich,” he said to me in 2000.

“In leading centers of instruction … has come a new despotism,” wrote Galbraith back in 1979. “This consists in defending scientific excellence in economics not as what is true but as whatever is closest in belief and method to the scholarly tendency of the people who already have tenure in the subject. It helps ensure the perpetuation of the neoclassical orthodoxy.” The result is an economics profession that “is the influential and invaluable ally” of the rich and powerful, he concluded.

One of the leading centers of ultra-free-market thinking is the University of Chicago.

“Employees face financial incentives that encourage them not to work,” declares U. of C. Professor Casey Mulligan. “Decreased employment is explained more by reductions in the supply of labor (the willingness of people to work) and less by the demand for labor (the number of workers that employers need to hire).”

His faculty buddy John Cochrane goes even further, announcing unemployment to be a good thing. “We should have a recession,” he states. “People who spend their lives pounding nails in Nevada need something else to do.”

This sort of silliness has unfortunately had a profound impact. As Christopher Hayes pointed out in a piece for In These Times a few years ago, the University of Chicago economics department can lay serious claim to be the most intellectually significant in the nation (and perhaps internationally, since the “Chicago Boys” wreaked havoc in Latin America).

“A 2001 study published in the U. of C.’s Journal of Law and Economics showed that those with college degrees are more likely to subscribe to the views of neoclassical economists than the general public,” writes Hayes. “This isn’t surprising. At elite colleges, economics is consistently one of the most popular majors (nearly a quarter of undergrads at the U. of C.), and across all schools, introductory economics, often a required course, has been one of the ten most popular classes for the last thirty years. Graduate schools—from business to public policy to political science to, most notably, law—are now suffused with economic paradigms for understanding not only financial interactions but all human behavior.”

Hayes sat in on a class at the university, taught by Professor Allen Sanderson. Sanderson proposed in the second lecture that the best way to fill the remaining slots in his oversubscribed class would be the most “efficient” method: an auction.

Sadly, this blind fealty to the market is not limited to the University of Chicago; it holds sway over almost all economics departments in the country. A friend of mine who was in the New School economics Ph.D. program informed me that only a handful of departments have dared to break free of the free-market chokehold: U Mass-Amherst, American University, UC-Davis, New School, and a couple of others.

There has been a timid challenge posed to the Chicago paradigm in recent years by what are called “behavioral economists.” These folks actually attempt to analyze how people behave in real-life situations, rather than drawing assumptions from highly stylized models. (“Freakonomics” is perhaps the best-known example of work in this field.) But even though they deviate from some of the assumptions of the Chicago School, the departure is so timid that they’ve found widespread acceptance among mainstream economists.

It is unlikely that even a free-market debacle on a global scale will change much in the economics profession. It will continue to adhere to its destructive way of thinking and will keep on exercising its baleful influence.