Half a century ago, the “Chicago Boys” embarked on an experiment in Augusto Pinochet’s post-coup Chile that would become the dominant economic-policy framework of our time, introducing a raft of radical measures inspired by the ideas of Milton Friedman and the rest of the Chicago School.

These ideas - born of an absolute faith in markets and an equally absolute suspicion of government - went on to rule the economics discipline and, more importantly, economic policymaking for the next 35 years. Not until the collapse of Lehman Brothers in September 2008, soon followed by the Global Financia...