The methodology of positive economics: reflections on the Milton Friedman legacy

383 Pages·2009·3.717 MB·English

by  Mäki, Uskali

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The Methodology of Positive Economics
MiltonFriedman’s1953essay“Themethodologyofpositiveeconom-
ics”remainsthemostcited,influential,andcontroversialpieceofmeth-
odologicalwritingintwentieth-centuryeconomics.Sinceitsappearance,
the essay has shaped the image of economics as a scientific discipline,
bothwithinandoutsideacademia.Atthesametime,therehasbeenan
ongoingcontroversyovertheproperinterpretationandnormativeeval-
uation of the essay. Perceptions have been sharply divided, with some
viewing economics as a scientific success thanks to its adherence to
Friedman’sprinciples,otherstakingitasafailureforthesamereason.
Inthisbook,ateamofworld-renownedexpertsinthemethodologyof
economicscastnewlightonFriedman’smethodologicalargumentsand
practices from a variety of perspectives. It provides the twenty-first-
centuryreaderwithaninvaluableassessmentoftheimpactandcontem-
porarysignificanceofFriedman’sseminalwork.
UskaliMäkiisAcademyProfessorattheAcademyofFinland. Hehas
written extensively on the philosophy and methodology of economics
andiseditorofanumberofbooks,includingTheEconomicWorldView
(Cambridge University Press, 2001), Fact and Fiction in Economics
(CambridgeUniversityPress,2002),andHandbookofthePhilosophyof
Economics(2009).

The Methodology of Positive
Economics
Reflections on the Milton Friedman legacy
Editedby
Uskali Mäki
CAMBRIDGE UNIVERSITY PRESS
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Cambridge University Press
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Published in the United States of America by Cambridge University Press, New York
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© Cambridge University Press 2009
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may take place without the written permission of Cambridge University Press.
First published in print format 2009
ISBN-13 978-0-511-53695-3 eBook (Adobe Reader)
ISBN-13 978-0-521-86701-6 hardback
ISBN-13 978-0-521-68686-0 paperback
Cambridge University Press has no responsibility for the persistence or accuracy
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and does not guarantee that any content on such websites is, or will remain,
accurate or appropriate.
For INEM

Contents
Listoffigures pageix
Listoftables x
Contributors xi
Preface xvii
Part1 Theclassicalessayintwentieth-centuryeconomic
methodology 1
Themethodologyofpositiveeconomics(1953)
milton friedman 3
Part2 Readingandwritingaclassic 45
1 Readingthemethodologicalessayintwentieth-century
economics:mapofmultipleperspectives
uskali mÄki 47
2 EarlydraftsofFriedman’smethodologyessay
j. daniel hammond 68
3 Unrealisticassumptionsandunnecessaryconfusions:
rereadingandrewritingF53asarealiststatement
uskali mÄki 90
Part3 Models,assumptions,predictions,evidence 117
4 TheinfluenceofFriedman’smethodologicalessay
thomas mayer 119
5 DidMiltonFriedman’spositivemethodologylicense
theformalistrevolution?
d. wade hands 143
vii
viii Contents
6 Appraisalofevidenceineconomicmethodology
melvin w. reder 165
7 Thepoliticsofpositivism:disinterestedpredictionsfrom
interestedagents
david teira serrano and jesÚs ZAMORA BONILLA 189
Part4 Theoreticalcontext:firm,money,expectedutility,
WalrasandMarshall 215
8 Friedman’s1953essayandthemarginalistcontroversy
roger e. backhouse 217
9 Friedman(1953)andthetheoryofthefirm
oliver e. williamson 241
10 Friedman’sselectionargumentrevisited
jack vromen 257
11 ExpectedutilityandFriedman’sriskymethodology
chris starmer 285
12 MiltonFriedman’sstance:themethodology
ofcausalrealism
kevin d. hoover 303
13 Ontherightsideforthewrongreason:Friedmanonthe
Marshall–Walrasdivide
michel de vroey 321
Part5 Concludingperspectives 347
14 ThedebateoverF53afterfiftyyears
mark blaug 349
15 Finalword
milton friedman 355
Index 356