Why Friedman’s Methodology Did Not Generate Consensus Among Economists

Abstract

In this paper I study how the theoretical categories of consumption theory were used by Milton Friedman in order to classify empirical data and obtain predictions. Friedman advocated a case by case definition of these categories that traded theoretical coherence for empirical content. I contend that this methodological strategy puts a clear incentive to contest any prediction contrary to our interest: it can always be argued that these predictions rest on a wrong classification of data. My conjecture is that this methodological strategy can contribute to explain why Friedman's predictions never generated the consensus he expected among his peers. .

Milton Friedman’s Empirical Approach to Economics: Searching for Scientific Authority While Shaping the University of Chicago Economics Department

“…33 For an analysis of the link between the classification of data and the definition of theoretical categories, see David Teira (2009). 34 A naive model is a model in which minimum amounts of effort and manipulation of data are used to prepare a forecast.…”

“…For an exhaustive list of Friedman's publications, see Cole (2012). 2 For an analysis of Friedman's methodology, see, for example, Frazer and Boland (1983), Hirsch and de Marchi (1991), Teira (2007Teira ( , 2009, Mäki (2009), Cherrier (2011), andHands (2003). 3 See, for example, Samuels (1976), Patinkin (1981), Emmett (1998Emmett ( , 2010c, Hammond and Hammond (2006), Harberger and Edwards (forthcoming), Mirowski et al (2011), Stapleford (2011), and Van Horn, Mirowski, and Stapleford (2011).…”

“…23 Regression analysis, as Fisher taught it, relied explicitly on a classificatory device: the contingency tables invented by Karl Pearson (Porter 1988). These tables collected observations in their rows and columns and delivered, in the bivariate case, an intuitive test of their fitness to the distribution pattern required by correlation analysis, so that further predictions could be derived through a regression (Teira 2007).…”

“…We can offer an alternative explanation for Friedman’s ideological lack of trust and relate the limits of predictions as consensus devices to his approach to empirical research in economics and, more concretely, to his methodological prescriptions concerning the criteria to define theoretical categories 18 . Indeed, David Teira (2009) has shown how, by relaxing coherence, Friedman’s methodological prescriptions concerning the definition of categories hindered consensus. In other words, under Friedman’s methodological prescriptions, it was always possible to argue that another classification of data was possible when disagreements existed.…”

“… 2 For an analysis of Friedman’s methodology, see, for example, Frazer and Boland (1983), Hirsch and de Marchi (1991), Teira (2007, 2009), Mäki (2009), Cherrier (2011), and Hands (2003). …”