The
Methodology Mystery: Friedman on false assumptions
Issues in Economics: why there has been so little agreement about Friedman’s argument that a theory’s assumptions need not be true (and in abstract theories often won’t be); whether this argument can save economic theories criticised for their lack of realism (especially those he seeks to defend, which assume agents behave as if rationally maximising their returns)
Philosophy used: some philosophy of science (Hempel and Oppenheim, Popper); falsity and existence (Russell, Strawson); basic logic.
Argument
i. full descriptive accuracy is impossible; it is necessary to abstract from complex reality; and
ii. false assumptions can generate valid predictions.
i. Friedman’s only criterion for theory-acceptance is predictive success (e.g. Wong, Rosenberg) – but simplicity, fruitfulness, etc.
ii. Friedman neglects explanation – but mention of it; Hempel and Oppenheim on explanation/prediction symmetry; Popper’s tirade against the ‘obscurantism of instrumentalism’ goes along with recognition of methodological limitations in social science.
iii. Friedman confuses unrealistic-meaning-simplifying with unrealistic-meaning-false, and so slides into thinking constructive approximation (Sen on round numbers); and household/consumer/firm (Russell and Strawson on ‘the present King of France’): call these ‘technical’ falsehoods? (Aside: F-Twist and S-Twist)
iv. Friedman gets his logic wrong by:
x. arguing from falsity to truth – but logic as just a truth-preserving system (truth-table for the ‘arrow’)
y. committing the fallacy of ‘affirming the consequent’ (i.e. arguing that if P implies Q, and Q is true, P must be true) – but his focus on assumptions which are not true.
z. neglecting the theorem that propositions imply themselves, so a false assumption must have at least one false consequence – but he can reply about the use to which a theory is put.
(Dr. J G T Meeks)