It’s arduous to search out an article prior to now century extra influential in financial methodology than Milton Friedman’s “The Methodology of Constructive Economics.” Its significance lies not in presenting groundbreaking new concepts however in its energy to prepare and articulate present ones that had already been shaping the unconscious of many economists. Since its publication in 1953, this essay has develop into a cornerstone of mainstream financial methodology—a mainstream financial “bible” of kinds.
Nevertheless, there’s a stunning twist: Friedman himself later regretted writing it. This revelation was as surprising to me because it could be to you. I first got here throughout this declare whereas studying Deirdre McCloskey’s Past Positivism, Behaviorism, and Neo-Institutionalism in Economics. On web page 60, McCloskey writes: “I’ve mentioned, in Samuelson’s PhD thesis (1941) and in Friedman’s ‘The Methodology of Constructive Economics’ (1953)—a paper, Friedman informed me, that he later regretted.”
Shocked by this, I delved deeper. To achieve readability, I reached out to Deirdre McCloskey herself and requested her concerning the context of Friedman’s remorse. Right here’s how she recounted it throughout our interview:
Mani Basharzad: You point out that Friedman as soon as informed you he regretted writing his article “The Methodology of Constructive Economics,” a bit that has since develop into nearly a bible of financial methodology. May you elaborate on that?
Deirdre McCloskey: It wasn’t a dialog—it was a remark in a letter he wrote to me, praising my article from 1993, which I believe was known as “The Rhetoric of Economics.” In that article and in subsequent books, I attempted to point out economists that the philosophy, historical past, and sociology of science don’t help the naïve positivist formulation that each Samuelson and Friedman superior. It’s vital to do not forget that Samuelson was making comparable claims on the time. For some motive, although, Friedman’s article turned extra well-known.
This was a putting admission, notably as a result of it’s absent from Milton Friedman: The Final Conservative, his most up-to-date biography, in addition to his earlier ones. Whereas Friedman by no means made a public assertion about this remorse, McCloskey’s account suggests he might have been dissatisfied with the implications of the methodological custom he helped set up.
In his later years, Friedman’s mental pursuits appeared to shift. He grew nearer to economists like Friedrich Hayek, whose methodological views typically diverged from the mainstream. Whereas Friedman acknowledged the utility of mathematical instruments in financial evaluation, he was by no means as fervent a champion of formalism as Paul Samuelson was.
No matter Friedman’s private reflections, the custom of methodological instrumentalism that his essay solidified continues to form economics right this moment. His legacy is a reminder that even probably the most influential thinkers can grapple with the unintended penalties of their concepts.
