A Critique of Friedman's Methodological Instrumentalism

Milton Friedman's 1953 classic, Methodology of Positive Economics, is probably the best-known piece of methodological writing in the discipline [9]. It is also a marketing masterpiece. Never before has one short article on methodology been able to generate so much controversy. It was reviewed often, usually negatively. Yet ironically, the methodological prescriptions advanced in his essay have been accepted by many working economists. And this has happened without Friedman ever having directly responded to his critics! The most recent contribution to the secondary literature is Lawrence Boland's piece, Critique of Friedman's Critics [4, 503-22]. Boland argues that Friedman's methodology is best understood as a variant of the philosophical position known as instrumentalism, and that if Friedman is so interpreted, many critiques of his position existent in the economic literature miss their mark. While these points are well-taken, Boland states in his conclusion that no one has been able to criticize or refute instrumentalism [4, 521]. Such a statement leaves the reader with the impression that Friedman's position is not only untouched, but perhaps even vindicated. It is the purpose of this paper to challenge such a conclusion by critiquing Friedman's methodological instrumentalism. In the next section, some brief comments on definitional and interpretive issues are followed by a restatement of Friedman's position. Sections III, IV, and V contain the core of the criticisms against Friedman's methodological instrumentalism, from both philosophical and methodological perspectives. A conclusion emphasizes the importance of this debate for the critical methodological question of how theory choice is effected in economics.