There is not, of course, a one-to-one relation between policy conclusions and the conclusions of positive economics; if there were, there would be no ...

Milton Friedman's 1953 essay 'The methodology of positive economics' remains the most cited, influential, and controversial piece of methodological writing in twentieth-century economics. Since its appearance, the essay has shaped the image of economics as a scientific discipline, both within and outside of the academy. At the same time, there has been an ongoing controversy over the proper interpretation and normative evaluation of the essay. Perceptions have been sharply divided, with some viewing economics as (...) a scientific success thanks to its adherence to Friedman's principles, others taking it as a failure for the same reason. In this book, a team of world-renowned experts in the methodology of economics cast new light on Friedman's methodological arguments and practices from a variety of perspectives. It provides the 21st century reader with an invaluable assessment of the impact and contemporary significance of Friedman's seminal work. (shrink)

A review of A. Hisch and N. de Marchi's thorough historical study on Milton Friedman's life-long work as an economist (and more specifically as a monetary economist) and as an economic methodologist (in his famous essay "The Methodology of Positive Economics".

Milton Friedman and Amartya Sen have a lot in common. Both are Nobel Prize-winning economists who venture beyond the more technical questions of positive economics to demonstrate the relevance of their expertise to philosophy and public policy. Their social and political philosophy, including normative theorizing from their work and the work of other economists, comprises arguably the most influential part of their corpus. Like most Americans, both Friedman and Sen are liberals, in the sense that they argue (...) that social arrangements should be assessed according to their tendency to further the liberty of individuals. In addition, both demonstrate the deep link between political and economic institutions, and articulate the ways in which an individual’s freedom (or lack thereof) in one sphere impacts her freedom in other spheres. -/- Despite these and other similarities, there is an immense partisan divide between the followers of their work in American politics (in particular). Friedman’s work is championed by so-called neo-liberals – a group that has come to dominate the political and economic right in the United States - providing the philosophical foundation for demands for limited government and free markets. Both critics and plaudits regard Friedman as the “intellectual architect” of the free-market policies of the Republican Party, from Ronald Reagan forward. Sen’s work, on the other hand, is frequently utilized to defend so-called progressive policies in the U.S. and abroad. Such policies, many argue, further the effective or substantive freedom of individuals (an idea associated with early socialist thought). This essay begins an overdue systematic analysis of their social and political philosophy, focusing on the central driving concept for both theorists: the idea of freedom. With this study in hand, I recommend a pragmatic, pluralist understanding of freedom in the United States and elsewhere. (shrink)

In this paper, I shall defend two main claims. First, Friedman’s famous paper “On the methodology of positive economics” (“F53”) cannot be properly understood without taking into account the influence of three authors who are neither cited nor mentioned in the paper: Max Weber, Frank Knight, and Karl Popper. I shall trace both their substantive influence on F53 and the historical route by which this influence took place. Once one has understood these ingredients, especially Weber’s ideal types, many (...) of F53’s astonishing sentences like “the more significant the theory, the more unrealistic the assumptions”, make good sense. Second, I shall claim that the much-discussed question whether Friedman’s essay espouses an instrumentalist or a realist position, is the wrong question to be asked. I shall illustrate that by a comparison with examples from physics in which also unrealistic assumptions are made. Also there, the question whether these assumptions are indicators of instrumentalism or realism is not appropriate. Cleared from these misunderstandings, F53 presents itself as an interesting and reasonable but much less controversial contribution to the methodology of economics. (shrink)

In this paper, I shall defend two main claims. First, Friedman’s famous paper “On the methodology of positive economics” (“F53”) cannot be properly understood without taking into account the influence of three authors who are neither cited nor mentioned in the paper: Max Weber, Frank Knight, and Karl Popper. I shall trace both their substantive influence on F53 and the historical route by which this influence took place. Once one has understood these ingredients, especially Weber’s ideal types, many (...) of F53’s astonishing sentences like “the more significant the theory, the more unrealistic the assumptions”, make good sense. Second, I shall claim that the much-discussed question whether Friedman’s essay espouses an instrumentalist or a realist position, is the wrong question to be asked. I shall illustrate that by a comparison with examples from physics in which also unrealistic assumptions are made. Also there, the question whether these assumptions are indicators of instrumentalism or realism is not appropriate. Cleared from these misunderstandings, F53 presents itself as an interesting and reasonable but much less controversial contribution to the methodology of economics. (shrink)

Even outrageously unrealistic assumptions are just fine insofar as the theory or model involving them performs well in predicting phenomena of interest. Most economists and many non-economists will attribute this principle to Milton Friedman. Many will consider the principle itself outrageous, while others praise Friedman for having formulated it so persuasively.

What is the exact nature of the consumption function? Can this term be defined so that it will be consistent with empirical evidence and a valid instrument in the hands of future economic researchers and policy makers? In this volume a distinguished American economist presents a new theory of the consumption function, tests it against extensive statistical J material and suggests some of its significant implications.Central to the new theory is its sharp distinction between two concepts of income, measured income, (...) or that which is recorded for a particular period, and permanent income, a longer-period concept in terms of which consumers decide how much to spend and how much to save. Milton Friedman suggests that the total amount spent on consumption is on the average the same fraction of permanent income, regardless of the size of permanent income. The magnitude of the fraction depends on variables such as interest rate, degree of uncertainty relating to occupation, ratio of wealth to income, family size, and so on.The hypothesis is shown to be consistent with budget studies and time series data, and some of its far-reaching implications are explored in the final chapter. (shrink)

In this article, the author offers a discussion of the evidential role of the Galilean constant in the history of physics. The author argues that measurable constants help theories constrain data. Theories are engines for research, and this helps explain why the Duhem-Quine thesis does not undermine scientific practice. The author connects his argument to discussion of two famous papers in the history of economic methodology, Milton Friedman's 'Methodology of Positive Economics', which appealed to example of Galilean (...) Law of Fall in its argument; and Vernon Smith's 'Economics in the Laboratory'. While the author offers some criticism of Friedman and Smith, most of the article is a friendly reinterpretation of their insights. (shrink)

In this article, the author offers a discussion of the evidential role of the Galilean constant in the history of physics. The author argues that measurable constants help theories constrain data. Theories are engines for research, and this helps explain why the Duhem-Quine thesis does not undermine scientific practice. The author connects his argument to discussion of two famous papers in the history of economic methodology, Milton Friedman’s “Methodology of Positive Economics,” which appealed to example of Galilean (...) Law of Fall in its argument; and Vernon Smith’s “Economics in the Laboratory.” While the author offers some criticism of Friedman and Smith, most of the article is a friendly reinterpretation of their insights. (shrink)

Milton Friedman was one of the most influential economists of the twentieth century. Many of the neo-liberal views that he advocated were adopted in the 1980’s by Western countries such as Britain and the United States. This essay focuses on Friedman’s views on politics, economics and freedom. The first section discusses his perspectives on the relation between capitalism and freedom, the nature of markets, his understanding of equality and of the social responsibility of business. The second section attempts (...) to provide an ethical critique on Friedman’s separation between economics and ethics, his concept of the market, his views on freedom and equality and the implications of his economic doctrine for human identity. The third section offers some key ethical principles that may help to reform modern capitalism. (shrink)

In this paper I investigate two denials in Milton Friedman's Nobel Lecture (1976). The first is [i] the denial that 'Economics and its fellow social sciences' ought to be 'regarded more nearly as branches of philosophy.' The second is [ii] the denial that economics is 'enmeshed with values at the outset because they deal with human behaviour' (267). I show that Friedman's appeal to his methodology in the Nobel lecture fails on conceptual grounds internal to Friedman's methodology. (...) Moreover, I show that the failure is related to a broader systematic problem: when properly understood, Friedman's methodology shows that positive economics is (in a non-trivial sense) enmeshed in values. In order to account for Friedman's overreaching, I turn to the charged social context regarding Friedman's purported involvement with the Chicago Boys, who were then serving Chilean Dictator Pinochet. I conclude by explaining why I re-open the old chestnut of values in positive science. The episode allows me to raise a question of fundamental import about the relationship between expertise and society. (shrink)

In this paper I study Milton Friedman’s statistical education, paying special attention to the different methodological approaches (Fisher, Neyman and Savage) to which he was exposed. I contend that these statistical procedures involved different views as to the evaluation of statistical predictions. In this light, the thesis defended in Friedman’s 1953 methodological essay appears substantially ungrounded.

Milton Friedman famously stated that the only social responsibility of business is to increase its profits, a position now known as the shareholder model of business. Subsequently, the stakeholder model, associated with Edward Freeman, has been widely seen as a heuristically stronger theory of the responsibilities of the firm to the society in which it is situated. Friedman’s position, nevertheless, has retained currency among many business thinkers. In this article, we argue that Friedman’s economic writings assume an economy in (...) which businesses operate under the protections of limited liability, which allows corporations to privatize their gains while externalizing their losses. By accepting limited liability, Friedman must also accept a view of business as embedded in social interdependency, which serves as the logical and moral foundation for corporate social responsibility (CSR). To achieve consistency with his economic principles, Friedman must either abandon limited liability or modify his doctrine on CSR and his related shareholder model of business. (shrink)

The scandals of the 1980s, extending into the 1990s, came as a profound shock to Australians and New Zealanders. Both countries have prided themselves – somewhat smugly and naively – on being open, fair and honest societies. So it was very disillusioning to see both corruption and gross dereliction of duty exposed in virtually every sphere of public life. Perhaps the most positive outcome, however, amidst an almost daily diet of amazing revelations, has been the ability of the system (...) – and especially the judiciary and the media – to expose and deal with corruption even at the highest level.Following an extensive survey and literature review, it is clear that there is now widespread awareness of the need for reform in many areas of public administration, corporate governance and professional behaviour. However, a continuing cause for concern is the lack of leadership in identifying and addressing complex ethical dilemmas, particularly in the areas of conflict of interest and disclosure. (shrink)

Those engaged in the fields of peace and political psychology need to maintain a balanced view. To obtain this balanced view of the future, the editors invited sociologist and peace researcher Elise Boulding to write a paper concerning "cultures of peace" and then invited scholars and researchers from across the globe to comment on it. This special issue is the result. Seeking a balanced view that does not ignore the harsh realities of today's world or drain us of hope for (...) the future, this issue discusses: *the positives and negatives of a possible paradigm shift from dominance to mutualism in both interpersonal and interstate relations; *how human peaceableness can not occur until the pervasive problems of poverty, violence, ecological destruction, and discrimination are resolved; *how peace does not mean acquiescence to an unjust patriarchal system of economic, ecological, and sexual exploitation; *how advances in technology and marketing that have strengthened the culture of peace have done the same for the malign culture of violence; and *the mission of transforming a culture of war to one of peace, presenting actions that are intended to facilitate the tranformation. (shrink)

After an extended period in which Marxism received relatively little attention, many of its tenets are now playing a more important role within the left. This essay argues for the relevance today of a number of Marx’s major themes. The Marx I offer here is a conservative Marx. I base this view on his insistence that socialism is needed not to makes us perfect but to save society, in a general sense, from the threats of destruction that it encounters under (...) capitalism. His criticism of utopianism requires that change be anchored in steps humanity has prepared itself to take, rather than in steps that it has no reason to believe will be effective. The importance of class has survived attacks on it as a relic of industrialism and the dominance of the male proletariat. But the working class is more extensive than it ever was. It now encompasses diverse races, genders, and cultures in what can become a front against capitalism. Finally, Marx’s politics posits an inversion of the power relation in capitalist society with capitalism’s subordination of citizens to the state. The global ferment against the failures of capitalism opens new possibilities for the growth of anti-capitalist currents. (shrink)

Uskali Mäki has offered an innovative scientific realist account of Milton Friedman’s 1953 essay, ‘The Methodology of Positive Economics’, which directly challenges the dominant instrumentalist interpretation. This paper offers critical reflections on Mäki’s approach and interpretation. It is argued that Mäki’s method of rereading-rewriting the text is problematic; that an unforced instrumentalist account of unrealistic assumptions can be extracted from the text itself; and that seemingly realist passages can be plausibly read as expressing an instrumentalist stance.

_Pathologies of Rational Choice Theory_, a book written by Donald Green and Ian Shapiro and published in 1994, excited much controversy among political scientists and promoted a dialogue among them that was printed in a double issue of the journal Critical Review in 1995. This new book reproduces thirteen essays from the journal written by senior scholars in the field, along with an introduction by the editor of the journal, Jeffrey Friedman, and a rejoinder to the essays by (...) Green and Shapiro. The scholars—who include John Ferejohn, Morris P. Fiorina, Stanley Kelley, Jr., Robert E. Lane, Peter C. Ordeshook, Norman Schofield, and Kenneth A. Shepsle—criticize, agree with, or build on the issues raised by Green and Shapiros critique. Together the essays provide an interesting and accessible way of focusing on competing approaches to the study of politics and the social sciences. (shrink)

The views of thirteenth century Catholic thinker Thomas Aquinas and twentieth century economist Milton Friedman on the social responsibility of business are contrasted by probing the foundations of their positions. The basis of Aquinas' normative stance in political economy is found in the metaphysical and moral realism of the classic tradition. The role Descartes and Hobbes played in overturning this philosophical starting point and ushering in an age of ideology is traced out. Friedman's commitment to Comte's vision of positivism (...) is revealed and what this entails for metaphysics, ethics, and economics is given. (shrink)

This essay reflects on arguments by Paul Ramsey, in The Patient as Person: Explorations in Medical Ethics (1970) and elsewhere, that continue to challenge policy‐makers and those doing clinical and translational research involving children. Ramsey argued that parents cannot morally authorize their child's participation in research unless the research is designed to benefit the child. He acknowledged that abiding by this position could have adverse impacts on improving child health, and he concluded, in a 1976 Hastings Center Report piece, that (...) researchers must “sin bravely.” Many philosophers and theologians, including Richard McCormick, have argued against Ramsey. The Ramsey‐McCormick debate played out in the bioethics literature and, by invitation, at the deliberations of the National Commission for the Protection of Human Subjects of Biomedical and Behavioral Research, which was tasked with developing an ethics framework and policies for human subjects protections. Although in its final recommendations, the commission sided with McCormick, the strict limitations on risks and harms to which a child can be exposed were clearly influenced by Ramsey. (shrink)

The main point of this paper is to contribute to understanding Milton Friedman’s (1953) “The Methodology of Positive Economics” (hereafter F1953), one of the most influential statements of economic methodology of the twentieth century, and, in doing so, help discern the non trivial but complex role of philosophic ideas in the shaping of economic theorizing and economists’ self-conception. It also aims to contribute to a better understanding of the theoretical origins of the so-called ‘Chicago’ school of (...) class='Hi'>economics. In this paper, I first present detailed textual evidence of the familiarity of George Stigler with the early work of Talcott Parsons, the most important American translator and disseminator of Max Weber’s ideas, who also helped create sociology as a distinct discipline in the United States. The Chicago-Parsons link is no surprise because historians have known that Frank Knight and Parsons corresponded, first about translating Weber and then about matters of mutual interest. Knight, who was a doctoral advisor to Stigler and teacher of Milton Friedman, was not merely the first American translator of Weber, but remained keenly and, perhaps, increasingly interested in Weber throughout his life. I am unfamiliar with any investigation of the Weberian influence on Knight’s students. I show that Stigler praises Parsons’ treatment of Alfred Marshall, who plays an outsized role in Friedman’s self-conception of economics and economic theory. I also show that Stigler calls attention to the methodological similarity between Friedman and Parsons. Finally, I turn to F1953, and I show, first, that some of its most distinctive and philosophically interesting claims echo Parsons’ treatment of methodological matters; second that once alerted one can note Weberian terminology in F1953. (shrink)

In lieu of an abstract, here is a brief excerpt of the content:Journal of the History of Philosophy 41.1 (2003) 81-96 [Access article in PDF] Pragmatism:The Unformulated Method of Bishop Berkeley Lesley Friedman 1. Introduction THOUGH WELL KNOWN AS A SCIENTIST, logician, and metaphysician, Charles Sanders Peirce is perhaps best remembered as the founder of Pragmatism. Surprisingly, Peirce attributes this way of thinking—often taken as a uniquely American contribution—to Bishop George Berkeley. According to Pierce, Berkeley should be regarded as the (...) author of that method of modern pragmatism (RFB, 96): 1 Pragmaticism is... a method of thinking.... Of those who have used this way of thinking Berkeley is the clearest example.... (CP, 8.206, c.1905) Berkeley on the whole has more right to be considered the introducer of pragmatism into philosophy than any other one man.... (1903 letter to William James)In a metaphysical Club, I used to preach this principle as a sort of logical gospel, representing the unformulated method followed by Berkeley, and in conversation about it I called it 'Pragmatism.' (CP, 6.482, 1908) [End Page 81]While it is acknowledged that Peirce believed Berkeley to be "a very distinguished master of the pragmatist mode of thinking," just why Peirce makes this claim is not altogether clear. In significant ways Berkeley blundered metaphysically, according to Peirce (MS, 322, c.1907). 2 He overlooked the reality of possibility (and thus realism about generals), misunderstood the nature of existence and the ordinary notion of matter, and had an inadequate view of perception. 3 In his early work, Peirce goes so far as to criticize what looks to be Berkeley's attempt at the pragmatic method: "A better rule [than Berkeley's] for avoiding the deceits of language is this: Do things fulfil the same function practically? Then let them be signified by the same word. Do they not? Then let them be distinguished" (CP, 8.33, 1871). Moreover, while Peirce cites the Essay Towards a New Theory of Vision as using the "medium of pragmatism," others have criticized Berkeley in this very work for drawing conclusions without any experimentation. 4 Since it is precisely the pivotal role of experience and experiment that distinguish the method of pragmatism, it is puzzling that Berkeley is chosen as worthy of the title that Peirce bestows on him. My hope in this paper is to shed some light on this question. I beginwith an explication of Peirce's pragmatism and then move on to offer an account ofhow Berkeley uses this method, though never formulates it. Next, I discuss the positions Peirce understood to be consequences of the view, including critical common-sensism, fallibilism, and scholastic realism. I suggest that, although he erred on several corollary positions, Berkeley foresaw the aims, purpose, and essential points of the methodological, though not the "metaphysical side" of pragmatism. 5 2. Peircean Pragmatism Pragmatism 6 is not a metaphysical doctrine: it does not aim to ascertain the truth of things; it does not attempt to throw any "positive light on any problem" (CP, 5.464, 1907). Rather, it offers a means of distinguishing legitimate from illegitimate [End Page 82] hypotheses, so that verbal disputes—those that so often arise simply because the disputants do not understand meanings in the same way—can be resolved. It is thus "only a method of thinking"(CP, 8.206, c.1905, emphasis added).... pragmatism proposes a certain maxim which, if sound, must render needless any further rule as to the admissibility of hypotheses to rank as hypotheses, that is to say, as explanations of phenomena held as hopeful suggestions; and furthermore, this is all that the [logical] maxim of pragmatism really pretends to do.... (CP, 5.195, 1903) Seeking to lay "the dust of pseudoproblems," pragmatism allows "us to discern what pertinent facts the phenomena may present. But this is a good half of the task of philosophy" (CP, 8.186, 1903). It is worth pausing to mention that philosophy, as Peirce understands it, does not stand apart from science in the way it does today, but rather is the second of the three sciences of discovery, all of which... (shrink)

In Capitalism and the Jews, Jerry Z. Muller attempts to resolve Milton Friedman's paradox: Why is it that Jewish intellectuals have been so hostile to capitalism even though capitalism has so greatly benefited the Jews? In one chapter Muller answers, in effect, that Jewish intellectuals have not been anticapitalist. Elsewhere, however, Muller implicitly explains the leftist tendencies of most intellectuals—Jewish and gentile—by unspooling the anticapitalist thread in the main lines of Western thought, culminating in Marx but by no means (...) ending with him. Thus, Milton Friedman saw a paradox where none existed. This may have been because Friedman was an economist, and economics is the one strand of Western thought that is, by and large, procapitalist. To an economist, opposition to capitalism may be paradoxical; to noneconomists, economics is alienating in its form and in its content. There is thus no mystery as to why intellectuals, including Jewish intellectuals, tend to shun economics and therefore gravitate to the left. (shrink)

In Capitalism and the Jews, Jerry Z. Muller attempts to resolve Milton Friedman's paradox: Why is it that Jewish intellectuals have been so hostile to capitalism even though capitalism has so greatly benefited the Jews? In one chapter Muller answers, in effect, that Jewish intellectuals have not been anticapitalist. Elsewhere, however, Muller implicitly explains the leftist tendencies of most intellectuals—Jewish and gentile—by unspooling the anticapitalist thread in the main lines of Western thought, culminating in Marx but by no means (...) ending with him. Thus, Milton Friedman saw a paradox where none existed. This may have been because Friedman was an economist, and economics is the one strand of Western thought that is, by and large, procapitalist. To an economist, opposition to capitalism may be paradoxical; to noneconomists, economics is alienating in its form and in its content. There is thus no mystery as to why intellectuals, including Jewish intellectuals, tend to shun economics and therefore gravitate to the left. (shrink)

Preview: /Review: Paul Giladi, ed., Responses to Naturalism: Critical Perspectives from Idealism and Pragmatism (New York, NY, Routledge, 2020), 330 pages./ Although Bergson does not have a prominent place in this outstanding new volume of essays edited by Paul Giladi, Responses to Naturalism: Critical Perspectives from Idealism and Pragmatism, the book helped me follow through from my ongoing study of Bergson’s work. The book shows the development and continued dominance of the naturalistic position in philosophy. The book also shows (...) the increasing efforts by contemporary philosophers to make a creative use of the history of philosophy in order to engage with contemporary naturalism and to appropriate what is of value in it and in other philosophical traditions in moving forward. The book suggests how various strands of idealism and pragmatism may have much to contribute in formulating alternatives to or enriching philosophical naturalism. (shrink)

This essay is part of an attempt to reconcile two extreme views in economics: the (neglected) subjective, apriorist approach and the (standard) objective, scientific (i.e., falsifiable) approach. The Austrian subjective view of value, building on Carl Menger’s theory of value, was developed into a theory of economics as being entirely an a priori theory of action. This probably finds its most extreme statement in Ludwig von Mises’ Human Action (1949). In contrast, the standard economic view has developed into (...) making falsifiable predictions about economic phenomena whereby the truth of the assumptions, especially about economic agents, is relatively unimportant: predictive fecundity is all. This finds an extreme statement in Milton Friedman’s introductory essay in his Essays in Positive Economics (1953). However, many economists fall somewhere between the two extremes, such as McKenzie and Tullock (1978). (shrink)

This essay seeks to start a dialogue between two traditions that historically have interpreted the economy in opposing ways: the individualism of classic economic liberalism (CEL), represented by Adam Smith and Milton Friedman, and the communitarianism of Catholic social teaching (CST), interpreted primarily through the teachings of popes and secondarily the U.S. Catholic bishops. The present authors, an economist and a moral theologian who identify with one or the other of the two traditions, strive to clarify objectively their similarities (...) and differences with the opposing perspective. Section one focuses on each position''s perspective of love of self and love of others. We find both CEL and CST saying that self-love, rightly understood, constitutes a moral good and that the love of others serves as an important principle in the political economy. We find less agreement in section two regarding justice and rights, but even here, we discover a few surprises. Both traditions uphold justice (giving to each party what is due) as essential to the political economy, and recognize some similarity in that type of justice called commutative. We note, however, substantial differences regarding a second type of justice that we call "public justice." First, they differ over the extent to which government should be involved. Here the meaning of rights, especially that of individual freedom, arises. Secondly, the traditions diverge over whether benevolence as a motivator ought to serve as a partner for public justice. Thirdly, CEL in general opposes CST''s emphasis on social justice that calls upon institutions to be proactive in helping citizens and groups to become active participants in the economy. We conclude our essay by summarizing our discoveries and by suggesting areas for further dialogue. (shrink)

Methodological disputes in economics have been with us since Mill and Senior fought over the nature of economic science in the first half of the 19th Century. Progress has been extremely slow, and there is good reason for this as the present essay hopes to show. Three important methodological positions are examined critically: the “ultra-empiricism” of T.W. Hutchison, the “moderate empiricism” of Milton Friedman, and the “extreme a priorism” of Lionel Robbins and Ludwig Von Mises. The argument between (...) Guttierrez and Block inTheory and Decision over praxiology is discussed in connection with the last mentioned position. The paper concludes that “extreme a priorism,” though very much out of fashion is not without its resources. The work of the contemporary German philosopher, Paul Lorenzen, is enlisted to bolster this position. (shrink)

This paper explores the level of obligation called for by Milton Friedman’s classic essay “The Social Responsibility of Business is to Increase Profits.” Several scholars have argued that Friedman asserts that businesses have no or minimal social duties beyond compliance with the law. This paper argues that this reading of Friedman does not give adequate weight to some claims that he makes and to their logical extensions. Throughout his article, Friedman emphasizes the values of freedom, respect for law, and (...) duty. The principle that a business professional should not infringe upon the liberty of other members of society can be used by business ethicists to ground a vigorous line of ethical analysis. Any practice, which has a negative externality that requires another party to take a significant loss without consent or compensation, can be seen as unethical. With Friedman’s framework, we can see how ethics can be seen as arising from the nature of business practice itself. Business involves an ethics in which we consider, work with, and respect strangers who are outside of traditional in-groups. (shrink)

When President Reagan and Prime Minister Thatcher adopted the neoliberal doctrine as the paradigm of economics, there was no evidence that the move would have been successful, but thirty years on, the recurrent crises that culminated in 2008 suggest a serious mis-match between expectations and outcomes: a re-examination of the paradigm is in order. This book focuses on Milton Friedman's formulation of the neoliberal doctrine, and analyses two aspects that were essential to turning it into a fully-fledged paradigm: (...) the attribution of scientific status to positive economics, which led to informing public policies on the requirements of the market; and the characterisation of economic freedom as capable of promoting political freedom, which led to identifying free market with democracy. The book exposes Friedman's methodological argument for attributing positive economics scientific status as a failure, and his characterisation of economic freedom as a delusion; it identifies in the emergence as the mainstream in economics of the neoclassical synthesis, which borrowed from Walras' the mathematical treatment of equilibrium but not the ethical and social framework in which it was inscribed, a development that facilitated the transition from the Keynesian to the neoliberal paradigm. Dr. Mosini shows that the gigantic bail-outs carried out courtesy of the public purse, which institutionalised the practice of collectivising losses while keeping profits private, were no accident, but the consequence of the rethinking of the function of lender of last resort according to Friedman's conception of rationality in relation to risk, combined with his interpretation of the 1930s recession. The book concludes that the neoliberal paradigm has served the interests of the economically powerful social strata it was designed to benefit extremely well, but that the deep, and deepening, injustice it has brought about calls for a complete rethinking of the paradigm of economics according to ethical principles respectful of human values. This book should be of interest to students and researchers of Political Economy, Economic Methodology, History of Economic Thought and Philosophy. (shrink)

The main arguments of Milton Friedman's famous and influential essay are unsuccessful: He fails to prove that the exercise of social responsibility in business is by nature an unfair and socialist practice.Much of Friedman's case is based on a questionable paradigm; a key premise is false; and logical cogency is sometimes missing.

In addition to his Noble Prize-winning work in economics, Milton Friedman produced some of the most influential philosophical work on the role of government in a free society. Despite his great influence, there remains a dearth of scholarship on Friedman’s social and political philosophy. This paper helps to fill this large void by providing a conceptual analysis of Friedman’s theory of freedom. In addition, I argue that a careful reading of his arguments for freedom ought to lead Friedman, (...) and like-minded liberals and libertarians, to give absolute priority to his negative income tax proposal. A substantial basic income furthers effective economic freedom (on Friedman’s own understanding), redeems his central claim that markets enable cooperation without coercion, and enables him to address his lifelong interlocutors by mitigating concerns for the ways in which economic dependence and inequality undermine both freedom and democratic legitimacy. (shrink)

Edward Nelson, Milton Friedman and Economic Debate in the United States, 1932-1972 (volumes 1 and 2), Chicago and London, The University of Chicago Press, 2020.

Martin Buber: The Life of Dialogue , the first study in any language to provide a complete overview of Buber's thought, remains the definitive guide to the full range of his work and the starting point for all modern Buber scholarship. As well as summarizing Buber's early intellectual development and attitudes - his mysticism, his youthful existentialism, his philosophy of Judaism and religious socialism - it focuses on the two crucial issues of his mature thought: his dialogic or I-Thou philosophy, (...) and his probing of the nature and redemption of evil. As a sensitive, intuitive and perennially fascinating account of one of the twentieth century's great spiritual teachers, and as an influential classic in its own right, Martin Buber: The Life of Dialogue reveals the implications of Buber's thought for theory of knowledge, education, philosophy, myth, history and Judaic and Christian belief. This fully revised and expanded 4th edition includes a new preface from the author, an expanded bibliography incorporating new Buber scholarship, and two new appendices in the form of essays on Buber's influence on Emmanuel Levinas and Mikhail Bakhtin. (shrink)

Professor Thomas Mulligan undertakes to discredit Milton Friedman's thesis that The Social Responsibility of Business Is to Increase Its Profits. He attempts to do this by moving from Friedman's paradigm characterizing a socially responsible executive as willful and disloyal to a different paradigm, i.e., one emphasizing the consultative and consensus-building role of a socially responsible executive. Mulligan's critique misses the point, first, because even consensus-building executives act contrary to the will of minority shareholders, but even more importantly, because he (...) assumes that the mandate of a shareholder majority brings legitimacy to efforts of corporate managers to utilize corporate wealth in solving social problems. It is the role of our democratic institutions to deal with national agenda issues such as inflation, unemployment, and pollution, not that of the private sector. Corporations and private individuals do have a role to play in enhancing the quality of the human environment, however, and the author suggests a coherent means of developing that role in an effort rescue corporate social responsibility from Mulligan no less than from Friedman. (shrink)

In this paper, I defend Rudolf Carnap's Principle of Tolerance from an accusation, due to Michael Friedman, that it is self-defeating by prejudicing any debate towards the logically stronger theory. In particular, Friedman attempts to show that Carnap's reconstruction of the debate between classicists and intuitionists over the foundations of mathematics in his book The Logical Syntax of Language, is biased towards the classical standpoint since the metalanguage he constructs to adjudicate between the rival positions is fully classical. I argue (...) that this criticism is mistaken on two counts: (1) it fails to fully appreciate the freedom with regard to the construction of linguistic frameworks that Carnap intended his Principle to embody, and (2) Friedman's objection underestimates the extent to which the evaluation of a framework is task-relative. I conclude that Tolerance is not self-undermining in the way that Friedman claims it is. While this is a restricted conclusion -- and is not a vindication of Carnap's views on logic and mathematics tout court -- it nonetheless suggests that his tolerant perspective has been dismissed too quickly, even by his supporters. (shrink)

In 1992, I sent Milton Friedman a draft of my 1993 paper “Friedman's Theory of Corporate Social Responsibility.” He and I corresponded at length. My 1993 paper argues that Friedman's published formulations of his theory are not equivalent and that they prescribe different courses of action in many possible cases. In our correspondence, Friedman conceded that his two formulations of his theory are inconsistent and, at my suggestion, he endorsed a modified version of the view he presented in Capitalism (...) and Freedom as the preferred version of his theory. This modified theory is an important formulation of his position. In one of his letters to me, Friedman writes: “I agree that corporate executives might have duties to the general public which sometimes outweigh their duties to the shareholders.” I argue that this creates major problems for his theory. I also answer Friedman's published response to one of my criticisms. (shrink)

It’s a commonplace that Federal Reserve chairman Ben Bernanke draws his policies from Milton Friedman and Anna Schwartz’s A Monetary History of the United States. With that in mind, this article establishes five points. First, contrary to conventional wisdom, Friedman and Schwartz merely insinuate their claim the Fed caused the Depression in MH. Second, their criticisms of Fed policy during the Depression, which turn on its refusal to adopt open market purchases, repudiate Friedman’s famed libertarianism and market fundamentalism. Third, (...) Friedman and Schwartz don’t refute the practical objections of bankers who opposed OMPs in the 1930s. Consequently, Bernanke’s policies for addressing the financial crisis risk doing precisely what Friedman’s targets warned against—encouraging financial speculation without addressing problems of unemployment. Fourth, Friedman and Schwartz’s prescriptions entail a neoliberal, not a libertarian, state, one governed by technocrats and answerable to financial markets. Finally, what accounts for and unifies Friedman’s contradictions is the beneficiary—finance. (shrink)

The version of the invisible hand argument in Adam Smith's Theory of Moral Sentiments differs in important respects from the version in The Wealth of Nations. Both are different, in turn, from the version invoked by Milton Friedman in Free to Choose. However, all three have a common structure. Attention to this structure can help sharpen our sense of their essential thrust by highlighting the questions (about the nature of economic motivation, the structure of markets, and conceptions of the (...) public interest) to which answers of certain kinds would have to be available for any of the versions to succeed. (shrink)

In this paper I challenge the pernicious aspects of Milton Friedman's methodological outlook that continues to hold sway over mainstream neoclassical economists. I do this by showing how Friedman's own methodological dicta could have been used against him when he famously advanced the expectations critique of the Phillips curve at his presidential address to the American Economic Association. I use this case study to further suggest that psychological and neurophysiological data should not be deemed irrelevant to economic science.