Friedman's Positive Economics and Philosophy of Science

Periodically, Milton Friedman's well-known piece on methodology, " The Methodology of Positive Economics," is interpreted and criticized. The most recent exchange was initiated by Lawrence Boland [9] with comments by Rotwein [30] and Caldwell [13], and with a reply by Boland [10] to Rotwein. Boland maintains that a coherent philosophy of science instrumentalism underpins Friedman's essay. In reply, Rotwein and Caldwell argue that an instrumental view of science trivializes science in general and economic science in particular. However, Rotwein criticizes Boland for not retaining enough of traditional empiricism, while Caldwell essentially argues that Boland retains too much of traditional empiricism.' While this debate might be a bit exasperating to the non-specialist in methodology, interpretation and counter-interpretation of positive economics is a reflection of continuing developments in philosophy of science and implicit attempts to "update" positive economics. What is happening is that issues of extreme philosophical importance are being brought into economics in the debate over the nature of positive economics. In philosophy of science, the major issue is whether both skepticism and fideism can be avoided. Skepticism is the view that knowledge as proven assertion from intuition or sense experience is unattainable; while fideism is the view that some unprovable assumption must be accepted as a fundamental belief. Similarly, in economics, it appears that skepticism and fideism are the major issues in the pieces by Boland and Rotwein. Rotwein, believing he is following in Hume's footsteps, adopts a strong form of fideism; while Boland, making a distinction between the intellectual long run and the intellectual short