Milton Friedman’s causal realist stance?

• Published in: Oxford economic papers 2018-07, Vol.70 (3), p.719-740
• Main Author: Mariyani-Squire, Edward
• Format: Article
• Language: English
• ISSN: 0030-7653; 1464-3812
• DOI: 10.1093/oep/gpy004

Since the 1990s, a causal realist interpretation of Milton Friedman’s 1953 essay ‘The Methodology of Positive Economics’ has been advocated. This article recounts three arguments for this interpretation and then critically examines them. The arguments are: (1) Friedman’s methodology is based upon Alfred Marshall’s own realist methodology; (2) key passages in Friedman’s 1953 essay express a causal realist stance; and (3) Friedman and Schwartz’s work on US monetary history presupposes causal realism. These arguments are contestable. First, there are important differences between Marshall’s and Friedman’s methodology. Second, key passages in the 1953 essay are prima facie incompatible with a causal realist stance. Third, Friedman and Schwartz’s ‘transmission mechanism’, appended to their monetary history, is arguably instrumentalist in character. The article concludes with some brief reflections on how Friedman’s approach to economics, including his 1953 essay, could be read as strategically malleable, rather than being an ‘objectively’ prescriptive methodology.