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The Elgar Companion to the Chicago School of Economics

The Elgar Companion to the Chicago School of Economics

Elgar original reference

Edited by Ross B. Emmett

Many know the Chicago School of Economics and its association with Milton Friedman, George Stigler, Ronald Coase and Gary Becker. But few know the School’s history and the full scope of its scholarship. In this Companion, leading scholars examine its history and key figures, as well as provide surveys of the School’s contributions to central aspects of economics, including: price theory, monetary theory, labor and economic history. The volume examines the School’s traditions of applied welfare theory and law and economics while providing a glimpse into emerging research on Chicago’s role in the development of neoliberalism.

Chapter 12: Friedman, Positive Economics, and the Chicago Boys

Eric Schliesser

Subjects: economics and finance, economic psychology, history of economic thought, methodology of economics


Eric Schliesser* Introduction Experiences in controversies as these brings out the impossibility of learning anything from facts till they are examined and interpreted by reason; and teaches that the most reckless and treacherous of all theorists is he who professes to let facts and figures to speak for themselves, who keeps in the background the part he played, perhaps unconsciously, in selecting and grouping them, and in suggesting the argument post hoc ergo propter hoc. Alfred Marshall (1885 [1925], p. 168), epigraph in Friedman and Schwarz (1963) Milton Friedman offers two denials in his 1976 Nobel lecture. The first (a) is the denial that ‘Economics and its fellow social sciences’ ought to be ‘regarded more nearly as branches of philosophy’. The second (b) is the denial that economics is ‘enmeshed with values at the outset because they deal with human behaviour’ (Friedman 1976 [1992], p. 267). I call claim (b) Friedman’s basic claim, or FBC. By exploring the details of Friedman’s methodological commitments, I argue against FBC. It does not follow that the denial of FBC means commitment to (a). In fact, I show that by Friedman’s own methodological lights as presented in ‘The methodology of positive economics’ (1953; hereafter F1953) he ought to be committed to the claim that positive science (all science) is enmeshed in values. However, along the way, by calling attention to the furore concerning Friedman’s public entanglement with the so-called ‘Chicago Boys’, I also make the case that it still would be wiser and healthier...

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