Academic journal article The Economic and Labour Relations Review : ELRR

Valeria Mosini (2012): Reassessing the Paradigm of Economics: Bringing Positive Economics Back into the Normative Framework

Academic journal article The Economic and Labour Relations Review : ELRR

Valeria Mosini (2012): Reassessing the Paradigm of Economics: Bringing Positive Economics Back into the Normative Framework

Article excerpt

Valeria Mosini (2012)

Reassessing the Paradigm of Economics: Bringing Positive Economics Back into the Normative Framework

Routledge, London and New York.

pp. 164

Hardback: ISBN 978-0-415-57511-9

Ebook: ISBN 978-0-203-80684-5 RRP: AUD 115

Reassessing the Paradigm of Economics is primarily focused on Milton Friedman's methodological pronouncements and practices. Valeria Mosini seeks to show that Friedman's methodology, and particularly his claim that economics can be a purely 'positive' science, serves a highly partisan policy agenda--namely, 'the neoliberal paradigm. Mosini also argues that Friedman's methodology deserves special attention today because his claims of objectivity for neoliberal policies are partly responsible for the financial crisis of 2008. Reassessing the Paradigm thus extends the boundaries of methodological analysis beyond its usually abstract and sometimes arcane terrain. Mosini shows that methodological reflection is important not just because economics should strive to be scientifically objective. Methodological reflection is important because pronouncements on 'correct' method by economists can facilitate specific ideological agendas that powerfully influence economic policy and thereby affect millions of lives.

In general terms, Mosini shows that if one doesn't come to grips with Friedman's methodological claims, one cannot fully come to grips with the neoliberal paradigm they support. Although this insight has probably been intuited by most economists, heterodox and mainstream alike, it has not been explicitly argued for at great length. Although I agree with Mosini's goal and her general conclusions, I think some of the arguments deployed to reach those conclusions are contestable. In the remainder of this review, I will outline Mosini's arguments chapter by chapter and offer some critical comments along the way. The criticisms are not fatal, but should at least give one pause.

The book comprises six chapters (plus a lengthy introduction). The first four chapters focus on Friedman's methodological claims and the effect they have had on the general contours of academic economics. In the light of these chapters, the last two chapters attend to aspects of the neoliberal paradigm and Friedman's role in its construction and defense.

Chapter One examines the 'logical consistency' and 'validity' of the core of neoliberalism as exhibited in Friedman's Essays in Positive Economics. Mosini boils Essays' most famous piece, 'The Methodology of Positive Economics' (hereafter F53) down to four propositions: (1) The only objective test of a positive theory's worth is its predictive success; (2) The realisticness of assumptions is not a test of a theory's worth because all theories inevitably contain unrealistic assumptions; (3) Evidence can only disprove a theory, never prove it to be true. Because of the 'contradiction' between (1) and (3), a final element is required: (4) 'somewhat arbitrary' additional criteria (simplicity and fruitfulness) are required in order to choose between rival theories. Mosini argues that Friedman's economic writings in Essays are logically inconsistent with F53's doctrines, chiefly because his theories are 'hypothetical' (meaning solely counterfactual) and his predictions so vague as to be unfalsifiable. She also notes that Friedman's positive analyses usually entail substantial institutional changes which fall within the purview of normative, not positive economics. With respect to 'internal validity', Mosini finds that Friedman's arguments for neoliberal policies are informal and are not rigorously empirically established (being merely plausible, not probable). Further, F53 is 'externally invalid' because it is incompatible with the methodological positions of contemporaneous scientists and philosophers (Henry Margenau, Percy Bridgeman and Stephen Toulmin).

There are, I believe, problems with Mosini's approach to F53. …

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