Though Milton Friedman’s essay, which will be reviewed in the next chapter, was written three years before the exchanges between Hutchison and Fritz Machlup which occurred in the mid-1950s in the pages of the Southern Economic Journal, I will review that debate first for the simple reason that, while Friedman’s work can easily stand as an independent contribution to the methodology of economics, Machlup’s case is explicitly directed against the views outlined in Hutchison’s book.
In his ‘The Problem of Verification in Economics’, Machlup develops a sophisticated defense of the assumptions of economic theory from attacks such as those advanced by Hutchison, whom he labels an ‘ultra-empiricist’. It is evident in his article that Machlup has a thorough grounding in contemporaneous philosophy of science, and he is able to use that knowledge successfully against Hutchison.
‘The Problem of Verification in Economics’ begins with some typically Machlupian ‘defining of terms’, the most important of which is ‘verification’ itself: verification is
a procedure designed to find out whether a set of data of observation about a class of phenomena is obtainable and can be reconciled with a particular set of hypothetical generalizations about this class of phenomena. 1