Friedman 1953

Milton Friedman

Essays in Positive Economics
Part I - The Methodology of Positive Economics ∗
University of Chicago Press (1953), 1970, pp. 3-43

Introduction
In his admirable book on The Scope and Method of Political Economy John Neville Keynes distinguishes among “a positive science … a body of systematized knowledge concerning what is; a normative or regulative science…[,] a body ofsystematized knowledge discussing criteria of what ought to be…[,]an art… [,] a system of rules for the attainment of a given end”; comments that “confusion between them is common and has been the source of many mischievous errors”; and urges the importance of “recognizing a distinct positive science of political economy.”1 This paper is concerned primarily with certain methodological problems thatarise in constructing the “distinct positive science” Keynes called for - in particular, the problem how to decide whether a suggested hypothesis or theory should be tentatively accepted as part of the “body of systematized knowledge concerning what is.” But the confusion Keynes laments is still so rife and so much of a hindrance to the recognition that economics can be, and in part is, a positivescience that it seems well to preface the main body of the paper with a few remarks about the relation between positive and normative economics.

I. THE RELATION BETWEEN POSITIVE AND NORMATIVE ECONOMICS
Confusion between positive and normative economics is to some extent inevitable. The subject matter of economics is regarded by almost everyone as vitally important to himself and within therange of his own experience and competence; it is the source of
continuous and extensive controversy and the occasion for frequent legislation. Self-proclaimed “experts” speak with many voices and can hardly all be regarded as
∗

I have incorporated bodily in this article without special reference most of my brief “Comment” in A Survey of Contemporary Economics, Vol. II (B. F. Haley, ed.)(Chicago: Richard D. Irwin, Inc., 1952),

pp. 455-57. I am indebted to Dorothy S. Brady, Arthur F. Burns, and George J. Stigler for helpful comments and criticism. 1 1. (London: Macmillan & Co., 1891), pp. 34-35 and 46.
1

disinterested; in any event, on questions that matter so much, “expert” opinion could hardly be accepted solely on faith even if the “experts” were nearly unanimous and clearlydisinterested. 2 The conclusions of positive economics seem to be, and are, immediately relevant to important normative problems, to questions of what ought to be done and how any given goal can be attained. Laymen and experts alike are inevitably tempted to shape positive conclusions to fit strongly held normative preconceptions and to reject positive conclusions if their normative implications -or what are said to be their normative implications - are unpalatable. Positive economics is in principle independent of any particular ethical position or normative judgments. As Keynes says, it deals with “what is,” not with “what ought to be.” Its task is to provide a system of generalizations that can be used to make correct predictions about the consequences of any change in circumstances.Its performance is to be judged by the precision. scope, and conformity with experience of the predictions it yields. In short, positive economics is, or can be, an “objective” science, in precisely the same sense as any of the physical sciences. Of course, the fact that economics deals with the interrelations of human beings, and that the investigator is himself part of the subject matter beinginvestigated in a more intimate sense than in the physical sciences, raises special difficulties in achieving objectivity at the same time that it provides the social scientist with a class of data not available to the physical scientist. But neither the one nor the other is, in my view, a fundamental distinction between the two groups of sciences.3 Normative economics and the art of economics, on...