Discussion Questions on Milton Friedman
1. According to Friedman, how are positive and normative economics related to one another? What is needed to bring about a stronger consensus on policy and better policy?
2. What is and ought to be the goal of any positive science, including positive economics? What data is relevant to the assessment of positive economics? What does Friedman take a "prediction" to be?
3. What does Friedman mean by the "assumptions" of a theory or of an hypothesis?
4. What is it for these assumptions to be "realistic"?
5. Why, in Friedman's view, is it a mistake to appraise a theory by the realism of its assumptions?
6. Think about Friedman's example (on pp. 156-7) of a theory of leaf distribution which supposes that leaves can move instantaneously from branch to branch. What does Friedman say about this theory? Is he right? What does he mean when he says that the hypothesis is only an "as if" claim?
7. Why in Friedman's view are surveys designed to study decision-making in firms misconceived? Why don't the findings of such surveys count as evidence for or against the theory of the firm?