On Douglas on Milton Friedman on Gödel

The interaction between the observer and the process observed that is so prominent a feature of the social sciences, besides its more obvious parallel in the physical sciences, has a more subtle counterpart in the indeterminacy principle arising out of the interaction between the process of measurement and the phenomena being measured. And both have a counterpart in pure logic in Gödel’s theorem, asserting the impossibility of a comprehensive self-contained logic. It is an open question whether all three can be regarded as different formulations of an even more general principle.—Milton Friedman (1953) “The Methodology of Positive Economics,” note 3.

In a series of papers (here, here, and here), I have defended Milton Friedman’s methodological sophistication, especially in his 1953 essay. I have not been uncritical. But I have passed over the note above in silence. I have to admit that I have been unsure what the point of the note is (other than a certain kind of name-dropping, it seems to stress that there are no special problems in doing economics relative to other scientific disciplined) in the overall argument, and I have been unable to place the claims contained in it in context of Friedman’s other writings of the time.

The excellent young Spinoza scholar, Alexander Douglas, is underwhelmed by Friedman’s note and makes deserved fun of the part about Gödel in a recent post on his blog. But then Douglas draws a rather far-reaching conclusion that is worth quoting in full. I think draws on a lot of common misconceptions about the nature of Friedman’s economics and its role in the economics profession that are worth debunking not only in order to do justice to the historical actors and the manner in which economics has evolved during the last sixty years or so, but also to remind us that the real story is always more complex (and I hope more interesting) than our images. Douglas writes:

While Friedman’s comment is contained within a footnote making a peripheral point, I believe that its wrongness should cast out a warning beacon across the rest of his work. Nobody who understood Gödel’s theorem would state what Friedman states, even as a throwaway comment. It’s no use arguing that Friedman accidentally wrote ‘logic’ when he meant ‘formal system for arithmetic'; people don’t make slips of the pen on that order. It is thus worrying, first of all, that Friedman should make such bold proclamations about something he doesn’t seem to understand. But it is also worrying that he should lack the understanding. Logic and mathematics are, after all, fairly central to what neoclassical economists do. It is telling that an economic theorist of Friedman’s stature should be deficient in the simple curiosity that would have led him to learn what he needed to avoid such an egregious howler. It reveals something, I suspect, about the dismissive attitude some neoclassical economists take towards other disciplines, even those that lie at the very foundations of the theoretical systems they typically employ.—Alexander Douglas

First, it is worth reminding ourselves that Ernest Nagel’s and Newman’s’ book on Gödel’s theorems appeared after Friedman’s essay (in 1958 according to Wikipedia). This is not to excuse Friedman, but to remind ourselves that during 1948-52 -- the period when Friedman drafted his celebrated essay --, students and advanced scholars even in philosophy were not exposed yet, I think, to a decent introduction to the celebrated results.

Second, in 1953 economics was not yet a full-fledged mathematical science in the way it has since become and Friedman was not the representative of those who wanted to make it so (Samuelson, Arrow, Bergson, etc.). He was, despite his life-long admiration of Alfred Marshall, very critical of those who wished to make economics primarily a mathematical science. His 1953 essay is, in fact, a defense of economics as an empirical, data-driven science (or so I have argued); as Friedman writes, “Economics as a positive science is a body of tentatively accepted generalizations about economic phenomena that can be used to predict the consequences of changes in circumstances.”

Third, of his generation, Friedman was not a bad mathematician; at one point he apprenticed to one of the very best mathematical economists of the 1930s (Hotelling); as anybody who has looked at his work from the forties and fifties discovers (including his work for the armed forces), he could be very skilled mathematical economist when he set himself to it. But he was not interested in mathematical rigor as an end in itself nor in introducing more mathematical tools than he thought required for the economic problem he focused on.  (The reader can decide whether this is good or bad.)

Fourth, with some exceptions, economists at The University of Chicago (in the 1940s and 50s) lagged in mathematical hyper-sophistication compared to economists at MIT, Yale, Cambridge, LSE, and even Columbia; the exceptions (Oskar Lange, Abba Lerner, etc.) were not neoclassical economists (Lange was a Marxist, in fact).

Having said that, Friedman’s essay is a defense of the autonomy of economics. And so it’s correct to suggest, as Douglas does, that there is a kind of lack of interest in deep engagement with other disciplines. So, Douglas's insight stands. I have argued that Friedman’s essay is compatible with experimental economics, but that project was still a glimmer in Vernon Smith’s mind then. But the economics that Friedman advocates is also not the imperialistic one familiar from his student Gary Becker; in fact, I believe he was distinctly reserved of Becker’s project through the end of his life, but about that some other time more.

Finally, Ernest Nagel offered a once-famous criticism of Friedman's essay (recall). He keeps a discrete silence on the Gödel’ footnote (I think).

Comments

[axdouglas]

Hi Eric,

Thanks for this. These are all very good points, so I have little to say in reply.

I think there's something very confused in the way neoclassical economists handle the idea of observer-independence (or perhaps background-independence). This comes across especially in Robert Lucas' stuff. I'm going to put some thoughts on that in a post I'm writing partially in response to your post on Rosenberg on Krugman. It seemed like a neat historical angle to try to hang the blame for this on Friedman, but probably that's unfair!

[Benj Hellie]

"The second great modern crisis in the foundations of mathematics—precipitated in 1931 by Gödel's proof that there are bound to be undecidable statements in arithmetic—has its
companion-piece in physics in Heisenberg's indeterminacy principle." — WV Quine, 'On what there is', /Review of Metaphysics/, 1948, 38.

[Alexander Douglas]

Fascinating - thanks!

Perhaps this is the origin of Friedman's idea, or perhaps it shares with it a common origin (Carnap?).

But the analogy Quine draws doesn't have to do with observer-dependence as such. Rather, the point seems to concern ontology rather than methodology. In particular, Quine's claim seems to be that the posits of physics are revealed by Heisenberg's indeterminacy principle to be part of a 'mythology', as the posits of set theory are revealed to be part of a 'mythology' by Gödel. A bold claim! But a different one, I think, from that made by Friedman.

Indeed, I'm coming around to the view that what Friedman says is not implausible; I'm not sure I could say the same for Quine's assertion. (See my discussion with Richard Zach: http://originofspecious.wordpress.com/2014/09/23/an-exchange-with-richard-zach-about-my-friedmangodel-post/)

[Alan Nelson]

I'm no fan of MF's famous article. But Eric's quote from MPE strikes me as appropriately guarded. He writes 'counterpart', not 'exact analogy.' And couldn't the "general principle" he wonders about be something as bland as "Odd things happen to theories when some kind of self-referentiality is introduced"?

[Alan Nelson]

Now I've seen Benj Hellie's nice reminder. Quine's use of 'companion-piece' is even more measured than Friedman's "counterpart."