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 of systematized 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."--Milton Friedman (1953) “The Methodology of Positive Economics” in Essays on Positive Economics, Chicago: The University of Chicago Press, p. 5. [The ellipses are in Friedman. Hereafter: Friedman 1953][1]
According to Milton Friedman the art of economics is a system of rules for the attainment of a given end. Implied in Keynes’ definitions is a division within the art of economics into two: first, if the given ends follow from normative economics then the art of economics is the system that generates normative policy. This way of putting it stipulates that the art is – like a deductive logic – moral truth preserving from input to its output. The implied nature of the second part of this division within the art is left unclear. For, unless normative science is completed, it is possible, of course, that a given end is moral but not part of a body of systematized normative knowledge. In fact, when one starts musing on it, more combinations between given ends and the output of an art are possible (from a-moral ends to moral output; from a-moral ends to a-moral output, etc.) One can even entertain the possibility that an immoral given end (say, state enforced birth-control) may lead to welcome policy results. So, it is by no means obvious what the status of the output of the art is when the given ends do not follow directly from normative economics.
Much of Friedman essay is devoted to the nature and defense of the possibility of positive economics and, while less important, how it contrasts with normative economics. In fact, the art of economics seems so little pertinent to Friedman’s essay, that in a (1992) paper in the Journal of Economic Perspectives, David Colander comments, “Friedman placed Keynes' tripartite distinction in the open and then he lost it.” (p. 192)
But, as Colander notes, Friedman does address the art of economics at least once more in his 1953 essay. It is worth quoting the passage in full:
Normative economics and the art of economics, on the other hand, cannot be independent of positive economics. Any policy conclusion necessarily rests on a prediction about the consequences of doing one thing rather than another, a prediction that must be based-implicitly or explicitly-on positive economics. There is not, of course, a one-to-one relation between policy conclusions and the conclusions of positive economics; if there were, there would be no separate normative science. Two individuals may agree on the consequences of a particular piece of legislation. One may regard them as desirable on balance and so favor the legislation; the other, as undesirable and so oppose the legislation.
I venture the judgment, however, that currently in the Western world, and especially in the United States, differences about economic policy among disinterested citizens derive predominantly from different predictions about the economic consequences of taking action-differences that in principle can be eliminated by the progress of positive economics-rather than from fundamental differences in basic values, differences about which men can ultimately only fight. (Friedman 1953: 5)
Friedman treats the art of economics as dependent on empirical science. For it’s this science that provides the knowledge that constitute at least part of the rules of how one gets from given ends to proper outcomes. That is, the dependence of the art on positive science is epistemic in character.
This dependence claim can also be found in the relevant chapter of J.N. Keynes’ (1891) book, but he argues for it slightly differently (than Friedman does): “it is both possible and desirable to discuss [positive] economic uniformities independently of [normative] economic ideals, and without formulating economic precepts [of the art], although the converse cannot be affirmed.”[2] From this quote it is not quite clear in virtue of what the art is dependent on positive science, but Keynes claims elsewhere that the dependence is “logical…for we cannot satisfactorily lay down rules for practical guidance expect on the basis of knowledge of facts.”[3]
Of course the passage just quoted from J.N. Keynes is rather important: for Keynes consensus over facts is eminently possible, but elsewhere it may be “prevented by conflicting ideals, as well as by divergent views as to the actual and possible.” (Keynes 1891: 51.) And so, on Keynes’ view, conflict over given ends and disagreement over feasibility will prevent consensus over the art of economics according to Keynes.[4] A view like this – there is natural value conflict but relatively easy agreement over facts and theory -- we also find in Keynes’ colleague Sidgwick and a generation later in Robbins, and is used to argue for a disciplinary distinction between economics and ethics.[5]
By contrast, and strikingly, on Friedman’s picture, rather than disagreeing about the given ends that are the inputs of the art of economics, it is likely people will disagree about the outputs of the art. And that is because Friedman presupposes that in the context he is writing (“the Western world, and especially in the United States,”) there is kind of basic value unanimity over the given (major) ends while there is disagreement over what science predicts.
Because the main aim of Friedman’s essay is to explore “whether a suggested hypothesis or theory should be tentatively accepted as part of the "body of systematized knowledge concerning what is,"” (Friedman 1953: 3) while Friedman assumes consensus over the input of the art of economics and treats its output as dependent on empirical/positive science, he does not really pause to reflect on the contents of the art. Colander seems to think this is due to a lack of interest. But there may be a rather obvious reason for Friedman’s silence (which also points to an important difference with Colander).
If we reflect a bit on the form of the art of government, which (when we plug in Keynes’ definition as quoted by Friedman) just is a rule “for the attainment of a given end;” this is highly reminiscent of Robbins’ famous characterization of the nature of positive economics, which just is “a relationship between [given] ends and scarce means which have alternative uses.”[6] So, if in the context of consensus over given ends, one takes this relationship between ends and means to be known, as supplied by positive economics, then a fortiori there is no further fact of the matter that enters into the rule of the art of government.
That is to say, on Friedman’s account there is no substantive difference between positive and the art of economics. For the art of economics is then just a proper subset of its science restricted in scope by a more limited set of given ends and dependent on the development of the relevant positive science! So, for example, Friedman explicitly affirms “there is an underlying consensus on the objective of achieving a "living wage" for all, to use the ambiguous phrase so common in such discussions.” (Friedman 1953: 5.) And it is pretty clear he thinks there is a similar consensus over the importance of economic growth as one of the main “long run objectives.”(“Monetary and Fiscal Framework for Economic Stability” in Friedman 1953: 133. He tends to ignore disagreement over distribution!)
Colander does not offer the reconstruction of this second passage I have just given, but I suspect he does recognize something like the position I have ascribed to Friedman. Because he writes,
I hedge my interpretation of Colander because he also claims that Friedman’s lost the art of economics. Whereas it is more accurate to say, as an interpretation of Friedman, that he differs in his understanding of what the content of the art of economics is from Keynes (and Colander), and that for Friedman [Thesis A] the art of economics just is a subset or extension of positive economics. Or to be more precise, in societies with a fundamental consensus over ends, the art of economics is a subset or modest extension of positive economics. Friedman tacitly denies there is a significant difference between applied economics and economic science.
I mention this for two reasons. First, Colander’s analysis has been influential on those that notice Friedman mentions an ‘art of economics. For example, while citing Colander, Thomas Mayer writes that “in stressing the positive–normative distinction Friedman furthered the unfortunate tendency to ignore a third category of economics, J. N. Keynes’s (1891) art of economics, that is the knowledge required to apply positive and normative economics in a way that results in successful policies.”[7] (Emphasis added.)
Second, Friedman's account of the art of economics matters because while it would be wrong or misleading to treat Friedman as a kind of rational choice theorist in the way familiar from Becker & Stigler 1977,[8] I want to suggest that by implying that [Thesis A] the art of economics just is a subset or extension of positive economics, Friedman does give voice here to – and now I am stipulating -- a distinctly and broadly agreed upon Chicago understanding of the art of economics as continuous with its (positive/empirical) science.[9]
An anticipation of Friedman's position can, indeed, be found in Keynes’ Scope an Method. When the “end at which the art of political economy aims” at is agreed upon (as Friedman stipulates, recall, is the case among disinterested citizens in the ‘Western world’) – say, “simply the increased production of wealth” – “its scope is certainly definite.” (Keynes 1891: 76.) And in such cases statements of positive science in the “indicative mood” can be transformed into statements “in the imperative.”[10] Colander is right to suggest that Keynes does not accept this position in his own voice because Keynes denies such unanimity over ends in the wider context of the passages I have just quoted. But the position does have an important earlier advocate: J.S. Mill.
In the final Chapter XII of (the final) Book VI of Mill’s Logic, after distinguishing between a science and art, Mill writes:
the reasons of a maxim of policy, or of any other rule of art, can be no other than the theorems of the corresponding science.
The relation in which rules of art stand to doctrines of science may be thus characterized. The art proposes to itself an end to be attained, defines the end, and hands it over to the science. The science receives it, considers it as a phenomenon or effect to be studied, and having investigated its causes and conditions, sends it back to art with a theorem of the combination of circumstances by which it could be produced. Art then examines these combinations of circumstances, and according as any of them are or are not in human power, pronounces the end attainable or not. The only one of the premises, therefore, which Art supplies, is the original major premise, which asserts that the attainment of the given end is desirable. Science then lends to Art the proposition (obtained by a series of inductions or of deductions) that the performance of certain actions will attain the end. From these premises Art concludes that the performance of these actions is desirable, and finding it also practicable, converts the theorem into a rule or precept.[11]
So, unlike Keynes (and Friedman), Mill includes the setting of ends within the art. But as it happens, the end (growing a nation wealthy) the art of political economy pursues is treated as given in the fifth essay of some Unsettled Questions. But anticipating Friedman, Mill treats the art and science as sharing content.[12] And while Friedman and Mill have slightly different conceptualizations of what an economic theory is and Mill surely should not, I think, be treated as a proto rational choice theorist, Mill, too, endorses [Thesis A]. (As an aside, while my argument for this conclusion is wholly distinct from Foucault’s, at a high level of generality the position echoes Foucault’s understanding of Chicago economics as a kind of radicalization of the radical-Benthamite tradition. )
Mindful of inductive risk, Mill is cautious to remind the reader that what I have called '[Thesis A]' presupposes a mature science. Imperfect or incomplete science will generate bad rules: “If, in this imperfect state of the scientific theory, we attempt to frame a rule of art, we perform that operation prematurely.” (Mill 1882: 654) Of course, one may not know that one’s science is incomplete or one must act on imperfect knowledge. So, for “a wise practitioner, therefore, rules of conduct will only be considered as provisional.” (Idem) As an aside, for Mill, then, there is also no difference in kind in the art of political economy and the of government. In the Logic, in the very next paragraph, Mill goes on to offer a sketch of the art of political science.
That Friedman appeals to the existence of (an idealized) ‘disinterested citizen’ as a theoretical posit may be surprising given that the rest of his paper argues for the legitimacy for positing firms that behave as if they are maximizing returns. (Friedman 1953: 21.) And since later Chicago economics became associated with a theory of rent-seeking, it might seem odd to see him posit a disinterested citizen. In addition, that the disinterested citizen agrees over values is by no means obvious if one thinks that modern society is intrinsically pluralist.
But it’s clear that in the 1940s and 50s, the idea circulated among Chicago economists with reference to J.N. Keynes. For example, in the context of a polemical exchange with Samuelson over the new welfare economics, Friedman’s friend, George J. Stigler wrote a decade earlier:
Talcott Parsons probably had economists in mind when he wrote: “For it is a fact that social existence depends to a large extent on a moral consensus of its members and that the penalty of its too radical breakdown is social extinction. This fact is one which the type of liberal whose theoretical background is essentially utilitarian is all too apt to ignore—with unfortunate practical as well as theoretical consequences.” At the level of economic policy, then, it is totally misleading to talk of ends as individual and random; they are fundamentally collective and organized. If this conclusion be accepted, and accept it we must, the economist may properly exceed the narrow confines of economic analysis. He may cultivate a second discipline, the determination of the ends of his society, particularly relevant to economic policy. This discipline might be called, following J.N. Keynes, applied ethics.[13]
Parsons attributes the claim to Durkheim, who, on Parsons’ view, advocated “moral conformity.”[14] (To be sure with a minimal use of compulsion.) Even in the passage quoted by Stigler it’s clear that Parsons is contrasting Durkheim with a position one might associate with the liberal interpretation of Mill for whom increasing moral “diversity” is an “increase in happiness” not social instability.[15] So what follows may be a bit counter-intuitive because I claim that in addition to both embracing [Thesis A] Friedman’s position is itself in in the ambit of Mill’s philosophy in more ways than one here.
To the best knowledge, J.N. Keynes would never posit the existence of a kind of value unanimity among citizens. But the ‘disinterested citizen’ that Friedman appeals to is an entity that is posited, as a normative ideal, in Mill’s Utilitarianism, where “as between his own happiness and that of others, utilitarianism requires him to be as strictly impartial as a disinterested and benevolent spectator.” In general, Mill praises disinterestedness.
In addition, Friedman clearly is presupposing a conception of progress such that in the ‘Western world’ there is a moral consensus and possibility for disinterestedness conception of citizenship. The implied contrast are communist states and less developed countries, of the sort that Mill infamously thought (temporarily) lacking in capacity for self-rule. I don’t mean to suggest Friedman agrees with Mill’s imperial policies. But Friedman does embrace a model of development. (Friedman 1953: 202.)
Now, ordinarily, among liberal interpreters, Mill is usually not associated with moral consensus. He is considered the great advocate of individuality, spontaneity, and authentic experiments in living that see moral conformism as oppressive. Nothing I say undermines that reading.[16]
But some conservative critics of Mill take him to be an advocate of a revisionary moral consensus to be propagated initially by the clerisy, and eventually adopted by the disinterested citizen.[17] The two interpretations of Mill are, incidentally, not necessarily in conflict with each other if the experiments in living are treated as a means toward the discovery of moral truth and so a new consensus. And I do not mean to suggest this interpretation is exclusive to conservatives. For example, late in life, Rawls seems to have understood Mill as advocating a “comprehensive philosophical and moral doctrine” that involved “a society united on a form of utilitarianism.”[18] I do not want to suggest that Friedman must be echoing Mill here. [19]
In the fifth essay of some Unsettled Questions, Mill contrasts sharply between the science and art of economics. And according to Mill,
These two ideas [of science and art] differ from one another as the understanding differs from the will, or as the indicative mood in grammar differs from the imperative. Science is a collection of truths; art, a body of rules, or directions for conduct. The language of science is, This is, or, This is not; This does, or does not, happen. The language of art is, Do this; Avoid that…An art would not be an art, unless it were founded upon a scientific knowledge of the properties of the subject-matter…Rules, therefore, for making a nation increase in wealth, are not a science, but they are the results of science. Political Economy does not of itself instruct how to make a nation rich; but whoever would be qualified to judge of the means of making a nation rich, must first be a political economist. The one deals in facts, the other in precepts. [20]
In context, with an appeal to Adam Smith, the ends of political economy are taken as given (that is, growing a nation rich). This pretty much anticipates the material Friedman quoted from Keynes.
[1] I think Friedman uses ‘admirable’ because he appreciates the robust defense of the possibility of a positive economics in J.N. Keynes. This is also the aim of his 1953 essay.
[2] Unless I otherwise note, I quote from the first edition J.N. Keynes (1891) The Scope and Method of Political Economy London (and New York): Macmillan and co, this quote is from p. 36.
[3] Keynes 1891: 39.n1. This has to be distinguished from the historical dependence of the positive science on the art which influences “the actual course of economic development,” (Keynes 1891: 44-45). Of course, Keynes’ use of ‘logical’ (familiar from, say, Mill’s Logic) is not far removed from the more modern use of ‘epistemic,’ so I don’t want to suggest there is a gap between Friedman and Keynes here.
[4] This is a feature not a bug of Keynes’ approach because the main point of his book is that a positive science of economics is possible without reference to normative or art of economics. Keynes 1891: 64. See also, Su, Huei-chun. "Beyond the positive–normative dichotomy: some remarks on Colander's Lost Art of Economics." Journal of Economic Methodology 19.4 (2012): 377.
[5] Robbins certainly did not posit it: “it is a case of thy blood or mine—or live and let live, according to the importance of the difference, or the relative strength of our opponents.” For background: Schliesser, E. "The Separation of Economics from Virtue: A Historical-Conceptual Introduction." Economics and the Virtues: building a new moral foundation Oxford: Oxford University Press (2015): 141-164.
[6] Lionel Robbins (1st edition 1932) Essay on the Nature and Significance of Economic Science London: Macmillan and Co: 15.
[7] Thomas Mayer “The influence of Friedman’s methodological essay” in The Methodology of Positive Economics: Reflections on the Milton Friedman Legacy. Edited by Uskali Mäki (2009) Cambridge: Cambridge University Press: 123-124. M
[8] Stigler, George J., and Gary S. Becker. "De gustibus non est disputandum." The American Economic Review 67.2 (1977): 76-90.
[9] I do not mean to suggest this is the end of the matter. A fuller discussion would include the significance and content of Harberger, Arnold C. "Three basic postulates for applied welfare economics: an interpretive essay." Journal of Economic literature 9.3 (1971): 785-797.
[10] This statement does not occur in the first edition. It’s a later footnote that I have found in the fourth (1917) edition that I consulted of the Macmillan edition on p. 79 n.1.
[11] John Stuart Mill (1882: eight edition) A System of Logic, Ratiocinative and Inductive New York: Harper & Brothers: 653-654
[12] To be precise, “there is need of a set of intermediate scientific truths, derived from the higher generalities of science, and destined to serve as the generalia or first principles of the various arts.” Mill 656. These intermediate scientific truths may (to adopt a phrase from recent philosophy of science) may termed gross generalities.
[13] George J. Stigler, “The New Welfare Economics,” American Economic Review 33(1943): 358; he quotes from Talcott Parsons, The Structure of Social Action (New York: McGraw-Hill, 1937), 395. I discuss the context in "The Separation of Economics from Virtue: A Historical-Conceptual Introduction," (2015), op cit.: 141-164.
[14] Parsons 1937: 395 n1.
[15] Parsons 1937: 396. (Mill is not named, but the position is treated as both liberal and utilitarian.)
[16] Not everyone that diagnoses this reading of Mill endorses it. Hayek treat’s Mill’s embrace of authenticity as very dangerous to responsibility and, so, freedom. Judge Bork treats Mill as advocate of licentiousness.
[17] Cowling, Maurice. Mill and liberalism. Cambridge University Press, 1990 [1963].
[18] See, especially, Rawls, John. "The domain of the political and overlapping consensus." NYUL Rev. 64 (1989): 235.
[19] Later in life Friedman he did read Cowling’s interpretation of Mill and quoted it approvingly in a different context (1977).
[20] Emphasis in original. J.S. Mill (1854) Essays on Some Unsettled Questions of Political Economy, London John W. Parker, p. 124.
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