Friday, December 2, 2016

Friedman as Logician (ii)


Faust's pact with Mephisto,
engraving by Julius Nisle, circa 1840. [A]

The previous post argued that Friedman's methodology allows unsound arguments.

Fine. So what?

That post provides material sufficient for an answer. As it happens, the answer turns out to be delightfully topical: unsound arguments are a Faustian bargain.

This table comes from the previous post:

Argument\Premises |      True       |     False
==================================================
Valid             | True conclusionConclusion?
--------------------------------------------------
Invalid           |  Conclusion?    |  Conclusion?
==================================================

A quick reminder: sound arguments correspond to the blue cell and their conclusions are necessarily true. Unsound arguments correspond to the red north-east cell; invalid arguments correspond to the Invalid red row: those conclusions are either true or false, which must be evaluated empirically.

A generous interpretation of Friedman's essay leads one to identify that table's whole first row (the Valid row) with his methodology: it allows (as opposed to encourages or demands) the use of false premises, while demanding valid arguments (i.e. allows unsound arguments). Sometimes Friedmanite arguments will support true conclusions; sometimes, false. Based on the a posteriori empirical truth or falsehood of the conclusions, therefore, there is nothing to differentiate Friedman's methodology from the second row (the Invalid row): the latter will yield true or false conclusions, too.

The only difference is that a true conclusion supported by a Friedmanite argument can be explained after the fact by a valid argument. Those supported by an invalid argument cannot.

Now, if one charitably identifies the Valid row as Friedman's methodology, what can one say about the second row (Invalid) so similar to it? The best description I can come up with for the Invalid row is either deliberate sophistry or quackery (readers are invited to submit their own descriptions).

There's a more direct and perhaps intuitively appealing way to argue my conclusion here that Friedman's methodology is quite close to sophistry/quackery (and, again, I cannot claim to be fully original: more on this in two future posts).

----------

In the 1950s marginalism was under siege: its assumptions were being disputed. In his essay, Friedman himself makes tangential references to that, carefully avoiding specifics. His methodology granted immunity against said criticism. At the time, some were displeased by this move. Perhaps one could sum up their views: Friedman was moving the goal posts.

But if you are a partisan of marginalism (like Friedman was) that immunity was invaluable and goes a long way into explaining his methodology's popularity. Few back then complained about this.

Well, expediency has a price. To persuade, to give good reasons to believe in a conclusion, is what arguments are meant to do. But by their own nature, unsound arguments are less than persuasive where persuasiveness counts: with the public. That's not the public's fault. It's yours. Maybe that explains the ancient Greeks' insistence on true premises: unsound arguments don't "click"; they are suspiciously similar to sophistry/quackery.

"But … but … but … Our predictions! We were right!" Sorry, professors, you won't make an unsound argument any sounder, by repeating like a broken record that your conclusion is true. In effect, to be right is the less instructive outcome: check the table above. The beauty of Friedmanite philosophy!

Little spoilt-child tantrums won't help either. To play the role of weary philosopher-king whose feelings were hurt by the ignorant hoi polloi may make you feel good, but won't fool anybody else. It's not them who are being irrational, it's your fucking arguments that suck.

Now, that's a delightful irony.

Old Nick wants what's rightfully his. Pay him.

Mephistopheles by Mark Antokolski, 1884. [B]

Update:
08/02/2017. From Bloomberg View:
"Practitioners can help by being more discerning. Whenever an economist says 'in our model,' beware. Demand to know what assumptions the model makes, and question those assumptions as severely as the theorists test for valid inference -- because valid inference from bogus assumptions is useless."
You are welcome, Bloomberg View.

Image Credits:
[A] "Faust's pact with Mephisto, engraving by Julius Nisle". Author: Julius Nisle (died 1850). Source: Wikimedia. File in the public domain.
[B] "Mephistopheles by Mark Antokolski, 1884." Photo: shakko. Source: Wikimedia. File licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

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