Revisiting Friedman’s F53: Popper, Knight, and Weber

Neither Karl Popper, nor Frank Knight, nor Max Weber are cited or mentioned in Friedman’s famous 1953 essay “On the methodology of positive economics” (F53). However, they play a crucial role in F53. Making their con-tribution explicit suggests that F53 has been seriously misread in the past. I will first show that there are several irritating statements in F53 that are, taken together, not compatible with any of the usual readings of F53. Sec-ond, I show that an alternative reading of F53 can be achieved if one takes seriously Friedman’s reference to ideal types; “ideal type” is a technical term introduced by Max Weber. Friedman was familiar with Max Weber’s work through Frank Knight, who was his teacher in Chicago. Given that in F53’s view ideal types are fundamen-tal building blocks of economic theory, it becomes clear why both instrumentalist and realist readings of F53 are inadequate. Third, the reading of F53 in terms of ideal types gives the role of elements from Popper’s falsifica-tionist methodology in F53 a somewhat different twist. Finally, I show that the irritating passages of F53 make good sense under the new reading, including the infamous “the more significant the theory, the more unrealistic the assumptions”