Chapter dzǵ: Tacit Preachments are the Worst Kind ȁȁȈ- Ļe prestige of falsifiability, with misconceptions about it being rein-
forced by the slogan against testing a theory by its assumptions to the
degree that downright false propositions share in its supposed prestige.
(A warning is valid, however, against ostensibly empirical propositions
so constructed as to enjoy built-in immunity to any adverse evidence.) - Ļe prestige of the polar extremes of abstract, high-power theorizing
and empirical work, with what counts as “empirical” being practically
confined to statistics. - Ļe associated idea that familiar, dependable facts are by that very
token unimportant. - Knee-jerk insistence on certain styles of argumentation and particu-
larly on “rigor” (about which I’ll have more to say). - Ļe prestige of working on the frontier.
Examples abound of methodological preconceptions practically fore-
ordaining conclusions or shielding shaky argument or dubious assump-
tions from scrutiny. Ļey include (in my opinion) the “Austrian” theory of
the business cycle, the “pure-time-preference” theory of interest, London-
School skepticism of cost-oriented business regulation and indeed of any
objective content in the very concept of cost, the rational-expectations
school’s insistence on equilibrium modeling, Milton Friedman’s Marshal-
lian demand curve, and widespread mindless recitation of Friedman’s slo-
gan about not testing a theory by its assumptions.
In macroeconomics, the shift of fashion from monetarism to its new-
classical version and then on to real business cycles appears to exhibit a
methodological basis (as well as some factors discussed later). David Lai-
dler (ȀȈȈǿ) and Karl Brunner (ȀȈȇȈ) have diagnosed as much, mentioning
an impatience with disequilibrium analysis and a shift of priorities away
from empirical evidence toward supposed first principles, microfounda-
tions, and rigor.
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Ļe new classical macroeconomics, or rational-expectations/equilibrium-
always school, provides examples. (Citations and fuller discussion appear
in myȀȈȇȅ, pp.Ȃȇȅ–ȂȈȂ.) Ļe Lucas supply function (LucasȀȈȆȂ) deals
with cyclical fluctuations in aggregate output on the basis of the method-
ological preconception that sellers are responding to prices only, rather