Friedman, 1972, p. 133.
10. Robbins, 1935, p. 240.
11. Friedman, 1953.
12. There is a difference of opinion among economists on the goal of the economic method. Positivists and operationalists, like Samuelson, emphasize that the role of economics is only to describe. Logical empiricists, however, insist that explanation is the goal of economics. By contrast, instrumentalists, like Friedman, emphasize that prediction is the primary function of economics (see Blaug, 1980; Caldwell, 1982). Since I do not wish to enter into this controversy in this brief paper, I have mentioned all three approaches in the text. There is another goal, persuasion, which has also been emphasized (McCloskey, 1986). This, however, does not differ from explaining and predicting because it is generally not possible to persuade without convincing explanation and reliable prediction. The goal of persuasion has not, therefore, been discussed in this book.
13. Routh, 1989, p. 19.
14. Rawls, 1958.
15. Solo, 1981, p. 38; see also Sen, 1987, p. 32.
16. Colander, 1992, p. 113.
17. Cited by Kuhn, 1961, p. 161.
18. Blaug, 1980, p. 149.
19. Named after Jean Baptiste Say (1767–1832).
20. Smith (1723–90), 1937, p. 423.
21. Rosenberg, 1992, p. 219; see also Blackhouse, 1994, p. 13.
22. A number of economists may hesitate to accept this view. It is, however, a logical outcome of the belief in the efficacy of market forces, and economists like J.B. Clark felt that factor incomes in the real world closely approximated the marginal product and its value (see Stigler, 1941).
23. Milton and Rose Friedman, 1980, p. 23.
24. Klein, 1954, p. 90.
25. Keynes, 1924, p. 88. This book is Volume IV of Keynes, 1972.
26. Lucas did more than any other economist to undermine confidence in the government’s ability to increase employment and output growth with expansionary monetary and fiscal policies. See, in particular, Lucas, 1973 and 1976; Mankiw, 1990.
27. There seems to be a change once again in the direction of the wind as reflected in the World Bank’s call for ‘effective’ and ‘good’ government in its 1997 World Development Report: The State in a Changing World.
28. Hahn, 1970.
29. Samuelson has rightly indicated that “the Invisible Hand will only maximize total social utility provided the state intervenes so as to make the initial distribution of dollar votes ethically proper “ (1966, p. 1410; italics in the original).
30. Okun, 1975, p. 11.
31. Perfectly competitive markets are said to prevail if there are many buyers, many sellers, no barriers to entry, and perfect information about the present and the future. These conditions are not satisfied anywhere.
32. Brittan, 1985, p. 16.
33. Tawney, 1948, p. 12.
34. See North, 1990; Hausman and McPherson, 1993; Rodney Wilson, 1997.
35. Koopmans, 1969, cited by M. Ali Khan in Z. Ahmed et al., Fiscal Policy ..., 1983, p. 243.
36. Kuhn, 1970.
37. Peter Howitt, 1987, p. 273.
38. Lucas and Sargent, 1979, p. 4.
39. Arrow, 1967, p. 734. See also, Peter Howitt, 1987, p. 273.
40. See Chapter 3 on “The Crisis of the Welfare State” in Chapra, 1992, pp. 113–46.
41. Cited by Myers, 1983, pp. 2–3.
42. Lakatos, 1974.
43. Hutchinson, 1964, pp. 29–31.
44. Blaug, 1980, p. 150.
45. See Mark Blaug, 1980; Bruce Caldwell, 1982.
46. Samuelson, 1972, pp. 765–6; also 1966, p. 1778.
47. Friedman, 1953, p. 14. He also states that: “Truly important and significant hypotheses will be found to have ‘assumptions’ that are wildly inaccurate descriptive representations of reality, and in general, the more significant the theory, the more unrealistic the assumptions (in this sense).” (See also Hahn’s view in Hahn and Hollis, 1979, p. 12.)
48. The modern Austrian School, therefore, argues that “prediction is absolutely impossible in a subject like economics because economic behaviour, being forward-looking, is inherently unpredictable” (Blaug, 1980, pp. 259–60).
49. Schweitzer, 1949, p. xii; see also Sorokin, 1951, p. 177.
50. The theoretical side of Welfare Economics is organized around three main theorems. For a brief but readable discussion of these see Feldman, 1987, pp. 889–94.
51. See the article on “Altruism” by Hammond, 1987, p. 86.
52. Blaug, 1980, p. 140.
53. See, for example, Hutchinson, 1964; Myrdal, 1970; Heilbroner, 1973.
54. Blaug, 1980, p. 146.
55. Myrdal, 1970, pp. 55–6.
56. See Hausman and McPherson, 1993; Rodney Wilson, 1997.
57. See, for example, Dopfer, 1976; Balogh, 1982; Bell and Kristol, 1981.
58. See, for example, Skinner, 1986. This book provides the story behind some of the most valiant rebels against the tyranny of normless human sciences.
59. Warnock, 1972, p. 85.
60. Wiseman, 1991, p. 150.
61. Fulton and Gee, 1994.
62. See, Janos Horvath, “Foreword”, in Solo and Anderson, 1981, pp. ix–x.
63. Hahn and Hollis, 1979, p. 12.
64. Solo and Anderson, 1981, p. x.
65. Lutz and Lux, 1979, p. ix.
66. Maslow, 1970.
67. Choudhury, 1986, p. 237.
68. Sen, 1987, pp. 78 and 79.
69. Hausman and McPherson, 1993, p. 723.
70. Schadwick, 1975, pp. 229 and 234.
71. Lutz, 1990, p. ix.
72. Minsky, 1986, p. 290.
73. Galbraith, 1987, p. 284.
74. John Hey, 1997, p. 4.
75. Blaug, 1980, p. 121.
