On the Right Side for the Wrong Reason: Friedman on the Marshall−Walras divide

The aim of this article is to assess Friedman’s claim, put forward in his 1949 article on the Marshallian demand curve, that there is a methodological divide between the Marshallian and Walrasian approaches. Friedman’s argument will be critically examined and compared with the views he expressed in other articles written around the same time. My evaluation will lead to a mixed conclusion. Positively, Friedman must be hailed for having brought the Marshall−Walras divide to the forefront. In a more critical vein, I will suggest, first, that Friedman’s argumentation in the 1949 paper is definitely wanting. A better account of the differences between Marshall and Walras is to be found in his 1955 review of Jaffé’s translation of Walras’s Élements d’économie pure. Second, I will claim that Friedman’s real target in his 1949 article was imperfect competition theory à la Chamberlin and Keynesianism à la Lange, which he wrongly associated with Walrasian theory. Third, present-day proponents of the divide will be criticised for having naively echoed Friedman’s argumentation instead of having tried to improve it. The paper finishes with an outline of the criteria that should be used for giving the Marshall−Walras divide a stronger grounding. ◊ IRES, Université catholique de Louvain, 3 Place Montesquieu, 1348 Louvain-la-neuve, Belgium. E-mail address: [email protected] This work was supported by the Belgian French-speaking Community (Grant ARC 03/08-302) and the Belgian Federal Governement (Grant PAI P5/10).