Need a theory's assumptions be true? In a since notorious
essay, the economist Friedman argued they need not be and in
abstract theories often won't be. The first part of the
thesis discusses his case, which has been widely misunderstood,.
It concludes that, whilst false assumptions may fulfil the role
of epitomising and implying truth, those in Friedman's key
economic example do not. The rest of the thesis then relates
Friedman's case to that in defence of general equilibrium theory
(the heart of orthodox economic theory) and argues that this
defence fails. Two complementary arguments against the
defenders' position are presented, the first working from the
fact that the theory's assumptions are not true and the second
considering what would happen if they were - the conclusion
being that the theory relates neither to actual cases nor to
possible polar ones. Comparisons drawn with rival economic
theories end this case-study in the philosophy of economics
