> Laibman might be right given in terms of what is needed to persuade
> economists.
>
> Milton Friedman also rejects any facts that do not confirm his theory.
>
> Reder, Melvin W. 1982. "Chicago Economics: Permanence and Change." Journal
> of Economic Literature, 20: 1 (March): pp. 1-38.
> 13: // McCloskey: "Any apparent inconsistency of empirical findings with
> implications of the theory, or report of behavior not implied by the
> theory, is interpreted as anomalous and requiring one of the following
> actions: (i) re-examination of the data to reverse the anomalous finding;
> (ii) redefinition and/or augmentation of the variables in the model...;
> (iii) alteration of the theory to accommodate behavior inconsistent with
> the postulates of rationality ... (iv) placing the finding on the research
> agenda as a researchability anomaly." Chicago tends to shun iii.
> 18: The major objective is to convert non economists to their way of
> thinking.
> 19: "However imaginative, answers that violate any maintained hypothesis
> of the paradigm, are penalized as evincing failure to absorb training."
> 20: ""Explanation" means either a demonstration that the phenomenon is
> compatible with the underlying theory, or the provision of such extensions
> of the theory as may be required."
Friedman's approach to verification is even worse than that. My neoclassical training gets (thankfully) foggier and foggier, but... wasn't there the Friedman Machlup (I think) debate of the late 40s in which Friedman argued that the *assumptions* used to create and underpin a theory need not conform to observable facts or reality, IF the theory is tested and data "verifies" it?
So, combine assumptions that can be made up to yield what you want, with fudging test results as you indicate. Nothing is really falsifiable is it? Neoclassical theory must be right!
But, again, I doubt if Laibman is really rejecting facts as part of the verification process.
RO