Milton Friedman's question begging

The thermostat argument is irrelevant in the absence of an empirically accurate model

Nick Rowe tweeted his post about "Milton Friedman's thermostat" where he begins:

I know I'm right in saying that Milton Friedman's thermostat is an important idea that all economists ought to be aware of. And I'm pretty sure I'm right in asserting that almost all economists are unaware of this important idea that all economists ought to be aware of.

If Nick is right about economists being unaware of it, then there's a good reason: it's not a logically valid argument.

Nick retells Friedman's parable using a gas pedal g(t) and a car's speed s(t) going up and down hills h(t). The basic premise is that if the driver perfectly achieves a target speed of 100 km/hr, then it will look like the gas pedal movements are unrelated to speed (if we don't know about the hills). The gas will be going up and down, but the speed will be constant.

The argument purportedly can be deployed at anyone using data to claim the gas pedal doesn't matter.

But how did either the plaintiff or the defense know the gas pedal had anything to do with this scenario in the first place? Friedman's thermostat assumes some prior empirically validated model where the gas pedal was conclusively proven to determine the car's speed before the "constant speed" scenario came to be.

That is to say a scientist just given the "constant speed" scenario would say there's no evidence anything influences speed. The "best model" is actually a constant

s(t) = 100 km/hr

Not

s = s(h(t), g(t), t)

If you already know g(t) matters ‒ and adaptively makes s(t) constant ‒ then, yes, the constant s(t) data doesn't disprove that. But if it is a question whether g(t) matters, then assuming g(t) matters in order to disprove claims that g(t) doesn't matter is classic question begging.

Additionally, in order to disprove claims that g(t) doesn't matter one could just deploy the original data and findings that g(t) does matter. This of course makes Friedman's thermostat superfluous.

So hopefully that's why most economists don't know about Milton Friedman's question begging, I mean, thermostat.

Now it is true that when Friedman deployed the argument [pdf], he said there was a time when the thermostat was imperfect before the analog of the "constant speed" scenario ‒ which allows one to determine the effects of g(t). However it is not an undisputed fact that g(t) was determined to affect speed (for example, post war inflation is arguably a demographic effect).

This is why, at the end of the day, it's usually best to argue about models in terms of empirical data rather than logic and philosophy.