ABSTRACT
In Chapter 2 I argued that Alchian, Friedman and Becker advanced natural selection arguments in order to defend marginal analysis in general, and the neoclassical theory of the firm in particular, against antimarginalist criticisms. I pointed out that they all argued for the so-called ultimate claim: the tendencies in industry behaviour that are predicted by neoclassical theory come about even if its assumption of ‘profit maximization’ is false. Friedman is the only one who argued also for the ‘intermediate claim’: surviving firms display behaviour that is consistent with ‘profit maximization’ even if this assumption is false. In Chapter 3 we have seen that pioneers of the new theory of the firm are engaged in a research programme that is characterized by its ‘hard core’ proposition that prevailing organization forms are efficient. In turn, this hard core proposition was seen to be based on a variant of Friedman’s claim: even if those who introduced organization forms did not know (and perhaps could not have known) in advance what forms would be efficient, economic ‘natural selection’ in competitive markets has seen to it that efficient organization forms survive.
