from Grok:

Milton Friedman had several critiques of the Austrian School of economics, although he also shared some common ground with them. Here are some key points of his critique:

Empirical vs. Theoretical Focus: Critique: Friedman was a proponent of empirical economics, arguing that theories should be tested against real-world data. He believed that the Austrian School, particularly its more dogmatic adherents, placed too much emphasis on theoretical deduction without sufficient empirical validation. Friedman's methodology involved testing theories with data, contrasting with the Austrian preference for praxeology, which emphasizes logical deduction from self-evident axioms. Monetary Policy and Central Banking: Critique: While Friedman favored a rules-based approach to monetary policy (like a fixed monetary growth rule), he supported the existence of a central bank, which many Austrians oppose. Austrians like Ludwig von Mises and Friedrich Hayek argued against central banking due to its potential for causing economic cycles through manipulation of money supply. Friedman's advocacy for a monetary rule was seen by some Austrians as too interventionist. Economic Predictions and Policy Advice: Critique: Friedman was critical of the Austrian School's reluctance to engage with economic policy in a way that could lead to specific, actionable advice. He believed in using economic knowledge to inform policy, even if his approach was towards reducing government intervention in different ways than Austrians might advocate.

Methodology of Positive Economics: Critique: Friedman’s essay "The Methodology of Positive Economics" argues that theories should be judged by their predictive power, not by the realism of their assumptions. This was in stark contrast to the Austrian methodological approach, which often judges theories based on the logical coherence of their assumptions. View on Inflation: Common Ground and Critique: Friedman and Austrians share a disdain for inflation, but Friedman’s solution was to advocate for a steady, predictable increase in the money supply, whereas Austrians typically advocate for a free banking system or commodity-based money to naturally control inflation.

Despite these critiques, Friedman respected some Austrian economists, particularly Hayek, with whom he had significant agreement on the importance of individual liberty and free markets, though their methods and specific policy prescriptions often diverged.