Behind methodological individualism

Abstract

Methodological individualism has become a more fashionable slogan for economistsin recent years. In specific terms we are being urged to accept a doctrine within whichall explanations of social phenomena have to be couched in terms of statements aboutindividuals. However, the term has a wide and sometimes ambiguous usage and is beingemployed as a packaging for all kinds of methodological and theoretical prescriptions. Forexample, it has been regarded as a commandment that thou shalt, where possible, placemacroeconomic statements on firm microeconomic foundations (e.g. Blaug, 1980), or aninjunction against (reckless) aggregation, particularly in regard to welfare criteria orsocial welfare functions (e.g. Kirzner 1980; Littlechild, 1978), or as an inspiration forrecent theoretical developments in economics with pro-market policy conclusions (e.g.Furubotn and Pejovich, 1974).One of the further problems in discussing this topic is that often the term 'methodo-logical individualism' carries an ideological charge. Indeed, by both advocates and itsopponents it is too frequently confused with individualism of a political variety. However,the connection between political and methodological individualism is merely assumed bythese supporters or critics, or supported by cursory argument. It is never demonstratedwith any rigour.Although there is a lack of uniformity in the use of the label, it is argued here that the keyelement in the classic statements of methodological individualism is a refusal to examinethe institutional or other forces which are involved in the moulding of individual pref-erences and purposes. We are thus confronted with a remarkable optimism about thepossibility of explanation of social phenomena in terms of individuals, but an extremereluctance to give even partial explanations of individual behaviour in social or evenpsychological terms. This refusal is both dogmatic and, as will be argued below, unaccept-able on analytical grounds.This reduction of explanation and thereby causality solely to individuals has a furtherimplication: the explanation of social phenomena proceeds, even by a circuitous route,