Methodological individualism

Method of analysis in social sciences

In the social sciences, methodological individualism is a method for explaining social phenomena strictly in terms of the decisions of individuals, each being moved by their own personal motivations. In contrast, explanations of social phenomena which assume that cause and effect acts upon whole classes or groups are deemed illusory, and thus rejected according to this approach. Or to put it another way, only group dynamics which can be explained in terms of individual subjective motivations are considered valid. With its bottom-up micro-level approach, methodological individualism is often contrasted with methodological holism,[1] a top-down macro-level approach, and methodological pluralism.[2]

## History within the Social Sciences

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This framework was introduced as a foundational assumption within the social sciences by Max Weber, and discussed in his book Economy and Society.[3] Within later schools of economic thought, such as the Austrian School, strict adherence to methodological individualism is considered a necessary starting principle. It draws heavily upon assumptions of neoclassical economics, where social behavior is explained in terms of rational actors whose choices are constrained by prices and incomes, and where individuals' subjective preferences are treated as a given.[4]

## Criticisms

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Economist Mark Blaug has criticized over-reliance on methodological individualism in economics, saying that "it is helpful to note what methodological individualism strictly interpreted [...] would imply for economics. In effect, it would rule out all macroeconomic propositions that cannot be reduced to microeconomic ones [...] this amounts to saying goodbye to almost the whole of received macroeconomics. There must be something wrong with a methodological principle that has such devastating implications".[5]

Similarly, the economist Alan Kirman has critiqued general equilibrium theory and modern economics for its "fundamentally individualistic approach to constructing economic models", and showed that an individualist competitive equilibrium is not necessarily stable or unique. However, stability and uniqueness can be achieved if aggregate variables are added, and as a result he argued "the idea that we should start at the level of the isolated individual is one which we may well have to abandon".[6]

## See also

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* Methodological holism
* Methodological pluralism
* Austrian School
* Praxeology
* Analytical Marxism – School of Marxist theory

## References

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1. ^ Zahle, Julie, "Methodological Holism in the Social Sciences", The Stanford Encyclopedia of Philosophy (Winter 2021 ed.), Edward N. Zalta (ed.), URL = <https://plato.stanford.edu/archives/win2021/entries/holism-social/>.
2. ^ Piana, Valentino (2020). "Pluralism". Economics Web Institute. Retrieved April 7, 2020.
3. ^ Heath, Joseph (2020), "Methodological Individualism", in Zalta, Edward N. (ed.), The Stanford Encyclopedia of Philosophy (Summer 2020 ed.), Metaphysics Research Lab, Stanford University, retrieved September 18, 2021
4. ^ Stigler, George; Gary Becker (March 1977). "De gustibus non est disputandum". American Economic Review. 67 (2): 76. JSTOR 1807222.
5. ^ Blaug, Mark (1992). The Methodology of Economics: Or, How Economists Explain. Cambridge University Press. pp. 45–46. ISBN 0-521-43678-8.
6. ^ Kirman, Alan (1989). "The Intrinsic Limits of Modern Economic Theory: The Emperor has No Clothes". The Economic Journal. 99 (395): 126–39\. doi:10.2307/2234075. hdl:1814/23029. JSTOR 2234075.

## Further reading

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* Agassi, Joseph (1960). "Methodological individualism". The British Journal of Sociology. 11 (3): 244–70\. doi:10.2307/586749. JSTOR 586749.
* Arrow, Kenneth J. (1994). "Methodological Individualism and Social Knowledge". American Economic Review. 84 (2): 1–9\. JSTOR 2117792.
* Kaushik Basu (2008), "Methodological Individualism", The New Palgrave Dictionary of Economics, 2nd ed., New York : Palgrave Macmillan ISBN 978-0-333-78676-5 Abstract.
* Brian Epstein (2009), "Ontological Individualism Reconsidered", Synthese 166(1), pp. 187–213.
* Hayek, F. A. (1948). Individualism and Economic Order. University of Chicago Press - via Internet Archive.. ISBN 0-226-32093-6
* Geoffrey Hodgson, (2007) "Meanings of Methodological Individualism", Journal of Economic Methodology 14(2), June, pp. 211–26.
* Harold Kincaid (2008), "Individualism versus Holism," The New Palgrave Dictionary of Economics, 2nd ed., New York: Palgrave Macmillan ISBN 978-0-333-78676-5 Abstract.
* Lukes, Steven (1968). "Methodological Individualism Reconsidered". British Journal of Sociology. 19 (2): 119–29\. doi:10.2307/588689. JSTOR 588689.
* Menger, Carl (1963). Schneider, Louis (ed.). Problems of Economics and Sociology [Investigations into the Method of the Social Sciences with Special Reference to Economics]. Translated by Nock, Francis J. Urbana: University of Illinois Press. p. 93 - via Internet Archive.
* Mises, Ludwig (1998). "The Principle of Methodological Individualism". Human Action: A Treatise on Economics - The Scholar's Edition. Ludwig von Mises Institute. pp. 41-43. ISBN 9780865976313.
* Popper, Karl R. (1960). The Poverty of Historicism (2nd ed.). London: Routledge & Kegan Paul - via Internet Archive.
* Schumpeter, Joseph (February 1909). "On the Concept of Social Value". Quarterly Journal of Economics. 23 (2): 213–32\. doi:10.2307/1882798. JSTOR 1882798.
* Lars Udéhn (2002), "The Changing Face of Methodological Individualism", Annual Review of Sociology, 28, pp. 479–507.

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