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Methodological individualism

Methodological individualism is the requirement that causal accounts of social phenomena explain how they result from the motivations and actions of individual agents, at least in principle.[1]

Contents

In economicsEdit

In neoclassical economics, people's behavior is explained in terms of rational choices as constrained by prices and incomes. The neoclassical economist accepts individuals' preferences as given. Gary Becker and George Stigler provide a forceful statement of this view:[2]

On the traditional view, an explanation of economic phenomena that reaches a difference in tastes between people or times is the terminus of the argument: the problem is abandoned at this point to whoever studies and explains tastes (psychologists? anthropologists? phrenologists? sociobiologists?). On our preferred interpretation, one never reaches this impasse: the economist continues to search for differences in prices or incomes to explain any differences or changes in behavior.

CriticismsEdit

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".[3]

The ironic thing about this criticism, however, is that such an implication is not at all rejected by those who support methodological individualism, and in fact methodological individualism is often used as a method of critiquing macroeconomic laws. This criticism cannot be effectively used against those who already reject much of mainstream macroeconomic law.[4]

See alsoEdit

ReferencesEdit

  1. ^ Methodological Individualism at the Stanford Encyclopedia of Philosophy.
  2. ^ Stigler, George; Gary Becker (Mar 1977). "De gustibus non est disputandum". American Economic Review. 67 (2): 76. JSTOR 1807222. 
  3. ^ Blaug, Mark (1992). The Methodology of Economics: Or, How Economists Explain. Cambridge University Press. pp. 45–46. ISBN 0-521-43678-8. 
  4. ^ Schumpeter, Joseph (1 March 1980). Methodological Individualism. Mises University. 

Further readingEdit