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]

In economics

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.


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 also


  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 reading

  • Kenneth J. Arrow (1994), "Methodological Individualism and Social Knowledge," American Economic Review, 84(2), pp. 1–9.
  • Kaushik Basu (2008), "Methodological Individualism," The New Palgrave Dictionary of Economics, 2nd Edition, New York : Palgrave Macmillan ISBN 978-0-333-78676-5 Abstract.
  • Brian Epstein (2009), "Ontological Individualism Reconsidered," Synthese 166(1), pp. 187–213.
  • Friedrich A. Hayek (1948), Individualism and Economic Order. University of Chicago Press. ISBN 0-226-32093-6
  • Geoffrey Hodgson, (2007) "Meanings of Methodological Individualism", Journal of Economic Methodology 14(2), June, pp. 211–226.
  • Harold Kincaid (2008), "Individualism versus Holism," The New Palgrave Dictionary of Economics, 2nd Edition, New York: Palgrave Macmillan ISBN 978-0-333-78676-5 Abstract.
  • Steven Lukes (1968), "Methodological Individualism Reconsidered," British Journal of Sociology 19, pp. 119–29.
  • Ludwig von Mises, "The Principle of Methodological Individualism", chapt. 2 in Human Action ISBN 9780865976313 Eprint.
  • Joseph Schumpeter (1909), "On the Concept of Social Value", Quarterly Journal of Economics, 23(2), February, pp. 213–32.
  • Lars Udéhn (2002), "The Changing Face of Methodological Individualism", Annual Review of Sociology, 28, pp. 479–507.
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