A Century of Methodological Individualism
Andy Denis City University London email@example.com Version 2: August 2010
Paper for the 42nd annual UK History of Economic Thought conference, Kingston University September 2010 Please do not disseminate further
Proposal 2009 marks the centenary of methodological individualism (MI). The phrase was first used in English in a 1909 paper by Joseph Schumpeter in the Quarterly Journal of Economics. Yet after 100 years there is considerable confusion as to what the phrase means. MI is often invoked as a fundamental description of the methodology both of neoclassical and Austrian economics, as well as of other approaches, from New Keynesianism to analytical Marxism. However, the methodologies of those to whom the theoretical practice of MI is ascribed differ profoundly on the status of the individual economic agent, some adopting a holistic and some a reductionist standpoint. My purpose is to uncover and evaluate some of the meanings of the phrase 'methodological individualism'. The first part considers the contributions of Joseph Schumpeter, who was the first to use the term, and of Carl Menger, considered by many to be the founder of MI. I find evide nce that both writers recommend a highly reductive, atomistic methodology. I then consider the contributions of von Mises and Hayek, concluding that Mises and Hayek based their methodological stance on fundamentally different ontologies, with von Mises building on the reductionism of previous writers such as Schumpeter and Menger, and Hayek, on the contrary, adopting a holistic ontology more in line with Adam Smith, Marx and Keynes. From an ontological perspective this seems to leave Hayek as something of an outlier in the Austrian tradition. The final part concludes, touching on some of the more recent literature, and suggesting that the analytical Marxism of Jon Elster and others has more in common, methodologically, with reductionist writers such as Bentham, Malthus after 1800, Ricardo, Menger, Schumpeter, Mises, Friedman and Lucas, than with more holistic writers such as Adam Smith, Dugald Stewart, Malthus before 1800, Marx, Keynes and Hayek.
Methodological Individualism, (1909-2009), Part 1
Part One: Schumpeter and Menger
1. Introduction February 2009 marked the centenary of the term methodological individualism (MI). The phrase was first used in English in a 1909 QJE paper by Joseph Schumpeter. MI is often invoked as a fundamental description of the methodology both of neoclassical and Austrian economics, as well as other approaches, from New Keynesianism to analytical Marxism. However, the methodologies of those to whom the theoretical practice of MI is ascribed vary widely and, indeed, differ profoundly on the status of the individual economic agent, some adopting a holistic and some a reductionist standpoint. Even after 100 years there is considerable confusion as to what the phrase means: Denis (2006b) shows with reference to a case study, a debate on the subject of MI between members of the History of Economics Societies email list, the hazard of mutual misunderstanding caused by lack of a shared understanding of the meaning of MI. The purpose of the research of which this paper is part is therefore to uncover, clarify and evaluate some of the meanings of the phrase methodological individualism (MI). This first paper considers the contributions of Joseph Schumpeter, who was the first to use the term, and of Carl Menger, considered by many to be the founder of MI. The approach adopted is to apply the intellectual apparatus developed in Denis (2004) to the arguments of these writers. This constitutes a test of that apparatus: is it able to clarify the standpoints to which it is applied? My interest in the topic is thus quite specific. In JEM 2004 I published a paper,³Two rhetorical strategies of laissez-faire´, setting out a new approach to economic methodology, an approach which emerged in my study of Smith, Hayek and Keynes (Denis, 2004). My 2006 paper on Malthus in History of Economic Ideas(Denis, 2006a) was an attempt to test this approach ± was the two-rhetorical-strategies approach able to enlighten us, to tell us more about Malthus? The answer, I felt, was encouraging. Application of the new approach revealed a fundamental shift in Malthus¶s methodology around the turn of the 19th century, between the First and Second Essays, a shift which had not previously been noticed in the literature. My interest here is the same: can this new approach enlighten us ± can it help us to understand the meanings of MI? This part of the paper briefly recapitulates the two-rhetorical-strategies approach, then applies this approach to the founding fathers of the literature on MI, Schumpeter and Menger. The conclusion reached is that both Schumpeter and Menger adopt a reductionist ontology in the sense of Denis (2004). Subsequent parts examine the contributions of Mises andHayek, and of the analytical Marxists. 2. Two rhetorical strategies of laissez-faire and interventionism1 This section sketches the view developed in Denis (2004), that proponents of conservative policy prescriptions, such as laissez-faire, are compelled, to the extent that they are confronted with ontological issues, to make a choice between reductionism and holism, and, if they choose the latter, have to attach to it an invisible hand mechanism to underpin the Page 2 of 39
Methodological Individualism, (1909-2009), Part 1
reductionist policy prescription of laissez-faire. In the research project summarised in Denis (2004) I have tried to show two things: Firstly, that in a world of partially overlapping and partially conflicting interests there is good reason to doubt that self-seeking agent behaviour at the micro-level will spontaneously lead to desirable social outcomes at the macro-level. The presence in such a world of externalities, such as the prisoners¶ dilemma, implies that Nash equilibria cannot be assumed to generate socially desirable outcomes, even in the minimal sense of Pareto efficiency. And, secondly, that we can usefully distinguish between two kinds of argument for laissez-faire. Reductionist laissez-faire writers argue or assume that important aspects of the society we live in can straightforwardly be reduced to the behaviour of individuals: individual utility maximisation leads to social welfare maximisation by a process of aggregation. Apparent macro-level irrationality, such as unemployment, can thus be reduced to micro-level decisions on the trade off between leisure and labour. This is the well-known stance of Friedman and Lucas. There are, however, more holistic economic proponents of laissez-faire, writers who also would like us to rely on the spontaneous interaction of self-seeking agents, but who recognise that social or collective rationality, or irrationality, may be emergent at the macro-level, and not reducible to the rationality, or otherwise, of substrate-level behaviour giving rise to it. In order then to present the macro-level outcomes as desirable, they have proposed various µinvisible hand¶ mechanisms which can, in their view, be relied upon to µeduce good from ill¶. Smith, I argued, defended the µsimple system of natural liberty¶ as giving the greatest scope to the unfolding of God¶s will and the working out of µnatural¶, providential processes, free of interference by µartificial¶ state intervention ± the expression not of divine order but of fallible human reason. Hayek, adopting a similar policy stance, based it in an evolutionary process in which those institutional forms best adapted to reconciling individual agents¶ interests would, he believed, spontaneously be selected for in the inter-group struggle for survival. Reductionism (often referred to in the literature as atomism) can be defined as the view that an entity at one level can be understood as a congeries, an aggregate of entities at a lower, substrate level, and that the properties and behaviour of higher level entities can be understood in terms of the properties and behaviour of its constituent lower level parts, taken in isolation. Holism (often referred to as organicism) is the opposite view, namely that phenomena at one level can be understood as emergent at that level, that a higher level entity can be understood as a product of the interrelationships between its component parts. The opposition between the two is often expressed in the literature by means of the formula that the whole is (reductionism), or is not (holism), equal to the sum of the parts. The contrast between the reductionist and holistic approaches can be illustrated by comparing the status of the individual in Friedman and in Hayek. Economics, Friedman says, is based in the study of ³a number of independent households, a collection of Robinson Crusoes´ (1962: 13). For Hayek, however, ³individuals are merely the foci in the network of relationships´ (1979: 59). So for one we arrive at the macro by aggregating large numbers of isolated micro elements, whereas for the other, it is the interconnections between the micro elements which are key. An alternative to both of these approaches is to combine Smith¶s and Hayek¶s recognition of the holistic nature of the world we live in with rejection of their postulate of an invisible hand. In this view, rational self-seeking behaviour on the part of individual agents is by no means either the necessary or the sufficient micro substrate for the desirability of social outcomes. According to Keynes, for example, uncoordinated egotistical activity in unregulated markets may lead to inefficient outcomes. The price system aggregates rational individual actions but the aggregate is an unintended outcome as far as those individuals are Page 3 of 39
Our interest is in the method. 1980). The main purpose of Schumpeter¶s paper is to investigate the meaning of the term µsocial value¶. but merely to show some of its implications: ³At the outset it is useful to emphasize the individualistic character of the methods of pure theory. not..
3. A year after publishing his book in German. the invisible hand is merely our own bleeding feet moving through pain and loss to an uncertain « destination´ (Keynes. that is.´ This is the first and only reference to MI in the paper. ³Methods of pure theory are individualistic´. ³Methodological Individualism´. ³On the concept of social value´. (1909-2009). There is no particular reason why unintended outcomes should necessarily be desirable and often they are not. Part 1
concerned. ³Meaning of the concept of social value´. ³Relation of the theory of prices to the concept of social value´ ± applies this methodology to the specific question in hand. just mentioned. sets the scene methodologically. is ³First of all. However. The term methodologischer Individualismus was introduced in Joseph Schumpeter¶s 1908 Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie. as the question of the meaning of social value ³is a purely methodological one´ (Schumpeter. The meanings of MI: the founding fathers (i) Schumpeter
It seems appropriate to start with the originator of the term MI. Almost every modern writer starts with wants and their satisfaction. if undesirable aggregate outcomes are to be avoided: ³there is no design but our own . 1909: 231). Chapter 6. Schumpeter published a paper in English in the Quarterly Journal of Economics. The first sentence of the final section..Methodological Individualism. and its application to the concept of social value is only of interest in so far as it illuminates thatmethodological approach. but society as a whole has to take responsibility for organising the aggregate outcome. A footnote states that the claim made here is more fully elaborated in Schumpeter¶s 1908 book in German. Without expressing Page 4 of 39
. he says: the point is not to comment on their methodology. given what everyone else is doing. ³Concept of social value opens up an optimistic view of society and its activities´. it is here claimed that the term µmethodological individualism¶ describes a mode of scientific procedure which naturally leads to no misconception of economic phenomena. and the first appearance of the term methodological individualism in English occurs at the end of this paper (Schumpeter. methodology is in Schumpeter¶s paper in the foreground throughout. Individuals take responsibility for maximising their own welfare. and Section IV. and takes utility more or less exclusively as the basis of his analysis. Section I. 1909: 213) 2. Section III. to make value judgements about it. The purpose of the present paper is to apply this structure of ideas to the case of methodological individualism. Schumpeter¶s analysis is presented as empirical and positive: this is what economists do. ³Summary´. 1981: 474). was translated into English and published as a pamphlet in 1980. and the rest of the paper ± Section II. with a Preface by Hayek (Schumpeter.
´ (Schumpeter. because we must know individual wealth.. to relate to individuals only « Marginal utilities do not depend on what society as such has. Since standard assumptions about those wants give us utility curves3.´ (Schumpeter. we cannot start from Society: ³It now becomes clear that the same reasoning cannot be directly applied to society as a whole. methodological individualism was no universal injunction or methodological principle from which we depart at our peril. 231).. we have to start from the individual: first. how the social process of distribution will turn out. and. For only individuals can feel wants.. and therefore (iii) utility curves are only meaningful for independent individuals. so far. Instead for him it was an attempt to demarcate the µpure theory¶ of economics from other approaches and methods of scientific inquiry « Schumpeter upheld methodological individualism as Page 5 of 39
. therefore. utility curves and the quantities of goods together determine marginal utilities for each individual. I wish to point out that « it unavoidably implies considering individuals as independent units or agencies. We may take it. but also for the classical system. tell us much else. We gather from the theory of prices certain laws concerning the interaction of the several kinds of income and the general interdependence between the prices and the quantities of all commodities. ´ Two points are worthy of note here.. (ii) only individuals can feel wants. utility curves like those of individuals . Society as such. Hodgson (2007: 212-3) suggests that ³for Schumpeter. Schumpeter summarises how economics starts from individualist assumptions and. and it seems to be derived from individualistic assumptions by means of an individualistic reasoning. having no brain or nerves in a physical sense. and. as far as it goes. above all. 1909: 214-5). the latter ³therefore. (1909-2009). therefore. and prices. finally. as far as it goes. cannot feel wants and has not. fairly represents facts´ (Schumpeter. 1909: 214). ³individuals as independent units´. 1909: 215. which are ³the basis and the chief instruments of theoretical reasoning. and they seem. but on what individual members have . and. Further. in nuce. We should note that though Schumpeter says here that he expresses no opinion about the procedure. This. 1909: 215). So the argument is: (i) most economists start with wants and analyse utility via utility curves. fairly represents facts´ and that it ³naturally leads to no misconception´ of economic phenomena (Schumpeter. We could easily show that this holds true not only for modern theories. Firstly. have a clear meaning only for individuals´. Part 1
any opinion about this modus procedendi. that in fact MI is to be endorsed. and. By contrast. via individualist reasoning. he does say elsewhere that it is ³free from inherent faults.Methodological Individualism. because we must know individual wants. 1980). and this is much more explicit in the book (Schumpeter. builds up to social phenomena as follows: ³Marginal utilities determine prices and the demand and the supply of each commodity. is the whole of pure theory in its narrowest sense. secondly. It is submitted that this treatment of economic problems is free from inherent faults.
of course. according to Schumpeter. Part 1
neither a universal principle of social scientific research nor an obligatory rule for all social scientists. it is a demarcation criterion combined with a very clear injunction as to what methods are applicable in social science. 1986: 888-9). (1909-2009). The violation of SI which his standpoint admits is a very precise one. it remains permissible ³for the special purposes of a particular set of investigations « to start from the given behaviour of individuals without going into the factors that formed this behaviour « In this case we speak of Methodological Individualism´ (Schumpeter. not because there is anything wrong with the methodological approach it describes. we need also to look at Schumpeter (1986) to clarify his stance. There Schumpeter identifies a Sociological Individualism. The contrast which Schumpeter draws here between MI and µSociological individualism¶ (SI) is as follows. by which ³we mean the view. MI means starting with the behaviour of individuals and treating that behaviour as primitive and given.Methodological Individualism. All utilities are changed when he lives in society. 1909: 215. that the self-governing individual constitutes the ultimate unit of the social sciences and that all social phenomena resolve themselves into decisions and actions of individuals that need not or cannot be further analyzed in terms of superindividual factors´ (Schumpeter. 231). In other words. Before proceeding. from what Schumpeter was saying in 1909. because of the possibility of barter which then arises « Our individual will now put a new value on his goods because of what he can get for them in the market « This fact may be said to show the direct social Page 6 of 39
. Nevertheless. disciplines which may wish to further analyze the decisions and actions of individuals. As he has already explained Schumpeter (1909). this is a requirement for economic science: it is a procedure which is ³free from inherent faults´. of the decisions and actions of individuals in terms of superindividual factors. namely the further analysis. ³fairly represents facts´ and ³naturally leads to no misconception´. He has already said this in the QJE paper: ³it is only as long as an individual is isolated that the total as well as the marginal utilities of all commodities he may possess depend exclusively on him. the reader is invited to pause and consider: is this description consistent with what Schumpeter wrote in 1909? And is it consistent with the methodology of neoclassical economists such as Friedman and Lucas? On the first question. It is surprising and instructive to see what Schumpeter says next in History of Economic Analysis: ³This view is. by disciplines other than economics. but ± this is not be taken as endorsement of methods other than MI for the understanding of social phenomena. but only sort of4. and ³we have t start o from the individual « the same reasoning cannot be applied directly to society´ (Schumpeter. it is difficult to discern a difference here. however. As Hodgson points out. 1986: 889). widely held in the seventeenth and eighteenth centuries. Preferences may be themselves socially determined. untenable so far as it implies a theory of the social process´ (Schumpeter. so far as economics is concerned ± that methodological approach simply is MI ± but because it makes MI a requirement for other disciplines.´ Well. So Hodgson is correct that Schumpeter is proposing ³a division of labour between different social disciplines´ (Schumpeter 1986: 889). SI is µuntenable¶. 1986: 888). this is µsort of¶ true.
designate certain categories of human interaction. produced. such as psychology. and paid for because individuals want them. such concepts as µstate¶. and because the fact of a market places a new value on items which individuals could conceivably sell. In Weber¶s own words: ³Interpretative sociology considers the individual [Einzelindividuum] and his actions as the basic unit. from which to deduce our theorems. A footnote to this account considers the relation between Schumpeter and his teacher. but not a methodological imperative. ³Weber¶s « point of departure and the ultimate unit of his analysis is the individual person´ (Gerth & Wright Mills. and that their results. and the like. writes that ³the theoretical elaboration of this doctrine [sc the doctrine of methodological individualism] is due to Weber. within the range of problems that primarily interested them. for sociology.´ So a clear methodological approach emerges. To study the social consequences of these individual preferences. Part 1
influence on each individual¶s utility curves. individuals are not isolated and their utilities depend upon social influences including the value they place on commodities due to the psychological forces of fashion and herd behaviour. that is within the range of the problems that come within the logic of economic mechanisms. µfeudalism¶. But in economics. at once necessary and sufficient. 2009: 2). were not substantially impaired by the limitations that are inherent in this approach´ (Schumpeter 1986: 889). in the online Stanford Encyclopedia of Philosophy. Secondly « Everyone living in a community will more or less look for guidance to what other people do « The phenomenon of fashion affords us an obvious verification of this « We must look at individual demand curves and marginal utilities as the data of purely economic problems « Social influences form them. the individual is « the sole carrier of meaningful conduct´ (Weber. as its µatom¶ « In this approach. ³In general. by using the µindividualistic methods¶ which Schumpeter describes. but for us they are data. 1970: 55). so far as they went.Methodological Individualism. Every demand on the market is therefore an individualistic one´ (Schumpeter. Indeed. These influences on individual decisions and behaviour are the domain of other sciences. we are able to put aside questions as to the reason for this or that individual preference. the procedure of the theorists of that period [sc 1870-1914] may be defended as methodological individualism. µassociation¶. This subsection has tried to show the true and the false in Hodgson¶s reading of Schumpeter as proposing MI as a µ(sub)disciplinary demarcation device¶. one which is entirely consistent with that of Friedman and Lucas. Joseph Heath. 1909: 216). Hence it is the task of Page 7 of 39
. (1909-2009). 1922: 132). we assume that the isolated individual is indeed the atom of society. and one which is reductionist in the sense discussed above in Section 2 of this paper. Hence Schumpeter¶s verdict on the neoclassical writers of the marginal revolution: ³it may be shown that. and ask instead only about the consequences of such preferences: ³For theory it is irrelevant why people demand certain goods: the only important point is that all things are demanded. and Schumpeter uses the term as a way of referring to the Weberian view´ ( Heath. Max Weber.
to the actions of participating individual men. He speaks of ³the hatred of atomism in political economy´ which. and for practical purposes the two can be separated. ³has no specific propositions and no prerequisites.´ (1980: 4) This is a critical distinction ± although. rather the real question is an epistemological one. Keynes and Hayek. stems from opposition to political individualism (1980: 3). it seems highly likely that what Weber here describes is exactly the µSociological Individualism¶ that Schumpeter rejects in History of Economic Analysis. there is the concept of economy as a µresult of economic actions and the existence of individuals¶. Turning now to Schumpeter (1980). and Mises. characterises Smith.Methodological Individualism. indeed atomism is most frequently disputed by the opponents of the theory´ (1980: 2). Dugald Stewart and the early Malthus. as well as Marx. and ontology discarded: Page 8 of 39
. Given the close connection between Schumpeter and Weber.´ (Weber. 1922: 142). without exception. but immediately spoils things a little by denying that this ontological question is of any relevance. Schumpeter says. and of the analytical Marxists such as Elster and Roemer. he says. the contrast he has in mind is with political individualism. This question is purely methodological and involves no important principle´ (1980: 3). my thesis is that the holistic. of Friedman and Lucas. (1909-2009). while the reductionistic approach. seeing macro level entities as an organism or a system. Weber. Part 1
sociology to reduce these concepts to µunderstandable¶ actions. as we will see it does not cut the way Schumpeter expects it to. of Bentham and Ricardo. Schumpeter identifies this fundamental division in the methodology of economics. and an instance of this is his use of the term µatomism¶ throughout as a synonym for MI: ³in this day and age. µprerequisites¶ and µimportant principles¶. it just means that i[t] bases certain economic processes on the actions of individuals. the validity of the individualistic concept is strongly queried. which starts from the proposition or principle that freedom contributes to the well-being of individuals and society (1980: 3). of Schumpeter. it should leave open the possibility of other disciplines exploring the social influences on the preferences and hence on the decisions and µunderstandable¶ actions of participating individual men. is characteristic of Malthus from the Second Essay of 1803 onwards. His criticism of it being that. MI. or ³organicist´ approach. that is. One the one hand there is the concept of the national economy as an µorganism¶ and. the standpoint which reduces social entities to the µeconomic actions and existence of individuals¶. Schumpeter is explicit here that the underlying issue concerns the adoption of a holistic or reductionist ontology: ³If we wanted to study « the nature of economics we would have to comment on the two concepts which represent two completely opposite points of view in this field. When he says that MI lacks µspecific propositions¶. the first point to note is that Schumpeter appears to take a stronger line here than he does in the QJE paper the following year. nor as subsequent readers have understood it to do. Therefore the question really is: is it practical to use the individual as a basis « or would it be better « to use society as a basis. while the mode of procedure Weber describes is unexceptionable and indeed necessary in economics. In brief. on the other hand.
Menger is certainly extremely important for the debate on MI. that Schumpeter feels a need for space for other disciplines to explain individual preferences. I conclude therefore that the version of MI which we find at the beginning of the twentieth century in the work of Schumpeter and Weber. do not exist´ (1980: 6). however. such as sociology. and by considering the behaviours which such isolated individual atoms will engage in. is to be understood in the sense already discussed that other disciplines may wish to investigate the social origins of the preferences of individuals. Mises adopts the same line. if we go beyond pure theory. that ontology is a waste of time and ontological questions both unanswerable and unimportant. Schumpeter claims that MI is desirable because it is what computer scientists would call a µquick and dirty¶ way to obtain desirable results: ³All we are saying is that the individualistic concept leads to quick. There only remains the footnote. we turn to Menger. As we will see later.
Page 9 of 39
. even if he did not himself use the term. therefore. For instance in organisation and even more in sociology. It is a theme of my approach that one cannot so easily dispense with ontological questions. Part 1
³What counts is not how these things really are. consists of the reductionist claim that we can start out with individuals conceived of in isolation.Methodological Individualism. and we believe that any social-orientated concept within the pure theory would not give us any greater advantages and is therefore unnecessary. and indeed relies upon and expresses what I have called a reductionist ontological orientation. in pursuit of their own interests. On the contrary. How we know the world is not to be divorced so easily from how the world is. (1909-2009). expedient and fairly acceptable results. (ii) Menger
From a consideration of Schumpeter. but in view of its methodological character this is not of any consequence « Principal5objections against µatomism¶ as we represent it. Continuing the theme that ontology is irrelevant. The apparent concession that ³atomism would not get us far´ in other disciplines. we may arrive at the social phenomena we wish to explain. seen by many as the founder of the approach designated MI. This does not therefore in any way indicate any deviation from a reductionist ontology of economics. including the social influences thereon. the originator of the term methodological individualism. things are different. atomism would not get us very far. but how we put them into a model or pattern to serve our purpose as best as possible « This proposition is as paradoxical as it is fundamental: is the nature of a political economy supposed to be of no significance to the political economist? We not only believe that this is a valid question but we can go further by saying that even the nature of economics is not important to us´ (1980: 5). For Udehn. on what exactly Menger¶s role was. everything Schumpeter says here is laden with ontological implications. opinions vary. but for pure economic theory this is unnecessary. However.
³It is worth emphasising the difference between methodological individualism. 2001: 94) For Heath. 2000: 111-121). and these in turn are conditioned by the combination of the parts to form a Page 10 of 39
. Sciabarra quotes Menger on the organic metaphor in social science: ³The normal function of organisms is conditioned by the functions of their parts (organs). can never µdeny the unity of organisms¶ « His micro-level analysis is not opposed to the organic orientation´ (Sciabarra. it is Schumpeterian MI plus the claim that individual tastes and preferences may themselves be analysed on the basis of the isolated individual. Part 1
³according to Menger « The ultimate explanation of all economic phenomena « is in terms of the behaviour of economising individuals. then deduce what will happen when a group of individuals.Methodological Individualism. discusses Menger in a section of Chapter 3. 2009: 3-4). entitled µBeyond the atom: The organic legacy of classical liberalism¶ (Sciabarra. After quoting Barry Smith¶s claim that ³Marx and Menger share an Aristotelian antipathy to atomism´ (Sciabarra. So is Menger fairly to be associated with either of these reductionist versions of MI? Setting out the case against this reading. Chris Matthew Sciabarra. represented by Robinson Crusoe alone on his island « This is Menger¶s µatomistic¶ method which would later become known as µmethodological individualism¶ (Udehn. It is clear from Heath¶s account that what is here designated µatomism¶ is a close parallel of µsociological individualism¶ in Schumpeter¶s account. (1909-2009). than the atomism that Schumpeter defends in his 1908 book. 2000: 121). were pure atomists. and thus remains open to the possibility that human psychology may have an irreducibly social dimension « Most theorists of the Austrian School. Menger seeks an integration of micro and macro approaches. ³After Hegel´. That is.´ (Heath. The former. Methodological individualism. in Weber¶s sense. enter into interaction with one another. on the other hand. or parts´ (Udehn. Many writers claim to find the origins of methodological individualism amongst the economists of the Austrian School (especially Carl Menger) « The atomistic view is based upon the suggestion that it is possible to develop a complete characterisation of individual psychology that is fully pre-social. however. ³To conclude: Carl Menger may be considered the founder of µmethodological individualism¶. Sciabarra writes: ³In praising the µorganic orientation of social research¶. disparagingly called µatomistic¶. in his 2000 book Total Freedom: toward a dialectical libertarianism. does not involve a commitment to any particular claim about the content of the intentional states that motivate individuals. The starting-point of Menger¶s analysis is the isolated individual. more strongly reductionist. and the older traditions of atomism (or unqualified individualism) in the social sciences. and which he identifies with MI. but « he did not use this term himself « he called it µatomism¶ which means that complex phenomena should be explained in terms of their simplest elements. 2000: 117). so characterized. Finally. however. 2001: 88). We should note that this atomism is thus more demanding. like Carl Menger and Ludwig von Mises.
e.. Menger starts his discussion of organicism with the statement that ³There exists a certain similarity between natural organismsand a series of structures of social life. the notionof following directions of research in the realm of social phenomenasimilar to those followed in the realm of Page 11 of 39
. or as structures analogous to them. a functionality which is not. If this analogy holds. Menger deals explicitly with this question in his 1883 work Investigations Into the Method of the Social Sciences(Untersuchungenüber die MethodederSocialwissenschaften und derPolitischenOekonomieinsbesondere). the biological point ofview in research confronted the atomistic´ (Menger. One needs.´ After some discussion of this statement he moves on to society: ³We can make an observation similar in many respects in reference to aseries of social phenomena in general and human economy in particular´ (Menger. then it has far-reaching consequences for the methodology of economics: ³Now if social phenomena and natural organisms exhibit analogies withrespect to their nature. but a list of arguments that he proposes to address. economy. To evaluate Sciabarra¶s reading. as unintended resultsof historical development. an institution which « is the unintended product of historical development´ (Menger. or by the normal function of the other organs « Organisms exhibit a purposefulness of their parts in respect to the function of the whole unit. 1985: 130). we need to turn to what Menger himself wrote. their origin. We should start. a purposefulness which is not the result of human calculation. Menger writes. Part 1
higher unit. 1985: 129-30). however. (1909-2009).. when closelyobserved.Methodological Individualism. and their function.but of a natural process. by noting that the passage Sciabarra cites is a list of contents of Book 3 Chapter 1 ± not a list of statements that Menger endorses. Similarly we can observe in numerous socialinstitutions a strikingly apparent functionality with respect to the whole « They. ³Natural organisms almost without exception exhibit. Indeed. both in respect to their functionand to their origin. It is therefore invalid to cite this passage in support of Menger¶s ³use of organic analogies´ or to underpin the contention that Menger ³relies heavily on the organic metaphor´. as Sciabarra does (2000: 120). too. in particular Book Three. 1985: 24). both in respect to their function and to their origin´ (Menger. it is at once clearthat this fact cannot remain without influence on the method of researchin the field of the social sciences in general and economics in particular « if state.g. cited in Sciabarra. 1985: 129-159). It seems clear from this that Menger cannot be regarded as an atomist in Heath¶s meaning of the term. the result of human calculation. etc. only to think of the phenomenonof money. 2000: 120). society. however « There exists a certain similarity between natural organisms and a series of structures of social life. however. areconceived of as organisms. µThe Organic Understanding of Social Phenomena¶ (Menger. present themselves tous rather as µnatural¶ products (in a certain sense). ³The conception of the national economyas an organism and of its laws as analogous to those of anatomy andphysiology confronted the physical conception. however. the fundamental opposition between the µatomic¶ and the µorganic¶ standpoints is set out early in the Preface: in the µpostclassical period¶. a really admirable functionality of all parts with respect to thewhole.
organic nature readily suggestsitself.Methodological Individualism. All along. Page 12 of 39
. economy. firstly. and. that the analogy between society and natural organisms is only very partial. but setting out the ideas he is going to criticise. to the conception of an anatomy and physiology of µsocial organisms¶of state. indeed. of the mechanical play of natura l forces. that it is superficial. Menger is not articulating his own standpoint. But this is notthe consequence of a natural µorganic¶ process. it would seem. too. only in certain respects. 1985: 133). and even here only offer an incomplete explanation: ³that part of the social structures in reference to which the analogywith natural organisms comes in question at all exhibits this analogy. but upon the vague feeling of a certain similarityof the function of natural organisms and that of a part of social structures. They are the result of purelycausal processes. etc´ (Menger. rather. but the result of humancalculation « Thus wecannot properly speak of an µorganic¶ nature or origin of these socialphenomena´ (Menger. The analogy is superficial because it ³is by no meansone which is based upon a full insight into the nature of the phenomenaunder discussion here. usually exhibita purposefulness of their parts with respect to the whole. However. on the contrary. in part really asextremely superficial and inexact´ (Menger. the very next lines tell us that Menger¶s purpose is quite otherwise: ³In the preceding discussion we have presented the basic ideas of thetheory of the analogy of social phenomena and natural organisms « we do. Even in these respects it only exhibitsan analogy which must be designated in part as vague. The so-calledsocial organisms. 1985: 130-131). 1985: 134). So for Menger organic notions offer an explanation of only some but not other social phenomena. Against this view he makes two points.It is clear that an analogy of this kind cannot be a satisfactory basis foran orientation of research striving for the deepest understanding of socialphenomena « Natural organisms are composed of elements which serve the functionof the unit in a thoroughly mechanical way. secondly. believe that inthe foregoing we have presented the nucleus of the above theory in theform and in the sense in which it is expounded by the most careful andmost reflective writers on this subject´ (Menger. Sciabarra¶s reading holds up. 1985: 132). They are. simply cannot be viewed and interpretedas the product of purely mechanical force effects.the result of human efforts. feeling. acting humanbeings´ (Menger. 1985: 131). (1909-2009). society. The above analogy leads to the idea of theoretical social sciencesanalogous to those which are the result of theoretical research in the realmof the physico-organic world.therefore. The analogy between social and biological entities is partial because ³A large number of social structures are not the result of a naturalprocess « They are the result ofa purposeful activity of humans « Social phenomena of this type. Thus far. the efforts of thinking.
Yet I should still not like in any way to denythe value of certain analogies between natural organisms and social phenomenafor certain purposes of presentation. and the ³exact´ or ³atomistic´ orientation. whereas empirical-realistic economics has to make us aware of the regularities in the succession and coexistence of the real phenomena of human economy´ (Menger. Without being diverted into a potentially lengthy discussion of the adequacy of this dualistic account of scientific knowledge. 1985: 137) So the presentation of social entities as organic may conceivably be a useful figure of speech. superficial and inexact in social science. we have to understand his view that there are ³two basic orientations of theoretical research´. is an unscientific aberration. the ³realistic-empirical orientation´. The phrase µin their isolation¶ suggests a reductionistic approach. how we are to understand those social phenomena which µarise behind men¶s backs¶. in their isolation from other factors´ (Menger. thought of in their isolation´ (Menger. Analogy in the above sense. though they may have purely presentational advantages: ³there seems to be no doubt that play with analogies between natural organisms and social phenomena « is a methodological procedure which scarcely deserves a serious refutation. Thus. To see how Menger addresses this. but should never be taken literally. scientific research simply cannot be based on them. is wholly consistent with reductionism. Part 1
Because organic notions are so limited. 1985: 72-73).¶that is. and this is no accident: ³The nature of this exact orientation of theoretical research in the realmof ethical phenomena « consists in the fact that we reduce humanphenomena to their most original and simplest constitutive factors « and « try to investigate the laws by which more complicated human phenomenaare formed from those simplest elements. ³The function of the exact orientation oftheoretical research is to apprise us of the laws by which not real life inits totality but the more complicated phenomena of human economy aredeveloped « from these most elementaryfactors in human economy. 1985: 62). for all Menger¶s assertions that the two are complementary in theoretical science. 1985: 63). The relation between the two orientations is that ³exact economics by nature has to make us aware of the laws holding for an analytically or abstractly conceived economic world. an analogy or metaphor. as the unintended consequences of the behaviour of many humans.Methodological Individualism. 1985: 56). as I have defined it: the reduction of entities at one level to an aggregate of lower level entities taken in isolation. As means for presentationit still may prove useful for certain purposes´ (Menger.as method of research. it is nevertheless clear that for Menger only the atomistic method can generate theoretical Page 13 of 39
. (1909-2009). it is very clear that the ³exact´ orientation which Menger describes. in thetotality and the whole complexity of their nature´ (Menger. The former sets out ³to investigate the types and typical relationships of phenomena as thesepresent themselves to us in their µfull empirical reality. In contrast. This leaves open the question.
but description nonetheless. Part 1
knowledge. it by no means follows that the exact orientation of research isin general inadequate for the realm of phenomena discussed here « The actual consequenceof the above circumstance for theoretical research in the realm of organismsis that it establishes a number of problems for exact research. such as money. while the empirical-realist method is little more than description. So the scientific response to the existence of apparently organic entities is ³exact´ or ³atomistic´ analysis.Methodological Individualism. stylized description perhaps. It is here that we meet a noteworthy. 1985: 143). that is. 1985: 146). A reductionist ontology creates a strong default policy prescription of laissez-faire. The exact or atomistic analysis of the unintended social consequences of individual actions ± money. if anything.´ (Menger. (1909-2009). such as employment. Indeed. An analysis drawing on a different ontology might ask in which case to what extent the institution in question served society. Any apparent macro pathology. Just so in the case of Menger. This is a clear statement of reductionism in the sense set out in Denis (2004). markets. or they are the consequence of micro-level errors ± pricing oneself out of a job ± which cannot be rectified by collective action. and what. thought of in their isolation´. a reconstruction on the basis of the ³simplest elements. 1985: 133). and so on ± shows that they result from deliberate self-seeking behaviour of individuals. then individual rationality implies a socially rational outcome. law. language. These problemsare the exact interpretation of the nature and origin of organisms (thoughtof as units) and the exact interpretation of their functions « This problem « is undertaken by the exact orientation of research in the realm of social phenomena also. religion and the state (Menger. and especially in the realm of those which are presented to us as the unintended product of historical development. We are now in a position to understand Menger¶s approach to the understanding of social entities embodying the unintended consequences of individual actions. in which case the apparent unemployment can be safely regarded as voluntary. religion. problem of the social sciences: Page 14 of 39
. With respect to language. ³We are confronted here with the appearance of social institutions which to a high degree serve the welfareof society. markets and money. markets. If the macro is just the aggregate of isolated micro behaviours. can be ascribed to micro level decisions ± which are either rational. andthe solution of these cannot be avoided by exact research. can therefore simply be assumed to be socially desirable. But for Menger. perhaps the most noteworthy. could be done to improve it. they are not infrequently of vital significance for the latter and yet are not the result of communal social activity. His response is the same for natural as for social science: to attempt to understand entities as organic is to remain at the descriptive level and to fail to provide true theoretical insight: ³From the circumstance that organisms present themselves to us in eachcase as units and their functions as vital manifestations of them in theirtotality. These ³social phenomena come about as the unintended result of individual human efforts (pursuing individual interests) without a common will directed toward their establishment´ (Menger. language. a species of leisure. In Denis (2004) I drew attention to the Panglossian consequences of the adoption of a reductionistic ontology.
Hayek reviews the object and method of the social sciences: Page 15 of 39
. Studies on the Abuse of Reason (Hayek.
Part Two: Mises and Hayek
The second part of the present paper considers the contributions of von Mises and Hayek. such as Bentham and Ricardo. Udehn¶s reading that ³The starting-point of Menger¶s analysis is the isolated individual. adopting a holistic ontology more in line with Adam Smith. From an ontological perspective this leaves Hayek as something of an outlier in the Austrian tradition. (1909-2009). represented by Robinson Crusoe alone on his island´ does seem to be supported by the passages from Menger that I have cited above. of The Counter-Revolution of Science. 1985: 146) In conclusion to this sub-section. ³Scientism and the Study of Society´. later published as the first part. Conclusion This part of the paper constitutes the first part of an examination of the topic of methodological individualism. on the contrary. with whom they might have been expected to share an approach. in particular. 1979). and reductionism ± the standpoint that phenomena are to be understood as congeries of substrate entities taken in isolation. suggests that both clearly operated within the reductionist paradigm.
4. An examination of the writings of two foundational figures in MI. and Hayek. Schumpeter and Menger. 2009) is his wartime series of articles in Economica on ³Scientism and the Study of Man´. with von Mises building on the reductionism of previous writers such as Schumpeter and Menger.Methodological Individualism. If correct. and Friedman and Lucas. and of the analytical Marxists. The conclusion drawn is that Mises and Hayek based their methodological stance on fundamentally different ontologies. 2 Hayek on methodological individualism
The key text for Hayek¶s views on MI (Heath. this implies that there is a fundamental methodological commonality between both writers and others adopting a reductionist standpoint. At the beginning of the chapter on ³The Subjective Character of the Data of the Social Sciences´ (Chapter 3). The sequel will examine the contributions of Mises and Hayek. Marx and Keynes. Part 1
³How can it be that institutions which serve the common welfare and are extremely significant for its development come into being without a common willdirected toward establishing them?´ (Menger. therefore. we can see that Sciabarra¶s attempt to present Menger as holding an organic view of social institutions seems not to work. On the other hand it does imply a surprising and profound difference in methodology between them and those writers. The study has consisted of an application of the ideas set out in Denis (2004). the concepts of holism ± the standpoint that phenomena may be understood as emergent and based in the interrelationships between substrate entities. such as Smith and Hayek.
a µchoice¶ (Denis. 1979: 59). and their aim is to explain the unintended or undesigned results of the actions of many men (Hayek 1979: 41). For Hayek. Hayek goes on to say that ³it is the various attitudes of the individuals towards each other « which form the recurrent. for example. epiphenomena. This does not mean how two (or more) people feel about each other. This notion of a social structure emerging from the interrelationships of the substrate level entities is what I have defined as holism. 2004: 344-346). if a man is a policeman. for example. For Friedman. then they too are intended. a collection of Robinson Crusoes´ (1962: 13). It is these ³attitudes of the individuals towards each other´ that constitute ³a constant structural element which can be separated and studied in isolation´. he will. but with the relations between men and things or the relations between man and man. the object of social science is to explain different social structures in terms of the recurrent elements of which they are built up (Hayek. (1909-2009). Part 1
They [sc social sciences] deal not with the relations between things. The overall order of actions in a group is « more than the totality of regularities observable in the actions of the individuals and cannot be wholly reduced to them « a whole is more than the mere sum of its parts but presupposes also that these elements are related to each other in a particular manner (1967: 70).Methodological Individualism. Returning to Chapter 3 of The Counter-Revolution of Science. In this paradigm the focus on unintended consequences is lost: on the contrary. In Lucas. economics is based in the study of ³a number of independent households. 1979: 58). as we can see when Hayek addresses the question of the relationship between wholes and parts: That a particular order of events or objects is something different from all the individual events taken separately is the significant fact behind the [phrase of] « µthe whole being greater than the mere sum of its parts¶ « [I]t is only when we understand how the elements are related to each other that the talk about the whole being more than the parts becomes more than an empty phrase (1952: 47). unemployment is treated as µan individual problem¶ and as therefore necessarily µvoluntary¶. So Hayek identifies the µnetwork of relationships¶ with the µattitudes of the individuals towards each other¶. if social outcomes are merely the aggregate of many ± presumably intended ± individual actions. Page 16 of 39
. The notion of unintended consequences is typically reserved for the discussion of market imperfections and state interventions in the economy which generate perverse incentive structures. having just said that individuals are focuses in networks of relationships. and these recurrent elements are said to be the social relations between agents: ³If the social structure can remain the same although different individuals succeed each other at particular points. This standpoint is echoed throughout Hayek¶s work. They are concerned with man¶s actions. but the beliefs about each other that they entertain and which drive their behaviour. This emphasis on social relationships and unintended consequences already expresses a holism very different from the reductionism of the neoclassical school. In this view we understand the economy by aggregating the isolated actions of the many Robinsons on their islands. Any interrelationships between them are irrelevant. recognizable and familiar elements of the structure´ (Hayek. qua policeman. this is« because they succeed each other in particular relations « The individuals are merely the foci in the network of relationships´ (58-59). For example.
Chapter 4. and as ideas about that object´ (61). He has already in the previous chapter identified these facts. as part of their object. The individual here is a vehicle of social relations: what is of interest about an individual is not that he is Fred or Susan. It is therefore the case that ideas enter into social sciences ³in two capacities. (1909-2009). and what we reconstruct by ³the following up of the implications´ of those individual decisions.Methodological Individualism. but are able to infer motivation on the basis of the humanity shared by agent and observer. the unintended pattern of social relations. thus enters into the account in two ways ± as a determinant of the individual actions. or prefers jam or peanut butter. The latter. according to Hayek. and the essentially social notion of the individual in Hayek. these data. 2979: 61-76). We need to distinguish between ³the views held by the people which are our object of study´ and those people¶s ³ideas about the undesigned results of their actions ± popular ideas about the various social structures or formations´. Hayek starts by noting that ³in the social sciences our data or µfacts¶ are themselves ideas or concepts´. This contrast ± ³between ideas which being held by the people become the causes of a social phenomenon and the ideas which people form about that phenomenon´ (62-63) ± turns out to be essential for Hayek¶s definition of MI:
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. Part 1
entertain ³certain attitudes toward his fellow man´. with the network of social relations. Hayek argues that this is perfectly possible. because we can empathise with the agents¶ beliefs. is to identify and ³understand « the unintended and often uncomprehended results of the separate yet interrelated actions of men in society « to reconstruct these different patterns of social relations´ (59). We do not simply observe and obtain rules of social behaviour via induction. but which are interrelated because what the individual believes will be the consequence of his actions depends on his place and rôle in the network of social relations. This is not to say that that the second class of ideas cannot itself motivate behaviour and constitute the data for a scienc and e. We should note here the contrast between the essentially asocial notion of the individual as Robinson Crusoe. In this µreconstruction¶ we start with the µseparate yet interrelated¶ decisions made by individuals ± decisions which are made separately by each person on the basis of his own beliefs and his own goals. It is both what we start with. entitled ³The Individualistic and µCompositive¶ Method of Social Science´ (Hayek. Identifying these µconstant structural elements¶ is possible. Substituting another person at this nodal point in the social network will ³preserve a constant structural element´. as it were. The objective. We can intuit the meaning these actions have for the participants. and it is this structural element which is the proper object of study of social science. while himself being ³the object of certain attitudes of his fellow men which are relavant to his function as policeman´ (59) ± because that is what it means to be a policeman. motivations and actions. on the basis of this Verstehen. therefore. the ideas which people hold which motivate them to behave in certain ways are the object of study of the social science: the latter are the views which social science attempts to refine or replace with scientific views of the unintended social structures. Only the former. characterising such neoclassical writers as Friedman and Lucas. and as a result of the actions taken by the many. but that he plays a rôle dictated by the totality of social relations focused in him. is as one might expect key for our understanding of Hayek¶s version of MI.
is to be contrasted with µscientism¶. These principles can. µthe speculative concepts of popular usage¶. then the question arises. And. it is obscure in Hayek¶s account how we are to µreconstruct¶ social wholes. again. not individual persons. and it is this that makes social science methodologically individualist. but they then also retrace their steps. but the beliefs which motivate them. starting with the simplest elements. these popular generalisations are µcollectives¶ and scientism is to be identified with µcollectivist prejudice¶ (65). What Hayek does not say explicitly here is that if we follow this logic faithfully. working those simple elements up into mental models of the given. not a consequence of it. what is it which is individualist about this method? To answer this. it is not given to anyone what the relevant relations are. Hayek changes tack. what beliefs and what incentive structure they present to the individual. ³The physical sciences necessarily begin with the complex phenomena of nature and work backward to infer the elements from which they are composed « the method of the natural sciences is in this sense. nitrogen. are the simple parts: what we have to do is to combine them in thought to discover the µprinciples of coherence¶ of the µwholes¶ which we cannot observe. This path of the mind from the simple to the complex is µcompositive¶ or synthetic. but as vehicles of specific socially inculcated beliefs. MI. Moreover. And the latter are a product of the constellation of social relations within which the individual person is embedded. Natural science is as synthetic as analytic and generally analysis and synthesis are inseparably bound together. etc. as Hayek himself has shown in the previous chapter. by comparison with empirical observation. as I have indicated. one contains. (1909-2009). that the simple elements of social science are. by work. Since social relations are intangible. Part 1
that he [sc the social scientist] systematically starts from the concepts which guide individuals in their actions and not from the results of their theorizing about their actions. and the unintended consequences of the resulting individual actions constitute the social structure. But when we recall that these individuals are not considered qua individuals. is the characteristic feature of « methodological individualism (64). Since this is popular speculation about patterns of social relations. Our understanding of an amoeba is not complete when we can say how much carbon. secondly. about social wholes. These can only be discovered by analysis.Methodological Individualism. The method of the social sciences is said to be µindividualist¶ because it µstarts¶ with individuals. however. in a word. which starts with µpopular generalizations¶. by analysis. in order to µdiscover¶ µthe principles of structural coherence¶ of those social wholes. as nodes in Page 18 of 39
. firstly. I am not at this point primarily interested in the adequacy of this characterisation of social and natural science. then natural scientists must necessarily be methodological holists. Since. by our Verstehen of the knowledge and motives of individuals. We only need to note here. that is. The phenomenon is complex: the given whole has to be traced back to its more simple parts. only be found by abstraction. He represents science as a passage from the part to the whole or the whole to the part. by thought. µnaively accepting¶ them as facts. The point here. the pattern of social relations. is to note the rôle of the model in Hayek¶s argument. if we don¶t know what those principles of coherence are in the first place: knowledge of the principles of coherence is a prerequisite of this reconstruction. for Hayek. analytic´ (65 -67). that natural scientists d on¶t just analyse the given into its simplest categories. about unintended social structures. Hayek uses the social to explain the social: the network of relations determines the attitudes and motivating beliefs of each nodal individual. In society the opposite is true: what is given to us. So this model of science as analytical in the natural and synthetic in the social domains doesn¶t seem to work. In the study of social activity analysis thus plays as great a rôle as synthesis.
and the socialist economy preclude one another. 1996: 258).Methodological Individualism. Collectivism. the aptness of the designation seems questionable. for Hayek. promarket forces writer: The market economy or capitalism. n 1). do not deal with µgiven¶ wholes but their task is to constitute these wholes by constructing models from the familiar elements ± models which reproduce the structure of relationships between some of the many phenomena which we always simultaneously observe in real life´ (98) . to see how he combines these disparate and contradictory elements. there is no such thing as a mixed economy. or our ability to say anything sensible about them. It may be useful in conclusion to this account.
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. We start with Mises¶s rhetorical goals: what does he want to convince us of? We can then move on to the means he adopts to attain that goal. is impossible since these social wholes are not µgiven¶ or observable: ³what of social complexes are directly known to us are only the parts « the whole is never directly perceived but always reconstructed by an effort of our imagination´ (93. There is no mixture of the two systems possible or thinkable. Dugald Stewart and the earlier Malthus. a system that would be in part capitalist and in part socialist (Mises. Ricardo and the later Malthus. to examine Chapter 6 ³The Collectivism of the Scientistic Approach´ (Hayek. he says. It is worth dwelling on this. reconstructing social wholes in thought forms the very raison d¶être of social science: ³The social sciences. The source of the difficulty is that in some ways Mises adopts elements of both standpoints. 1979: 93-110). Methodologically what Hayek describes is entirely holist. thus. it is clear that both are species of holism. capitalism (as a given historical ³phase´) or a particular industry or class or country as definitely given objects about which we can discover laws by observing their behavior as wholes´ (93). What is µcollectivist¶ about scientism for Hayek is thinking that social wholes are given to observation instead of having to be reconstructed by the compositive method. Whatever the virtues and vices of this distinction between methodological individualism and collectivism in Hayek¶s account. while in the earlier part of the present paper I have argued that Hayek¶s standpoint is holistic in the tradition of Adam Smith. I have argued in Part One. Malthus. Hayek. (1909-2009). is the ³tendency to treat wholes like society or the economy. like Adam Smith. This. 3 a Mises¶snotion of methodological individualism Mises¶s rhetorical strategy
I will confess at the outset that Mises is one of the more difficult writers I have read on the subject of MI. as well as to Bentham. where Hayek again attempts to bring out what he believes is individualist about his methodology by contrast with the µcollectivism¶ of the approach he is arguing against. Friedman and Lucas. as it is usually called. above. as well as of Marx and Keynes. it is worth underlining that Hayek is absolutely not denying the existence of social wholes. It will be necessary to set out his rhetorical strategy with care. Dugald Stewart. We are now in a position to examine Mises¶s contribution to the discussion on MI. that Schumpeter and Menger adopted a reductionist stance comparable to Friedman and Lucas. Part 1
networks of social relations. Once that is in place it will be possible to turn to what he has to say explicitly on the topic of MI. It is abundantly clear that Mises. On the contrary. is a pro-capitalist. In particular.
he argues. harmony of interests is substituted for conflict. the preservation and further intensification of social cooperation. Any supposed conflict of interest is only apparent: For what the individual must sacrifice for the sake of society he is amply compensated by greater advantages.Methodological Individualism. Part 1
Socialism is not a realizable system of society¶s economic organization because it lacks any method of economic calculation « Socialism is not an alternative to capitalism. it is an alternative to any system under which men can live as human beings. His sacrifice is only apparent and temporary. i.e. families. So. becomes paramount and obliterates all essential collisions (673). is to convince us of the virtues of capitalism and the impossibility of socialism or any kind of mixed economy. for Mises.. Mises is very specific about the circumstances in which this natural harmony of inte rests would be violated. To stress this point is the task of economics (679-680). It removes the natural conflict of interests « A pre-eminent common interest. a postulate he refers to as ³the µorthodox¶ ideology of the harmony of the rightly understood. agents do not have conflicting. social groups. and as far as. he foregoes a smaller gain in order to reap a greater one later. as long as population is below the point at which declining returns to additional labour set in. The significance Page 20 of 39
. How does he propose sell us this agenda? What is the central argument that he deploys? Mises argues that under capitalism. He advises him to recognize what his rightly understood interests are (146-147). The purpose of economics. So for Mises there is a natural harmony between the interests of individuals. People are no longer rivals in the struggle for the allocation of portions out of a strictly limited supply. long-run. the division of labor is substituted for economic autarky of individuals. but rather augments. (1909-2009). for Mises. and generates pitiless biological competition. the average shares of the individuals (667). The source of this harmony of interest is the division of labour: What makes friendly relations between human beings possible is the higher productivity of the division of labor. tribes. and nations´ (176). just as long as population is below its optimum level: The natural scarcity of the means of sustenance forces every living being to look upon all other living beings as deadly foes in the struggle for survival. Within the system of society there is no conflict of interests as long as the optimum size of population has not been reached. and nations. As long as the employment of additional hands results in a more than proportionate increase in the returns. people cannot have essentially conflicting interests. but only common interests. An increase in population figures does not curtail. They become cooperators in striving after ends common to all of them. interests of all individuals. But with man these irreconcilable conflicts of interests disappear when. No reasonable being can fail to see this obvious fact « In striving after his own²rightly understood²interests the individual works toward an intensification of social cooperation and peaceful intercourse « The utilitarian economist «does not ask a man to renounce his wellbeing for the benefit of society. Harmony will arise.
there would be an incentive not to cooperate. humans will not reproduce in excess of the numbers which can be supported at the level of overall satisfaction which people aim for. and the people too stupid to be able to see their own interests properly. apply the term moral restraint employed by Malthus (668). Individual behaviour led by rational self-interest ± moral restraint ± will thus automatically lead to the desirable social outcome that the level of population will not exceed its optimum level. even antisocial. (1909-2009). But this depends on population not exceeding its optimum level. there could be no coop eration. world of conflicting not harmonising interests. so everyone would have an incentive not to cooperate: we would live in an asocial. Man does not blindly submit to a sexual stimulation like a bull. into a scale of values.Methodological Individualism. without any valuation or ethical connotation. at the time of writing. men may seem to have an interest to lie. A typical defence of the rôle of the state is to say that. then. At the margin. We may agree that he who acts antisocially should be considered mentally sick and in need of care. The incentive to lie. Their satisfaction is the outcome of a weighing of pros and cons. Acting man also rationalizes the satisfaction of his sexual appetites. some provision must be Page 21 of 39
. Given that individual people in society have no conflicting interests. or too morally weak to be able to control themselves: The anarchists overlook the undeniable fact that some people are either too narrowminded or too weak to adjust themselves spontaneously to the conditions of social life. In the long run. cheat and steal is a short-term or apparent interest. But everyone can be thought of as marginal. Even if we admit that every sane adult is endowed with the faculty of realizing the good of social cooperation and of acting accordingly. so we have an incentive not to engage in behaviours which disturb them. not the case that the optimum level of population had been reached. in which a place is also assigned to specifically human ends. In Mises¶s account. Differently from animals. For Mises. Part 1
of the level of population is this: if there are increasing returns to labour. will do so. because individuals have divergent interests. as we will see shortly. cheat and steal. and hence no society. why then do we need a state? Mises¶s response is revealing. the incentive not to is the real. and the insane. long-run interest of individuals. to divide their labour and share the benefits of doing so. one might ask. on the contrary. there still remains the problem of the infants. people have the incentive to cooperate. µrightly-understood¶. but to do so would damage private property. and if not prevented from acting on them. we all benefit from these features of capitalism. the young. the mentally ill. We would have a merely animal existence. But for Mises. and indeed not likely ever to be the case. the state is only necessary to protect us from those who are not fully rational ± the old. If there were no unexploited benefits from cooperation. common to all animals. In this sense we may. Mises believed that it was. the market and division of labour. If population exceeded its optimum level. Man integrates the satisfaction of the purely zoological impulses. But as long as not all are cured. The reason is relevant to our enquiry. the aged. additional labour would reduce the productivity of all. he refrains from copulation if he deems the costs²the anticipated disadvantages²too high. and as long as there are infants and the senile. to each others¶ detriment.
1958. Mises¶s argument. by the application or threat of violent action. An anarchistic society would be exposed to the mercy of every individual. and we all want a bigger slice. It is merely that he is not to bring beings into the world for whom he cannot find the means of support « It is clearly his interest and will tend greatly to promote his happiness. For this conclusion to be avoided we would have to be able to demonstrate that the adverse consequences to society would be felt by the individual actor himself. or the effect of which may be weakened by distance and diffusion. This is the structure of the prisoners¶ dilemma: overlapping interests on the main diagonal. Malthus wrote that the improvement to society due to the practice of moral restraint is to be effected « by a direct application to the interest and happiness of each individual. to pursue a general good which we may not distinctly comprehend. and « considerations of his own interest and happiness will dictate to him the strong obligation to a moral conduct while he remains unmarried (Malthus. 1996: 146). As soon as thequestion is posed. But this may not be the so. Mises¶s view that individual and social goals are perfectly aligned parallels Malthus¶s argument that the µfull fruits¶ of individual restraint are enjoyed by theindividual practicing it. there are. This power is vested in the state or government (149). But for Mises. This is very much Mises¶s argument: ³Every step by whichan individual substitutes concerted action for isolated action results in animmediate and recognizable improvement in his conditions´ (Mises.prisoners¶ dilemmas or free riders. Given that we have a society in which population does not exceed its optimum level. He who performs his duty faithfully will reap the full fruits of it. If there are externalities. A case in point is the argument about moral restraint(Denis. at the margin and for all intra-marginal units. whatever anyone else is doing. which we can get by competing. II: 169). unexploited opportunities to gain from cooperation and division of labour. 2006a). Hence it is in the interest of any individual to cooperate and he has no interest in any action which would damage that cooperation.Methodological Individualism.must depend on assuming that there are no significant externalities. One might thing that the essence of the human condition is that we have partially overlapping and partially conflicting interests: we all want a bigger cake. This duty is intelligible to the humblest capacity. Part 1
taken lest they jeopardize society. this makes a big assumption. to defer marrying till by industry and economy he is in a capacity to support the children that he may reasonably expect from his marriage. The happiness of the whole is to be the result of the happiness of individuals. (1909-2009). the answer presents itself: such externalities simplycannot be assumed away. It assumes that there are no (significant) externalities. This argument ± that the individual and society have interests which aligned so that what the individual does in his own interest is exactly would society would have wanted him to do ± calls for careful examination. and to begin first with them. In adopting this reductionist standpoint. Society cannot exist if the majority is not ready to hinder. Why individual Page 22 of 39
. However. we only have the overlapping interest of the larger cake. It is not required of us to act from motives to which we are unaccustomed. It is worth dwelling on this point. which we can get by cooperating. like Malthus¶s. then it might very well be in the interest of the individual to engage in socially undesirable behaviour. whatever may be the number of others who fail. minorities from destroying the social order. Every step tells. No cooperation is required. and conflicting interests in off-diagonal outcomes.
remains mysterious. that a mechanism is needed to explain how social outcomes are desirable. 2002). in particular in relation to Lucas and Malthus (of the Second Essay onwards).Methodological Individualism. ³The Epistemological Problems of the Sciences of Human Action´. This kind of argument I have previously. If the whole is just the sum of the parts. Now it is clear that Mises is perfectly well aware of the possibility of externalities. if a policy prescription of laissez-faire is to be sustained. This knowledge will provide him with the most powerful incentive to do his best « However. (1909-2009). apparent macro-level pathologies such as unemployment can be reduced to rational. Mises defines MI as follows: Praxeology[ie ³the general theory of human action´] deals with the actions of individual men. So in Lucas unemployment is understood as the sum of all the household decisions regarding the trade-off between leisure and wage income. b Mises on MI
Having established the outlines of Mises¶s rhetorical strategy. It is only in the further course of its inquiries that cognition of human Page 23 of 39
. only an infinitesimal fraction of the produce of his additional exertion benefits himself and improves his own well-being (Mises. micro-level. of which he himself is a part. ³The Principle of Methodological Individualism´. I will focus on Section 4. « While the sacrifices an individual worker makes in intensifying his own exertion burden him alone. Mises thinks the same: What causes unemployment is the fact that « those eager to earn wages can and do wait. It is if one adopts a holistic ontology. Why the externality or public-good argument that Mises cites in his critique of socialism does not apply to the issue of conflicting or harmonic interests is not addressed. we can now turn to what he has to say explicitly about MI. Mises posits no such black-box mechanism: his approach is reductionist. Examples of such mechanisms are the invisible hand of a benevolent deity in Adam Smith and a human-favourable group-selectionist process of social evolution in Hayek (Denis. Denis. Part 1
choices on reproduction should lead to socially desirable population levels. individual decisions. without any mechanism to ensure this. part of Chapter II. of Mises¶s Human Action: A treatise on economics (Mises. The ground for a laissez-faire policy prescription is prepared. In a reductionist ontology the whole is held to be just the sum of the parts: the whole may be understood as the parts ± taken in isolation ± writ large. At the beginning of the section. it is therefore necessarily voluntary. and macro level entities emerge from the interrelationships between the micro-level substrate entities. where the whole is not the sum of the parts. characterised as reductionist. 1996: 677). A job-seeker who does not want to wait will always get a job in the unhampered market economy « It is only necessary for him either to reduce the amount of pay he is asking for or to alter his occupation or his place of work (598). 2005. 1996: 41-44). and indeed he uses the argument against socialism: under socialism [the socialist authors say] every worker will know that he works for the benefit of society.
Trotsky (1973: 233-234) illustrates a discussion of Marxist notions of science by means of equally approving references to the top-down approach of Freud and the bottom-up research strategy of Pavlov. 2006) this question of starting point is not very interesting. as Mises imagines it. but that his behaviour is dictated by the network of relations within which he operates. no golden key to knowledge of the world. most Keynesians and monetarists used a bottom-up approach. What is of great interest. whether such individuals are the isolated atoms of Manger¶s atomism. The methodologically pluralistic statements of Trotsky and Friedman are therefore to be endorsed. His most eminent feature. as he has defined it: Real man is necessarily always a member of a social whole. could only emerge within the framework of social mutuality. that is. As I have argued elsewhere (Denis. In the latter case. Mises presents a summary of the case against MI. modelled as isolated atoms. Part 1
cooperation is attained and social action is treated as a special case of the more universal category of human action as such (41). only later moving on to the ³cognition of human cooperation´ then the clear implication is that for Mises. Immediately after this introductory statement defining MI. The choice of a top-down or bottom-up heuristic will depend on our interests.Methodological Individualism. The first half dozen lines appear to be a correct statement of that case. on the contrary. There is no proper starting point for science: we start from wherever we happen to be. can claim to µstart¶ with the individual. The absence of any statements corresponding to Hayek¶s careful description of individuals as nodes in networks of social relations is also evidence for this interpretation. the study of the individual is posterior to the study of society. are conceived of as essentially social entities or. As the whole is both logically and temporally prior to its parts or members. is whether the individuals with which one starts. (1909-2009). and from the individual to move on to the social wholes of which the individual is a part. or the foci of networks of social relations that Hayek posits. That top-down and bottom-up approaches may be considered to be equally valid is exemplified by Milton Friedman¶s (1976: 316) statement that while both Keynes and he used a top-down methodology. Now we have seen that both reductionists such as Menger and Schumpeter. what we think we already know. My own view here is that the choice of top-down or bottom-up heuristic is a wholly pragmatic matter: there is no issue of principle here. and our hunches about what we might be about to find out. though rather vague. it could be argued that we are not really starting with individuals. if one chooses to start with individuals. If we are to take literally Mises¶s statement about starting with individuals. by the interaction and Page 24 of 39
. The question is. since the individual as focus of a network of relationships already presupposes society. however. But speech is manifestly a social phenomenon. Man is always the member of a collective. The point is not simply that the individual is a member of a collective. is warranted. Man as man is the product of a social evolution. these individuals are atomic. our goals. Similarly. reason. The only adequate method for the scientific treatment of human problems is the method of universalism or collectivism. (41-42) Some discussion of this case against MI. and holists such as Hayek. There is no thinking which does not depend on the concepts and notions of language. It is even impossible to imagine the existence of a man separated from the rest of mankind and not connected with society.
which did not yet exist. conditional on forming a part of the whole. Logically the notions of a whole and its parts are correlative. We can see this as Mises pursues the idea of the reduction of society to individual persons. As logical concepts they are both apart from time. And it chooses the only method fitted to solve this problem satisfactorily. and their operation. we are approaching very close to Menger¶s µexact¶ or µatomistic¶ orientation of research. thought of in their isolation´ (see Denis. considers it as one of its main tasks to describe and to analyze their becoming and their disappearing. Methodological individualism. (42) And that¶s all he has to say about it. far from contesting the significance of such collective wholes. Nobody ventures to deny that nations.Methodological Individualism. states. that is. The relation between whole and parts cannot be dismissed so lightly. (42) So social entities such as nations and states do exist: this is at least a step away from Margaret Thatcher¶s infamous claim that there was µno such thing as society¶. Finally. and has the meaning it has. Mises last statement about the necessity o f µuniversalism or collectivism¶ needs elaboration: what exactly does this methodological collectivism consist of? Mises¶s response to this case against MI may be quoted in its entirety: Now the controversy whether the whole or its parts are logically prior is vain. The life of a collective is lived in the actions of the individuals constituting its body. a reconstruction on the basis of the ³simplest elements. This is the difference between an organic unity and a congeries. of course. We are left in doubt as to how the claim that wholes and parts are correlative meshes with the claim that we need to start our investigation with the part. if we are to base the analysis of such entities on the actions of the isolated individual. 2009). but in general not on any particular part: the relationship is not symmetric. First we must realize that all actions are performed by individuals. Part 1
interdependence between the individual and myriad other individuals. The whole cannot be µtemporally prior to its parts¶. of the whole to its parts: a social collective has no existence and reality outside of the individual members¶ actions. municipalities. their changing structures. parties. (1909-2009). religious communities. not qua parts of this whole. A collective operates always through the intermediary of one or several individuals whose actions are related to the collective as the secondary source. it is true. though. In the following paragraph Mises discusses whether social entities can be said really to exist: It is uncontested that in the sphere of human action social entities have real existence. even though it may well chronologically predate many. as my body is older than any of its cells. even all of its extant parts. Nevertheless. in turn depends on the parts. are real factors determining the course of human events. The whole is not µlogically and temporally prior to its parts¶. The whole is indeed logically prior: in an organic unity each part only exists. There is no social collective conceivable which is not operative in the actions of Page 25 of 39
. The parts must have existed prior to the emergence of the whole. The whole.
citing Hayek) c Elements of holism and organicism in Mises
I said earlier that there were difficulties in discerning Mises¶s rhetorical strategy. (1909-2009).Methodological Individualism. no interests of others not shared by the interest of the actor. It is very different from the Hayekian view that individuals are embedded in networks of relationships and that it is these relationships which constitute the structural element leading to particular patterns of behaviour of the individuals. The components of society are thus not human beings but relations between them. In a social structure ³individuals are merely the foci in the network of relationships´ (Toynbee. In what circumstances would it be permissible to ignore this distinction? The circumstance that there was no difference between the actor and the agent whose welfare is impacted by the action. The life of a collective is not just lived in the actions of the individuals which constitute it. this is a strong suggestion that we should look for holism. For the holistic standpoint it is not individual people which form the elements of society. Chris Matthew Sciabarra¶s book Total freedom: toward a dialectical libertarianism (Sciabarra. which makes it an intellectual cousin of Marxian economics. indeed. Sciabarra (2000: 115-121) claims that Menger is a dialectical thinker who adopted an ³organic orientation of social research´. holism is a prerequisite for dialectics. 2009) that this Page 26 of 39
. there is a strong overlap in meaning between what Sciabarra refers to as dialectics. Part 1
some individuals. 1972: 42. Mises concludes his consideration of MI with the statement that Those who want to start the study of human action from the collective units encounter an insurmountable obstacle in the fact that an individual at the same time can belong and²with the exception of the most primitive tribesmen²really belongs to various collective entities. The cause of this difficulty is in part the appearance in Human Action of many elements of a more organic and holistic ontology. in so far as they are distinct. 2000) examines what he claims is the dialectical heritage of the Austrian school. The reality of a social integer consists in its directing and releasing definite actions on the part of individuals. Thus the way to a cognition of collective wholes is through an analysis of the individuals¶ actions (42). but I have argued (Denis. and consequently inferring what he meant by MI. The problems raised by the multiplicity of coexisting social units and their mutual antagonisms can be solved only by methodological individualism (43) This notion of MI is clearly a reductionist one. This section will note some of these passages and attempt to reconcile them with what has already been said regarding Mises¶s reductionist approach. As Toynbee puts it in his definition of µsociety¶ at the start of A Study of History: Society is the total network of relations between human beings. Throughout these statements Mises fails to distinguish between the intentions of agents¶ actions and the consequences of those actions. but the relations between them. Without going into a lengthy discussion at this point. This is what Mises appears to be assuming: that there are no externalities. but in the consequences to the individuals of actions taken by individuals. what methodologists of economics commonly refer to as organicism. Where Sciabarra finds dialectics. and what I have defined as holism.
profit and loss. focuses on the µbecoming¶ and the µdisappearing¶ of wholes´ (125). It is impossible to study labor and wages without studying implicitly commodity prices. his ³portrait of the price system´ is ³thoroughly organic´ (124). And ³The exchange relation is the fundamental social relation. It substitutes collaboration for the²at least conceivable² isolated life of individuals. who think. Page 27 of 39
. ³atomistic´. Society is the outcome of conscious and purposeful behavior « The actions which have brought about social cooperation and daily bring it about anew do not aim at anything else than cooperation and coadjuvancy with others for the attainment of definite singular ends. value. in consequence of the ubiquity of interconnectedness in social life. cooperation. (1909-2009). ³Mises was an organic thinker´ (124). in his own words. Interpersonal exchange of goods and services weaves the bond which unites men into society´ (194). Sciabarra¶s account of dialectics in Hayek (122-133) is completely consistent with the reading I have proposed in the first part of the present paper. Mises is here expressing a clearly holistic social ontology: Society is concerted action. and that in truth Menger¶s approach is wholly reductionist. and act. (143) Many further examples of this holistic vision could be cited. Mises proclaims.Methodological Individualism. It invariably deals with the interconnectedness of all the phenomena of action. Society is division of labor and combination of labor. According to Sciabarra. I¶ll confine myself to two more: ³What is called a price is always a relationship within an integrated system which is the composite effect of human relations´ (392). For Mises. These are not isolated statements. a misreading of the text. The total complex of the mutual relations created by such concerted actions is called society. money and credit. interest rates. I suggest. Sciabarra notes an ³emphasis on the organic whole in Mises´ (125). There are no such things as ³economics of labor´ or ³economics of agriculture. 1996: 761). he views market institutions ³as organic relational structures constituted by human actors´ (125). Part 1
is based on a simple mistake. by interrelatedness rather than isolation:
In speaking of the laws of nature we have in mind the fact that there [is] an inexorable interconnectedness of physical and biological phenomena and that act[ing] man must submit to this regularity if he wants to succeed. The catallactic problems cannot become visible if one deals with each branch of production separately. In his capacity as an acting animal man becomes a social animal.´ There is only one coherent body of economics (874). indeed. What are these claims worth?
Mises repeatedly expresses the view that both the natural and social worlds are characterised by interconnection. and all the other major problems. Mises (122-127). and ³views society itself as an organism of sorts´ (125). the discipline of economics must itself by viewed holistically: Economics does not allow of any breaking up into special branches. purposeful individuals. The real problems of the determination of wage rates cannot even be touched in a course on labor. In speaking of the laws of human action we refer to the fact that such an inexorable interconnectedness of phenomena is present also in the field of human action as such and that acting man must recognize this regularity too if he wants to succeed (Mises. ³Structural processes are rooted in the organic relations among fully social. Methodological individualism. comes somewhere in between.
Page 28 of 39
. we can see that he systematically advance a holistic social ontology. shared this perspective. The reductionism of neoclassical writers such as Lucas and Friedman really does start with the asocial. has to convince his audience that socially desirable outcomes cannot normally be expected to arise spontaneously. Part 1
These passages are enough to demonstrate the Sciabarra is onto something here: there is no question but that Mises systematically adopts and presents a salient and very clearly holist social ontology. but emerges from the interconnections between them. I argued that there were two possible kinds of arguments which might serve this cause.Methodological Individualism. 2004). Similarly. The model suggested was one where many economists are seen as attempting to persuade us of something. (1909-2009). 4 Conclusion
In this paper I have examined the views and stances of Hayek and von Mises towards methodological individualism (MI) in order to attempt to unravel their conception of the rôle of the individual in society. I suggest. might lead to any question regarding their desirability. for example ± are something organic and therefore different in quality from the individual behaviours on which they rest. Returning to Mises. On the contrary. The previous paper in this series argued that the foundational writers in the Austrian tradition. In a holistic strategy the social outcome is something quite different from the individual actions of substrate level agents. s The question is. two possible rhetorical strategies in defence of laissez-faire. Individual utility maximisation is directly social welfare maximisation. This study was prompted by the observation that writers to whom MI is ascribed have fundamentally diverse notions of the relation between micro and macro. that emergent social entities ± the price system. there is no reason to assume that rational individual decision-making will translate into desirable social outcomes. as explained earlier in this paper. The answer. An economist supporting. In order to convince us that rational social outcomes will nevertheless emerge from rational individual behaviour. a policy of large-scale government intervention in the economy. biological individual. There is no hint that the fact. what work does this do in convincing us that self-seeking individual behaviour will spontaneously lead to desirable social outcomes. and by a human-favourable process of evolution of social institutions in Hayek. for example. No mechanism is proposed wh ich might lead individual self-seeking behaviour nevertheless to underpin desirable collective outcomes ± for the simple reason that none is required. So what is going on? How does this relate to the reductionism with which Mises was associated in the first section of the present paper? To answer this we have to return to the idea of a rhetorical strategy with which this series of papers began (see Denis. an additional mechanism is also required. This is represented by the invisible hand of a benign deity in Adam Smith. in order to act in a socially desirable way. an economist supporting laissez-faire as a default policy prescription has to convince us of the opposite. long-run interest. individuals for Mises spontaneously have a common interest: each only has to do what is in his own true. Menger and Schumpeter. between self-seeking individual behaviours and the desirability or otherwise of the social outcomes to which those behaviours lead. and interprets social outcomes as the aggregate of individual choices. is that it does no work at all towards this goal. In a reductionist strategy the social outcome is presented as just the aggregate of all the individual decisions: if the latter are rational then so is the former. The problem with the latter approach is that if the social outcome does not simply reproduce the quality of the individual actions underpinning it.
Klein. one holistic and one reductionistic. 2000: 123. is quite different. as well as of other approaches. The purpose of the research of which this paper is part is to uncover and evaluate some of the meanings of the phrase methodological individualism (MI). nd) ± that society is the intended consequence of purposeful individuals. It may be that Hayek spotted this and sought to rectify it in his own ontology. and that he sought to repair a perceived lacuna in Mises¶s work by reference to an evolutionary process of the development of social institutions (Denis. Part 1
Hayek¶s standpoint. If social entities are organic. 2006a) ± Malthus switches from holistic providentialism to reductionism between the First and Second Essays on Population ± the existence of both standpoints side by side may create problems of consistency for the writer. The approach adopted is to apply the intellectual apparatus developed in Denis (2004) to the arguments of these writers. Lukes (1968: 77) notes ³the extraordinarily muddled debate provoked by the wide-ranging methodological polemics of Hayek and Popper´. individuals are only nodes in the network of social relationships. however. In particular. (1909-2009). Mises presents two social ontologies.Methodological Individualism. While it is the case that I have noted an instance of an economist adopting both reductionist and holist ontologies (Denis. I ask whether the concepts of holism ± the standpoint that phenomena may be understood as emergent and based in the interrelationships Page 29 of 39
. Yet after 100 years there is considerable confusion as to what the phrase means. The phrase was first used in English in a 1909 paper by Joseph Schumpeter in the Quarterly Journal of Economics. It is the reductionistic social ontology. the holistic. I have suggested that Mises forms something of a transitional form between Menger and Schumpeter on the one hand and Hayek on the other.
Part Three: The case of analytical Marxism
1 Introduction 2009 marked the centenary of methodological individualism (MI). instead of the unintended consequence. however. what is to guarantee that these emergent outcomes will have desirable features? We know that Hayek questioned the µrationalism¶ of Mises¶s account (Sciabarra. It may be that Hayek found the organic and holistic ontology in Mises¶s work attractive. Nevertheless. For Hayek.´MI is often invoked as a fundamental description of the methodology both of neoclassical and Austrian economics. It is debateable whether term µmethodological individualism¶ aptly characterises this perspective. from New Keynesianism to analytical Marxism (AM). organic ontology in many ways overshadows the reductionistic ontology in the pages of Human Action. 2002). However. so µstarting with individuals¶ means starting with the social relations within which they are embedded. The next part of thepaper will examine the contributions of the analytical Marxists. which is presented as the reason that socially desirable consequences can be relied upon to emerge from individual self-seeking behaviour. the methodologies of those to whom the theoretical practice of MI is ascribed differ profoundly on the status of the individual economic agent. some adopting a holistic and some a reductionist standpoint. emerging from the interconnectedness which Mises identifies as ubiquitous within the market system. while according to Udehn (2002: 480) ³The participants in the debate appear frequently to misunderstand one another and argue at cross-purposes.
the more complex phenomena « it is the attitudes of individuals which are the familiar elements and by Page 30 of 39
. and of the Analytical Marxists. In discussing the behaviour of a person we could never be satisfied by an account. Where there is an organic relationship. The first part of the present paper considers the contributions of Joseph Schumpeter.Methodological Individualism. where there are purposes. and Friedman and Lucas. The second part drew the conclusion that Mises and Hayek based their methodological stance on fundamentally different ontologies. And. 1937). the function of the part in the whole. knowing about these subordinate levels. Marx and Keynes. considered by many to be the founder of MI. and form the elements from which we must build up. such as Bentham and Ricardo. are able to clarify the standpoints to which they are applied. such as Smith and Hayek. 2 The relationship between parts and wholes in social science The key question I am focusing on here concerns the relationship between parts and wholes. We can intuit what it is like to be a person because we ourselves are persons: we can draw on Verstehen: it is the concepts and views held by individuals which are directly known to us. in terms of molecules and cells. to any desired level of detail. Marx famously compared mid-nineteenth century peasant small holdings in France to potatoes in a sack (Marx. In my view a bottom-up explanation of organic entities in terms of particles and subordinate components of the thing studied will always be incomplete without an account of purpose. the whole is a precondition for the explanation of the parts. and Hayek. adopting a holistic ontology more in line with Adam Smith. I would like to start by saying more about this. his preferences. drawing on the work of Daniel Dennett on the µintentional stance¶. asking about the beliefs and motivations of the individual. On the other hand it does imply a surprising and profound difference in methodology between them and those writers. This implies that there is a fundamental methodological commonality between both these writers and others adopting a reductionist standpoint. the reason the part is there. would still leave us asking for more. This is what Hayek seizes on as the foundation for the claim that his methodological approach is µindividualist¶. and reductionism ± the standpoint that phenomena are to be understood as congeries of substrate entities taken in isolation. That is not to say that congeries don¶t exist. This examination of the writings of two foundational figures in MI suggests that both clearly operated within the reductionist paradigm. who was the first to use the term. on the contrary. Part 1
between substrate entities. his goals. by organic activity at the cellular and system level. of course. and of Carl Menger. While it is of course the case that every aspect of the individual is underpinned by material substance. his past. they do not override or displace causation but work through causation. We would need to know about the person¶s identity. (1909-2009). however complete. The important bit of the job is to discover where there are top-down and bottomup explanations and successfully to marry them up. with von Mises building on the reductionism of previous writers such as Schumpeter and Menger. with whom they might have been expected to share an approach. From an ontological perspective this leaves Hayek as something of an outlier in the Austrian tradition. as it were. The final part of the paper continues the story with examinations of the relation between wholes and parts in social science.
Pointing out that the µextension¶ of. But this is only the start. i. Now the big issue is. which are much less known (Hayek. unless you go up a level or two and ask ³Why?´ « you will never be able to explain the manifest regularities. for others equally obvious that there are. It does not have "interests" and does not aim at anything. For some it is obvious that there are not. whatever it is that the phrase ³French Enlightenment´ refers to. the wheels and pinions and gears. 1995: 421). we could not be satisfied by an account exclusively in terms of the component parts.³cannot be articulated with unlimited detail´. whether indeed there are causally efficacious entities operating at social levels above that of the individual human agent. nor a power. 1974: glossary entry for hypostasis). This is the issue of hypostatisation. Either you adopt it. to ascribe substance or real existence to mental constructs or concepts. in matchless microdetail. Whatever the provenance of either mechanism. the French Enlightenment. But they are not the only potential agents in the world. such as the fact that giraffes have come to have long necks (Dennett. that is. Only individuals act « Society does not exist apart from the thoughts and actions of people. Hypostatisation is the attribution of substance or real existence to concepts or abstractions (Greaves. the results of individual actions. 1979: 537).. or Paley¶s watch.e. 1962: 78). for example. Page 31 of 39
. Nagel agrees. nor an acting being. he suggests that this failure may lead to a µhypostatic¶ conception of it as a causally efficacious unitary whole: such a hypostatic transformation of a complex system of relations between individual human beings into a self-subsisting entity capable of exercising causal influence is the analogue of vitalistic doctrines in biology « such hypostatic interpretations have been useless as guides in inquiry and sterile as premises in explanations « [T]he methodological assumption that all collective terms designate either groups of human individuals or patterns of behaviour leads to a more fruitful way of identifying the extensions of such terms than does the perplexing hypostasis of mysterious superindividuals (Nagel. In the sciences of human action the most conspicuous instance of this fallacy is the way in which the term society is employed by various schools of pseudo science « society itself is neither a substance. This is an application of the intentional stance to other people. 1979: 65). or you will forever be baffled by the regularity ± the causal regularity ± that is manifestly there « Even if you can describe. We can think about the meaning of the Antikythera mechanism. because we know what it means to mean something.Methodological Individualism. Part 1
the combination of which we try to reproduce the complex phenomena. For Dennett There is no substitute for the intentional stance. and explain the pattern by finding the semantic-level6 facts. (1909-2009). We would have to be told how those parts interacted to achieve the purpose of the whole. The same is valid for all other collectives (Mises. Mises sets out the view that hypostatisation is a mental error with great clarity in a subsection of The Ultimate Foundation of Economic Science entitled ³The Pitfalls of Hypostatization´: The worst enemy of clear thinking is the propensity to hypostatize. We can understand the purpose of things because we have purposes. every causal fact in the history of every giraffe who has ever lived.
All that we need to say is that they are not all obviously incorrect. the labour theory of value and the theory of exploitation. For Dawkins and Dennett. 332. but a vehicle which comes to have its own interests. but has to be explored and ± if incorrect ± refuted in each case. the networks of social relations within which individuals are embedded undergo a process of natural selection such that the traditions we inherit embody the rules we must follow. 1989: 19. administrators and priests. indeed is it necessary. for a Marxist to be committedto methodological individualism. Some of its principle members included GA Cohen. 1972: 45). 1972: 44). For Hayek. Finally. It is not my purpose here to argue that all or indeed any of these views are correct.e. i. nd). nd: 1). it is pretty much a given that such µsuper-individual¶ entities exist. are such explanations legitimate in thesocial as well as in the biological realm ? « (2) Is it possible. Traditions here clearly exist and follow their own logic. 2005). Part 1
For writers such as Marx. 1995: 471). Toynbee and Dennett. two of the key questions identified. and indeed the first two in Van Parijs¶s list. For Hayek. 2002b) .
3 Analytical Marxism Analytical Marxism (AM) is a movement which emerged and largely receded again in the last quarter of the twentieth century. For Keynes the class of rentiers and the institutional structure of atomistic capitalism are creations of society which served their own interests. however. implicitly and explicitly refer to the issue of MI: (1) Are the central propositions of historical materialism to be construedas functional explanations. even if we don¶t understand them. Dennett. However. touching on the falling rate of profit. and the issue is to identify them and explain their working. in particular regarding equality. Jon Elster. (1909-2009). Keynes. are hypostatisations of the activity of social individuals. The activities which take place within the civilisation are directed towards the maintenance of the civilisation. to the view that all social-scientificexplanations should ultimately be phrased in terms of actions and thoughtsby individual human Page 32 of 39
. opposed to the interest of and parasitic on the human substrate of which they are formed (Denis. and John Roemer (Van Parijs. this logic is to act in our interest. for example. the unit of social analysis is the civilisation. which diverge from those of its creators (Dawkins. and the future of socialism after the decline and fall of the supposedly socialist states. attempting to merge aspects of Marxian thought with analytical philosophy. as explanations of institutions by references tothe functions they perform? If so. i. At its heart is the methodological view that ³Formalmodels resting on assumption of individually rational behaviour. The possibility of non-human social entities cannot be dismissed in limine. for Marx. but no mechanism is specified which guarantees this (De nis.e. can be used to understand the economic and political dynamics ofcapitalist societies´ (Van Parijs. who are free from the necessity of producing the material requirements of the society (Toynbee. Van Parijs identifies eight core questions which AM addresses. the µintelligible field of study¶ (Toynbee. 2002a). For Toynbee. the sustenance of a minority. organic social forms which have acquired their own interests. including the soldiers. Dawkins. interest which now diverge from ours (Denis. asinstantiated by neo-classical economic theory and the theory of strategicgames.Methodological Individualism. the individual is itself a hypostatisation: individual organisms are µgigantic lumbering robots¶ built by genes to serve as their vehicle. the status of traditional Marxist ethical statements. states and capitals. Hayek.
are three-tiered: First. not infrequently violated by Marx. while individual actions are derived from the aggregate pattern´ (Elster. the putative explanation. there is intentional explanation of individual action in terms of the underlying beliefs and desires. The converse of the principle is that of methodological collectivism. Explanation proceeds from the laws either of self-regulation or of development of these larger entities. Firstly. The last form is the specifically Marxist contribution to the methodology of the social sciences (Elster. Desirable social science explanations. we should think carefully about what biologists do when they µgo from cells to molecules¶. the molecules in question can only be understood as parts of the cell. these individuals are logically prior to any social entities. their beliefs and their actions. 1985: 5). we should note that this reference to goingfrom institutions and cells to individuals and molecules. a noted proponent of AM. there is a causal explanation of mental states. Jon Elster. which is closely related to two other methods of Hegelian inspiration. Indeed. begin[s] by stating and justifying the principle of methodological individualism. to the explanans. MI is the doctrine that all social phenomena ± their structure and their change ± arein principle explicable in ways that only involve individuals ± their properties. their goals. What they do is absolutely not to take the molecules in isolation. To illustrate his notion of MI. Secondly. simply means to pass from the explanandum. Part 1
beings? Or are there some admissible ³structuralist´ Marxian explanations which are radically irreducible to an individualisticperspective? (Van Parijs. understanding of the micro presupposes the macro. In Making Sense of Marx. In other words. there is causal explanation of aggregate phenomena in terms of the individual actions that go into them. In contrast to MI. 1985: 5). a passage which is apparently reversed in the account of good scientific method given on the previous page. nd: 2)7 Concerns of MI are thus central to the AM project. Elster continues: ³To go from social institutions and aggregate patterns of behaviour to individuals is the same kind of operation a going from cells to s molecules´ (Elster. In Elster¶s view. Methodological individualism thus conceived is a form of reductionism (Elster. such as desires and beliefs. 1985: 4). 1985: 4). Next. Finally. functional explanation and dialectical deduction´ (Elster. The molecules of RNA. etc. The clear implication here is that social science must seek explanations at the level of the individual taken in isolation. according to Elster. that which is to be explained. 1985: 6).Methodological Individualism. One simply cannot get from naked molecules to the cell. (1909-2009). Page 33 of 39
. DNA. Methodological collectivism ± as an end in itself ± assumes that there are supraindividual entities that are prior to individuals in the explanatory order. yet underlying much of his most important work. can only be explained by reference to what they are there for.
but cannot themselves cause that behaviour. On the contrary. which it is important to appraise. only a temporary necessity(Elster. Part 1
The recipe for successful science described here is reductionist as I define it. From the standpoint of holistic approaches to social science. that is when we reduce the time-lag between explanans and explanandum. Why does this tradition persist? Because the individuals concerned behave in such a way as to maintain it. An important issue which Elster raises concerns the ultimate desirability of different kinds of explanations. is closely associated with going from the aggregate to the less aggregate level of phenomena (Elster. from longer to shorter time-lags « [T]here is a real danger that attempts to explain complex phenomena in terms of individual motivations and beliefs may yield sterile and arbitrary explanations « [T]his may be the case for the problem of finding micro-foundations for collective action. such that traditions which are good at presenting the human substrate with a set of incentives to act in support of the tradition itself are selected for. The aggregate phenomena are presumed to be a consequence of the behaviour of individuals. although it is important to bear in mind that this is only faute de mieux. that is. It is not only our confidence in the explanation. But why is it in their interest to do so? The micro-level explanation stops there. 1985: 56).´ Elster argues. reductionism is not an end in itself. We should add however. it is by no means a shortcoming of a theory that it the explanation it offers only makes sense at the macro level. µthe rationale for reductionism¶ is the ³need to reduce the time -span between explanans and explanandum ± between cause and effect ± as much as possible´ in order to reduce the risk of such errors as spurious correlation (Elster. that a more detailed explanation is also an end in itself. According to Elster. It is a Page 34 of 39
. again. While it is not clear to me what reducing the time-span between cause and effect has to do with going from the more to the less aggregate level phenomena.Methodological Individualism. ³In this perspective. We start with individuals considered in isolation from the ³aggregate phenomena´ which. an explanation of social entities in terms of a description of the behaviours of micro-level agents may be no explanation at all if it fails to enlighten us as to the macro reasons why the micro-level pattern of behaviour occurs. In such cases we are better off with a black-box explanation for the time being. only a concomitant of another desideratum. 1985: 5). on other views. secondary by-products which play no further role. 1985: 5): these risks are reduced when we approach the ideal of a continuous chain of cause and effect. Methodological collectivism can never be a desideratum. but our understanding of it that is enhanced when we go from macro to micro. (1909-2009). This presentation of the matter contains a concession to µmethodological collectivism¶. to holism instead of reductionism. because it is in some sense in their interest to do so. The macrolevel explanation might be that the tradition has survived and developed within an evolutionary process. This. might be held to influence or even determine the behaviour of the individual. it is clear that all the action is presumed to take place at the micro level: it is at the micro level that the explanans is to be sought and the macro level phenomena are merely epiphenomena. But that is to posit ³supra-individual entities that are prior to individuals in the explanatory order´.
or rather ranges of behaviour.Methodological Individualism. such as that in the Principia Mathematica. To adopt Elster¶s half-hearted. which has nothing to say about such substrate matters. It is the macro-level description of what is going on which is key. it can be done mentally.
Statement (a) is a statement of reductionism. The third. and considering the crucial question of the existence of real hypostatisations. Indeed. part began by reviewing the relationship between wholes and parts in social science. is therefore in some sense incomplete. bringing the story up to date. the view that individuals act in some sense in accordance with their perceived interests. the micro-level description a matter of filling in the detail. or the processor in a computer. This can be done with a digital computer. if need be. economy and clarity is gained by excluding detail. Udehn and Hodgson. in the cells of the brain. While there is some degree of substrate-neutrality. The explanation of macro-level phenomena must be consistent with the behaviour of self-seeking individuals. Similarly. faute de mieux. Ultimately the rejection in limine of non-human causally efficacious social entities appears implausible and unnecessarily restrictive. is to adopt the strategy of looking for the cause of a traffic jam under the bonnet of the i ndividual vehicles (Hofstadter. an analogue computer such as the Phillips machine. Consider the example of calculation. or with a stick drawing in the sand. there are limits. will examine the contributions of Popper and Watkins. To understand the point requires us to discriminate between two possible statements of methodological individualism: (a) The explanation of macro-level phenomena must be in terms of the behaviour of self-seeking individuals. A brief consideration of the approach to MI of the analytical Marxist school of thought came to the conclusion that these writers adopted a reductionist ontology in which the non-existence of real hypostatisations was an axiom ± an assumption not a finding. Part 1
standpoint that allows institutions and practices ± the mafia. But the contention that such theories are µblack boxes¶. A complete scientific account of calculation would include a description of what is going on at the micro-level. 1985: 787). and Marx¶s labour theory of value. may be considered incomplete to the extent that they do not specify the precise agent behaviours.
4 Conclusion In this paper I have set out a sequence of studies of the proponents of methodological individualism (MI) using the notions of holistic and reductionist ontologies developed in Denis (2004). (1909-2009). the notion that we could dropthem if only we had complete knowledge of the substrate would be rejected by holists. Keynes¶s theory of aggregate demand. Elster¶s formulation contains a grain of truth however. It cannot be done with the clouds or the stars in the sky. Arrow.
Bibliography Page 35 of 39
. and to look for microlevel explanations wherever possible. which would be consistent with them. while (b) is a statement of materialism. acceptance of macro-level explanations. not accumulating it. or with an abacus. An account of arithmetic. and thus far final. supposing for the moment that they are true. the catholic church. or the labour party ± to have their own interests. Further work.
cfm?abstract_id=947260 (Accessed 26 June 2009). HH Gerth and C Wright Mills (1970 ) ³Introduction: the man and his work´ in Weber (1970): 3-74. Friedrich Hayek (1952) The Sensory Order. F. URL: <http://mises. Friedrich Hayek (1967) Studies in Philosophy.denis/research/marx. URL: <http://staff. Andy Denis (2005) ³The Invisible Hand of God in Adam Smith´ Research in the History of Economic Thought and Methodology 23-A: 1-32. Andy Denis (2004) ³Two rhetorical strategies of laissez-faire´ Journal of Economic Methodology 11 (3): 341-353. Andy Denis (2002b) ³Collective and individual rationality: Maynard Keynes¶s methodological standpoint and policy prescription´ Research in Political Economy 20.uk/andy. (1909-2009). URL: http://papers. Page 36 of 39
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Andy Denis (2002a) ³Was Hayek a Panglossian evolutionary theorist? A reply to Whitman´ Constitutional Political Economy 13 (3).com/sol3/papers.ssrn. Available online from Social Science Research Network. Milton Friedman (1976) ³Comment´. Available online from the Ludwig von Mises Institute.
(1909-2009). Online edition. URL: <http://mises. Reprinted in Dorothy Emmet and Alasdair MacIntyre (1970) Sociological Theory and Philosophical Analysis London: Macmillan. Ludwig von Mises (1962) The Ultimate Foundation of Economic Science Princeton: Van Nostrand. Carl Menger (1985) Investigations Into the Method of the Social SciencesNew York and London: New York University Press for The Institute for Humane Studies.marxists. Questing for the essence of mind and pattern New York: Basic Books John Maynard Keynes (1981) Activities 1929-31.edu/archives/sum2009/entries/methodological-individualism (Accessed 2 January 2010). 1806. Douglas R Hofstadter (1985) Metamagical Themas. Mises Institute 2009. Ludwig von Mises (1996)  Human Action: A treatise on economics Irvington: Foundation for Economic Education. Page 37 of 39
.htm>. 1826] An essay on the principle of population. Available online from the Ludwig von Mises Institute. 1807.org/books/investigations. Available online from the Marxists Internet Archive. URL: <http://mises. forthcoming URL: http://plato. Originally published (1883) as Untersuchungen über die Methode der Socialwissenschaften und der Politischen Oekonomie insbesondere. Ernest Nagel (1979) The Structure of Science.org/resources/3250> (accessed 12 June 2009). Problems in the logic of scientific explanation Indianapolis: Hackett Joseph Schumpeter (1909) ³On the Concept of Social Value´ The Quarterly Journal of Economics 23 (2): 213-232 (February). URL: http://mises. 76-88.aspx> (accessed 23 May 2010).Methodological Individualism. Online.pdf (Accessed 26 June 2009). London: Dent/Everyman¶s Library. in two vols. Steven Lukes (1968) ³Methodological Individualism Reconsidered´ The British Journal of Sociology 19(2): 119-129. Rethinking Employment and Unemployment Policies. Klein (nd) ³Biography F. for the Royal Economic Society. A. URL: <http://www. Part 1
Joseph Heath (2009) ³Methodological Individualism´ The Stanford Encyclopedia of Philosophy Edward N Zalta (ed).org/about/3234> (accessed 10 January 2010). Karl Marx (1937)  The Eighteenth Brumaire of Louis Bonaparte Moscow: Progress Publishers.stanford. Mises Institute 2009 Edited by Louis Schneider. Peter G. Geoffrey M Hodgson (2007) ³Meanings of methodological individualism´ Journal of Economic Methodology 14 (2): 211-226 (June).mises. XX London: Macmillan. translated by Francis J Nock. 1817.org/archive/marx/works/1852/18th-brumaire/ch07. Thomas Robert Malthus (1958) [1803.org/books/ufofes/ch5~4. Available online from the Ludwig von Mises Institute. in D Moggridge (ed) The Collected Writings of John Maynard Keynes Vol. Hayek (1899-1992)´ Ludwig von Mises Institute. URL: <http://www.
archive. Philippe Van Parijs (nd) ³Analytical Marxism´ Available online. Lars Udehn (2002) ³The Changing Face of Methodological individualism´ Annual Review of Sociology 28: 479-507.org/books/schumpeter_individualism. with a preface by FA Hayek. however] (Accessed 26 June 2009). 1994. and in German as ³Analytischer Marxismus´ in Kritisches Wörterbuch des Marxismus Band 1. PA: The Pennsylvania State University Press. pp. Part 1
Joseph Schumpeter (1980) Methodological Individualism Brussels: Institutum Europæum. The translation is questionable in places.Methodological Individualism.History and Meaning London: Routledge.org/details/daswesenundderh00schugoog [unfortunately pp 98-99 are missing. Chris Matthew Sciabarra (2000) Total freedom: toward a dialectical libertarianism University Park. English translation by Michiel van Notten of the corresponding chapter of Joseph Schumpeter (1908) Das Wesen und derHauptinhaltdertheoretischenNationalökonomie.). Cited in Gerth& Wright Mills (1970: 55). the German text may be consulted online in the Google Internet Archive at http://www.
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. Joseph A Schumpeter (1986 ) History of Economic Analysis London: Routledge. Lars Udehn (2001) Methodological Individualism: Background. Wolfgang Fritz Haug (ed. Berlin: Das Argument. 1922). Max Weber (trans.Analytical_Marxism__final_1. pp. 202-205.be/cps/ucl/doc/etes/documents/1994.pdf (Accessed 26 June 2009). maart 1987.) Max Weber (1922) Gesammelte Aufsätze zur Wissenschaftslehre (Tübingen. ed: HH Gerth& C Wright Mills) (1970 ) From Max Weber: Essays in Sociology London: Routledge. (1909-2009). URL: <http://www.pd f> (accessed 23 May 2010). URL: http://mises. Arnold Toynbee (1972) A Study of History Oxford: Oxford University Press Leon Trotsky (1973) Problems of everyday life New York: Pathfinder Press. 41±44 .uclouvain. and a Summary by Frank van Dun. (Published in Dutch as ³Analytisch marxisme´ in Vlaams Marxistisch Tijdschrift 21(1).
it [sc the ³September Group´ of analytical Marxists] gradually took a more prospective turn. The relationship between the reductionist methodological statements of this group and the policies. once we have adopted the intentional stance. 1995: 356). semantics about their meaning. (1909-2009). of course. or indeed constant utility (or indifference) curves. with a growing emphasis on the explicit elaboration and thorough defence of a radically egalitarian conception of social justice « and a detailed multidisciplinary discussion of specific reforms « This development has arguably brought analytical Marxism considerably closer to left liberal social thought than to the bulk of explicitly Marxist thought´ (Van Parijs.Methodological Individualism. not their names and speeches « So it is only at the level of intentional objects. the characters and their personalities. 5 Prinzipielle is better translated as principled than principal ± AD. 4 Geoff Hodgson has responded (personal communication) to the points made here.
In previous papers I have explored the relationship between the ontological approaches of reductionism and holism and the policy prescriptions which they might underpin. not even a sequence of propositions « What is in common. but I have not yet reviewed and edited the section in the light of what he says. nd: 3-4). described here as µradically egalitarian¶. Dennett¶s discussion of what West Side Story and Romeo and Juliet have in common illustrates the point:what they share is ³not a string of English characters. 3 The term µutility curve¶ seems to refer to any one of total or marginal utility curves. Mea culpa. that we can describe these common properties´ (Dennett. that Having started with a critical inventory of Marx¶s heritage. not the text. is not a syntactic property or system of properties but a semantic property or system of properties: the story. which it espoused. is suggestive and warrants further attention. Emphasis in citations follows the original ± exceptions are noted as such. 6 Syntax is about the rules for manipulating words.
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. Part 1 Notes
This section draws on the corresponding section of Denis (2006a: 11-14).
Of interest is the final comment of Van Parijs¶s brief paper.