capitalism

240 Individualism, Methodological
are unique wholes that cannot be reduced to, that is, cannot
be completely explained in terms of, the actions, beliefs,
values, and so forth of individuals. Holism, according to a
popular if somewhat loose definition, is the doctrine that
a social whole is “more” than the sum of its individual
parts—or, alternatively, that the whole is in some sense logically
prior to the individuals that comprise it.
Holists have often compared social phenomena to the
emergent properties of a chemical reaction. According to
this argument from analogy, individual human beings are
“atoms” that, when combined in a particular manner
through interaction, produce social “molecules” (institutions)
with new and unique characteristics.
In criticizing this view, which he dubbed “the chemical
method,” John Stuart Mill wrote: “Human beings in
society have no properties but those which are derived
from, and may be resolved into, the laws of the nature of
individual man.” However, Mill has been criticized by
other methodological individualists for his defense of
psychologism, which is the label given by Karl Popper to
the view that all social phenomena can be explained in
terms of the intentions, purposes, and motives of individual
human beings.
Although psychologism rightly insists that we must
reduce the actions and behavior of collective entities to the
actions and behavior of individuals, it erroneously maintains
that such explanations must be psychological (i.e.,
that they must ultimately refer to the conscious states and
dispositions of acting agents). According to Popper, Hayek,
and other methodological individualists, this error is serious
because many social institutions were not consciously
designed, but instead are the unintended consequences of
human action.
Hence, Mill’s psychologism, although a species of
methodological individualism, is but one variation of this
approach. According to its critics, many of whom are
methodological individualists, psychologism fails to take
into account the many social institutions, such as money
and language, that have developed spontaneously without
conscious planning or foresight. To say that all institutions
are the result of individual actions is not to say that these
institutions are the product of deliberate planning or design.
As Adam Ferguson put it in his book An Essay on the
History of Civil Society (1767), many social institutions
“are indeed the result of human action, but not the execution
of any human design.”
We are largely indebted to Adam Ferguson, David
Hume, Adam Smith, John Millar, and other luminaries of
the Scottish Enlightenment for our understanding of unintended
consequences and their role in the development of
spontaneous, unplanned social institutions. It is scarcely
coincidental that these sociological pioneers were methodological
individualists. None would have seriously entertained
the notion that social phenomena are reducible to
anything more than the actions of individuals and their
recurring relationships.
Modern social theory arose with the desire to explain
the origin and development of undesigned institutions. In
1882, Carl Menger phrased “the most noteworthy problem
of the social sciences” as follows: “How can it be that institutions
which serve the common welfare and are extremely
significant for its development come into being without a
common will directed toward establishing them?”
Karl Popper has noted that an “action which proceeds
precisely according to intention does not create a problem
for social science.” In a similar vein, in The Counter-
Revolution of Science, F. A. Hayek has argued that
modern social theory grew from a desire to explain the
origin and development of undesigned institutions: “It is
only insofar as some sort of order arises as a result of
individual action but without being designed by any individual
that a problem is raised which demands a theoretical
explanation.”
The significance of the theory of spontaneous order for
methodological individualism is that it offers a third alternative
to the extremes of psychologism and holism. The
methodological individualist can readily concede that some
social institutions result from something more than individual
actions—if by this we mean the intended outcome of
such actions. We also may speak of institutions as possessing
emergent properties—if by this we mean properties that
emerged spontaneously, apart from the intentions or plans
of individual actors.
It must be emphasized that methodological individualism
is not a libertarian theory per se. It is simply a method
of investigation in the social sciences. Although almost all
ethical and political individualists have embraced methodological
individualism, it also has been employed by
philosophers and social theorists with different moral and
political beliefs. Methodological individualism, however, is
far more consistent with the economic, sociological, and
political foundations of libertarianism than with any other
social philosophy.
In modern sociology, the most influential proponents
of methodological individualism have been Max Weber,
Georg Simmel, Alfred Schütz, and other proponents of the
interpretive and phenomenological schools of social theory.
It also has been widely employed by modern economists,
including Austrians such as F. A. Hayek and Ludwig von
Mises, members of the Chicago School such as Frank
Knight and Milton Friedman, and pioneers in Public
Choice theory such as James Buchanan. Last, methodological
individualism has been vigorously defended by Karl
Popper and his followers, most notably J. W. N. Watkins.
GHS
See also Economics, Austrian School of; Individualism, Political and
Ethical; Individual Rights