Methodological Individualism

54 Psychologism in early social sciencemaking the enjoyment he derives from his possessions a maximum’ (p. 79,note). 12In Wicksteed’s major work, The Common Sense of Political Economy (1910), utilitymaximisationis pushed a bit further into the background. Economics is nowbased on a ‘psychology of choice between alternatives’ ([1910] 1933: 2f). For thepurposes of economic theory, each individual is endowed with a single scale ofpreferences encompassing all objects of desire (pp. 32–6). The economicproblem confronting each individual is how to administer limited resources inthe choice between alternatives according to his/her scale of preferences.Wicksteed is aware that choice is not always deliberate and not always rational,but maintains that the principle of price is always active (p. 28). Wicksteed’s realpoint of departure is the household, not the individual, but he assumes that it isadministered by an individual in the form of a housewife. The end of economicanalysis, however, is to explain the organization of industry and commerce. As inhis first work, he calls it a ‘catallactic community’, but he also describes it as a‘spontaneous organisation’, made up of ‘spontaneous relations’ (pp. 15f). The‘aggregate’, or combined, result of the actions of all individuals in this catallacticcommunity is called, with a term borrowed from mechanics, a resultant. (see, e.g.pp. 5, 162, 167).Wicksteed is critical of the idea of economic man acting from a specificeconomic motive. Economics is not based on the assumption of a specific motiveat all, but on a specific, impersonal, economic relation called ‘non-tuism’. For thepurposes of economic science there is no need to assume that individuals areself-interested. They may very well act from altruism or benevolence. The onlyassumption needed is that individuals are not altruistic or benevolent towardsparties to exchange, but that they try to strike the best bargain they can in theireconomic transactions. ‘The economic relation does not exclude from my mindeveryone but me, it potentially includes every one but you’ ([1910] 1933: 174).Wicksteed knows, of course, that economic relations are usually ‘embedded’ insocial relations of various sorts, but defends the simplifying assumption ofisolated economic relations for the purposes of economic science (pp. 194ff). 13Economics, then, is not based on assuming a particular motive such as selfinterest,or utility-maximisation, still this does not mean that it is free frompsychology (Wicksteed [1914] 1933: 780): ‘If political economy is the science ofwealth, then it deals with efforts made by man to supply wants and satisfydesires. “Want,” “effort,” “desire,” “satisfaction,” are each and all psychicphenomena’ (Wicksteed [1914] 1933: 766). It is equally obvious, however, thatthe economist is not engaged in doing psychology. Following John NevilleKeynes, Wicksteed argues that economics takes psychological principles as itspoint of departure, rather than subjecting them to investigation. But the ultimatelaws of economics are psychological and ‘it may be argued that politicaleconomy is largely, or even prevailingly, applied psychology, so that the economistmust from first to last realise that he is dealing with psychological phenomena,and must be guided throughout by psychological considerations’ (p. 767).Alfred Marshall (1842–1924) was probably the most influential of the British