Methodological Individualism

Résumé du document

?Methodological Individualism' is an integral part in Economics and originates within the Austrian School of Economics. However, there are many different schools of thought for individualism; this paper will concentrate on the Austrian School of thought. The likes of Kenneth Arrow and Alan Kirman have expressed the suggestion that the problem with economics might be its methodological individualism. On the flip side, however, there is Coleman and Boudon who argue that methodological individualism is the solution and not the problem. This paper will briefly outline the concept of ?Methodological Individualism' and illustrate an example that explains its purpose in economics then conclude with a critique.

Extraits

[...] For Weber this was the underlying principle to Methodological Individualism as it allows one studying this phenomenon to understand why individuals act as they do. This is totally unattainable in the natural sciences. Without knowing this small scale phenomena and understanding why it occurs, one would have a very difficult job of deciphering large scale phenomena. Linda Jones in 1994 in her book on Social Context of Health and Health Work” basically said that individualism is the theoretical approach which suggests that group explanations are found for phenomena rather than social structures or political and economic ones. [...]

[...] Habits that are passed on are evolutionary and are likely to benefit the individual for the future. This is known as “Group Selection” critique of the Austrian School of Economics: Methodological Individualism, http://www.huppi.com/kangaroo/L-ausmi.htm) this perhaps can be expressed best in an example: Two family butchers, X and Y. Both began their business in 1810 and did relatively well passing it on to their next generation and so forth. X has stayed in the same shop and has never picked up the secrets or techniques from his forefathers or adopted new technology and in the last fifty years has experienced a sharp decline in profits. [...]

[...] However there is much debate as to the worthiness of Methodological Individualism. Bibliography Blaug, Mark. (1993) The Methodology of Economics: Or How Economists Explain, (Second Edition) Cambridge University Press: Cambridge Davis, John, Hands, D. Wade, and Mäki, Uskali (eds.) (1998) The Handbook of Economic Methodology, Edward Elgar: Aldershot Deborah L Walker, Austrian Economics, The Concise Encyclopaedia of Economics, www.econlib.org/library/enc/AustrianEconomics.html Dow, Sheila. (2002) Economic Methodology: An Inquiry, Oxford University Press: Oxford Geoff Hodgson, (1986) Behind Methodological individualism; Cambridge Journal of Economics 211-224 Jones J. [...]

[...] Popperian Methodological Individualism 4. Coleman's Methodological Individualism 5. Austrian Methodological Individualism” (Lars Udehn p. 347) In a nutshell Methodological Individualism means that all economic phenomena can be explained and accounted for by individuals. Furthermore if a decision is made by a group of people: for example a discussion on what economic topic to pick for a presentation, it is not a group decision but an individual decision, even if the final decision is one that no one suggested in the group, but was a compromise, all members have agreed to this compromise as this gives a better feeling, utility, than no compromise. [...]

[...] (Menger [1883] 1963:155, Lars Udehn pp 90-91) Critique of Methodological Individualism Methodological Individualism can have entirely different meanings in economics and sociology. Most of the criticism of Methodological Individualism relates to the partnership between what Watkins called “rock bottom explanations and half-way ones” (http://plato.stanford.edu/entries/methodological-individualism). (For example the actions of individuals, we still do not know why they may have made a certain decision to act, like murder.) For example if one was to look at the decline in violent crimes in the US in the 1990s, one would begin to think of the obvious contenders: hiring more police, decline in drugs, increase in religion, fewer younger men. [...]