Methodological individualism
Method of analysis in social sciences
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Related on Lably
Through Social science, Max Weber and Economy and Society
History within the social sciences
This framework was introduced as a foundational assumption within the social sciences by Max Weber, and discussed in his book Economy and Society. Within later schools of economic thought, such as the Austrian School, strict adherence to methodological individualism is considered a necessary starting principle. It draws heavily upon assumptions of neoclassical economics, where social behavior is explained in terms of rational actors whose choices are constrained by prices and incomes, and where individuals' subjective preferences are treated as a given.
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Criticisms
Economist Mark Blaug has criticized over-reliance on methodological individualism in economics, saying that "it is helpful to note what methodological individualism strictly interpreted [...] would imply for economics. In effect, it would rule out all macroeconomic propositions that cannot be reduced to microeconomic ones [...] this amounts to saying goodbye to almost the whole of received macroeconomics. There must be something wrong with a methodological principle that has such devastating implications".
Similarly, the economist Alan Kirman has critiqued general equilibrium theory and modern economics for its "fundamentally individualistic approach to constructing economic models", and showed that an individualist competitive equilibrium is not necessarily stable or unique. However, stability and uniqueness can be achieved if aggregate variables are added, and as a result he argued "the idea that we should start at the level of the isolated individual is one which we may well have to abandon".