by Gene Callahan
Many Austrian economists embrace the doctrine of ‘methodological individualism,’ as I myself did, for instance, in my book Economics for Real People. But subsequent study on my part, most significantly of the work of Tony Lawson in his philosophy of economics project he calls ‘Critical Realism,’ as well as my readings of the social theories of the British Idealists, has led me to question the soundness of that position.
I will begin by noting that I think the adoption, by Mises, Hayek, and other Austrians of their era, of methodological individualism is understandable, given that the chief alternatives available when they wrote were some sort of ‘social holism,’ a la Durkheim, or Marxist historical and class determinism. If one’s choice is restricted to those three options, I believe methodological individualism is indeed the preferable stance to take.
However, the very either/or framing of these options was a symptom of the reductionist view of science that was prevalent at that time. Social phenomena, so it was thought, ought to be explained using a single theoretical framework: either explanations should be couched in terms of, say, individual choices, or society as a whole, or in terms of material, historical ‘forces.’ This view was in line with the ‘unity of science’ project that dominated early twentieth-century philosophy of science. But today, even in regards to the physical sciences, the assumptions of that project have been widely rejected; for instance, LSE philosopher of science Nancy Cartwright contends that we live in a ‘dappled world,’ and that the dream that we can reduce the plurality of explanatory schemes to a single, ‘fundamental’ mode of explanation is, in fact, nothing more than a dream.
That reductionist project was tied to the notion that there is some ‘basic entity’ that should be the foundation of all ‘fundamental’ scientific explanations, and that reference to higher-level, composite entities is merely a convenience springing from human limitations in getting at the ‘real’ story. But nothing in the modern history of science suggests that all scientific theories are converging on such ‘fundamental’ explanations: to the contrary, much progress has been made by ignoring the reductionist impulse. The entire science of thermodynamics rests on the aggregation of particles into a statistical ensemble; as Werner Heisenberg noted, it is hardly sensible to ask what the ‘temperature’ of a single atom is. Evolutionary theory explains the traits of individual organisms by looking to the history of the species of which they are a member, a distinctly anti-reductionist enterprise. Ecology arose as a science when it was recognized that the behavior and survival of individual organisms can not be fully understood without recognizing the larger ‘web of life’ in which those organisms are situated. While a hurricane surely consists of a multitude of molecules in motion, the very phenomenon of hurricanes would vanish if our view was limited to looking at each molecule in the atmosphere individually. And quantum mechanics, which is, at present, the culmination of the quest to find the ‘ultimate’ constituents of nature, contends that the behavior of a single particle is intrinsically conditioned by its previous interaction with other particles; in other words, the behavior of the ‘atomic’ components of reality can only be explained by referencing a larger context than individual particles.
So, if physical science has progressed by such pluralistic methods, is there any reason to think that social science cannot do likewise? Surely, Mises and Hayek were correct to argue that the action of an individual is not determined by social wholes or historical forces, as Lawson recognizes when he writes, for instance, that ‘given the open nature of human action—the fact that each person could always have acted otherwise—it follows that social structures can only ever be presented in an open system.’
But why isn’t acknowledging the reality of individual, human choice as compatible with the validity of social explanations couched in terms of higher-level entities as is acknowledging that storms are composed of molecules compatible with a meteorological understandings of the weather? Without denying the reality of individual choice, can we not employ other levels of explanation whenever they are more efficacious? For instance, does it really advance our understanding of social phenomena to insist that ‘the German army invaded Poland’ is somehow an unsatisfactory explanation of the events of September, 1939, and to demand that a ‘real’ explanation must be put in terms of why a vast number of German-speaking individuals wearing very similar clothing just happened, at the same time, to rush eastward and begin shooting at a large number of Polish-speaking individuals who all were wearing a different sort of clothing? Indeed, doesn’t the Austrian explanation of a phenomenon like inflation rely on the existence of a supra-individual institution such as money? And isn’t Menger’s theory of the origin of money reliant on supra-individual social facts that determine the most saleable commodity in any particular society?
Now, it may be objected, to the above, that Mises, Hayek, and other Austrians were well aware that individuals are socially embedded, and that their choices are ineluctably situated within a social context. Just so, I respond! My contention is that Mises and Hayek were led to advocate methodological individualism as a philosophical stance because it seemed preferable to the other options they saw as available for grounding social theory, but, when they turned to explaining real social phenomena, they were far too capable as social theorists to actually restrict themselves to the sort of explanation their purported philosophy ostensibly required. But contemporary philosophy of science has made room for methodological pluralism, and, I suggest, that is the proper attitude for today’s Austrians to adopt: social explanations should be framed in terms of whatever level of reality makes the phenomenon in question most comprehensible, and not restricted by an injunction that declares all but individualist explanations to be invalid.