Geoff Hodgson on Methodological Individualism
| Nicolai Foss |
Geoff Hodgson is no doubt a very thoughtful economist. I admire much of his work. But I have always been disturbed by a sustained theme in his writings: His relentless criticism of methodological individualism. To me, MI is “trivially correct,” to paraphrase Jon Elster, and I have viewed Hodgson’s critiques as bizarre and idiosyncratic, particularly because I have not thought that he provided any good reasons to reject MI.
However, the Journal of Economic Methodology has just published a very interesting piece by Hodgson, “Meanings of Methodological Individualism,” in which he offers some serious reasons why MI is problematic (and perhaps more than that). Hodgson argues that MI are surrounded by a number of ambiguities: 1) It is unclear whether it is intended to be something that is specific to “pure economics” or to the social sciences in general; 2) it is unclear whether MI is about social ontology or about social explanation, and 3) it is unclear whether it refers to “explanation in terms of individuals, or indivuals alone.”
Now, 1) doesn’t really seem to me to be an ambiguity. While indeed Schumpeter, the inventor of the term, thought of MI as something that applied to pure economics alone, it is quite clear that modern proponents of MI think of it as applying generally to the social sciences. 2) is a red herring, for while MI is about explanation it is rooted in the ontological argument that only individuals act.
However, Hodgson is right in arguing that 3) represent an ambiguity in the history of MI. He himself takes the position that explanation purely in terms of individuals is impossible and points (drawing on Arrow) to general equilibrium as a theory that, although it has been claimed to explain solely in terms of individuals, actually relies fundamentally on assumptions on social structure. The position that a social science explanation involves individuals as well as the structures within which they interact has been called “institutional individualism.” It may be found in the famous Coleman diagram in the argument that “downwards causation” from structures to the conditions of individual actions is possible (see the first chapter of this) (for this reason, Mario Bunge has argued that Coleman is really a “closet systemist”, i.e., semi-holist).
Hodgson argues that “institutional individualism” isn’t individualism proper. He is right that the position looks like a confused half-way house. But is it really? The structures or institutions in question are themselves and in turn explainable in terms of individuals. Of course, it may be argued that these individuals in turn interacted within structurs, so we get bogged down in the wellknown regress problem of individuals and structures. This argument, I submit, is ultimately another red herring, as only individuals act, not structures or institutions. The idea of a regress gets this wrong.