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Methodological individualism: True and false

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  • Alexander J. Malt

    (University of Durham)

Abstract

I apply Hayek’s distinction between ‘true’ and ‘false’ individualism to methodological individualism. Hayek traced ‘false’ individualism to Cartesian rationalism; Hayek’s rejection of Mises’ praxeology was due to its rationalist underpinnings. The first half of this paper identifies praxeology’s foundational philosophical concepts, emphasising their Cartesian nature, and illustrates how together they constitute a case for methodological individualism: intuition and deduction; reductionism; judgement; dualism. In the second half of this paper, I draw upon philosophy and cognitive science to articulate ‘Hayekian’ (N.B. not Hayek’s) alternatives to these Cartesian concepts. The Hayekian alternative allows a ‘gestalt switch’ from the individual- to the system-level perspective. I therefore suggest that methodological individualism is both true and false: true, in that economic phenomena are grounded in the actions of individuals; false, in that certain problems might be reconceived/discovered at the system-level. I finish by suggesting three avenues of research at system-level: optimisation; stigmergy; computational complexity.

Suggested Citation

  • Alexander J. Malt, 2018. "Methodological individualism: True and false," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 31(1), pages 73-109, March.
    • Handle: RePEc:kap:revaec:v:31:y:2018:i:1:d:10.1007_s11138-016-0373-9
    DOI: 10.1007/s11138-016-0373-9
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    References listed on IDEAS

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    1. Geoffrey M. Hodgson, 2007. "Meanings of methodological individualism," Journal of Economic Methodology, Taylor & Francis Journals, vol. 14(2), pages 211-226.
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    4. Hoppe, Hans-Hermann, 1996. "Socialism: A Property or Knowledge Problem?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 9(1), pages 143-149.
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    7. Ariely, Dan & Wallsten, Thomas S., 1995. "Seeking Subjective Dominance in Multidimensional Space: An Explanation of the Asymmetric Dominance Effect," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(3), pages 223-232, September.
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