History of development and definition

The term ‘methodological individualism’ was coined by Joseph Schumpeter (Hodgson 2007, pp. 211–214; Udehn 2002, p. 484). This term first appeared in German – ‘Der

methodolo-gischer Individualismus’ – as a chapter title in the book published by Schumpeter in 1908

‘Das Wesen und der Hauptinhalt der theoretischen Nationalökonomie’. One year later it ap-peared in English in the article ‘On the Concept of Social Value’ published in the Quarterly Journal of Economics. Schumpeter employed this term to make a distinction between political and methodological individualist. For Schumpeter methodological individualism simply means that individual is the starting point for describing economic phenomena, for all things are demanded, produced, and paid for because individuals want them – irrelevant why indi-viduals demand these goods. Thus, the term served rather as a method in theoretical econom-ics than in sociology and should not be associated with many prominent versions of methodo-logical individualism promoted after the Second World War that put the emphasis on the question why and how individuals take decisions and actions resulting in certain economic phenomena.

Notwithstanding the frequent appearance of the term methodological individualism in con-temporary literatures of social sciences, there is no consensus on its sense and usage (Hodg-son (2007, p. 212; Udehn 2002). Therefore, the clarification of the definition and the notion behind these two words is of the uttermost importance. Containing the word ‘individualism’

this term has indeed the notion that the methodology of explaining social phenomena should be based on individuals with their actions and decisions. However, it is first important to fur-ther specify what precisely the explanantia of methodological individualism is: are social phenomena to be explained entirely in terms of individuals alone or partly in terms of indi-viduals plus other factors such as the interactive relations between indiindi-viduals and social insti-tutions? Based on this difference in explanantia Udehn (2002, p. 500) distinguished two ma-jor versions of methodological individualism. Proponents of strong methodological individualism put individuals as the only exogenous variable in their model; whereas those of weak methodological individualism include interaction between individuals and social institu-tions. The development of the latter makes the traditional opposition and exclusive separation between individualism and institutionalism/holism difficult.

Against the strong version of methodological individualism Hodgson (2007) argued that re-ducing explanation only to individual is untenable. First, institutions do matter in explaining collective phenomena because they play influential role of shaping individuals:

Individual choice requires a conceptual framework to make sense of the world. The reception of information by an individual requires a paradigm or cognitive frame to process and make sense of that information. The acquisition of this cognitive apparatus involves processes of

socializa-standing of the world is necessarily acquired through social relationships and interactions. Cog-nition is a social as well as an individual process. Individual choice is impossible without these institutions and interactions. (Hodgson 2007, p. 218)

Second, despite the fact that the proponents of strong methodological individualism do not consider institution as explanantia, they would still have to account for the existing institution shaping the individuals. These individuals, in turn, are also shaped by the previous institu-tional set-up which is also partly a result of purposive actions from individuals, and so on.

Then, where should the analysis stop? This infinite regress, in which neither individual nor institutional explanatory factors are predominant over each other, brings us to the puzzle

‘which one comes first, the chicken or the egg?’ (Hodgson 2001, pp. 249–252). Acknowledg-ing that there is no ‘institution-free’ nature of individuals, each social analysis must always and unavoidably start from individuals plus some institutions, however primitive. Both of these arguments are in line in particular with the cultural-cognitive pillar of institution as it is elaborated in the Sub-chapter 3.5.3.

Based on these arguments, the analytical framework of this research follows the definition of the weak methodological individualism, namely ‘an approach to explaining social phenomena in terms of individuals, their interaction and social institutions’. The discourse upon methodo-logical individualism in this sub-chapter accentuates the importance of taking individuals with their actions, decisions, and interactions as one of the starting points in the empirical research stage. This necessity of integrating both explanantia into a model useful and applicable in empirical research leads to the Macro-Micro Model that was proposed by Coleman (1990) and then further extended by Esser (1999).

Table 3-1 Methodological individualism: A problematic label

Although the advocates of the weak version of methodological individualism have already given clear defini-tion and convincing arguments to abandon the too reductive, narrow view of the strong methodological indi-vidualism, Hodgson criticised the term itself: If social institutions and structures deserve the equal importance of being explanatory factor as individuals, why still call the term ‘methodological individualism’? Why not

‘methodological structuralism’ or ‘methodological institutionalism’? All of these terms are misleading, for each analysis has to start from both structures/institutions and individuals.

The term ‘institutional individualism’ proposed by Joseph Agassi can better reflect the notion. However, it is to notice that ‘institution’ receives here the adjective status; whereas ‘individual’ has the prestige status of being the noun. Why not call it ‘individualistic institutionalism’? No reasons and argumentations can give the one primacy over the other.

Another critique is concerning the confusion over the term as being ‘methodological’ or ‘ontological’ statement.

Following Udehn, methodological individualism is a principle, rule, or programme about how to define collec-tive concepts, explain social phenomena, and/or reduce macro to micro. Many advocates of methodological individualism, however, state it as an ontological thesis, namely that the cause, nature, and existence per se of social phenomena is individual; as it is stated in a well-known citation “There is no such thing as society”.

Source: own compilation based on Hodgson (2007) and Udehn (2002)