Following Anthony's lead, one reason why the term  
"methodological individualism" is useful is that it  
makes us pause to consider that a �method� is a means  
of achieving a goal. To speak of a method without a  
goal is to put the cart before the horse and driver.  
So what is the goal one aims to achieve when she uses  
methodological individualism?  
  
In his message, Anthony assumes that it is to explain  
social phenomena. Well, perhaps �a� goal of economics  
is to explain economic phenomena. But I don�t think  
that this pinpoints the reason why the greatest  
economists have studied economics. I think that their  
goal was to make judgments about market intervention  
(and the supreme intervention - socialism. To do this  
they had to explain relative prosperity. Explaining  
this social phenomenon was undoubtedly a means of  
achieving their main goal. But it was not the main  
goal and, therefore, did not drive the method.  
  
Being able to explain prosperity was a means of  
helping to judge whether particular government actions  
would help or hinder growth and development. It did  
not matter very much to them whether such factors as  
the �culture of individualism,� the Judeo-Christian  
religions, or the size and complexity of the human  
brain had helped produce prosperity. What one expects  
governments to do when they intervene �in the market�  
is to affect individual incentives, not culture,  
religion, or human physiology. Let others try to  
explain why the industrial revolution occurred in the  
West and not in the East, Arabia, or the Galapagos  
Islands.  
  
An apparent exception is money and banking, where  
there can be panics and manias. (I take it that this  
is the basis for Hoover's claims, although I don't  
have immediate access to Roger's reference.)  
Individual interaction has harmful outcomes in such  
cases that are beyond the individuals' intentions. And  
this is a possible justification for intervention. But  
methodologically individualist explanations of these  
phenomena are still essential before sound conclusions  
about intervention can be reached.   
  
It is easy to neglect the individuals and to identify  
causes for panics and manias in the �blind� reactions  
and animal spirits. People who do so are apt to seek  
answers to the interventionist question in a  
paternalist government. These people are brothers and  
sisters of Pigou, who recommended taxes and subsidies  
to deal with externalities. But let's first follow  
Coase, and of course Hayek, in examining thoroughly  
whether the individuals can solve their problems of  
externalities before we make a recommendation.  
  
Pat Gunning