I don't have any reason to doubt Larry's statement  
that Mises introduced the term "methodological  
individualism" to economics. If that is true, then he  
deserves some credit in history of thought texts.   
  
I would add that Mises did much more. The reason he  
was willing to entitle his books _Epistemological  
Foundations of Economics_, _The Ultimate Foundation of  
Economics_ and _Human Action_ is that he believed that  
he had discovered a new science: praxeology.   
  
Economics, he said, is a branch of praxeology. That  
is, the study of market interaction is a branch of the  
study of action in general. He believed that  
praxeology is the logical unfolding of the  
implications of the concept of action, which is known  
a priori. For example, human actors possess the  
property of perceived means and ends and they make  
choices. We know that a priori. By "logical unfolding"  
I mean that one tries to identify the essence (or  
properties) of action and then uses logic to determine  
the implications of the a priori assumption that  
individuals possess these properties.  
  
Economics is first an application of praxeology to the  
special conditions of the market economy. One asks: On  
the basis of what we know about action, what patterns  
can we identify among those people who possess the  
properties of action under the conditions of (1) money  
being used as an intermediary means in the effort to  
meet ends, (2) private property rights, and (3) free  
enterprise.   
  
Second it is specifically concerned with evaluating  
arguments for or against market interaction. By  
evaluating arguments, and not policies themselves, it  
applies criteria of logical consistency and relevance.  
It asks whether the means that are proposed will  
achieve the ends that the proposer wants to achieve.  
The only relevant values are those of the proposer of  
an intervention or a non-intervention (and of course  
the choice of the evaluator regarding which arguments  
to evaluate and, beyond that, his choice to do  
economics instead of car washing). In this sense, the  
science of economics is value free.  
  
The question raised by a number of contributors to  
this discussion of methodological individualism is  
whether it makes sense to define and study action  
without being concerned with history, evolution, the  
physiology of the brain, culture, etc. The best  
defense of the proposition that it does make sense is  
in part 1 of Human Action. _The Ultimate Foundations  
of Economic Science_ is an easier read. But the two  
are not equivalent. This is also likely to be the best  
epistemological defense of neoclassical economics. An  
excellent book by a philosopher on Mises's defense of  
praxeology is:   
  
Cubeddu, Raimondo.(1993) The Philosophy of the  
Austrian School. New York: Routledge.  
  
  
Pat Gunning