Antony Waterman wrote:  
< What is 'methodological individualism'? As I understand it, it  is the working
assumption that human social phenomena may be explained without remainder as the outcomes
of action by individuals: and that any additional explanans (e.g. 'collective' plans,
intentions etc., 'laws of history', 'general will' and so forth) are redundant. Why are we
quarrelling about this?>
  
  
Well, this thread started with a comment about Hayek and individualism as a basis of
social science. Someone asked, "does not the existence of corporate bodies
(collectivities) make these ideas inapplicable for modern society?" Hayek is the heir of
Austrian methodological individualism (MI) and closely related to Von Mises in this
respect. The question that was posed concerns whether there will be a remainder (in
Waterman's sense) due to which MI does not explanatorily exhaust all phenomena of interest
to an economist. New institutionalists do in fact claim this. I feel some refinements in
the discussion can be of use.
  
First of all, in all microreduction (viz. from the ideal gas law to the kinetic   
theory of gases, from Mendelian genetics to microbiological genomics, and from
institutions to individual action) the point of focus is the existence of so-called
emergent properties. So MI is a form of microreduction in which the
microlevel contains individual intentional behaviour and the macrolevel contains social
phenomena as emergent properties of our environment, such as institutions.
  
A good example of an emergent property is wetness: a molecule of water is not wet, but (as
was found out in 1999) six molecules are! So wetness emerges from a collection of water
molecules from a clearly discernable starting point of aggregation. This is interesting.
Similarly, life emerges from lifeless material at a particular point of aggregation (and
with a whole lot of other boundary conditions). Social phenomena emerge from individual
behaviour. The question, then, whether economic research is doing good science with its MI
orientation is justified in itself. The answers - as also this whole HES discussion that I
am reading through shows me - are sometimes somewhat less than well thought over.
  
The domain of economics is social phenomena as these come about as unintended consequences
of otherwise intentional behaviour by individual agents. (Intended social consequences are
possible too, but these seem to constitute the object of other types of social research.)
In whatever justification for either a MI or a more holistic approach, the ontological
issues must be well distinguished from the epistemological issues. To loosely say that the
social emerges from the individual and that therefore the proper place to look for
explanations of the social is the individual level, is like mixing up the two sorts of
issues. My car key fits into the steering wheel lock due to the macro morphological
characteristics of both the interior of the lock and the key; or is it due the micro
quantum characteristics of the two? To pre-scientifically plea for either approach is
making science into less than an empirical matter. The macroscopic explanations will do in
certain (most) circumstances, and these do probably not tell a fictitious story but a real
one. However, if you come up with a striking story about packages of quanta to explain the
functioning of a lock that really provides insight into the matter, great! The lock and
the key may be made up of whatever microscopic particles (ontology), that says nothing at
all which level is the best to start explanations from (epistemology). That's why science
is progressing best where it is pluralistic, no matter whether this concerns natural or
social science. Do not try to settle this a priori, but a posteriori!!!
  
The ideal gas law says that there is a approximately constant relationship between
pressure, temperature and volume of a gas, no matter what gas it concerns, as long it
remains well in between the limits of this particular gas
phase. The kinetic theory of gases says that this relationship is constant due   
to the elasticity of the collision of the molecules and the momentum exchange   
which is equal to twice the product of the mass of the molecules and their   
velocity towards the wall of the container. The kinetic theory of gases reveals   
a particular mechanism. With the help of some statistical auxiliary hypotheses and an
identificatory reasoning step, it can be shown how the ideal gas law in fact logically
derives from the assumptions of the kinetic theory. Microreduction in action. But the
kinetic theory is useless if you want
to make approximate calculations with gases in containers, construct gas pumps or
deflation valves. The focus you choose is to be determined by the research interests,
background information and doubtlessly some pre-scientific intuitions too. And science is
fallible, nothing new here.
  
In my view, the Austrians like Menger and Mises provided the most convincing arguments for
the expected fruitfulness of MI explanations because they stressed the underlying
mechanisms that are operative in translating individual action to unintended social
outcomes, or "emergent properties". Classical economics, insofar as it takes a Walrasian
style of reasoning, is less convincing in its MI orientation, for it lacks explicit
interest in the conversion mechanism that connects the individual with the social. The
Invisible Hand then remains a mystery because it is not considered an explanandum, but it
is at the same time empty as an explanans. The Austrians took an interest in the Invisible
Hand as something to be studied.
  
In conclusion, (1) in answer to Antony, it makes sense to ask the sort of   
questions this thread has been about; (2) the difference between the individual and the
social has something to do with emergent properties, just like this is the case in biology
and other natural sciences; (3) emergent properties are the raison d'=EAtre for holists;
(4) holists cannot be dismissed as wrong-headed without further ado, this depends upon the
prioriness or posterioriness of their stance (viz. in the first case they are wrong, in
the latter case they may have a point); (5) the discussion often confuses ontological with
epistemological issues; (6) epistemologically, it may make sense in a given situation to
use more holistic explanatory tools, at least for the time being, even if the ontic
constitution of the world is fundamentally one of micro-objects (properties, relations)
giving rise to macro-objects (properties, relations); (7) Austrians like Hayek have done
the best job in microreduction so far, because what interests us is the precise mechanism
under the phenomenon of "emergence"; (8) Austrian explanation has, at least partly,
similar characteristics as does the explanation of the gas laws in terms of a kinetic
theory: it refers to a mechanism.
  
Menno Rol