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Date: | Fri Mar 31 17:18:53 2006 |
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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
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