Since nobody seems willing to consider the existing literature on methodological individualism (MI), let me make the main point about MI that is central to neoclassical economics: MI simply says that things do not decide only individuals do. So, if one is to explain any social event, one must show that the event is the result of decisions made by individuals. The question is whether or not this precludes consideration of institutions. That is, do institutions play a role in any individual's decisions? If one requires any involved institution to also be explained as the result of individual decisions, this would amount to a reductionist version of MI. Such a version is not necessary but many neoclassical economists think that it is. The question is why. As Anthony suggests, it could be simply a matter of ideology (so-called ontological individualism). Is there any other reason? My humble suggestion is that if you are interested in MI you should follow Arrow's 1994 suggestion and read Chapter 2 in my 1982 book (Foundations of Economic Method [available free on my web page]) or if you are rich, read Chapter 2 in the second edition (not on my web page). Lawrence A. Boland