Download Lecture Slide - AI-Econ

HAYEK AS A
METHODOLOGICAL
INDIVIDUALIST
Francesco Di Iorio
Southeast University (Nanjing)
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• As understood by Hayek, MI is an explanatory approach
to the study of social phenomena that uses two
assumptions to explain these phenomena:
(i) Human actions must be explained taking into account
the meanings that individuals attach to them
(interpretative approach / Verstehen)
(ii)Social phenomena must be (largely) explained in terms
of unintended consequences of human actions (e.g.
traffic jam)
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MI vs HOLISM
• According to Hayek, holists and individualists disagree about 2
points:
• (i) Explanation of action: AUTONOMY vs HETERONOMY
• AUTONOMY = the causes of action must be sought inside the individuals (what matters is the
meaning the individuals attach to their actions) / HETERONOMY = the causes of action must be
sought outside the individual (human action must be explained in terms of social determinism)
• (ii) Ontology of “collective nouns” (e.g. market, society,
political party, Canadian Army) : NOMINALISM vs REALISM
• NOMINALISM = collective nouns do not refer to real substances (they refer to a collection of
individuals and emergent properties related to their interaction) / REALISM = collective nouns
refer to real substances (they are sui generis entities)
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Holism is largely rejected today; however MI is often
criticized
This is because MI is regarded as committed to
reductionism, where reductionism means an atomistic
theory of society that denies:
(i) the systemic nature of the social world and the
structural constraints imposed on the individuals by
this world
(ii) the causal power of social factors that are irreducible
to strictly individual properties
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•The equivalence between MI and reductionism does not
hold
• There are two variants of MI:
• Reductionist (e.g. reductionist economic approaches;
social contract theory)
• Non-reductionist (Popper, Menger, Weber, Hayek,
Boudon…)
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• The critics of MI argue that the entire individualist
tradition is reductionist
• There are two interpretations of MI in terms of
reductionism :
• (i) MI = idealist reductionism (e.g. Udehn, Bhaskar,
Lawson)
• (ii) MI = semantic reductionism (e.g. Kincaid, Sawyer)
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MI = idealist reductionism (e.g.
Udehn, Bhaskar, Lawson)
• MI is accused of reducing the social world to the mental
representation of it
• MI = anti-realist theory of the social world and social
constraints (social constraints = pure subjective opinion)
• MI is wrong because social constraints exist independently of
the agent’s opinion about what he or she is free or not free
to do
• There is a social structure that exists outside my mind and
that limits my freedom
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The interpretation of MI in terms of
idealist reductionism seems mistaken
• MI does not reduce the study of society to the study of purely
subjective opinions
• According to MI, the social world is not the product of a particular
mind, but rather the largely unintentional consequence of
intersubjectively shared meanings (collective opinions)
• Shared meanings create a stable structure of interaction and social
sanctions
• As Hayek pointed out, social systems must be seen as “the implications of many people
holding certain views”, i.e. as “the consequences of the fact that people perceive the
world and each other through sensations and concepts which are organized in a mental
structure common to all of them”. From the standpoint MI, grasping people’s common
understandings and the typical meanings that they attach to their actions is the first step
in explaining “the unintended or undesigned” nature of social phenomena.
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IM = semantic reductionism (e.g. Kincaid,
Sawyer)
• MI = social systems must be explained in terms of individuals
• This means that MI is supportive of a principle of semantic
reduction of social properties to individual ones
• MI is wrong because:
• (i) social phenomena cannot be analysed without reference
to semantically irreducible properties
• (ii) MI denies that there are semantically irreducible social
properties that causally influence action and limit individual
freedom
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The interpretation of MI in terms of
semantic reductionism seems implausible
because of the following 4 reasons:
• (i) many individualists openly rejected semantic reductionism:
• “the triviality as well as the vagueness of the statement that
the whole is more than the sum of its parts seems to be seldom
realized. Even three apples on a plate are more than “a mere
sum”, in so far as there must be certain relations between them
(the biggest may or may not lie between the others, etc.):
relations which do not follow from the fact that there are three
apples, and which can be studied scientifically” (Popper)
• “social structures … in respect to their parts are higher units”
(Menger)
• A society “is more than the mere sum of its parts” (Hayek)
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• (ii) The explanations in terms of unintended consequences are
semantically irreducible to psychological properties and laws
• Explanations of this kind are irreducible to the agents’ mental
and behavioral properties (e.g. Hayek’s analysis of the market
in terms of a self-organizing system)
• (iii) Methodological individualists (e.g. Menger, Popper,
Hayek) acknowledge the existence of emergent properties
that causally influence individuals and limit their freedom
• e.g. Hayek stresses that prices are unintentionally created by
human choices (prices unintentionally emerge from the
aggregation of different individual evaluations and distributed
items of information) and that they in turn affect those
choices, i.e. that the whole economic system causally
influence its parts and vice versa
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• (iv) By “explanations in terms of individuals” MI (as understood
by Hayek) does not mean that semantic reductionism is good
• It means that history and society cannot be explained in terms
of supra-individual social substances (holistic ontology) that
determine the individuals’ views and actions (heteronomy)
• According to MI, the individuals are the ultimate engine of
history and social dynamics (this view is consistent with the
contention that social phenomena are semantically irreducible)
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