Searching for a methodological synthesis -Hayek's individualism in the light of recent holistic criticism

Journal of Economic Methodology 4 (2):267-287 (1997)
This paper compares different strategies of analysing economic phe-nomena, namely individualism and holism. As it turns out, a main point for which methodological individualism is criticized is its supposed reductionism and the related arbitrariness of choosing individuals as a unit of explanation. The paper shows that there exists at least with F. A. Hayek an author who presents an evolutionary theory of economic and social change that avoids the reductionism of orthodox individualistic theory. According to Hayek, the social scientist should try to receive insights about collective phenomena by analysing to what extent rules of behaviour are adopted by some individuals, larger groups or a whole population. Besides the selection argument, Hayek's observation of learning processes as primary factors determining behaviour gives rise to a conception of mankind far beyond optimization models. Hayek thus overcomes a reductionist individualism by taking recourse to hierarchical selection and learning processes.
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