David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Ezio Di Nucci
Jack Alan Reynolds
Learn more about PhilPapers
Journal of Economic Methodology 19 (4):339-355 (2012)
In modern economics, the firm is a means of overcoming the inefficiencies generated by transaction costs and incomplete contracts. Its boundaries, therefore, are the means by which the efficiency of competition can be salvaged. Whether or not agents feel comfortable with the values which underlie various ownership structures remains outside this theory. Moreover, the working of different ownership structures is entirely based on the presumption that agents' motivation (as opposed to incentives) will remain constant. This, of course, is typical of methodological individualism where the analysis is one directional: from the agent to society. However, methodological individualism does not have to be confined to such narrow analytical conceptions. It would still be methodological individualism if social institutions would feedback into the behaviour (motivation) of agents. The main purpose of this paper is to show that a more socially conscious methodological individualism was employed in the analysis of the firm by classical economists like J.S. Mill. I will show that Mill was acutely aware of the significance of the proximity of ownership to the productivity of the operator. However, he was also aware of the function of the larger social context within which the operator worked. While Mill recognised the technological benefits of larger operations (corporations), he also recognised that in an environment where the system repeatedly fails the expectation of the larger body of workers, the gains from large enterprises may be completely undermined. Given Mill's general belief in the progress of humanity and in the possible improvement in the characteristics of individual members of society, he thought that in the future, such large enterprises may work well if ownership was given to all those engaged in the production process. While the work of J.S. Mill is clearly incomplete, he has rightly drawn attention to the neglected interrelationship between social arrangements and economic agents. In this respect, he offers a far more comprehensive insight into the possible cause and boundaries of the firm.
|Keywords||No keywords specified (fix it)|
|Categories||categorize this paper)|
Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
|Through your library|
References found in this work BETA
John Stuart Mill & John M. Robson (1966). Principles of Political Economy. Philosophy 41 (158):365-367.
Citations of this work BETA
Armin W. Schulz (2015). Firms, Agency, and Evolution. Journal of Economic Methodology 23 (1):57-76.
Similar books and articles
Eric Mack (1999). In Defense of Individualism. Ethical Theory and Moral Practice 2 (2):87-115.
Andrew Gustafson (2009). J. S. Mill's Communal Utilitarian Self. International Philosophical Quarterly 49 (2):173-184.
Marco Buzzoni (2004). Poppers Methodologischer Individualismus Und Die Sozialwissenschaften. Journal for General Philosophy of Science / Zeitschrift für Allgemeine Wissenschaftstheorie 35 (1):157-173.
G. B. Madison (1990). How Individualistic is Methodological Individualism? Critical Review 4 (1-2):41-60.
Stephen Nathanson (2005). John Stuart Mill on the Ownership and Use of Land. Philosophy in the Contemporary World 12 (2):10-16.
Dale E. Miller (2003). Mill's `Socialism'. Politics, Philosophy and Economics 2 (2):213-238.
Chandra Kumar (2008). A Pragmatist Spin on Analytical Marxism and Methodological Individualism. Philosophical Papers 37 (2):185-211.
Henry Jackman (1998). Individualism and Interpretation. Southwest Philosophy Review 14 (1):31-38.
Richard W. Miller (1978). Methodological Individualism and Social Explanation. Philosophy of Science 45 (3):387-414.
Torbjörn Tännsjö (1990). Methodological Individualism. Inquiry 33 (1):69 – 80.
Torbjörn Tännsjö (1990). Methodological Individualism. Inquiry 33 (1):69-80.
André Clark (2003). Methodological Individualism, Cognitive Homogeneity and Environmental Determinism. Journal of Economic Methodology 10 (1):79-85.
James H. Fetzer (1986). Methodological Individualism: Singular Causal Systems and Their Population Manifestations. Synthese 68 (1):99 - 128.
Daniel Steel (2006). Methodological Individualism, Explanation, and Invariance. Philosophy of the Social Sciences 36 (4):440-463.
Added to index2012-12-01
Total downloads5 ( #483,899 of 1,790,225 )
Recent downloads (6 months)1 ( #427,635 of 1,790,225 )
How can I increase my downloads?