Wednesday, March 27, 2013

Methodological Individualism in Economics

Francis Wooley at Worthwhile Canadian Initiative does a public service by explaining why economics is dominated by methodological individualism. I'm personally rather more critical of the approach, the more multi-paradigmatic field of political science was definitely a better fit for me, but any economist who takes time to discuss the issue deserves a shout out (be sure to read the comments). Economics does seem relatively unwelcoming towards other paradigms, so it's particularly important that economists realize that they are working within a particular paradigm.

What I wish was acknowledged was that this paradigm can be restrictive, the set of problems that can be examined within this paradigm is more limited than that available to those using multiple paradigms to investigate problems. Also, the paradigm's limitations tend to give an illusion of certainty and precision that's not really justifiable. Still, it's what economists do and there's a lot of value added for this approach. Especially when the alternative is the lazy appeals to culture we see too often in newspapers, and criticized in the post. Cultural explanations can be done well, but it rarely filters into the media in an intelligible form.

I do suggest reading it alongside "We Aren't the World." (hat tip Rod Dreher, whose post I will hopefully take up later).

[Updated to add in missing link and to make somewhat clearer. Worthwhile Canadian Initiative doesn't acknowledge the downsides to the approach nearly as much as I'd like, but it's great to see a mainstream economist acknowledging the existence of the paradigm. It is of course a major topic among a lot of non-mainstream economists, but rarely mentioned by more mainstream ones.]


  1. Thank you Tzi for posting "We Aren't the World" link. It is an excellent article. For an avid reader of scifi literature, the content of that article just sounds like common sense. It is almost like the Heisenberg principle.
    I am also very interested to see the applications of the facts uncovered in this research in economics. Good bye invisible hand. It seems it was all in some people's head all along. The big problem is that we haven't figured out what to do with bad memes, other than chop the heads carrying them...

    1. I did love that article, it's something worthy of much wider distribution. I'd agree with the problem regarding bad meme's; it's very, very difficult to change people's minds and there are an awful lot of terrible ideas circulating as common wisdom. It would be nice to think education is counter-acting this, but it seems like good research is losing on this front as well.