Methodological individualism

Methodological individualism is the requirement that causal accounts of social phenomena explain how they result from the motivations and actions of individual agents, at least in principle.

In neo-classical economics, people's behavior is explained in terms of rational choices, as constrained by prices and incomes. The neo-classical economist accepts individuals' preferences as givens. Becker and Stigler provide a forceful statement of this view:

Economist Mark Blaug has criticized over-reliance on methodological individualism in economics: "it is helpful to note what methodological individualism strictly interpreted ... would imply for economics. In effect, it would rule out all macroeconomic propositions that cannot be reduced to microeconomic ones ... this amounts to saying goodbye to almost the whole of received macroeconomics. There must be something wrong with a methodological principle that has such devastating implications."

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