Must social explanations involve human meaning?
Pete Boettke describes Lachmann's argument for methodological individualism here:
"Austrian economists, Lachmann insisted, are methodological individualist because it is only at the level of the individual that we can attribute meaning to human action."
Let us grant, for the sake of argument, that Lachmann is correct about the level of the individual and meaning. (I don't think he is, but I don't wish to argue that point here.) Does methodological individualism follow from the fact that "only at the level of the individual that we can attribute meaning to human action"?
I can't see why it would. Why must all social explanations be related to the meaning of human actions?
Schelling offers the following example that I believe shows they don't: Let us say human beings gain fine-tuned control over the height of their offspring, due to advances in genetic engineering. Most people are not that concerned with the height of their children, we will assume, but no one wants their child to be a "runt." So everyone asks there friendly genetic engineer to make sure their child is not the bottom 10% of the height distribution.
What will happen? The human race will get taller. Because of course, there must be a bottom 10% of the height distribution, because of what a distribution is. So that 10% will just keep moving upwards, along with the average height. And note that this benefits no one: the amount of food necessary to feed this population will go up as well.
We have a classic collective action problem. No one meant to raise the average height of the human race, but their actions did so anyway. And although they gave a reason for why they were acting that way, that reason is not an important part of our story. If the same process happened as the result of a bug in a genetic programming computer, we would get the same result.
So Lachmann's assertion that meaning exists only at the level of the individual does not get us to methodological individualism: there is just no reason that all social analysis must occur at the level of meaning.
"Austrian economists, Lachmann insisted, are methodological individualist because it is only at the level of the individual that we can attribute meaning to human action."
Let us grant, for the sake of argument, that Lachmann is correct about the level of the individual and meaning. (I don't think he is, but I don't wish to argue that point here.) Does methodological individualism follow from the fact that "only at the level of the individual that we can attribute meaning to human action"?
I can't see why it would. Why must all social explanations be related to the meaning of human actions?
Schelling offers the following example that I believe shows they don't: Let us say human beings gain fine-tuned control over the height of their offspring, due to advances in genetic engineering. Most people are not that concerned with the height of their children, we will assume, but no one wants their child to be a "runt." So everyone asks there friendly genetic engineer to make sure their child is not the bottom 10% of the height distribution.
What will happen? The human race will get taller. Because of course, there must be a bottom 10% of the height distribution, because of what a distribution is. So that 10% will just keep moving upwards, along with the average height. And note that this benefits no one: the amount of food necessary to feed this population will go up as well.
We have a classic collective action problem. No one meant to raise the average height of the human race, but their actions did so anyway. And although they gave a reason for why they were acting that way, that reason is not an important part of our story. If the same process happened as the result of a bug in a genetic programming computer, we would get the same result.
So Lachmann's assertion that meaning exists only at the level of the individual does not get us to methodological individualism: there is just no reason that all social analysis must occur at the level of meaning.
I don't get what the genetic example is doing at all. Would you likewise say that methodological individualism, in the tradition of Austrian economics, is shown to be dubious by the Mengerian theory of the origin of money? In that story, people have narrow ends, and nobody intends to create money, but that's what happens.
ReplyDeleteSo did I just show the weakness in Austrian insistence on methodological individualism?
Yes you did. Good work. You will note Menger never talked about "individualism" at all. And it is examples like this that led Hayek to abandon MI.
DeleteWhy did Mises insist upon methodological individualism despite accepting stories like the above? You'd have to ask him.
No, that previous answers is to flippant. Mises held to MI because in his intellectually formative years the only alternative was methodological holism. Hey, I would pick MI over MH as well! But we don't have to stay in that box. We can be MP theorists!
DeleteWhat is MP?
DeleteWhat is MP?
DeleteMethodological pluralism.
DeleteHang on a second Gene. If you're right, then a huge portion of *standard* economic analysis is not contained within "methodological individualism." Everything Hayek would have called "spontaneous order" falls outside its orbit.
ReplyDeleteIs it possible that you're using the term differently from how the proponents are using it?
Last thing: Suppose I say, "Fleming was working with some molds and discovered penicillin, even though that wasn't his intention."
According to you, was my statement an example of methodological pluralism?
"Everything Hayek would have called "spontaneous order" falls outside its orbit."
ReplyDeleteWell, yes, that's why Hayek dropped MI!
"Is it possible that you're using the term differently from how the proponents are using it?"
No, as someone who has spent a dozen years re-visiting this literature, that's not really possible.
What you are ignoring is my "vacuous" branch. And I am hardly the first to note this: MI thinkers can be divided into two groups: those who exclude much good social science, or those who include so much that the "individualist" part of the name loses all meaning.
Can you give an example of a thinker who's part of the group of "those who exclude much good social science"?
DeleteSure: Rothbard. Mises theory of MI would exclude a lot of good social science, but he was too good a social theorist to actually exclude them, for the most part.
Delete"MI thinkers can be divided into two groups: those who exclude much good social science, or those who include so much that the "individualist" part of the name loses all meaning"
ReplyDeleteWhich leaves me to wonder: where does that put Gene? Certainly you aren't doing any of us any favors by saying, "well, it's up into the air". That sounds mighty confused to me.
What? When did I say "Well it's up in the air?"
ReplyDeleteI thought i'd been pretty darned clear: Methodological pluralism for me.
I'm re-posting this because I think you deleted it (accidentally): Gene, the best example I can think of, of a popular economic explanation that violates MI is PV=MT. So are you saying that there is no non-vacuous way for an Austrian to say, "I object to PV=MT as a way of explaining prices, because it doesn't involve volitional actors."?
ReplyDeleteBob, when you say "object to PV=MT as a way of explaining prices", do you mean object to it as false, or object to it as an incomplete explanation of prices?
DeleteNo, I would say that objection is false: why in the world should we object to PV=MT a priori? Maybe it DOES hold. So what it doesn't involve volitional actors? If it generally holds, it generally holds. (I am not saying it does, just that ruling it out in advance seems totally unjustified.)
ReplyDeleteSo THIS is what I am saying: as soon as you give MI some bite, it is false.
@Gene_Callahan Do you at least agree that MV=PT cannot possibly be the fundamental explanation of prices?
DeleteOf course: http://gene-callahan.blogspot.com/2013/11/my-map-is-better-than-your-map-my-map.html
DeleteThe only "fundamental" explanation of prices is the entire universe!
Shoot I didn't say my comment properly. (In my defense, I *originally* did, before you sent it to limbo.) OK obviously you think clinging to MI is unwise, Gene. But, it seems you are saying something stronger. You're saying that everything that would fall under "spontaneous order" and "Invisible Hand" are not examples of MI. So I'm saying, is your claim that there does not exist a definition of MI, such that it excludes PV=MT but includes Menger's theory of the origin of money?
ReplyDeleteDo you see what I mean? It's one thing to say, "Let's have a big tent, and not exclude things just because they don't satisfy our superstition."
It's quite another to say, "Austrians reject MV=PT but in so doing, they just threw out the origin of money. Oops."
See what I mean?
"So I'm saying, is your claim that there does not exist a definition of MI, such that it excludes PV=MT but includes Menger's theory of the origin of money?"
DeleteHmmm... I see. I bet there is.