The Online Library of Liberty

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• Associate Editors
• Editorial
• Bibliographic Essay: Forrest Mcdonald, a Founding Father's Library
• Bibliographic Essay: Murray N. Rothbard, Modern Historians Confront the American Revolution
• I: Paradigms of Freedom
• Conflicting Paradigms
• Paradigms As Procrustes' Bed
• Interest and Ambition
• Thesis and Antithesis
• Freedom and Authority
• Sin and Society
• Autonomy and Authority
• Virtue and Status
• Utility and Progress
• Diversity and Equality
• II: Nonspontaneous Order
• State Vs Society
• The Therapeutic State
• Order and Elites
• Order and Virtue
• Self-perfection
• Socialism and Freedom
• Market Socialism
• Centralism Vs Decentralism
• Voluntary Servitude
• Authority and Obedience
• Social Control
• Power and Ideology
• Hegemony
• III: Spontaneous Order
• Freedom and Knowledge
• The Case For Government
• The Case Against Government
• Community Vs. State
• State and Morality
• Freedom and Creativity
• Order Without State
• IV: Individual and Social Good
• The Right to Privacy
• Autonomy and Psychiatry
• Personal Choice
• Individuals, Groups, and States
• Social Dynamics
• Social Engineering
• Individuals and Groups
• Personal Vs. Social Goods
• Individual Rationality
• Self-interest and Social Good
• Self-interest Vs. Slavery
• Art and Autonomy
• Radical Individualism
• V: Ethics, Rights, and Freedom
• Objective Values
• Natural Law
• Preambles to Freedom
• Social Sciences and Values
• Reason and Change
• Reason and Choice
• Economics and Values
• Legal Naturalism
• Justice As Restitution
• Justice As Punishment
• Rights and Contract
• Virtue In the Market
• Justice Under Capitalism
• Profits and Choice
• Social Framework and Prosperity
• Ecology and Rights
• Business' Social Ethics
• VI: Equality
• Problems With Inequality
• Equality, Power, and Values
• Unequal Income
• Equal Opportunity
• Equal Liberty
• Equality of Condition
• The Egalitarian State
• Sexual Equality
• VII: Power
• Empire, Equality, and Envy
• Imperial Presidency
• Empire and Inflation
• Watergate As a Symptom of Empire
• The Pragmatic Presidency
• “absolute Power” and Corruption
• VIII: Planning Vs. Choice
• Origins of Planning
• Bureaucratic Growth
• Prediction and Control
• Government Planning
• Government Experts
• Useless Usury Laws
• Wartime Regulation
• Government Inflation
• Neomercantilism
• Compulsory Schooling
• Planning In Nonprofit Agencies
• Private Capital and Education
• Choice and Spontaneous Order

Individuals and Groups

Agassi, Joseph

• Boston University and Tel Aviv University

“Institutional Individualism.” British Journal of Sociology (UK), 26 (1975): 144–155.

Which are more important: individuals or institutions? Perhaps both.

A lively but inconclusive debate has been waged in Britain over a proper social sciences methodology. This conflict, initiated by the studies of Friedrich Hayek and Sir Karl Popper (who, in turn, developed the insights of Max Weber and Ludwig von Mises), centered on methodological individualism vs. holism.

To explain the complex social processes encountered in economics and politics, methodological individualism focuses on human individuals: their choices and goals are the primary reality that the social scientist must examine. In this individualistic methodology, complex chains of individuals interacting purposefully explain and create aggregate social forces.

Holism, or methodological collectivism, focuses instead on social wholes (society, the state, and other institutions) as the primary reality. In this view, social institutions explain and determine the goals of individuals.

Holism differs from individualism as a method in three pairs of antitheses: (1) Society is a “whole” which exceeds its parts (holism); only individuals have aims or interests (individualism); (2) “Society” affects the individual's aims (collectivism, voluntary or involuntary); the individual behaves in a way adequate to his aim, given his circumstances (rationality principle); (3) The social framework influences and constrains the individual's behavior (institutional analysis); individuals' actions can change the social set-up (institutional reform).

In reality, these three alternatives are false dichotomies and do not need to exclude each other. They conflict only if we accept the false inference that if “wholes” exist, then they have distinct aims and interests of their own.

In another form, this debate pits psychologism against institutionalism. Psychologism as a theory claims that one can reduce every social, economic, or political theory to purely psychological explanation, in terms of individual purposes. Institutionalism denies psychologism. It asserts that the social sciences are autonomous, are not reducible to psychological entities, and involve distinct social entities (customs, traditions, societies, etc.).

Again, through three pairs of anti-theses, we witness the apparent contradiction of these two viewpoints: (1) Society is the primary social entity (institutionalism); the individual is the primary social entity (psychologism); (2) One's primary duty is to one's society (collectivist morality); the individual conscience may criticize society (autonomy of morals); (3) Social conditions affect individual conditions (collectivism); individuals affect social conditions (institutional reform).

Once again, in reality, we see this second set of opposed tenets as false dichotomies which are not necessarily inconsistent with each other. They contradict each other only if we fail to see that there may be different senses in which either society or the individual is primary at the same time.

We can escape these traditional dichotomies and reconcile the opposed viewpoints by accepting a revised form of “Popperian” institutional individualism. Combining institutionalism with individualism, this position asserts that both the individual and society are “primary.” We cannot reduce individual psychology into sociology, nor sociology into psychology. Institutional individualism agrees that a social institution may have aims and interests, but only when one or more individuals give it an aim, or act according to what they decide should be its interests. A society or an institution cannot have aims and interests of its own. The “aims” of institutions do not affect the individual's behavior. Individuals who created them endow the existing institutions with “aims.” Once created, institutions become a part of an individual's circumstances, which together with his aims influence his behavior.

An individual may obligate himself to his society or institutions (Church, lodge, etc.), but only if he freely chooses such obligation. This allows for a collective responsibility without tribalism or collectivist ethics.