Front Page Titles (by Subject) Individuals and Groups - Literature of Liberty, January/March 1978, vol. 1, No. 1
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Individuals and Groups - Leonard P. Liggio, Literature of Liberty, January/March 1978, vol. 1, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Individuals and Groups
“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.