Reading Liberals and Libertarians by Dr. Ernest Partridge over at Dissenting Voice prompted me to write this letter to Dr. Partridge in response:
Dear Dr. Partridge,
This is in reference to your May 17th, 2007 article Liberals and Libertarians published in Dissenting Voice. I think you have made a serious methodological error when attempting to prove the existence of “society” as an entity greater than the sum of individuals and their interactions, and since you mention that you devote two chapters of a book you are, writing I feel it is important to bring this to your attention.
The error you make is failing to stick to methodological individualism. Methodological individualism makes individuals the basic theoretic unit. Methodologically individualistic theories make some set of assumptions (which are usually based on empirical evidence) about the behavior of individuals and all phenomena are explained through individual actions. The only way we can speak about “society” or “the public” as something separate from individuals and their interactions is to take some methodologically social approach to economics. A methodologically social approach would make society the basic theoretical unit, and it would make assumptions about the behavior of society. Methodological individualism is vital in economics because we humans can really only observe individuals; we have almost no ability to observe society as a whole in order to make intelligent assumptions about the behavior of society which is necessary to take a methodologically social approach to economics (at least one that is useful). Note the failure of Marxism as a descriptive theory (ignoring the normative philosophy). While it would be possible choose a more reduced methodology, such as methodological cellurlarism or methodological molecularism which use cells or molecules as the basic theoretical unit, as is often done in the other sciences, for economic theories, it would be very difficult to make useful theories for “economic” phenomena because such theories would have to describe individual human behavior before it could describe interactions between individual humans. Theories that use a more reductionist methodology than individualism must “pass through” methodological individualism.
By definition, methodological individualism excludes any notion of “society” or “the public” that is more than individuals and their interactions. The examples you give as evidence of a social entity separate from individuals and their interactions are good examples of what economists call “externalities”. Externalities occur when an action has effects (positive or negative) on people who have difficulty bargaining with the actor. For example, in your antibiotics scenario, taking antibiotics is good for the individual but has a small negative effect on everyone around them. The negative effect on individuals from a single antibiotics user is small, but since it affects a large number of people and a large number of people use antibiotics the negative effect can be important. This problem does not resolve itself because since the negative effect is small for each individual person from individual antibiotics users, it is not worth any single person’s time to try to limit any other’s individual use of antibiotics. It is important to recognize that the negative effect is on individuals, not some metaphysical entity “society.”
Externalities and the resulting market failures are well explored in economics, and usually acknowledged by libertarians. I am a little disappointed that you fail to make this distinction because I know you are aware of the concept of a ‘market failure’ (and presumably ‘externalities’ as well) from reading another one of your articles. It is one thing to claim that we should use the power of the government to correct externalities (some libertarians, including me, would agree with you), but it is wholly different to claim that ‘society’ is more than individuals and their interactions.