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H.. ktisadi ve dari Bil imler Fakltesi Dergisi ,Cilt 16,Say 12, 1998 47
METHODOLOGICALINDIVIDUALISM N
CARL
MENGER:
AN EVALUATION*
H s eyi n ZEL
Abstract:
A l t h o u g h
Cari Menger, th e found e r o f the
A u s t r i a n
s chool o f e c o n o m i c s ,is kno wn as a
leading f i g r e i n t h e m a r g i n a l r e v o l u t i o n , h i s views o n t h e m e t h o d o l o g y o f
economicsdeserve even m o r e a t t e n t i o n .
in
p a r t i c u l a r ,
t h e t w o
v e r y f o u n d a t i o n s
o f t h e
A u s t r i a n school, n a m e l y s u b j e c t i v i s m a n d m e t h o d o l o g i c a l i n d i v i d u a l i s m , directly
come f r o m
Menger.
i n t h i s p a p e r , a f t e r b r i e f l y p o i n t i n g o u t t h e s u b j e c t i v i s t elements
in Menger's e c o n o m i c a n a l y s i s , I
e x a m i n e Menger's
v i e w s o n t h e m e t h o d o l o g y o f
e c o n o m i c s , w h i c h
t a k e s
m e t h o d o l o g i c a l i n d i v i d u a l i s m
a s t h e
m a i n
b a s i s ,
a n d
e v a l u a t e
b o t h h is v e r s i o n o f i n d i v i d u a l i s m a n d n e o f t h e a ttempts, made b y L u d w i g
L a c h m a n n , to p r o v i d e r i g o r o u s f o u n d a t i o n s to Menger's a r g u m e n t s .
it
is argued in
t h i s p a p e r t h a t b o t h o f t h e s e v e r s i o n s e x h i b i t th e s a m e i n c o n s i s t e n c y between
m e t h o d o l o g i c a l i n d i v i d u a l i s m a n d t h e h y p o t h e s i s o f u n i n t e n d e d consequences o f
i n t e n t i o n a l h u m a n b e h a v i o r , w h i c h h a s genera l ly been used as an a r g u m e n t in
f a v o r
o f
th em e t h o d o l o g ic a l
i n d i v i d u a l i s t i c s o c i a l t h e o r y .
z t
CARL
MENGER de METODOLOJKBREYCLKTR DEERLENDRME
A v u s t u r y a i k t i s a d i o k u l u n u n k u r u c u s u o l a n
C a r i
M e n g e r m a r j i n a l d e v r i m i n
n d e g e l e n i s i m l e r i n d e n b i r i s i o l a r a k b i l i n s e
d e,
o n u n i k t i s a t m e t o d o l o j i s i n e i l i k i n
g r l e r in i n o k d a h a i l g i n o l d u u s y l e n e b i l i r . z e l l i k l e , A v u s t u r y a o k u l u n u n i k i
t e me l
u n s u r u o l a n s b j e k t i v i z m
ve
m e t o d o l o j i k b i r e y c i l ik Menger'in
temel
k a t k l a r n d a n d r . B u
a l m a d a n c e l i k l e M e n g e r 'i n a n a l i z i n d e k i s b j e k t i f u n s u r l a r a
d e i n i l m e k t e
ve
o n u n i k t i s a t m e t o d o l o j i s i n e i l i k i n g r l e r i irdelenmektedir .
B u
b a k m d a n m e t o d o l o j i k b i r e y c i l i k , M e n g e r 'i n k e n d i y a k l a m n n t e m e l i n i
o l u t u r d u u n d a n , zel
b i r
n em t a m a k t a d r . B u n u n y a n n d a , M e n g e r 'i n y a k l a m n a
s a l a m a n a l i t i k t e m e l l e r k a z a n d r m a a m a c n d a o l a n
L u d v v i g
L a c h m a n n ' n b i r e y c i l i k
k o n u s u n d a k i g r l e r i d e i n c e l e n m e k t e d i r . a l m a d a , gerek M e n g e r ' i n v e
gerekse
L a c h m a n n ' n g r l e r i n i n a y n g l k t e n , y a n i m e t o d o l o j i k b i r e y c i l i k
i le
insanlar n
zgr i r a d e l e r i n e d a y a n a n i s t e n d i k d a v r a n l a r n n i s t e n m e d i k s o n u l a r h i p o t e z i
a r a s n d a k i t u t a r s z l k t a n k u r t u l a m a d k l a r
n e
sr lmektedir .
* I
w i s h
to e x p r e s s m y a p p r e c i a t i o n f o r th e c o m m e n t s m a d e b y P r o f . b r a h i m T a n y e r i f o r the f rs t d r a f t
o f t h e paper. A l ierrors a n d s h o r t c o m i n g s a re ,
needless
to say, mine.
* A s s . P r o f .
D r.
Hacettepe U n i v e r s i t y , D e p a r t m e n t
o f
E c o n o m i c s .
Keywords:
C a r i
M e n ge r , M e t h o d o l o g i c al i n d i v i d u a l i s m , A u s t r i a n E c o n o m i c s S c h o o l , e xa c t s c ie n c e,
L u d v v i g L a c h m a n n , h e r m e n e u t i c s , u n i n t e n d e d c o n s e q u e n c e s .
Anahtar Szckler: C a r i M e n g e r , M e t o d o l o j i k
b i r e y c i l i k ,
A v u s t u r y a k t i s a t O k u l u , k e s i n b i l i m ,
L u d v v i g L a c h m a n n ,
y o r u m s a m a c l k,
i s t e n d i k d a v r a n n i s t e n m e d i k s o n u l a r .
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48
Hseyin ZEL
Introduction
One of the
dis t ingu ishing character is tics
of the
Austr ian school
of
economics
is
it s emphas is on the methodological
foundat ions
of economics and the social
sciences in general. Although there are significant differences in the views of
different Austrian economists concerning th e methodology of economics, the two
very foundations of the Austrian school have always been subjectivism and
methodological individual ism,
and
these
tw o
foundations directly come from Cari
Menger, th e founderof theA ustr ian school .
As is well known,Menger's significance in the history ofeconomic analysis
lies in his introduction, together with Jevons and Walras, of the idea of marginal
uti l i ty, in his Principle
of Economics,publ ished
in
1871 (Menger 1981), though
he
never used this term.
in
this book, he conceptualized th e operation of a market
sys tem as governed by subject ive valuat ions of individuals which
determine
th e
entire s tructure of production and allocation of resources and the corresponding
enumerat ions
of
scarce resources (Kirzner 1990: 103). That
is ,
methodologically
speaking,
th e
Principle
is
founded
on a
subjectivist framework. Another significant
aspect o f
Menger ' s
v iews is tha t they rest almost exclusively on methodological
indiv idua l ism,
developed especia l ly
in his
Investigations
into
Method,
a
book
published in 1883 (Menger 1985).
The main focus of th is paper is thus methodological : in the first section.
After briefly
po in t ing
out the
subject ivist elements
in
Menger ' s economic analysis,
Iconcentra teon his v iewson the methodologyof the exact science of economics,
which is clearly founded upon methodological individualism.
in
th e
second
section,
I compare and crit icize two
different
perspectives on social theory,r tw o
different
versions of methodological individual ism vvithin th e Austrian school, namely,
Menger's
version,
and
Ludvvig
Lachmann ' s
version which adopts
an
hermeneutic
framework. it is the argument of this paper that both of these versions
suffer from
th e
same problem:
The
tens ion,
if not
contradic t ion, betvveen methodological
individualism and the hypothesis of unintended consequences of intentional human
behavior, even though this hypothesis
has
been used
in
both
Menger and the
other
Austrians as an
argument
for the
methodological individu al is t ic pos i t ion.
1
Subjectivism and
M ethodologicalindividualism
in
Menger s
Writings
1 1 Subjectivism an d Economic An alysis
Accord ing to Wicksell , "since Ricardo ' s Principles, there has been no book
n o t even except ing Jevon's br i l l iant
if
ra th er aphoris t ic achievement
and
W al ra s '
unfor tunate ly difficult work vvhich has exercised such great
influence
on the
development ofeconomics asM enger 's
Grundsaetze
." (quoted byHayek 1981:21)
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H..
ikt isadi
ve dari Bilimler Fakltesi Dergisi ,Cilt 16, Say 12, 1998 49
in th e Preface o f t h i s b o o k , Menger
asserts
t h a t e c o n o m i c the ory is
c o n c e r n e d
w i t h th e s a t i s fa ct i on o f materia l needs o f i n d i v i d u a l s . F o r h i m ,
e c o n o m i c
t h e o r y is conce rne d, n o t w i t h p a r t i c u l a r r u les fo r e conomi c activity, b u t
th e conditions u n d e r w h i c h
m en
engage
in
provi de nt a ct i v i ty d i re cte d
t o t h e
s a t i s f a c t i o n
o f t h e i rneeds. (Menger
1 9 8 1 :
48)
T h e needs o f i ndi v i dua l s a re , o f course, satis fied by goods. If a
t h i n g
is to
b e c o m e
a
g o o d ,
f o u r p r e r e q u i s i t e s
m u s t
b e p r e s e n t s i m u l t a n e o u s l y : A h u m a n n e e d ,
t h e c a p a b i l i t y o f t h a t t h i n g t o s a t i s f y t h i s n e e d , h u m a n k n o w l e d ge o f t h i s
c a u s a l
c o n n e c t i o n b e tw e e n tha t th i ng a n d s a t i s fa ct i on o f this need, an d f i na l ly , s u f f i c i e nt
a mount o f tha t th i ng fo r the s a t i s fa ct i on o f the ne e d:
. . . f rom
this i t i s evident that
g oods cha ra cte r is n o t h i n g i n h e r e n t in g o o d s a n d n o t a prope r ty o f
g o o d s ,
b u t
merely a re la t i ons h i p b e tw e e n ce r ta i n th i ng s an d me n, th e t h i n g s o b v i o u s l y c e a s i n g
to
b e
goods w i t h
th e
di s a ppe a ra nce
o f
t h i s re l a ti o n s h i p
(Menger
1981: 52).
in
th i s re s pe ct , the re
is no
e s s e nt i a l d i f fe re nce b e tw e e n cons ume r
goods,
r
in Menger's term s goods
o f
f i r s t
order, a n d
p r o d u c t i o n g o o d s , b e i ng
goods o f
h i g h e r order, i n c l u d i n g l a n d
a n d
l a b o r services, because b o t h k i n d s
o f
g o o d s
possess th e ca us a l conne ct i on
between
th i ng s a n d t h e s a t i s fa ct i on o f
needs.
T h e
o n l y di f ference between t h e m is t h a t
goods
o f f i r s t o rde r ha ve a di re ct an d g o o d s
o f s e cond orde r
an
i ndi re ct ca us a l re la t i on w i th
th e
s a t i s fa ct i on
o f o u r needs.
(Menger 1981:
57)
A c c o r d i n g
to
n e interp reter (Ga rrison 1990: 135), th is
di f fe re nce ca n b e a t t r i b ute d to the t i me e le me nt i nvo lve d i n product i on proce s s .
Hi g he r o rde r g oods
a re
t r a n s f o r m e d s e q u e n t i a l l y i n t o g o o d s
o f
l o w e r
a n d
l o w e r
order u n t i l they emerge as c o n s u m e r g o o d s . F o r e x a mple ,
s o m e
o f the s e h i g he r
orde r g oods , s uch
a s
seed
g r a i n , w h i c h
c o u l d b e
u s e d
f o r i m m e d i a t e
c o n s u m p t io n ,
b e c o m e c a p i t a l g o o d s i f the y a re us e d i n the product i on proce s s .
in
o t h e r w o r d s ,
c a p i t a l
g o o d s ari se
as an
o u t c o m e
o f t h e
t i m e
p re feren c e; the
c h o i c e
between th e
s a t i s f a c t i o n of the needs at present r in a more dis tant t ime period (Menger
1 981 :
1 55)
1
.
O n th e o t h e r h a n d , th e
economic
c h a r a c t e r o f g o o d s ari ses f rom th e
q u a n t i t a t i v e
r e l a t i o n s h i p betvveen the ne e ds a nd the a va i la b le q ua nt i ty o f tha t
good. If the requirements fo r goods are larger than th e avai lable quanti t ies o f
t h o s e
g o o d s , s o m e
o f t h e ne e ds w i l l re ma i n uns a t i s f i e d, an d the re fore , a c h o i c e
between needs wi t h respect
to
t h e i r i m p o r t a n c e m u s t
be
ma de ,
an d
f u r t h e r m o r e ,
in
t h i s c h o i c e
n e
m u s t
try to
ob ta i n
th e
greatest
p o s s ib l e
result wi th
agiven
q ua nt i ty
o f
th e
g o o d
r a
g i ve n re s u l t w i th
th e
s m a l l e s t p o s s i b l e
q u a n t i t y
(Menger
1 981 :
.9596).
T h e s e
k i n d s
o f
g o o d s w i l l
b e
e c o n o m i c g o o d s ; o t h e r s ,
th e
g o o d s w h o s e
a va i la b le q ua nt i t i e s
are
greater
r
e q u a l
t o t h e
re q ui re me nts
fo r
t h e m ,
are
n o n e c o n o m i c goo ds (M enger 1981: 97).
T h e
e x c h a n g e
v a l u e o f a n
economic
good i s determined by t h i s r e l a t i o n s h i p betvveen re q ui re me nts fo r a nd a va i la b le
q u a n t i t i e s
o f
g o o d s .
T h e
m o s t im p o r t a n t p r i n c i p l e
i n the
d e t e r m i n a t i o n
o f
v a l u e
is
m a r g i n a l
u t i l i t y ,
w h i c h i l l u m i n a t e s
a
d i f f i c u l t
a n d
p r e v i o u s l y u n e x p l o r e d
f i e ld o f
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50 H seyin ZEL
psychology (Menger
1981: 128). O n th i s c on c ep t ion ,
eq ui l ibr ium ( economic )
p r ic e s o f c o n s u m e r go o d s a r e d e te rm n e d b y s u p p l y a n d d e m a n d , w h i c h i n turn are
determined b y ut i l i t y ; t ha t i s , by the equ al i ty o f resp ec t ive m argin a l Utili t ies o f t h e
goods
in
q u e s t i o n
. On t he
o t h e r h a n d ,
th e
prices
o f
p r o d u c t i o n
goods, goods
o f
h i g h e r
o r d e r, i s a l w a y s a n d w i t h o u t e x c ep t io n d e t er m i n ed b y t h e p r o s p e c t i v e v a l u e
of the goods o f lower order in w h o s e p r o d u c t io n th e y serve (Menger 1981: 150;
q u o t e d
in
Hunt 1992: 320).
T h e
prices
o f
p r o d u c t i o n g o o d s
are
determined, again,
b y
the i r
Uti l i t ies ,
w h i c h u l t i m a t e l y g o v e r n
th e
s u p p l y
o f a n d t h e
demand
fo r
t h e m .
in
o t h e r w o r d s v a l u e , w h i c h
does
n o t e x i s t o u t s i d e t h e c o n s c i o u s n e s s o f m e n
( Men ger 1 981 : 1 21), i s en t i re ly a su b jec t ive p h en o m en o n . Va lu e is n o th in g
inherent in goods, n o p rop erty o f them , bu t m ere ly the im p ortan c e that we f ir s
f
at t r ibu t e
t o t h e s a t i s f a c t i o no f o u r needs, t ha t i s , to our l ives a nd wel lbe in g, and in
c o n s e q u e n c e c a r r y ver t o e c o n o m i c g o o d s a s t h e e x c l u s i v e c a u s e s o f t h e
s a t i s fa ct i on
o f o u r
needs
(Menger
1981:
116).
3
it c a n b e inferred f r o m th i s p resen tat ion that t h e m o s t s ign i f i c an t aspect o f
M e n g e r ' s e c o n o m i c v i e w s
i s no t t he
idea
o f
m a r g i n a l u t i l i t y per se,
b u t t h e
f o u n d a t i o n o f t h i s i d e a , n a m e l y , s u b j e c t i v i s m . N o n e t h e l e s s , s u c h a s u b j e c t i v i s m ,
sti l i
vvidespread
in t he
c on tem p orary n eoc las s ic a l ec on om ic s ,
as a
ru le c o u p l e s w i t h
th e v i e w k n o w n a s m e t h o d o l o g ic a l i n d i vi d u a l i s m . T h i s is p a r t i c u l a r l y t r u e f o r
M e n g e r . A c c o r d i n g t o S t r e i s s l e r
(1990:
6 0 ) , f o r e x a m p l e , a l m o s t t h e w h o l e o f t h e
p r o t o n e o c l a s si c a l s t r a i n o f G e r m a n e c o n o m i c s a t t h e d a y h a d a s u b j e c t i v e v a l u e
t h e o r y .
Menger's c o n t r ib u t i o n w a s t o
d e v e l o p
a n e w v a r i a n t o f s u b j e c t i v e v a l u e
t h e o r y w h i c h is f o u n d e d o n m e t h o d o l o g i c a l
i n d i v i d u a l i s m .
F o r t h i s reason , I n o w
w a n t t o
tu rn
to
M e n g e r ' s
a r g u m e n t s
a s to the
a p p r o p r i a t e m e t h o d o l o g y
o f
economics, and social sc ience in general, vvhich r e q u i r e m e t h o d o l o g i c a l
i n d i v i d u a l i s m
a s t h e
m a i n
b a s i s .
1.2.On The
Methodology
of
Exact
Science
in h is la ter book , Invesgations into
th e Method,
Men ger a im s at
developing
a c o n s i s t e n t m e t h o d o l o g y o f s o c i a l s c i e n c e s . T h i s b o o k i s i n f a c t a p o l e m i c a g a i n s t
th e Germ an H is tor ic a l School w h i c h
h ad
exerted
a
great in f lu en c e
o n t h e
soc ia l
sc ien t i f ic
d i s c o u r s e in G e r m a n y a t the d a y , e v e n t h o u g h h is
Principles,
w a s
d e d i c a t e d , s o m e w h a t
i r o n i c a l l y
to
W i l h e l m R o s c h e r ,
a
lead in g m em ber
o f
t h i s
s c h o o l .
4
Menger
starts h isInvestigation, w i t h a d i s t in c t ion between tw o k in ds o f
s c ie nt i f i c
k n o w l e d g e r tw o o r i e n t a t i o n s o f
r e s e a r c h :
: the individualo r i e n t a t io n ,
d e a l i n g w i t h t h e c o n c r e t e a s p e c t s o f t h e p h e n o m e n a , a n d t h e general o r i e n t a t i o n ,
a i m i n g
a t c o g n i ti o no f t h e gen era l c harac ter o f t h e p h e n o m e n ain qu es t ion ( Men ger
1985: 35). H o w ever, h ere, th e w o r d i n d i v i d u a la s o p p o s e d to gen era l m u s t n o t b e
c o n f u s e d w i t h s i n g u l a r
a s
o p p o s ed
to
c o l l e c t i v e .
F o r
e x a m p l e ,
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H.. ktisadi ve dari B ilim ler Fa k ltesi Dergisi ,Cilt 16, Say 12, 1998 51
A de f in i t e
n a t i o n ,
a de f in i t e
state,
a
c o n c r e te ec o n o m y ,
a n
a s s o c i a t i o n ,
a
c o m m u n i t y ,
ete . , are examples of
i n d i v i d u a l
p h e n o m e n a , b u t b y n o m e a n s o f
s i n g u l a r
p h e n o m e n a ( b u t
o f
c o l l e c t i v e p h e n o m e n a i n s t e a d ) ; w h e r e a s
th e
p h e n o m e n a l f o r m s o f t h e c o m m o d i t y ,o f the use v a lu e , o f thee n t r e p r e n e u r ,
ete., are
indeed general ,
b u t n o t
c o l l e c t i v e p h e n o m e n a . ( M e n g e r 1 98 5:
37 n).
T h i s d i s t i n c t i o n b e t w e e n i n d i v i d u a l and general is essential in
d i s t i n g u i s h i n g
th e h i s t o r i c a l sc ien c es f rom
th e
t h e o r e t i c a l
r exact sc ien c es . in th i s regard,
there are three grou p s o f sc ien c es in the f ie ld o f ec o n o m y : 1 ) H is to r ic a l sc ien c es ,
w h i c h h a v e t h e t a s k o f i n v e s t i g a t i n g a n d d e s c r i b i n g t h e i n d i v i d u a l n a t u r e a n d t h e
i n d i v i d u a l c o n n e c t i o n
o f
e c o n o m i c p h e n o m e n a ;
2)
t h e o r e ti c a l e c o n o m i c s, w i t h
.h e task
o f
in ves t igat in g
an d
desc r ib in g the i r gen era l n atu re
an d
gen era l c on n ec t ion
(their laws) ;
3) practical sc iences o f n a t i o n a l e c o n o m y , w i t h th e task o f
in ves t igat in g an d desc r ib in g the bas ic p r in c ip les for su i tab le ac t ion ( adap ted to the
v a r ie t y o f c o n d i t io n s ) i n t h e f i e l d o f n a t i o n a l e c o n o m y ( ec o n o m i c p o l i c y a n d th e
science o f f inance) . (Menger 1985:
3839) in
th i s sen se, ec on om ic s is a theoret ic a l
r e x a c t s c ie n c e w h i c h h a s th e task o f i n v e s t i g a t i n g th e general nature a n d t h e
general connection o f e c o n o m i c p h e n o m e n a , n o t o f a n a l y z i n g e c o n o m i c concepts
a n d o f dr avv in g t h e l o g i c a l c o n c l u s i o n s r e s u l t i n g f r o m t h i s a n a l y s i s . ( M e n g e r 1985:
37,
n.4)
W i t h
respect
to
e m p i r i c a l p h e n o m e n a w i t h i n
th e
general sphere ,
w e m u s t
d i s t i n g u i s h
betvveen
e m p i r i c a l types, s u c h a s t h e p h e n o m e n a o f p u r c h a s e , o f
m o n e y , o f s u p p l y a n d d e m a n d , o f p r i c e , o f c a p i t a l , o f r a te o f interest , a n d t h e
r e l a t i o n s h i p s
betvveen
d i f fe ren t ty p es ,
vvhich
is
c a l led
typical
r e l a ti o n s h i p s , s u c h
a s
the regu lar drop in p r ic e o f a c om m odi ty as a resu l t o f the in c rease in su p p ly , the
r i se in p r ic e o f a c om m odi ty as a resu l t o f the in c rease in c u rren c y , the
l ov v e r ing
th e
rate o f interest as r e s u l t o f c o n s i d e r a b l e a c c u m u l a t i o n o f c ap i ta l ete. (Menger
1985: 36). These t y p i c a l r e l a t i o n s h i p s d e s i g n a t e laws in ec on o m ic sc ien c es ,
w h i c h
i l l u m i n a t et h e
essence
r nature o f t h e s e p h e n o m e n a :
W i t h o u t
c o g n i t i o n
o f t h et y p i c a l
r e l a t i o n s h i p
w e
w o u l d
b e
deprived
n o t
o n l y o f a
d e e p e r u n d e r s t a n d i n g
o f t h e
real
vvorld, . . . but also, as m ay
eas i ly
be
seen,
o f
a l i c o g n i t io n e x t e n d i n g b e y o n d i m m e d i a t e o b s e r v a ti o n ,
i .e. , of any
prediction a n d control o f t h i n g s . A l i
h u m a n p r e d i c t i o n a n d ,
indi r ect ly , a l i
arbi trary s h a p i n g o f t h i n g s is
c o n d i t i o n e d
b y
t h a t
k n o w l e d g e w h i c h w e
p r e v i o u s l y h a v e c a l l e d
general.
(Menger 1985: 36)
A c c o r d i n g t o H u t c h i s o n (1973: 1 71 8), two p oin ts are im p ortan t in th i s
d i s t i n c t i o n betvveen th e general a n d t h e in div idu a l or ien tat ion . F i rs t , gen era l
knovvledge is c o n c e r n e d vvith p redic t ion an d c o n tro l ; an d sec on d, Menger's
c o n c e p t i o n
o f
e c o n o m i c t h e o r y seems
t o be an
essent ia l i s t p o s i t i o n ,
a
v i e w ,
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52
Hse yin ZEL
according to
Popper,
tha t "scientific research must penetrate into th e
essence
of
things
in order to
explain them (quoted
by
Hutchison 1973:
18). But
even though
he may be amethodological essentialist,
Menger should
not be characterizedas an
"instrumentalist",
because,
as
both
th e
above
and the
following
passages
show,
he
emphasizes "a deeper understanding" of the nature of the phenomena, "the real
world,"
before making anypredictions
5
The purpose of the theoretical sciences is understanding of the real world,
knowledg e of itex tending beyond
immediate
experience, an d control of it. We
unders tand phenomenaby means of theories as we become aware of them in
each
concrete
case merely
as
exempl i f icat ions
o f a
general regulari ty.
W e
attain a knowledgeof pheno mena extend ing beyon d immediate experience by
dravving
conclusions, in the concrete case,
from
certain observed facts about
other facts
not immediately
perceived. . . .
W e
control
th e
real world
in
that,
on
th e
basis
of our
theoretical knowledge,
we set the
condi t ions
o f a
phenomenon
which
are
within
our
control ,
and are able . in
such
a way to
produce
th e
phenomenon itself. (Menger 1985:
56)
The
types
and the
typical relationships (the laws)
of the
world
of
phenomena
can be divided into tw o parts; those regularities without any exception ("/avvs
o f
nature }, and those regularities inw hich exceptions arepossible ( empirical laws )
(Menger 1985: 50). However, this is not to say that th e "laws of
na ture"
can only
be observed in nature whereas to social phenomena only "empirical laws" apply,
because "the number
of
natural sciences which absolutely comprise stric t laws
of
nature
is also small, and the
value
of
those which show only empirical laws
is
nevertheless beyond quest ion" (Meng er 1985:52). Even more importan tly,
especially regarding economics,he
believes
that "whatever the
degree
of strictness
of th e laws characteristics of the
realm
of social phenomena may be, ... the
character
of economics as a
theoretical science
is by no
means
affected" (Menger
1985:51),
for
th e
theory
of
economy must
in no
case
be
confused wi th
th e historical
sciences of economy, r with th e practical ones. Only th e person who is
completely in thedark aboutth eformal natureand theproblems of theoretical
economics could perceive in it a
historical
science because th e general
(theoretical)
knowledge which
it
embraces ostensibly,
r
real ly,
shovvs
less
strictnessman in thena tural sciences. (Meng er 1985: 51)
According
to
Menger,
th e
degree
of the
strictness
of
laws
is
significant only
from th e
po in t
o f
view
of
understanding,
and
predict ing
and
controll ing
th e
phenomena, because "the greater th e strictness of the laws, th e greater also th e
degree of certainty which, on the basis of the laws, conclusions can be drawn
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ktisadi
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16,
Say
12,
1998
53
bey on d d i rec t exp er ien c e abou t the oc c u rren c e o f
f u t u r e
p h e n o m e n a , r a b o u t t h e
c oexi s ten c e o f s i m u l t a n e o u s p h e n o m e n an o td i rec t ly o b s e r v e d .
(Menger
1985: 5 2)
Sti l i , a li
these d i f fe ren c es , . . . a re , in resp ec t to the p redic t ion an d c on tro l o f
p h e n o m e n a , d i f f e r e n c e s in
degree,
n ot in p r in c ip le ( Men ger
1985:
52). Thu s , th e
c o r r e c t c o n t r a s t u n d e r d i s c u s s i o n s h o u l d b e between
e m p i r i c a l
a n d t h e exact
l a w s , a n d n o t
betvveen
e m p i r i c a l la w s a n d t h e la w s o f n a t u r e . in t h i s
regard,
the aim
o f
th e exact or ien tat ion
i s the
d e t e r m i n a t i o n
o f
s t r i c t l a w s
o f
p h e n o m e n a ,
o f
r e g u l a r i t i e s
in the
s u c c e s s i o n o f p h e n o m e n a w h i c h d o n o t present t hemselves t o u s a s a b s o l u t e ,
b u t
w h i c h i n r e s p e c t t o t h e a p p r o a c h e s t o c o g n i t i o n b y w h i c h w e a t t a i n t o t h e m
s i m p l y b e a r w i t h i n t h e m s e l ve s
th e
gu arant ee
o f
a b s o l u t e n e s s . ( M e n g e r 1985:
59)
Based
o n t h i s d i s t i n c t i o n ,h e m ain ta in s that
there
a re n a t u r a l
sc iences
w h i c h
a r e n o t exact ones (e.g., p hy s io logy , m eteoro logy ), an d, c on verse ly , there a re exact
sc iences
w h i c h
are not
n atu ra l sc ien c es (e.g.,
p r e e c o n o m i c s ) (Menger
1985:
59n).
T h e
l a w s
o f
t h e o r e t i c a l e c o n o m i c s
are
exact laws of the ethical
world
(p .
59n), that
is ,
t h e o r e ti c a l ec o n o m i c s
is anexact ethical science (p .
60n). Ho w ever,
here the term e t h i c a l s h o u l d n o t b e t a k e n t o i m p l y t h a t e c o n o m i c s c a n n o t b e f r e e
f
ro m
v a l u e
j u d g m e n ts . Su c h an argu m en t, ac c ord in g to Men ger, s im p ly c on trad ic ts
th e n a t u r e o f t h e exac t or ien tat ion o f th eo retica l research (Menger 1985: 236), even
a p rac t ic a l sc ien c e o f ec on om y
m u s t
b e f r e e f r o m m o r a l j u d g m e n t s , f o r
o t he rv v i s e
su c h an en terp r i se c an
n e
v er b e a n y t h i n g m o r e t h a n m o r a l w r i t i n g s a b o u t e c o n o m y .
T h u s , t h e socal led 'e th ic a l or ien tat ion ' o f p o l i t i c a l e c o n o m y is ... a vague
p os tu la te devoid
o f a n y
deeper
meaning,
... a
c o n f u s i o n
o f
t h o u g h t
(Menger
1985:
237, quoted
in
Hunt 1992: 32324).
O n th e other han d, regarding th e ep i stem olo gic a l s ta tu s o f e x a c t l a w s w h i c h
c an be veri f ied both b y experience an d laws o f
t h i n k i n g ,
w e have n e rule o f
c ogn i t ion
(Menger
1985:
60)
s u c h t h a t :
whatever was
observed
in even only ne case must alvvays put in an
appearance
again
under exactly the same
acual
condiions;
r , w h a t is in
essence th e
s a m e
t h i n g ,
t h a t s t r i c t l y t y p i c a l p h e n o m e n a
o f a
d e f i n i t e k i n d m u s t
a l w a y s ,
an d
indeed
in
c o n s i d e r a t i o n
o f o u r
l a w s
o f
t h i n k i n g , s i m p l y
of
necessity,
b e f o l l o vved b y
s t r i c t l y t y p i c a l p h e n o m e n a
o f j
s t
a s
d e f i n i t e
an d
d i f f e r e n t
a
t y p e . P h e n o m e n a
A a n d B must
u n d e r
th e
s a m e
c o n d i t i o n s a l w a y s
b e f o l l o w e d b y t h e s t r i c t l y t y p i c a l
p h e n o m e n o n
C in so fa r a s A and B ar e
t h o u g h t o f a s s t r i c t l y t y p i c a l a n d t h e s u c c e s s i o n o f p h e n o m e n a u n d e r
d i s c u s s i o n h e r e h as been observed even in
o n l y
a s i n g l e case . T h i s r u l e h o l d s
t r u e n o t o n l y o f t h e
nature
o f p h e n o m e n a , b u t
a l s o
o f t h e i r measure, an d
e x p e r ie n c e n o t o n l y o f f e r s u s n o e x c e p t i o n t o i t, b u t s u c h a t h i n g s i m p l y
seems
i n c o n c e i v a b l e t o t h e c r i t i c a l m i n d .
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54 H seyin ZEL
A second rule is that "a circumstance which was recognized as irrelevant
only in ne case in respect to the
succession
of phenomena will always and of
necessity prove
to be
irrelevant
under
precisely
th e
same actual conditions
in
respect to the same result ." (Menger 1985: 60)
Al though such
a conception implies
an empiricist epistemology,
6
according
to
M enger
the knowledge of
exact laws
are
not attainable through an empirical-realistic
orientation
like that of Bacon. That
is to say, the proposit ions of an exact science are not, in Popper's language,
"falsifiable." For Menger, test ing the pre theoryof
economy
by sense experience
is
analogous
to that of the mathematician who wants to correct th e principles of
geometry by m easuring real objects, wi thout reflecting that the latter are indeed not
identical with
th e
magni tudes wh ich
pre
geometry presumes
r
that every
measurement of necessity implies elements of inexacti tude" (Menger 1985: 70).
Likewise, natural sciences, like chemistry, does not teach us 'real
concepts'
of
definite groups of concre te phenomena. It s elements and compounds are, rather,
unempirical
in
their complete purity, they
are not to be
observed
in
nature
uninfluenced
by human art; indeed, to some extent, they cannot be prepared
synthetically" (Menger
1985:
85). Then,
th e knovvledge of
exact laws
can
only
be
attained through ex aminin g these con s t i tut ive e lements
and
compounds
"in
their
complete purity" which in turn requires a methodological individualist position, as
w eareabout to see.
1 3
Methodological
Individualism
and
Unintended
Consequences
According to Menger, th e correct method in an exact science is to try "to
ascertain the simplest elements ofeverythingrea l , e lements w hich must be thoug ht
of
as
strictly typical just because they
are the
simplest" (Menger
1985:
60). With
respect
to the laws of
phenomena
th e
same
is
true: Exact
science
examines
"how
more complicated phenomena develop from the simplest, in part even unempirical
elements
of the
real world
in
their
(likewise
unempirical) isolation from ali other
influences, with constant consideration of ex act (likewise ideal ) measure
(Menger 1985: 61). That is to say, th e correct method of an exact science of
economy ismethodological individual ism, and thenatureofexact orientation
consists in the fact
that
w e reduce
human phenomena
to
their
most
original
and
simplest consti tut ive factors.
W e
jo in
to the
latter
th e
measure
corresponding
to their nature,and
f inally
try to investigatethe lawsb y
which
more complicated
human
phenomena
are
formed
from
those simplest
elements,
thought
of
their isolation. (Meng er 1985:
62)
The simplest unit in economics is the "individual economy": "B y
economy
we understand th e precautionary activityof humans directed toward covering their
material
needs ;
by national
economy,
th e
social form
of
this activity" (Menger
1985: 62). This distinction
is
defined w ith reference
to
exchange relations: If there
is
no exchange between individuals,th e term "national economy," ifpermissiblein
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t h i scaseat ali, isj u s t th es u m m a t io n o f in d iv idu a l ec on om ies in a nation. However,
w h e n the m em bers o f a n at ion c om e in to e c o n o m i c c o m m u n i c a t i o n with eac h
othe r , th e c o n c e p t o f n at ion al
e c o n o m y
gains a di f ferent meaning. Here w e
c a n n o t
even
speak o f
na tio na l eco no my (Menger 1985: 193) s inc e
u n d e r o u r pr esent socia l condi t ions th e n a t i o n is s i m p l y n o t th e e c o n o m i c
s u b j e c t ( n o r ar e i ts f u n c t i o n a r i e s ) . T h e l ea d e rs o f t h e i n d i v i d u a l a n d c o m m o n
e c o n o m i e s are really th e e c o n o m i c s u b j e c t s . T h e g o a l o f t h e latter i s on the
w h o le not the m eet ing o f the mater ia l needs o f the na t ion in i t s to ta l i ty , but the
meeting
o f their
m ater ia l needs r
o f
t h o s e
o f
o ther def ini te actua l r potent ia l
p e r s o n s . F i n a l l y ,th e ec o n o m i c m e an s ath a n d d o n o t
serve
tosecure th e needs
o f t h e n a t i o na s a u ni t , bu t mer ely those o f actua l r potential people. (Menger
1985: 193194)
There fore , ec on om ies i s c on c ern ed wi th the se l f in teres ted behav ior o f
in d iv idu a l s . H owever,
th e
thesis
o f
private inteest
in the
f o r m t h a t
h u m a n s t ru ly
are
gu ided
in their economic activi ty exclus ively by consideration o f their
in d iv idu a l
interest
(Menger 1985:
83) is
erron eou s , bec au se other m ot ives ,
l ike
p u b l i c sp i r i t , l o v e o f
ne ' s
f e l l o w m e n ,
c u s t o m ,
fee l in g for
j u s t i c e ,
a n d o t h e r
s imilar factors determine m a n ' s ec on om ic actons. (Menger 1985: 84)
T h e n ,
it
vvould b e fa i r t o c la im that the c irc u m stan c e that
people
ar e not
gu ided
exc lu s ive ly
by sel finterest prohibi ts . . . the s tr ict regulari ty of
h u m a n
action in general, and of
ec on om ic ac t ion in p ar t i c u lar
and thereby
e l im in ates the p oss ib i l i ty o f a r igorou s
ec on om ic t h e o r y
(Menger 1985:
84). Another
fac tor
that prevents strict regularity
in
h u m a n s p h e re
is the
existence
o f
error.
Even
if
h u m a n
beings
are
gu ided
by
their
selfinterests, in
in n u m erable cases they
are in
error about their economic interest,
r in
ign oran c e
o f t he
ec on om ic s ta te
o f
af f airs (Menger
1985:
84). That
is to
say,
a l thou gh ec on om ies is anexact science,i t
c a n n o t p r o v i d e u n d e r s t a n d i n go f h u m a n p h e n o m e n a in their totali ty r o f a
concr ete por t ion ther eo f ,
butit can
p r o v i d e u n d e r s t a n d i n g
of ne of the
most
important sides
of
human
life. T he
exact
theory of
political economy is a
theor y
o f t h i s k i n d , a t h e o r y w h i c h teaches us to f o l l o w and u n d e r s t a n d in an
exact
w a y t h e
m a n i f e s t a t i o n s
o f
human se l f inter es t
in the
e f f o r t s
o f
e c o n o m i c
h u m a n s aimed at the p r o v i s i o n o f th eir m aterial needs. (Menger 1985: 87)
Th e central co ncern in econo mic a na lys is i s therefo re sel finterested
beh av ior o f the in d iv id u a l ec on o m ies . Th e n at ion al ec on om y , on the other
han d, is merely a result o f t h e in n u m erable in d ividu a l ec on om ic ac t ion s ; in order to
u n ders tan d th i s
f ic t ion, w e
m u s t
spl it it
into
it s
true elements, namely
i n d i v i d u a l s (Menger 1985: 93). Yet, even t h o u g h th e n a t i o n a l e c o n o m y
emerges
f r o m individual behavior, i t i s s o m e t h i n g di f ferent:
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56 H sey in ZEL
N a t i o n a l
e c o n o m y
i n t h e c o m m o n sense o f t h e
w o r d ,
is
by no
means
a
juxtaposition of isolated
individual
economies. T h e
latter,
ra ther ,
are
c l o s e l y
t ied tog ether
b y t ra f f i c
w i t h n e
a no th er . . . .
[ t h e e c o n o m y ]
is
r e a l l y ,
o n t h e
c o n t r a r y ,
a
c o m p l e x , r
if
n e w i s h e s ,
a n
organsn
of
economies
(o f
s i n g u l a r
a n d c o m m o n e c o n o m i e s ) , b u t ,w e repeat, i t i s no t i t s e l f a ne c o n o m y . . ..
it
i s th e
s a m e a s i n a m a c h i n e
w h i c h present s
a
u n i t
m a d e u p o f w h e e l s , a n d s o o n ,
w i t h o u t
b e i n g
a
wheel i t s e l f . (Men g er
1985: 194)
T h i s i s s u e
c arr ies u s
d i r ec t l y
t o t h e
p r o bl em
o f
s p o n t a n e o u s order,
t o u s e
Friedr ich
A .
Hayek's term, r the
u n in t en ded
c o n s e q u e n c e s
o f
i n t e n t i o n a l
b e h a v i o r . A c c o r d i n g to Menger, both th e f u n c t i o n s a n d t h e o r i g i n s o f s o c i a l
s t r u c t u r e s
an d i n s t i t u t i o n s can be
e x p l a i n e d
o n t h e
b a s i s
o f a n o r g a n i c i s t
a n a l o g v
b e t w e e n t h e s e s t r u c t u r e s
an d n a t u r a l
o r g a n i s m s ,
an
a n a l o g y w h i c h f o c u s e s
o n t h ^ _
r e l a t i o n s b e tw e e n th e w h o l e a n d t h ep a r t s :
T h e n o r m a l
f u n c t i o n
a n d
d e v e l o p m e n t
o f t h e
u n i t
o f a n
o r g a n i s m
a re
t h u s
c o n d i t i o n e d b y t h o s e o f i t s p a r t s ; th e lat ter in t u r n a re c o n d i t i o n e d b y t h e
c o n n e c t i o n
o f t h e p a r t s to
f o r m
a h i g h e r u n i t ; a n d f i n a l l y th e n o r m a l f u n c t i o n
an d
t h e d e v e l o p m e n t o f e a c h s i n g l e o r g a n a r e c o n d i t i o n e d b y t h o s e o f t h e
r e m a i n i n g o r g a n s .
T h e
same
is
true wi th res pec t
t o t h eorigin o f a
series
o f
s o c i a l p h e n o m e n a .
N a t u r a l o r g a n is m s a l m o s t w i t h o u t e x c ep t i o n e x h i b i t , w h e n c l o s e l y o b s e r ve d ,
a
r e a l l y a d m i r a b l e
f u n c t i o n a l i t y
o f a l i p a r t s w i t h
respect
t o t h e w h o l e , a
f u n c t i o n a l i t y w h i c h i s n o t , hovvever, t h e r e s u l t o f
h u m a n
calclation, b u t o f a
natural process. S i m i l a r l y , w e c a n observe in
n u m e r o u s
s o c i a l i n s t i t u t i o n sa
s t r i k i n g l y a p p a r e n t
f u n c t i o n a l i t y
w i t h r e s p e c t t o t h e w h o l e . B u t w i t h c l o s e r
c o n s i d e r a t i o n t h e y
s t i l i d o n o t p r o v e t o b e t h e r e s u l t o f intention
aimed
at this
purpose, i.e., th e
r e s u l t
o f a g r e e m e n t o f
m e m b e r s
o f
s oc iety r
o f
p o s i t i v e
l e g i s l a t i o n .
T h e y t o o ,
p r e s e n t
t h e m s e l v e s
to u s
r a t h e r
a s
n a t u r a l
p r o d u c t s ( i n
a c e r t a i n sense), as unintended
results
of
hisiorical
development. ( M e n g e r
1 9 8 5 : 1 3 0 )
The re fore , th e o r g a n i c i s t a n a l o g y is s o m e w h a t i n a d e q u a t e , b e c a u s e o n l y ^a
pa r t o f s o c i a l p h e n o m e n a is s i m i l a r to n at u r a l o n es . A
lar ge
n u m b e r o f so c ia l
s t r u c t u r es a re not the r e s u l t o f a n a t u r a l
p roc ess . . . .
T h e y are the r esu l t o f a
p u r p o s e f u l a c t i v i t y o f h u m a n s d ir ec t e d to w a r d t h e i r e s t a b l is h m e n t a n d d e v el o p m e n t
(the resul t o f agreement o f t h e member s o f society r o f p o s i t i v e leg i s la t ion )
(Menger
1985:
131).
S e c o n d l y , w h e r e a s n a t u r a l o r g a n i s m s
f u n c t i o n
in a
m e c h a n ic a l
w a y , th e s o c i a l
' o r g a n i s m s '
s i m p l y c a n n o t b e
vievved
a n d interpreted a s the
p r o d u c t o f p u r e l y m e c h a n i c a l
f o r c e
ef fects . They are, rather, th e r esu l t o f h u m a n
e f f or t s ,
th e
e f f o r t s
o f
t h i n k i n g , f e e l i n g , a c t i n g h u m a n
beings
(Menger 1985: 133).
in
o t h e r w o r d s ,
some
s o c i a l p h e n o m e n a
are the
r e s u l t s
o f a
common will directed
t o w a r d t h e i r e s t a b l i s h m e n t ( a g r e e m e n t , p o s i t i v e l e g i s l a t i o n ,
ete.),
w h i l e o t h e r s a r e
u n i n t e n d e d r e s u l t
o f
h u m a n e f f o r t s a i m e d
at
a t t a i n i n g e s s e n t i a l l yindividual
g o a l s
( th e u n i n t e n d e d r e s u l t so f these) (Menger 1985: 133).
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H.. ktisadi ve dari Bilimler Fakltesi Dergisi ,Cilt 16, Say 12, 1998 57
A
p er fec t exam p le
t o t h e
u n i n t e n d e d
c o n s e q u e n c e s o f i n d i v i d u a l se l f
interested behavior is the o r i g in o f
m o n e y
a s a m e d i u m o f exc han ge.
A c c o r d i n g
to
M e n g e r
(1892),
m o n e y a r i s e s f r o m
th e
f a c t t h a t there
is a
d i f f e r e n c e
in
m a g n i t u d e
between th e p r i c e at
w h i c h
n e can buy at a
given market,
a n d t h e pr ice at
w h i ch
n e
i s w i l l i n g to se l i th e s a m e c o m m o d i t y ( M e n g e r
1990:
243). On the bas i s o f th i s
di f f er en ce, it is
p o s s i b l e
to
d e f i n e
th e
c o n c e p t
o f t h e
saleability
o f a
c o m m o d i t y .
G o o d s c a n b e i d e n t i f i e d a s more r less saleable, a c c o r d i n g t o t h egreater r
less
f a c i l i t y w i t h w h i c h t h e y c a n b e d i s p o s e d o f a m ark et at any c o n v e n i e n t t i m e a t
c u r r en t p u r c h a s i n g p r ic es , r w i t h less r more
d i m i n u t i o n o f t h e same...
(Menger
1990: 244).
A t a
given t ime, s o m e
o f t h e
e x i s t i n g
g o o d s a re
m ore des i rab le
to
i n d i v i d u a l s
vvi thin
th e
m ark et sy s tem , that
is ,
e f fec t ive dem an d
fo r
them
is
greater
t h a n t h a t o f
o t h e r s .
in t h i s case , a n y
sel ler
in
p r i n c i p l e w i l l w a n t
to
e x c h a n g e t h e s e
speci f ic goods w h ic h
are
m o r e saleable t h a n o t h e r s w i t h
th e
c o m m o d i ty
h e
r
sh e
w i s h e s
to
se l i ,
even
i f
t h a t
se l le r does
n o t
need
t h a t
c o m m o d i t y
f o r h i s
r
h e r o w n
i m m e d i a t e c o n s u m p t i o n . T h e r e f o r e ,
t h e m o s t
saleable c o m m o d i t y
w i l l
gain
a
u n i v e r s a l
ac c ep tan c e
i n the
m a r k e t s
a s a
m e d i u m
o f
e x c h a n g e ;
a nd a s
s o o n
as it is
accepted
a s a
m e d i u m
o f
e x c h a n g e ,
its
s a l e a b i l i t y w i l l i n c r e a s e c u m u l a t i v e l y
(Menger 1990: 230).
H i s t o r i c a l l y
sp eak in g,
p r e c i o u s
m eta l s have been m ore r
less
th e
m o s t s a l e a b l e c o m m o d i t i e s ,
a n d
t h e r e f o r e t h e y h a v e b e c o m e m o n e y .
B e s i d e s
t h i s , th e
p rop ert ies
o f
these m eta l s , su c h
a s t he i r lo w
c o s t s
o f
t r a n s p o r t a t i o n
a s
c o m p a r e d to t h e i r
v a l u e ,
t h e i r u n l i m i t e d d u r a b i l i t y , d i v i s i b i l i t y , h o m o g e n e i t y , a n d
th e
re la t ive ly s l ight c os t o f hoard in g them have c on tr ibu ted to the i r bec om in g a
m e d i u m o f exc han ge ( Men ger 1 990: 253). Thi s deve lop m en t, ac c ord in g to Men ger,
h as taken
p l a c e
w i t h o u tan y
state
c o m p u l s i o n r v o l u n t a r y c o n v en t i o no f traders .
it
isp u r e l y s p o n t a n e o u s :
M o n e y
h a s n o t
been gener a ted
b y
l a w .
in its
o r i g i n
it is a
s o c i a l ,
a n d n o t a
s ta te
i n s t i t u t i o n . . . .
O n t h e o t h e r
h a n d ,
h o w e v e r , b y
s ta te r e c o g n i t i o n
a n d
state
r e g u l a t i o n ,
t h i s s o c i a l
i n s t i t u t i o n o f
m o n e y
h a s
been
per fected a n d
ad jus ted
to
th e
m a n i f o l d
a n d v a r y i n g needs o f a n e v o l v i n g c o m m e r c e, j u s t a s c u s t o m a r y
r i g h t s
h ave been per fected and ad ju s ted by s ta te law . (Menger 1990: 255)
A s c a n b e
seen f rom t h i s exam p le, ac c ord in g
to
Menger,
p r e
e c o n o m i c
t h e o r y as an
exac t sc ien c e, whic h a i m s
a t
u n d e r s t a n d i n g
th e
general
n a t u r e o f
e co n o m i c p h e n o m e n a ,
is
s p e c i f i c a l l y c o n c e r n e d w i t h
th e
u n i n t e n d e d c o n s e q u e n c e s
o f
p u r p o s e f u l , i n t e n t i o n a l b e h a v i o r
o f
i n d i v i d u a l s .
O n t h i s
c o n c e p t i o n , s c i e n t i f i c
a n a l y s i s m u s t
proceed
a s
a b s t r a c t i n g
t h e
e s s e n t i a l f e a t u r e s
o f
e m p i r ic a l p h e n o m e n a ,
s tar t in g f rom the s im p les t e lem en ts , n am ely in d iv idu a l
e c o n o m i es ,
a n d
p r o c e e d i n g
to
m o r e
a n d
m o r e c o m p l e x r e l a t i o n s
b y
t r a c i n g
th e
u n i n t e n d e d c o n s e q u e n c e s
o f
in t en t io n al
i n d i v i d u a l a c t io n .
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58
H s ey in
ZEL
A s a l a s t w o r d , it is in teres t in gt o n o t e t h a t th e v i ew s o n m e t h o d o l o g y b y t h e
m em bers
o f t h e
c o n t e m p o ra ry A u s t r i a n s c h o o l
is
p r o f o u n d l y d i f f e r e n t f r o m t h o s e
o f
Menger. A l t h o u g h a l i
th e
m em bers de fen d su b jec t iv i sm
an d
m ethodolog ic a l
in d iv idu a l i sm ,
in
m a n y
respects
th e
S c h o o l
h as
o u t g r o w n
r
rejected
Menger's
m ethodolog ic a l ou t look , an d i t c an n ot be sa id that c u rren t Au s t r ian m ethodolog ic a l
v i e w s d e r iv e p r e d o m i n a n t l y f r o m
C a r i
Menger.
F o r
exam p le,
th e
ear ly c hap ters
o f
vo n
M i s e s ' ,
w h o
d e f e n d s r a t i o n a l i s m
a s the
m e t h o d o l o g y
o f
A u s t r i a n s c h o o l ,
Kuman
Action,
w h i c h di s cus s vve s m e t h o d o l o g y , c o n t a i n s n o single reference to
Menger'sInvestigations. (White 1985: ix). Furthermore, there
are
som e d i f fe ren c es
between the m ethodolog ic a l v iews o f d i f fe ren t Au s t r ian s , thou gh there i s a c er ta in
te nde ncy
tovvards
ra t ion al i s t ep i s tem o logy ( Ebelin g 1990: 368370; Kirzner
1976).
F o r
e x a m p l e , w h e r e a s B h m B a w e r k d e f e n d s t h e
deductive
m ethod, F r iedr ic h
vo n
W i e s e r e m p h a s i z e d t h e
i n t r o s p e c t i v e
s o u r c e o f e c o n o m i c a n a l y s i s , b e l i e v i n g
t ha t it gave e c o n o m i c s a s t r o n g e r f o u n d a t i o n th a n t h o s e f o u n d in t h e n a t u r a l
sciences.
A l o n g
the sam e
l ines,
Lu dvvig
L a c h m a n n , f o l l o w i n g M a x W e b e r ,
em p has ized the s ign i f i c an c e o f the p r in c ip le o f understanding (Verstehen),as a
v i e w t h a t
leads t o t h e interpretative
r hermeneutic soc ia l theory ,
f o r h e
believed t h a t t h e a i m o f t h e a n a l y s i s is to m a k e th e p u r p o s e f u l h u m a n a c t i v i t y
in te l l igab le . O n t h e o t h e r h a n d , F . A . H ay ek em p has ized th e u n in ten ded
consequences o f h u m a n
b e h a v i o r ,
so t ha t
s o c i a l s c i e n t i s t s m u s t
b e
c a r e f u l a b o u t
m ak in g p redic t ion s . Y et , the u n i f y i n g p r in c ip le for a li o f them i s m ethodolog ic a l
i n d i v i d u a l i s m , w h i c h i s
Menger's
o u t l a s t i n g c o n t r i b u t i o n n o t o n l y t o t h e A u s t r i a n
s c h o o l , b u t
a l s o ,
m ore gen era l ly , to the n eoc las s ic a l ec on o m ic s .
2. Methodologicalindividualismand Hermeneutics
2.
1. A
Note
on
M enger s M ethodological
individualism
A s w e
have seen, there
a r e tw o
closely related aspects
o f
Menger's v i e w s
o f
th e m e t h o d o l o g y o f s o c i a l s c i e n c e ; m e t h o d o l o g i c a l i n d i v i d u a l i s ma n d t h e idea o f
u n i n t e n d e d
c o n s e q u e n c e s
o f
i n ten t i o n a l , p u r p o s e f u l h u m a n b e h a v i o r .
Hovvever,
t h e s e two a s p e c t s m u s t be k ep t d i s t in c t f r o m e a c h o t h e r , and there is a certain
v
ten s ion between them .
B u t
before proceeding
to
t h i s d is c u s s i o n ,
I
w o u l d f i r s t l y
like
to c on s ider Menger's m e th o d o l o g i c a l i n d i v i d u a l i s m . F o r t h i s r ea so n , i t w o u l d b e
h e l p f u l to c on s ider m ethod olo g ic a l in d iv idu a l i sm at a gen era l level .
A c c o r d i n g t o A n t h o n y G i dd en s (1984: 214), for example, the doctrines that
a d v o c a t e m e t h o d o l o g ic a l i n d i v i d u a l i s m i n v o l v e n e
r
m o r e
o f t h e
fo l lo vv i n g
theses :
(1)
Truistic
s o c i a l a t o m i s m : t h e v i e w w h i c h
h o l d s ,
t h a t it is elf evident
t h at
soc ia l p h en om en a c an be exp la in ed on ly in terms o f t h e a n a l y s i s o f t h e c o n d u c t
o f
i n d i v i d u a l s ;
(2) Th e
idea that al i s tatements about social phenomena
can be
r e d u c e d , w i t h o u t l o s s o f m e a n i n g , to d e s c r i p t i o n s o f t h e qu a l i t ie s o f i n d i v i d u a l s ;
( 3 ) T h e
as ser t ion that/ntal^j^n^^Hnnrg
rp f l l I j r i n p l y T i r I l l \n y
c o n c e p t w h i c h
refers to p rop ert ies o f c o l l e c t i v i t i e s r s o c i a l s y s t e m s a re a b s t r a c t m o d e l s ,
8/10/2019 Menger and methodological individualism
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H..
ktisadi
ve
dari Bilimler Fakltesi Dergisi
,Cilt 16,
Say 12,
1998 59
c o n s t r u c t i o n s o f t h et h e o r i s t, in s o m e w a y t h a tth en o t i o no f
i n d i v i d u a l
is n o t ; (4)
T h e
a l legat ion that there c an n ot
b e
l a w s
in t he
social sc iences,
save in so f ar as
there a re l a w s a b o u t th ep s y c h o l o g i c a l d i sp o s i ti o n so f i n d i v i d u a l s .
7
it
is
ev iden t that
Menger's
p o s i t i o n
c a n b e
c harac ter ized
a s
h o l d i n g
a li
these
f o u r
p r o p o s i t i o n s .
However,
w i t h respect
t o t he
c o n d u c t
o f t h e
a n a l y s i s
in an
exact science, w e need to d i s t i n g u i s h between three related b u t d i s t in c t theses
\ v i t h i n m e t h o d o l o g ic a l i n d i v id u a l i s m ; t o u s e Li t t le ' s(1991:183188) t a x o n o m y , f o r
s u c h
a
d i s t i n c t i o n
c a n
reveal
th e weaknesses in
Menger's argu m en ts
c o n c e r n i n g
(1)
Ontological
thesis:
a li soc ia l en t i t ie s a re r e d u c i b le w i t h o u t r em a i n d er to l o g i c a l
c o m p o u n d s o f in div idu a l s . Soc ia l en t i t ie s arenothing but e n s e m b l e s o f i n d i v i d u a l s
in
v a r i o u s r e l a t i o n s
to n e
a n o t h e r ;
(2)
T hemeaning thesis: s o c i a l c o n c e p t s m u s t
b e
definable
in
terms
o f
c o n c e p t s t h a t refer o n l y
to
i n d i v i d u a l s ,
an d
the i r re la t ion s
an d
b e h a v i o r ; (3) T heexplanation thesis: there are no a u t o n o m o u s s o c i a l e x p l a n a t i o n s ;
i ns te a d
a l i soc ia l fac t s an d regu lar i t ie s m u s t
u l t i m a t e l y
b e
explicable
in terms of
f a c t s a b o u t i n d i v i d u a l s t h e i r m ot ives , p owers , be l ie f s , an d capaci t ie s .
T h e
o n t o l o g i c a l t h e s i s
is
l i teral ly true; society
is
m a d e
u p r
c o n s i s t s
o f
p eop le . Bu t s in c e th i s i s a t r u i s m , it
does
n o t
y ie ld
u s in teres t in g in s ights for an
adequ ate soc ia l theory ;
i t can be
u sed
to
de fen d
a n y
k in d
o f
soc ia l theory . More
im p ortan t ly , the on to log ic a l thes i s does n ot en ta i l the theses abou t m ean in g an d
e x p l a n a t i o n
(Litt le 1991: 200).
T h e
m ean in g thes i s ,
o n t h e
o t h e r h a n d ,m a k e s
sense
i f t h e f a c t s r ef e r o n l y t o i n d i v i d u a l s a n d t h e i r p s y c h o l o g i c a l
proper t ie s .
Bu t there i s
n o reason to
t h i n k t h a t
s u c h a r e d u c t i o n i s p o s s i b l e . F a c t s a b o u t i n d i v i d u a l s a l w a y s
m a k e reference to s o c i a l c o n t e x t s . T h e predicates designating properties special to
p e r s o n s
a li
p r e s u p p o s e
a
s o c i a l c o n t e x t
f o r
t h e i r e m p l o y m e n t :
A
t r ibesm an im p l ies
a tr ibe, th e c a s h i n g o f a c h e q u e a b a n k i n g s y s t e m (Bhaskar 1989: 28). Secondly,
t h e f a c t s a b o u t i n d i v i d u a l s , s u c h a s t h e m o t i ve s o f a c r i m i n a l , a r e n o t n e c e s s a ri l y
e i ther m o r e o b s e r v a b l e r easier
to
u n d e r s t a n d t h a n soc ia l fac t s , su c h
as the
p r o c e d u r e s
o f a
c o u r t ; vvhi le c o m p a r i s o n
o f t h e
c o n c e p t s l ike
l o v e a n d w a r
s h o w s
t h a t those p rop ert ies t h a t
ap p ly to
i n d i v i d u a l s
a r e n o t
necessari ly ei ther c learer r
easier
to
d e f i n e
t h a n
t h o s e
t h a t
des ign ate soc ia l p hen om en a ( Bhask ar 1 989, p.28).
C o n s i d e r i n g
th e
e x p l a n a t i o n t h e s i s ,
w e c a n
assert that there
a re
s o m e
emergent
p r o p e r t i e s o f s o c i e t i e s i r r e d u c i b l e t o t h e d y n a m i c s o f i n d i v i d u a l s . in f a c t , w i t h
respect to ex f ) l an at io n , there ar e t w o p o s s i b i l i t i e s : (a ) L a w s m i g h t e x i s t a m o n g
p h e n o m e n a a t t h e h i g h e r
level
o f d e s c r i p t io n t h a t a r e n o t d e r iv a b l e f r o m l a w s a t t h e
lower leve l ,
an d ( b)
it m i g h t
b e t h a t
regu lar i t ie s
a t the
higher leve l
are in
f a c t
determined by regulari t ies at the lovver leve l , bu t p ragm at ic featu res o f exp lan at ion
make i t preferable not t o p e r f o r m t h e r e d u c t i o n ( L i t t l e 1991:187). S t i l i , f r o m a n
o n t o l o g i c a l p o i n t o f v i ew , i f i t i s t h ecase t h a t there are some emergent properties in
soc ie ty , r there
is a
d i s c o n t i n u i t y
betvveen
th e
level
o f
i n d i v i d u a l
a n d t h e
level
o f
s o c i a l . ,
t h en
we n eed an other v iew to exp la in soc ia l p roc esses , i r resp ec t ive o f the
p r a g m a t i c f e a t u r e s
o f
e x p l a n a t i o n .
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Although
Menger ' s whole system rests
on
methodological individualism,
as
far as I can see, he has no argument for methodological individ ualism , to be
conceived
as
consisting ali these
three
theses.
H e,
together with almost
th e
whole
of the Neoclassical economists, takes the "truistic social atomism" granted, and in
fact
defends
onlyonological
indiv idua lism, that is, the thesis that al i social entities
are
reducible
to
logical compounds
of
ind iv idua l s ,
and
social entities
are
nothing
but
ensembles of ind iv idua ls . Even if a society isj u s t a collect ion ofind iv idua l s ,
th e meaning and the explanation theses do not follow from this, as we have just
seen. That
is to
say, Menger confuses be tween these
tw o
d is t inc t leve ls .
9
But
even
more important ly ,
th e
ontological thesis itself
is not
necessari ly immune
to
criticism, if ne accepts the
claim
that societ ies have some emergent propert ies
irreducible
to the
dynamics
of
ind iv idua l s .
A
society
has a
different ontological
status than those
of the
indiv idua ls tha t const i tu te
th e
society (Bhaskar 1989,
especially chapter 2). General ly speaking, social structures
r
relat ions cannot be
explained on the basis of facts about individuals; on the contrary, facts about
individuals always make reference to social contexts. Without such a context we
cannot even define a specif ic individual. Nevertheless, i t should be stressed, as
Giddens (1984: 220) does, upon that while "the methodological individualists
are
wrong in so far as they claim that social categories can be reduced to descriptions
in terms
of
individual predicates
.. .
they
are
r igh t
to
insist that
'social
forces'
are
alvvays nothing more and n o t h i n g less
than
mixes r intended and un in t ended
consequences
of
act ion undertaken
in
specifiable contexts."
in
this regard,
w e
should bear in mind that Menger ' s posi t ion accommodates th e fact that even if
human behavior is characterized by
intent ionali ty ,
some social phenomena emerges
as unin tended consequences of in t en t iona l behav ior -as we have seen w h en
cons idering his ana lysis of money. However , what we
cali
as the "unintended
consequences" are not hi ng but the "emergent" pro pert ie s of social structures. Th at
is, social structures, relations, ete.
arise
f rom in tent iona l behaviors of individuals
but they cannot
be
reduced
to
these behaviors ,
t he
social
level
must have
a
different^
ontolog ical
s ta tus than it s const i tuents , individual ac t ions.For this reason, it is in
principle
th e
case tha t
w e
cannot explain social phenomena merely
on the
basis
of
individuals. in other words, there
is a
cer ta in tension be tween Menger ' s
individualism and the idea of the "spontaneous order. it can be argued that
Menger w as aware of the problem, for he t h o u g h t of a social entity as a form of
organism constituted by indiv idua l economies which "are closely tied together
by traff ic with
ne
another ." Nevertheless, such a conception of "organism", with
the idea of "traffic" at its center, which emerges as a result of the unintended
consequences, implies that th e ontological status of these organisms is different
from tha t of the ind iv idua l b e h a v i o r .in o the r words ,th e level of "organisms" is as
real as the level ofind iv idua l ,fo r these organisms to o have th e power of
"making
a
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kt isadi ve dari Bil imler Fakltesi Dergisi ,Cilt 16, Say 12, 1998 61
di f fe ren c e,
a
s h o r t h a n d
b u t
co n ven ien t de f in i t io n
o f t h e
co n cep t
o f
agency.
O n
t h i s
c o n c e p ti o n , a n y t h i n g w h i c h is c a p a b le o f b r i n g i n g
a b o u t
a ch an ge in
s o m e t h i n g ( i n c l u d i n g
i t s e l f )
is an
agent.
(Bhaskar 1975: 109). That
i s , the
n o t i o n
o f
a g e n c y i m p l i e s t h a t
in
o r der
fo r
s o m e t h i n g
to be an
agent
it
m u s t h a v e
s o m e
c a u s a l p o w e r in t h e
sen se t h at
it h as t h e
p o t e n c y
to p r o d u c e an
e f f e c t
in v i r t u e o f
it s n atu re ,
in the
a b s e n c e
o f
c o n s t r a i n t
an d
wh en p r o p er l y s t i m u l a t e d . (Harre
an d
Madden 1975:
16). '
T h e n
it
s h o u l d
be c lear t h a t
M e n g e r ' s o r g a n i s m s
are
e n d o w e d w i t h c a u s a l p o w e r s
a n d
h e n c e
the leve l o f
organisms m u s t also
b e
i n c o r p o r a t e d
i n to
th e s c i e n t i f i c
en deavo r . Desp i t e
t h i s , M e n g er s t i l i
w i s h e s
to
f o u n d
h is
e c o n o m i c a n a l y s i s e x c l u s i v e l y o n m e t h o d o l o g i c a l i n d i v i d u a l i s m .T h e r e f o r e, in
f a r as Menger is
r e l u c t a n t
t o a d m i t t h e i m p o r t a n c e o f t h e r e a l i t y o f t h e social
level ,
h is exact
o r i e n t a t i o n w h i c h
is
c o n c e r n e d w i t h
th e essences o f
e c o n o m i c
p h e n o m e n a w i l l u l t i m a t e l y
fa i l .
N ever t h e l ess ,
M e n g e r ' s o w n
a r g u m e n t s
a re not the o n l y
o n es de f en din g
m e t h o d o l o g i c a l i n d i v i d u a l i s m
in t h e
A u s t r i a n
t r a d i t i o n ; s o m e
A u s t r i a n e c o n o m i s t s ,
e s p e c i a l l y L u d v v i g
M . L a c h m a n n ,
d e v e l o p a r g u m e n t s u s i n g a l s o
a n
h e r m e n e u t i c
f r a m e w o r k ,
v v h o s e
cen t r a l cat ego r y
i s the
idea
o f interpretation.
Th er e f o r e ,
I
w o u l d l ike to t u r n n o w t o th e h e r m e n eu t i c t r a d i t i o n w i t h i nt h eA u s t r ia n s c h o o l .
2.
2. HermeneuticSocial
Theory
and the
Austrian
Subjectivism
A s i s vvell
k n o w n , h e r m e n e u t i c s , f r o m
th e
Greek
vvord hermeneus,
in terp reter , h a d
ar isen
as
e f f o r t s
to
in t er p r et
th e
B ib l ica l t ext s . Lat er
it was to
b e c o m e t h e n a m e o f a s p e c i f i c s o c i a l t h e o r y , vvhich asser t s t h at so c ie t y i s
essen t ia l l y co n cep t u al in c h ar ac t er, a n d so c ia l l i f e d o e s n o t exi s t in dep en den t l y o f
th e
c o n c e p ts a b o u t h o w i n d i v i d u a l s p e r c e i v e it . T h i s s o c i a l t h e o r y a s se r ts t h a t s o c i a l
w o r l d m u s t
b e
u n d e r s t o o d f r o m
w i t h i n ,
r a t h e r t h a n ex p l a i n e d f r o m v v i t h o ut ; t h a t
is ,
s o c i a l s c i e n c e s h o u l d b e c o n c e r n e d
w i t h
t h e c l a r i f i c a t i o n o f m e a n i n g a n d
_ n c e p t u a l c o n n e c t i o n s . in t h i s regard,
th e
m e t h o d
o f
so c ia l sc ien ces
is
conceptual a n d
their central
cat egor y is meaning,
w h e r e a s
th e
m e t h o d
o f
n a t u r a l
sc ien ces is
empirical
a n d
t h e i r
cen t r a l cat ego r y is casality (Bhaskar 1989: 134
135; W i n c h 1 95 8:
95).
12
T h e a i m i n social sc ience is not to i n c l u d e h u m a n a c t i o n
u n d e r a c a u s a l l a w , b ut to d i s c o v e r th erules ( r
g o a l s
r m e a n i n g ) vvhich g u i d e th e
a c t i o n a n d r e n d e r i t m e a n i n g f u l . A n d t h e e f f o r t f o r u n d e r s t a n d i n g t h e s e r u l e s
r equ ir es
interpretation.
in o t h er wo r ds , h er men eu t ic ap p r o ach t r eat s so c ia l
p h e n o m e n a
a s a
text
to b e
d e c o d e d t h r o u g h i m a g i n a t i v e r e c o n s t r u c t i o n
o f t h e
s i g n i f i c a n c e
o f
var io u s e l emen t s
o f t h e
so c ia l ac t io n
(Lit t le 1991:
68).
F o r
example,
a c c o r d i n g
to
P e t e r W i n c h ,
a
l e a d i n g h e r m e n e u t i c i s t , s o c i a l s c i e n c e s
a re
c o n c e r n e d
w i t h m e a n i n g f u l , r r u l e f o l l o w i n g b e h a v i o r , a n d t h e y m u s t b e based o n t h e
u n d e r s t a n d i n g o f t h e r u l e s vvhich c o n s t i t u t e t h e f o r m s u n d e r s t u d y ( W i n c h 1958:
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Hseyin ZEL
51-52). Because
of
this difference
in the
social sphere, hermeneuticists, following
M ax Weber, make a sharp distinction between
causal
explanation (erklareri) and
"interpretative
understanding"
(verstehen), and
thus between science
of
physical
non-human
world
of nature and the
science
of the
mind, culture,
and the
history
(Winch 1958: 95,
111).
Social phenomena can only be rendered intelligible, they
cannot
be
explained
in a
causal framevvork.
The
principle
of
verstehen
is
both
a
necessary
and sufficient method for the
social
scientific endeavor (Bhaskar 1989:
135).
Having rejected causal explanation as an appropriate category in social
science,
hermeneutic
theory may
proceed
along
tw o
possible lines (Hollis 1994:
18-19):
(1 )Holistic r
to p
down : The games absorb th e players.
If
actors, atleasr
in
their social capacities, desire, believe and therefore do only what is socially
expected of them, then they need no separate understanding. If, for instance, they
are
solely
th ebearersof
social roles, which derive entirely from determinate social
positions and dictate ali that
role-players
do, then th e method ofunders tandingc an
proceed exactly as the explanation which would proceed in a presystems-theory
adopting a structuralist position.
(2). Individualist r
bottom up : If
meanings
are
subjective first
and
intersubjective
only by mutual accord, an opposite account of understanding is
needed. The players
cons t ruct
th e games of social life, perhaps in the spirit of the
social contract, r of the idea of unintended consequences, often postulated to
account fo reconomic,moral, r political order.
N o
w, if w e return to Menger
af
ter these brief rem arks, some of the
above
ideas are similar to hisview s, especially to hisemphasis on subjectivism.Meng er 's
methodological individualism as the method of the exact
science
of
economics
requires that th e exp lana t iono f economic phenomena must be
made
by rendering
those phenomena intelligible in terms of the nature of plans and activities of
individuals which
give rise to them. If the observation includes subjective
interpretative unders tanding, Menger ' s work can be understood as an
hermeneutical attempt (Addleson 1986: 10). Likewise, according to Ludvvig
Lachmann, if we interpret Menger's insistence on the
essence
of economic
phenomena
as the
"interpretation
of meaning", we may
conclude that Menger
defended
th e
possibility
of an
economic theory
designed
to
interpret meaning
(Lavoie 1990: 362). For Lachmann, economics is a social science, that is, it tries to
establish systematic generalizations about observable phenomena; and it is a
science
of
human choice w h ic h
is the
manifes tat ion
of the
free will (Lachmann
1950: 166-167). The free wi l l , r the purposeful human behavior , is the main
difference
between natural and human sciences. The difference between them does
not lie in the differences in material natures of the objects studied, but in the
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63
di f fe ren c e
in
q u e s t i o n s t h a t
d i f f e re nt
sciences a k . E c o n o m i c s
c an be
defined
in
t er ms o f m ean s an d en ds . Bu t the m e a n s an d en ds have n o m ater ia l ex i s ten c e; they
are
s imply categories
o f
m in d. There fore , ali e c o n o m i c p h e n o m e n a m u s t
b e
interpreted
as
m a n i f e s t a t i o n s
o f t h e
h u m a n
m i n d ,
o f
dec i s ion s
to
seek
certain ends
w i t h given m ean s .
in
o t h e r w o r d s , a n e c o n o m i s t asks w h a t h u m a n c h o i c e s h a v e
caused a g iven p hen om en on . ( Lac hm an n 1 950: 168).
14
Therefore, a n y attempt to
e x p l a i n e c o n o m i c p h e n o m e n a w i t h o u t a n y r e f e r e n c e t o t h e p l a n s a n d p u r p o s e s o f
i n d i v i d u a l s w i l l u l t i m a t e l y f a i l , b e c a u s e s u c h a f o r m a l i s m , a s o p p o s e d t o
su b jec t iv i sm , c on trad ic ts th e very idea o f a soc ial sc ience:
. . . in the
s t u d y
o f t h e
h u m a n a c t i o n
w e a r e able to
a c h i e ve s o m e t h i n g w h i c h m u s t
forever
r e m a i n b e y o n d
th e
p u r v i e w
o f t h e
n a t u r a l
sciences,
v iz .
to make
event s
inelligible
b y t x p l a i n i n g
t h e m
in
ter ms
o f t h e
p l a n s
v v h ic h g u i d e
a ct io n. (L a ch m a nn
1969:152)
This i s the
real
m e a n i n g o f t h e m e t h o d o f verstehen; i n s t u d y i n g e c o n o m i c s
w e m u s t
a k
w h a t c o n s e q u e n c e s a re b r o u g h t a b o u t b y i n d i v i d u a l s ' p l a n s
(Lachmann 1969: 154). This i s a l so an a r gu m e n t a b o u t m e t h o d o l o g ic a l
i n d i v i d u a l i s m ,
i f a d i f fe ren t n e f rom that o fMenger's.
M e t h o d o l o g i c a l
i n d i v i d u a l i s m , t h e n ,
. ..
m e a n s s i m p l y t h a t
w e s h a l l n o t b e
sa t i s f ied
w i m
a n y
typ e
o f
e x p l a n a t i o n
o f
s o c i a l p h e n o m e n a
w h i c h does n o t
lead u s
u l t i m a t e l y
to a
h u m a n p l a n .
T h i s
e n t a i l s t h a t e x p l a n a t i o n s
c o u c h e d in
t e r m s o f s o c a l l e d
behavior
variables
a r e n o t
s a t i sf a c t o r y e x p l a n a t io n s
o f
h u ma n co nd u ct . (L a ch m a nn 196 9: 154 )
S u c h
an
argu m en t
fo r
m e t h o d o l o g i c a l i n d i v i d u a l i s m
is
an aly t i c a l ly m ore
p o w e r f u l t h a n Menger's o w n p o s i t i o n , for i t can
recognize
th e reality a n d
ef fec t iven ess
o f
ideas , in ten t ion s ,
a n d
p l a n s
i n the
soc ia l sp here ,
in
s h o r t
th e
reconstructed n a t u r e
o f t h e
soc ia l rea l i ty
and i t
rests
o n t h e
n o t i o n
o f
h u m a n
i n t e n t i o n a l i t y .
U n f o r t u n a t e l y ,th e a p p l i c a t i o no f t h e herm en eu t ic soc ia l theory t o t h e
A u s t r i a n
e c o n o m i c s
a s
d o n e
b y
L a c h m a n n a l s o c r e a te s i m p o r t a n t p r o b l e m s . F i r st
o f
ali,
L a c h m a n n ' s v e r s i o n o f h e r m e n e u t i c s d o e s n o t seem t o b e c o m p a t i b l e w i t h t h e
m a i n
h e r m e n eu t i c a r g u m e n t s .
i n L a c h m a n n ' s
v iews , there
is no
d i s t in c t ion between
interpretat ion
a n d c a u s a l e x p l a n a t i o n ; f o r e x a m p l e h e
asser t s
that a p u re ly
f o r m a l
ap p roac h c a n n o t explain, i.e. make intelligible, a s i n g l e h u m a nact... ( L a c h m a n n
1950: 169) in t h i s
regard, it is
in teres t in g
to
observe
t h a t n o
A u s t r i a n
seem t o b e
both ered w i th the d i f fe ren c e between exp lan at io n an d in terp reta t ion . Even m o re
c u r i o u s l y , R i c h a r d E b e l i n g (1986: 46) argu es that
a li
sciences a re hu m an sc ien c es ,
f o r
a l i the facts are theory laden, that i s , they must be interpreted.
A l t h o u g h
it is
c orrec t t o say
t h a t
th e
facts
o f a n y science ar e not
o n l y
theory
l a d e n
b u t also
t h e o r e t i c a l in a more radical sense, t h a t i s , they are es sen t ia l ly an aly t i c a l
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H seyin ZEL
cons truc ts o f the
sc ient i s t ,
1 5
th i s does not however entai l a hermeneutic posi t ion,
fo r
the
leading hermeneutic argument clear ly s tresses
th e
method
o f
verstehen
as
the appropr ia te method only for the social science. The issue
here
is not s imply that
of the
na tu r e
of the s c ient i s t ' s
percept ions ,
but of the
na ture
of the
reality itself,
no
mat ter how the scientis t perceives i t . That is to say, in the hermeneutic social
theory the emphasis is ontological : the social real i ty i tsel f is consti tuted through
mean i ng
r rules, and
hence
it is
essent ia l ly conceptua l .
Another ,
more
serious, problem of this approach is that it does not even
question
th e
ra t iona l choice model
o f
explana t ion . However ,
for
most
of the
hermeneut ic i s ts ,
the
rational choice model adopts
a
par ticular ly
" th in" and
abstract
perspective on agency, emphasiz ing causal
