Academic journal article Economics & Sociology

Roots and Paradoxes of Neoliberal Apologetics

Academic journal article Economics & Sociology

Roots and Paradoxes of Neoliberal Apologetics

Article excerpt


The history of economic thought has developed not only in theory (as a scientific generalization of processes and phenomena in economic reality, based on real facts, events and processes) but also in its doctrinal form (as a start from the predicted set of principles and conditions). In economic theory, there are two principally different ways of explaining the processes and phenomena of economic reality: methodological individualism and methodological holism. L. Udehn (2002) believes there is a discrepancy in literature regarding the contents of methodological individualism.

V. Draskovic & M. Draskovic (2013, p. 273) and Lakic & Draskovic (2015a,b) start from the hypothesis that methodological individualism "is the dominant monistic-ideological platform of contemporary economic theory, from which individual economic policies selectively derive neoliberal basis". According to them, it is a routine and one-way (monistic) course, which is institutionally polarized with another course, which can be labeled as a monistic dirigisme. Polarized discussions of the representatives of the aforementioned theoretical courses have marked the full development of economic thought. There is a different understanding of the role of state regulation and market regulation in the economy, their interrelation and appropriate form of ownership, as well as indirect (and direct, and even apologetic) aspirations for decisive influence on official economic policy.

Generalizing different definitions, it can be concluded that methodological individualism is the principle through which society is viewed as a collection of individuals, thus studying social phenomena, processes and social groups in their dynamics is reduced to studying individual behavior. As applied in economic theory, it is used to prioritize individual economic behavior, even in studying economic institutions as regulators, coordinators and limiters of economic behavior. Methodological individualism does not deny the existence of complex social phenomena such as institutions, norms and network of social relations, but considers that their explanation must be based on individual properties solely.

Methodological individualism is essentially a reductionistic scientific platform, with predominantly monistic character. Because social and economic phenomena are given exclusively individual significance, rather than seen in a synergic and pluralistic context of mutual complementary acting of a number of influence factors, many authors believe that external factors are important in explaining human actions and behavior. Individuals act in their environment and respond to it through the perception of their own limitations.

Thus, for example, G. Hodgson (2007) has criticized the attitudes of respectable economic theories, which have completely reduced the economic regulation at individuals. Methodological individualism is often placed in a valuable level with methodological holism, which prefers super-individual social categories (collective systems) and views society as a whole system, different from the sum of individuals it is made of. In economic theory, there are constant debates between the representatives of methodological individualism and methodological holism. F. Toboso (2008) has widely elaborated that phenomena, associating institutional economic theories with methodological individualism, and traditional institutionalism (the so-called Heterodox economy) with methodological holism. Similar views have D. Dequech (2007), L. Davis (2006) and T. Lawson (2006).

1. Literature review

There were also attempts to find a third way (middle way) in the economic analysis, but a greater synthesis has not been achieved. In this regard, J. Agassi (1960, p. 247) has formulated the principle of "institutional individualism", which supposes the activity of institutions as the cause of people's behavior. L. Udehn (2002, p. 490) points out that these principles have been supported by R. …

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