Methodological individualism

Methodological individualism is the theory that social and economic phenomena can be explained by reference to the actions of individuals rather than groups or collectives. Based on this theory groups and collectives are not entities which can act in and of themselves but only through the action of the individual members of which they are composed. Methodological individualism is one of the core concepts of the Austrian School of Economics, and while the term was coined by the Viennese economist Joseph Schumpeter, the idea was developed earlier by the founder of the school Carl Menger. Menger's formulation of this position is revealed by a quote of his published in 1889: "There is no economic phenomenon that does not ultimately find its origin and measure in the economically acting human and his economic deliberations". The development of this idea by Menger in the late 19th century was in direct contrast to the dominant theories of the German economists of the day, who at the time considered institutions such as "the people", "the economy", and "the nation" to be entities in their own right whose actions were influenced by factors over and above the action of individuals. Methodological individualism on the other hand does not deny the outright existence of collectives such as nations, economies, or classes, rather just denies that the action of such entities can be explained by anything other then the actions of their individual members.

Abuse
Methodological individualism is sometimes abused to say, in responses to suggestions that the libertarian movement should take a certain action, "The problem is that what is good for 'the movement' is irrelevant because we are individuals making decisions. We do not work as a unit or hive mind. So while 'the movement' might achieve change in the ways you suggest, it does not indicate what individuals should or could do." This is fallacious reasoning (specifically, the fallacy of misplaced concreteness) because to say that "the movement should do x" is the same as saying "the individuals in the movement should do y." Or, given that there is usually a division of labor, it is like saying, "Individual A should y; individual B should do z; etc."

Such phraseology as "the movement should do x" is just a shorthand. Obviously, movements act by means of their individuals taking certain actions; this is common knowledge, so it should not be necessary to state it the long way. As long as the shorthand does not lead to fallacious thinking, its use is okay.

There is no hive mind, but we are not totally uninfluenced by one another's actions either. Libertarians (e.g. Mises, Rothbard ) have often pointed out that the masses do not think and analyze all that much, but mostly rely on intellectuals to think for them. However, there are a lot of intellectuals out there with competing theories about what are the best policies and strategies, and the masses pick whichever ideas sound like they will further their interests the most. In some cases, these ideas have been revolutionary ideas that led to successful revolutions.