Subjectivism and Economic Analysis: Essays in memory of Ludwig ...

LÁSLÓ CSONTOScost minimisation, etc.), and clear the ground for an intentionalexplanation of a particular instance of the action type in question.This is the rational core, if there is one, of the more radicalsubjectivist claims of methodological solipsism.Intentional explanations of individual actions in economictheory, Lachmann’s misguided criticism notwithstanding, arebased on ideal types. Ideal types, in turn, are theoreticalconstructs, the logical structure of which is just about the same inboth the natural and the social sciences. Moreover, the use ofproperly constructed ideal types is methodologically fundamental,because these constructs fulfil indispensable classificatory,heuristic, and explanatory functions (Weber 1978:21). Theconstrained maximisation models of standard economic theory,for instance, help us pigeonhole economic behaviour into thecategories of expected utility maximisation, profit maximisation,price discrimination, etc. Furthermore, if we want to explain aparticular instance of any of these categories (the actions taken bythe managers of a specific firm, for example), and it turns out thatthese actions deviate from the course of action ‘prescribed’ orpredicted by our pet model, we are still going to have to use ourideal type as a benchmark, because without having that heuristicdevice at our disposal we will not be able to arrive at meaningfulhypotheses about the possible causes of this clash between theoryand reality.Notes1 For a good overview of different forms of methodologicalindividualism see Bhargava (1992). The term ‘methodologicalsolipsism’ itself was first used in a somewhat different sense from theone intended here (Carnap 1928).2 We should heed Schumpeter s advice with regard to Gottl’s work: ‘Ifear that the only way of appreciating Professor F. von Gottl-Ottlilienfeld, who held a conspicuous place and found manyadherents…is to read him’ (Schumpeter 1954:854). For a sympatheticand tolerant, but in the end devastating, criticism of Gottl’s views onthe epistemology of the social sciences, see Weber’s essay on ‘Knies andthe problem of irrationality’ (Weber 1975). In Weber’s view, Gottl:scrupulously eschews conventional, conceptually bound,and, from his point of view, ‘denatured’ language. Instead,he attempts to reproduce the contents of immediate‘experience’ in some sort of ideogram. Admittedly, many ofGottl’s views, including the principal theses of his work, arecontroversial. Nor has he succeeded in establishing genuine98