Adam Smith Methodological Individualism Summary

Exercising methodological individualism as opposed to methodological holism, Adam Smith employs his fundamental premise: every individual's choice is founded on their natural rational self-interest, to prove that the laws and functions of society are methodical, foreseeable, and governed by nature. Resting on this premise of natural rational self-interest, he foresees what actions individuals will take in a certain context to benefit themselves and employs this predictability as a method in determining how human nature creates the social laws that impact the functioning of society. In illustrating Smith's inductive method, I will first explain his essential premise of self-interest as it exists as an inherent nature. Secondly, I will demonstrate

To illustrate how he infers individual actions and their expectedness he employs the example of a hunter gatherer society. One person in the community "may excel in making the frames and covers of their little huts or moveable houses" and, relating back to Smith basic premise of self-interest, finds it is in his interest "to dedicate himself entirely to this employment" because by specializing in this one task he can create a surplus. And consequently trade the "produce of his own labour" for the produce of other people's labour who "reward him in the same manner with cattle." This desire for one's best interests creates specializations because in being able to create surplus through specifying, an individual can barter his produce of labour for another's produce of labour that he wishes for. This is a predictable pattern in all societies and trade, hence creating a civilization in which everyone now relies on one another for different products. Subsequently making the division in the labour inevitable. This micro level of predictability caused by natural rational self-interest is then applied in a broader sense by Smith, to the macro-levels in which societal 'laws'

Society is slowly built up through natural patterns of