Although the term methodological individualism was coined by the economist and historian Joseph Schumpeter, he was not the first to identify this methodological device and principle of explanation in the social sciences. For example, prior to Schumpeter, the sociologist Max Weber referred to the individualistic method, and the intellectual historian Élie Halévy wrote of an individualistic hypothesis, which he defined as a “principle of explanation,” in which the individual human being serves as the basic unit of analysis in the social sciences.

According to Ludwig von Mises, methodological individualism views “all actions [as] performed by individuals”— or, in the words of Karl Popper, that social phenomena “should always be understood as resulting from the decisions, actions, attitudes, etc., of human individuals, and that we should never ...