First, the methodological individualism which characterizes the theory to be presented here vitiates much of the antiteleology case. The action to be explained is at a higher level of social organization than the level at which purpose is specified. If it were not, if the theory were holistic, that is, remaining at the level of the system, then introduction of teleology at that level would explain a component of the system in terms of the function it performs for the system. This assumes what should be problematic for social theory―the integration and organization of the system. Such explanations, or “theories,” are labeled functionalism in social science, and functionalist explanations are subject to all the objections made against teleological explanations. […]
A second reason why a purposive theory of action at the level of individuals and based on a teleological principle is not harmful to social science, but desirable, lies in the peculiar relation of social science to its object of study. Social scientists are human beings, and the object of their study is actions of human beings. This means that any other kind of theory of human behavior poses paradox for the theorists themselves. The paradox can best be seen by supposing a fully developed theory of human behavior which is not based on purposive action but on a causal framework into which individual goals or purposes never enter. […]
The paradox arises because such theories imply that the theory itself, a result of purposive action, can have no effect on future action. Any attempt to use the theory purposefully will consequently be, according to the theory, destined to fail. A further paradox lies in the image of man implied by a nonpurposive theory. Since the conception is one into which purpose, goal, and will do not enter, it is incompatible with the very orientation of the theorist, who sets as a goal the development of such a theory. All of this arises because the subjects of the theory are persons, and that includes the theorists and the users of the theory.
There is another closely related value to basing social theory on purposive actions of individuals. In a certain range of scholarly endeavor, including ethics, moral philosophy, political philosophy, economics, and law, theory is based on an image of man as a purposive and responsible actor. Among these fields there exists a degree of fruitful interchange which has been denied to most sociologists, simply because sociologists have not chosen to ground their theoretical work in that same way. Moral philosophers from Kant to Rawls have grounded their work in a conception of purposive responsible individuals, as have political philosophers such as Bentham, Rousseau, Mill, and Locke. Some theorists, such as Bentham and Hayek, have been able to span all these fields because of the common conceptual base. Social theory which uses that base stands to profit from the intellectual discourse this common ground makes possible.
It is also important to answer the objection that individuals do not always act rationally. I will not dispute the point, for it is clear that persons sometimes act self-destructively and at other times act with questionable rationality. I will say this, however: Since social scientists take as their purpose the understanding of social organization that is derivative from actions of individuals and since understanding an individual’s action ordinarily means seeing the reasons behind the action, then the theoretical aim of social science must be to conceive of that action in a way that makes it rational from the point of view of the actor. Or put another way, much of what is ordinarily described as nonrational or irrational is merely so because the observers have not discovered the point of view of the actor, from which the action is rational. […]
Why Use Maximization Of Utility?
Even if purposive action is accepted as the appropriate principle of individual action for social theory this does not imply the narrow specification of purpose as maximization of utility. First, I need to say that neither in the qualitative form of the theory nor in the use of this qualitative theory in research is the idea of maximization of utility explicitly introduced. The assumption of utility maximization is necessary only for the quantitative development of the theory both for mathematical modeling and for the quantitative research which makes use of those models. Nevertheless, it is useful to spell out here the two reasons why such a narrow specification is valuable for social theory.
First, by making precise what is meant by “purposive action,” such a specification provides greater power. Any teleological principle which specifies that some quantity is to be maximized or minimized is more powerful than a less specific principle. This predictive power of a minimization or maximization principle is somewhat vitiated when measurement of the quantity to be minimized or maximized is less unequivocal than it is in a physical example, as is the case for utility.
A second reason favoring the use of this narrow specification of purposive behavior lies in its simplicity. For a social theory made up of three components―a macro-to-micro component, an individual-action component, and a micro-to-macro component―it is especially important that the individual-action component remains simple. This does not imply, of course, that the specification of purposive behavior is the best one of those at the same degree of simplicity. It is true, however, that a trade-off between complexity in the other two components and complexity in this component must be made if the overall theory is to remain manageable. I have chosen to trade off as much psychological complexity as possible in order to allow introduction of greater amounts of complexity in the other two components of the theory, the “social organizational” components.
[…]
The Macro-to-Micro and Micro-to-Macro Transitions
The two other components of the type of social theory under consideration, through which the transition from macro to micro and the transition back to the macro level occur, can be conceived of as the rules of the game, rules which transmit consequences of an individual’s action to other individuals and rules which derive macro-level outcomes from combinations of individuals’ actions. How a theory might encompass this can be seen by examining somewhat more deeply the three-part paradigm for explaining macro-level phenomena, which consists of type 1, type 2, and type 3 relations: the macro-to-micro transition, purposive action of individuals, and the micro-to-macro transition.
For many macro-level relations this paradigm provides precisely the appropriate imagery. The relation between improving economic conditions and revolutions, used as an example earlier, illustrates this appropriateness. But in other cases what is to be explained at a macro level is not a relation between one macro-level variable (such as change in economic conditions) and another (such as revolutionary activity). Instead, a macro-level phenomenon is to be explained, such as stock price volatility, for example. […]
This is a macro-level phenomenon, and the theoretical task is to account for it by going down to the level of individual actions and coming back up to the macrosocial level, as suggested in [Figure 5.2]. In this case the explanation might consist of a system involving micro-level actions, their combinations, the feedback from those combinations that affect further micro-level actions, followed by further combinations, and so on, producing the bubble of speculation and then the bursting of the bubble.
This example illustrates a more general situation, in which the theory describes the functioning of a system of action from which the three types of relations are not easily separable. Although such explanatory systems involve both individual-level actions and system-level behavior, they are not appropriately conceived of as the linking together of relations of these three types. Relations of the sort described by Figure 5.1 or Figure 5.2 are ordinarily best thought of as macro-level empirical generalizations which might be predicted as deductions from a theory. The theory which can generate such relations as specific propositions may be thought of as a theory of individual action together with a theory of how these actions combine, under specific rules, to produce systemic behavior.
Interdependence of Actions
There are various ways in which actions combine to produce macro-level outcomes, and it is useful to discuss some of these briefly. This cataloging of forms of interdependence of actions is not intended to be exhaustive.
A simple case is that in which one actor’s