In a period of deep global uncertainty, a new book promising to point the way toward a new social scientific understanding of “extraordinary cases of systemic failure” (p. vii) is bound to find an eager audience. In Invisible Hands, Russian Experience, and Social Science, Stefan Hedlund embraces this ambitious agenda, proclaiming his study to be a direct response to the unfolding of four major crises of the past two decades: the collapse of the Soviet system in 1991 and the uncertain postcommunist “transitions to democracy and the market” that followed, the U.S. invasion of Iraq and its often violent aftermath, the devastating global financial crisis of 2008, and the seemingly intractable Eurozone crisis that erupted in 2010. In all of these crises, Hedlund insists, social scientists first failed to predict systemic breakdown and then gave mostly bad advice to policymakers trying to address it.
Hedlund's main thesis is that these shortcomings can be traced to the unshakable faith among mainstream social scientists that with the adoption of good new formal institutions enshrining electoral competition and economic markets, self-interested actors will behave in ways that necessarily generate desired public goods over time. Invisible Hands reexamines the development of social science from its foundations in the nineteenth century, with the goal of explaining why social scientists today have apparently become blind to the informal historical and cultural dimensions of the establishment and maintenance of modern democracy and capitalism.
The result is a book that skillfully identifies some of the most important unanswered questions in contemporary social science theory. Yet Hedlund seems fundamentally ambivalent about just what is needed to move social science theory forward. Is it a rejection of “grand theory” in favor of a more modest effort to explain social relationships in particular historical and regional contexts, or of a return to the sociological analysis of “norms” as the primary glue of social order, or of the establishment of an entirely new paradigm that would provide the social sciences with a healthy new foundation? The author never makes this clear. Yet even if he fails to resolve some of the sticky theoretical and methodological problems he raises, his discussion ultimately pushes us in a salutary intellectual direction.
Hedlund's central critique of mainstream social science hinges on the problem of how to define “self-interest.” Economists take the assumption that individual behavior is “self-interested” as axiomatic, and the hegemony of “rational actor theory” in contemporary political science is nearly as complete. But as Hedlund points out, if purely instrumental self-interested behavior among human beings were ubiquitous and unconstrained, social life would devolve into a Hobbesian anarchy. In such a world, surely no one would ever leave a tip in a restaurant far from home or wait patiently at a red light on a lonely rural highway with no police in sight. Beyond this, most people in most societies would frequently stop to consider the potential payoffs of criminal or other “unacceptable” social behavior—pilfering supplies from the workplace, bribing officials in order to advance one's career, or, to take the extreme case, selling one's own defenseless children into slavery. That conduct like this does indeed frequently take place in corrupt and underdeveloped countries around the world is hardly proof of the ubiquity of raw self-interest. The real puzzle is to explain why the majority of individual actors in more stable, developed countries never even think about pursuing these sorts of illegal but potentially “rational choices.” The standard answer—that strong institutions providing “good governance” can make it instrumentally rational for individuals to respect the rule of law, rather than to flout it—only begs the question of where such good governance comes from in the first place.
Hedlund rightly thinks that a more comprehensive social science theory must not only explain the impact of instrumentally rational action under given incentive structures but also analyze the larger social context that either inspires individuals to calculate their “self-interest” within the framework of formal institutional rules or, instead, motivates them to advance their interests in defiance of the rules as need be. The task facing us, in short, is to reconnect “economics” (defined as the study of self-interested rational behavior) with “sociology” (which takes into account the historical and cultural context within which everyday informal norms of proper conduct are generated). Hedlund laments the absence in today's academia of great synthetic thinkers like Max Weber, Thorstein Veblen, and Karl Polanyi, for whom economics and sociology could never be fully disentangled—and whose works, as a result, retain their contemporary relevance for social scientists investigating why respect for formal rules emerges in some social contexts but not in others.
The author's spirited attacks on the social science mainstream raise high expectations that his book will propose a compelling theoretical path forward for resolving the conflict between economic and sociological approaches to social change. In this respect, however, Invisible Hands comes up short. Hedlund's insistence that we return to the study of “norms” as well as self-interest, after all, has already been anticipated within rational choice theory. Indeed, he approvingly cites the works of Douglass North, Oliver Williamson, and Avner Greif for their creative efforts to integrate “culture” and “ideology” into economic theorizing—but these are hardly obscure figures within the economics discipline.Footnote 1 Within political science, too, there have been long and spirited discussions concerning how culture, ideology, and “ideas” might be “brought back in”; Hedlund cites this literature extensively, beginning with the works of Jon Elster in the 1970s and 1980s and continuing on through more recent contributions by Peter Hall and Rosemary Taylor, Paul Pierson, and James Mahoney.Footnote 2
So what is really missing from mainstream social science? Hedlund argues not only that we must move beyond a narrow understanding of individual self-interest so as to embrace the study of cultural and psychological motives for action—a proposition with which many mainstream economists and political scientists would now agree—but also that we should reconsider methodological individualism itself. His division of “economics” and “sociology” rests on the proposition that while economists study individual action, sociologists embrace a methodological holism within which “societies” themselves are taken as primary units of analysis. It is these broad paradigms that Hedlund hopes to synthesize.
Any effort to take both individuals and societies as primary units of analysis, however, can only result in a conceptual and theoretical muddle. There are very good reasons why nearly all economists, along with the vast majority of political scientists and plenty of contemporary sociologists, have discarded the old “structural-functionalism” of Parsonian modernization theory in order to study the “microfoundations” of macrosociological outcomes. First, Parsonian social science displayed a tendency to assume that long-standing institutions and norms in any given “society” should be considered “functional” for the social order. Such reasoning, to take one well-known example, persuaded Samuel Huntington that Marxist-Leninist one-party regimes would continue to be highly successful mechanisms for channeling the social mobilization generated by a modernizing economy.Footnote 3 Second, Parsonian modernization theory privileged the study of continuity over social change. The domination of modernization approaches to the study of Soviet politics, and the resulting interpretation of Gorbachev's perestroika as a “functional” response to the growth of a modern Soviet “civil society,” was arguably one key reason why Sovietologists mostly failed to anticipate the collapse of the Soviet system.Footnote 4
Most problematically, Parsonian systems theory displayed a remarkable fuzziness concerning the definition of its own basic unit of analysis—“society.” To take a germane example: When exactly did the sociological unit labeled “Russian society” begin? With the Varangian invasion from Scandinavia? During the time of Kievan Rus? Or only after the establishment of the tsarist system in the wake of the Mongol invasion? What criteria should we use to decide this issue? Similarly, should we say that “Russian society” ended in 1917 with the Bolshevik Revolution—and then gave way to “Soviet” and ultimately “post-Soviet” society? Or was the same “Russian society” somehow in existence throughout the twentieth century and beyond, despite dramatic regime changes? And how should we understand the ontological status of other national cultures existing historically within the Russian, Soviet, and post-Soviet states? Was there a continuous “Ukrainian society” coexisting on the same political territory as “Russian society” from the end of the Polish-Lithuanian Commonwealth until the collapse of the USSR—and if so, how can we measure change and continuity in both “cultures” during the same time period? Or has the “Ukrainian social system” somehow appeared and disappeared in tandem with Ukraine's periods of political independence? Should we analyze smaller cultural entities within the contemporary Russian Federation, such as Chechnya, Karelia, and Tuva, as “societies” with their own “norms”? As part of the larger “Russian society”? Or as something else altogether?
Without clear theoretical and methodological criteria for determining just where the temporal and spatial boundaries of any given society might lie, the study of social norms can easily devolve into a recitation of widely accepted stereotypes about immutable “national cultures.” Unfortunately, this tendency is fully displayed in Hedlund's book, which treats “Russian culture” as more or less a continuous entity from at least the time of Ivan the Terrible through the present day. Russians, we are told, have always perceived formal legal rules as a mere instrument of those in power (p. 99). Russians have never truly embraced democracy; indeed, Russia “has a long-term cultural heritage of norms that promote collectivism and acceptance of autocratic government” (p. 109). In support of this interpretation, the author cites a handful of nineteenth- and twentieth-century historians and foreign observers—including V. O. Kluchevsky, Richard Pipes, Richard Hellie, and even the infamous French Russophobe the Marquis de Custine—but gives short shrift to the vast scholarly literature disputing this “continuity thesis.”
No wonder, then, that Hedlund dismisses every historical effort to reform or revolutionize Russian institutions as little more than window dressing. Of Tsar Alexander II, he has this to say: “While [the Great Reforms] did represent fundamentally important changes in the formal rules of the game, the outcomes would be short-lived and/or represent too little too late. The abolition of serfdom in particular would turn out to have been ill-conceived” (p. 128). Of the Bolsheviks, he writes: “Setting out to suppress all of those trends toward democratic institution building and a rules-based market economy that had been unfolding over the past half-century … Lenin and his cohorts actually succeeded in reviving a historical legacy marked by long-term Muscovite path dependence” (p. 131). On Stalin: “Faced with a perceived need for military modernization … Stalin launched a massive campaign for industrialization that yet again rested on tried and tested methods” (p. 133). On post-Soviet Russia, he continues: “Much as the old USSR could be shown to exhibit basic institutional continuity from the days of Muscovy … the Russian Federation of the early twenty-first century exhibits a number of striking resemblances with the very same” (p. 137). At some point, the reader just wonders: What would Hedlund consider as decisive evidence that Russia has at last escaped the Muscovite trap?
In fact, Hedlund is fundamentally ambivalent about the notion that social science involves the testing of hypotheses in order potentially to falsify them: “While there can be no getting around Karl Popper's insistence on falsifiability as the main criterion of acceptable science, we also must recognize that there is a trade-off of sorts between neatly formulated hypotheses that are amenable to rigorous testing and more broadly formulated questions that are of relevance to the serious real-life problems that surround us” (p. 268). Going further, Hedlund approvingly cites Geoffrey Hodgson in rejecting the notion that there can ever be a single grand theory in social science that provides overarching predictive hypotheses: “Once we recognize the presence of different types of socioeconomic systems, in time as well as in space, it follows that we can no longer subscribe to the common acceptance of one theory that fits all” (p. 213). Methodologically, Hedlund's primary prescription for social science is “an ambition to complement the tradition of deductive modeling with insights gained from inductive case studies” (p. 269).
Such a relativistic ontology, epistemology, and methodology combine to undercut the author's initial premise that a new social science might help us avoid disasters like the fate of the Russian economy in the 1990s. If social scientists should move away from the search for single grand theories with clear predictive implications to focus on “inductive” case studies involving “real-life problems” within particular historical contexts, how can we really hold previous economists or political scientists responsible for their failures to predict and ameliorate bad outcomes in the wake of systemic crises, in Russia or elsewhere? Indeed, Hedlund himself hints that given deleterious Russian historical traditions, the fate of Yegor Gaidar's liberalization might have been foreordained in any case: “Whether the Russian government under Gaidar really could have pursued a different economic policy is beside the point here” (p. 135). But if Russia in 1992 was simply doomed to return to its “Muscovite traditions” under any conceivable set of policy prescriptions, then why blame Gaidar, or his opponents, or anyone else for the bad economic results of the 1990s? Indeed, why blame American “neoliberals,” as Hedlund does, for the financial crisis of 2008 and the resulting Great Recession—since they, too, were merely following the long-term cultural pattern of “rugged individualism” and hostility to state regulation that is so typical of U.S. history?
Despite my critical comments, I do think that the book is on the right track in calling for a fundamental shift in contemporary social science thinking in response to our failure to understand situations of systemic crisis. We sorely need a more thoroughgoing reassessment of the assumption of universal instrumental rationality, which is clearly both empirically inaccurate as a description of individual decision making among real human beings and theoretically misleading in many of the ways Hedlund suggests. But methodological individualism, in my view, is absolutely crucial to further intellectual progress. For some reason, social scientists critical of rational choice theory continue to see the two axioms of neoclassical economics—methodological individualism and the assumption of instrumental rationality—as logically inseparable. They are not. One can rightly claim that no collective can ever be said to “act,” while rejecting entirely the assumption that individual action is universally motivated by the desire to maximize individual utility.Footnote 5
In fact, this was the explicit position of Max Weber himself, who repeatedly insisted that he was a methodological individualist, but who also held that instrumental rationality is only one of four basic types of individual “social action,” along with affect, value rationality, and habit. Weber's staunch methodological individualism has long been misunderstood due to the poor English translations of Weber's works by Talcott Parsons, who wanted to appropriate Weber's theory in support of his own structural-functionalism. Even today, scholars like Hedlund typically “place Weber partly but not wholly in the camp of methodological individualism” (p. 275)—simply because it is difficult today to imagine a full-fledged methodologically individualist culturalism.
Yet a genuinely neo-Weberian social science—instead of a retreat to a structural-functionalist study of “social systems” and their prevailing “norms,” or the mere accumulation of inductive case study evidence—is precisely what is needed in response to the problems Hedlund and other like-minded critics of rational choice theory identify. If we are to predict the likely social results of the imposition of new formal institutional rules in diverse historical and geographic contexts under conditions of systemic breakdown, we will need to ask new questions about individual behavior in uncertain environments. In doing so, we must focus not only on people's instrumental interests but also on their existing habits of action, their emotional reactions, and their deeply held value commitments. Embracing methodological individualism will help us avoid the pitfalls of reification and stereotyping of existing “societies,” instead highlighting the complexity of social interactions among different individual perspectives within any given political, economic, and cultural setting.
Weberian methodological individualism does not require the wholesale rejection of mainstream rational choice theory: Since most human beings do typically think about how to get more money and more power, many of the formal models developed in contemporary social science will continue to be relevant for the study of large-scale social transformations. Indeed, one need not refer to the legacy of Muscovy to make sense of Russian citizens' typical refusal to respect the legal rules governing the highly unstable, thoroughly corrupted democratic capitalism that emerged in the wake of the Soviet collapse. Such a result is entirely explicable by the quite instrumentally rational conduct of cynical contemporary Russians.
It is surely time, however, to broaden social science theory to take into account the fact that people do sometimes cling to habitual patterns of action long after they have become objectively dysfunctional, do conduct themselves emotionally in ways that contradict their individual interests, and even on occasion do reject short-term payoffs in order to defend moral principles they see as sacred. This sort of Weberian methodological individualism would still force us to take into account the historical legacies of old regimes that have shaped individuals' mind-sets, but in a way that does not force entire complex cultures to fit into rigid stereotypes. Over time, a Weberian approach might even help us develop falsifiable hypotheses that explain why the introduction of formal democratic and capitalist institutions produces positive-sum compliance in some social contexts—and only informal resistance and social chaos in others.
