Criticism of the Austrian approach is the 13th chapter of Austrian Economics: A Primer by Dr. Eamonn Butler. In the chapter, various criticisms are explained and usually countered from an Austrian perspective. The following criticism of methodological individualism was not countered from an Austrian perspective:
“When we see the doctor about a runny nose, we do not want a long micro-explanation about how nasal cells work. We want a short macro-explanation of whether it is an infection or an allergy, and whether antibiotics or antihistamine will cure it. We do not need to know how cells work to treat a runny nose, any more than a scientist needs to know how individual molecules behave in order to predict the expansion of a gas.
It may be technically true that only individuals choose. But that ignores useful macro-explanations, like culture, history, ethics, and tradition – all of which can give us useful insights into social and economic events. We can see patterns in a carpet without knowing the colour of each individual fibre. Likewise, we may well be able to detect – and predict – regularities in the macroeconomic figures, while knowing nothing of the individuals concerned.”
Yeah, I think this is a “so what?” argument. We know things about individuals because we are individuals. And we can deduce consequences from the actions of one or many individuals without accidentally making any unrealistic assumptions about the world. But none of us are a group, so we can’t know anything about a group without measuring that thing about the group. Secondly, we cannot simply treat the observations we make of groups as if they were axioms and make deductions from them since we may be making all sorts of unspoken, unrealistic assumptions about the world that are simply false.
This is not to say that reasoning about group behavior of humans is impossible, far from it. We can reason about groups of humans in exactly the same way we reason about groups of animals. We can observe the mating behavior of and selective pressures on animals (including humans) to see why certain features evolved. We can do the same things with the human anatomy, the human mind, human language and even, to an extent, human culture.
But certain empirical approaches used by biologists for the study of other animals are not appropriate for the study of humans. This is not because humans are in any way special. Rather, there are several important features of humans that are unique from all other animals. For example, a predator-prey model can be used to fairly accurately predict the medium-run fluctuations in the populations of two animal species who are in a tight predatory-prey relationship. The populations vary in time in proportion to a very simple differential equation. Of course, even in the animal kingdom, such simple models make many assumptions that the real world breaks. Climate, disease, sudden influx of foreign predators, and so on can radically alter a predator-prey population that had been assumed to be in “equilibrium.” But it is obviously completely inappropriate to apply this kind of model to humans. Malthusianism is, in essence, just this, an application of the predator-prey model to human population where we can substitute “war-famine-disease” for “predator” and “agriculture-industrialization-technology” for “prey.” There is one set of factors that blindly mitigates against human population and one set of factors that blindly propagates human population. But this neglects entirely the element of human calculation and action in response to the conditions of the world. Humans do not breed like animals, at least, not in the absence of breeding subsidies like food stamps.
Nonsense with respect to economics because of one simple fact - The scientific method is not applicable to the field of economics, therefore, causal relationships cannot be established by mere empirical research of aggregates.
The skeptic should ask himself if he can find one single theoretical model or proposition that is supported by scientifically controlled experiments.