The analysis of individualistic and collectivistic phenomena

The mainstream of present economic theory confines its analysis to indi­vidual actions, even when collectivistic phenomena are examined. In Sax’s view, however, social circumstances must be derived from two forces, indi­vidualism and collectivism.

Individualism is the inborn quality of man who considers himself the centre of the social circle. It is his attitude to relate everything, means and men, to himself. While the individualistic idea of personality is a product of civilization, the germ is present in every person (Sax, 1884, pp. 50f.). How­ever, the efforts of individuals collide with those of other persons as far as individual spheres of activity touch each other, and evasion is impossible. People have a predisposition for common living, and their community is shaped by heritage, kinship, language, religion, historical reminiscence and nationality. Arguing against historical materialism as well as against exagger­ated conservative ideas, Sax underlines that associations of individuals cannot be fully explained by economic processes.

Collectivism is the combination of individuals in a wholeness which com­mands individuals in order to fulfil collective purposes. There are communities such as state, church and nation: ‘They are not a product of individualism, though a product of individuals’ (ibid., p. 57). Sax is convinced that it would be an error to reduce institutions completely to individual actions.

Collectivism excludes individualism, as far as it pertains. On the one hand, collectivism constrains the free decisions of individuals when they interfere with other people; on the other hand, it combines and regulates individual activities that contribute to common functions wherever the free play of individual actions does not suffice, and individual egoism is constrained. Free activities of individuals are made possible without endangering social life through permanent conflicts and fights (ibid., pp.

Both aspects, individualism and collectivism, are the basis for the classification of economic spheres: there is the private economy (‘Privatwirtschaff) and the public economy (‘Gemeinwirtschaff). Public economics (‘theoretische Staatswirtschaff) analyses the economic aspects of collective communities. We have further to distinguish economic actions and socioeconomic processes. Economic actions are set by individuals dealing with nature. By analysing models of isolated economic actions and using the inductive method for deriv­ing general conclusions, one can find general economic categories. Socioeconomic processes (‘okonomische Socialvorgange') are beyond indi­vidual control, and by analysing them one has to deal with basic social relations (‘sociale Grundverhaltnisse'').

Sax draws attention to the mistake of identifying individualism with ego­istic behaviour and collectivism with altruistic (or at least norm-directed) behaviour. Individual behaviour - as well as the behaviour of collectivities - may be egoistic (as it usually is in market relations), mutualistic (combining solidaristic elements with self-interest, as in collective insurance or class­based behaviour), and altruistic behaviour (as in families). By emphasizing both poles of human behaviour, Sax acknowledges the use of these concepts by writers as diverse as Adam Smith, Francis Hutcheson, Adam Ferguson, Karl Knies and Gustav von Schmoller, Emile Durkheim and Albert Schaffle.