Methodological individualism is a philosophical orientation toward explaining broad society-wide developments as the accumulation of decisions by individuals.

In the writings of Thomas Carlyle, for example, human history is seen as a collection of the biographies of heroes, see philosophy of history.

More broadly, methodological individualism is opposed to, for example, statistical analysis, the comparison of experimental and control groups of individuals, because individualism denies that a collectivity is an autonomous decision maker, and demands that the social sciences ground their theory in individual action. The idea has been used to attack e.g. historicism, social class as a determinant of individual behavior, and the postmodern idea of social construction, as a collective determinant of how individuals think.

William James tried to free methodological individualism of Carlyle's elitism. He wrote that "communities change from generation to generation" due to "the Grants and the Bismarcks, the Joneses and the Smiths." Grant and Bismarck were the heads of governments of the U.S. and Prussia respectively when James wrote those words, but they are balanced in this passage by the anonymous Joneses and Smith, who also throw their stones and have their says in the communities' development.

Methodological individualism is an essential part of modern Economics, which usually analyses collective action in terms of rational, utility maximizing individuals. This is the so called Homo economicus postulate. The structure and dynamics of most economic institutions can be explained using it. One of the best examples of methodological individualism was the defense of logical reasoning by the Austrian School of economics as against the Historical School's promotion of statistical analysis in the Methodenstreit.

In politics methodological individualism underlies Liberalism. Some methodological individualists claim that they have no political opinion - rather, that they are just rational and using common sense. Some radical feminist and postmodern critics have argued that 'rationality' is itself a typically male, Western construction, and that "common sense" varies among cultures. For example, common sense notions in the US, such as women's rights, are very different from those in Iran.

In science, methodological individualism can be used to claim an objective stance toward reality. Such claims have been criticised by postmodernists and feminists, amongst others.

Methodological individualism has also drawn varied philosophical critique, especially from sociologists such as Karl Marx.

A much neglected aspect of methodical individualism is the realisation that reality can only be experienced and mediated by an individual's consciousness.

Famous methodological individualists

• Friedrich A. Hayek
• Ludwig von Mises
• Karl Popper