Defining individuality in institutional economics

A simplistic definition of individuality might focus upon observed heterogeneity, i.e. identify differences between individuals solely through dissimilarities in specific actions and physical characteristics. However, such an approach has significant limitations in its capacity to identify the source and extent of differences between agents. It fails to acknowledge the impact of the environment upon individual development and how the social context itself affects the ability to discern individuality. Furthermore, it overlooks how differences in personal beliefs and reflexivity underpin observed actions and choices, and how these elements of individuality are maintained over time. Not only are these concerns essential to a sophisticated recognition of individuality in institutional economics, they are actually central to the historical meaning of the concept. As Hinchman (Reference Hinchman1990) argues, the concept of individuality was not simply a reference to singular differences between individuals, nor was it intended to disconnect the individual agent from the social forces that shape their unique development. Instead, the mediation between the individual and the social context they occupy has historically been an important emphasis of the term “individuality” in the hands of authors such as Mill, Wilhelm von Humboldt, Schiller, and Goethe, among others (Hinchman, Reference Hinchman1990: 762–773). Maintaining this emphasis is particularly relevant for institutional approaches to economics, which prioritize the relationship between the agent and the social environment.

Investigating any such process of mediation between the individual and the environment cannot proceed without acknowledging the subjective inner life of individuals. Unfortunately, rather than developing the conceptual relationship between the objective world and the subjective mind of its participants, the neoclassical approach largely eliminated psychology from its depiction of economic agents, focusing instead on an atomistic conception of individuals in the context of a mechanistic system (Davis, Reference Davis2003: 26).Footnote ³ In contrast to this limited purview of neoclassical analysis, the subjective elements of individuals that allow them to navigate their environment are a central interest of institutional economics. An adequate conception of individuality within institutional economics requires both a recognition that institutions have an impact on the development of individuals, while also acknowledging the individual's awareness (or otherwise) of the environment they are embedded within. The approach presented here will seek to integrate both the objective and subjective characteristics of individuals in an effort to place this more sophisticated conception of individuality in the context of social institutions.

Davis has repeatedly argued that a meaningful interpretation of individual agents requires endowing them with a self-concept (Reference Davis2003, Reference Davis2011). Following the discussion of Davis (Reference Davis2003: 114–119), the term self-concept will be used here to refer to an individual's understanding of themselves, and incorporates some ability to evaluate their own behavior in the context of their environment. Indeed, the capability to consciously traverse the social world varies between individuals and is surely one important source of difference between them. Relatedly, Hodgson's work clarifies the role of habits in enabling individuals to navigate many activities (social and personal) without constantly applying such deliberate plans and conscious choices. Hodgson's approach draws on William James’ pioneering work to highlight and explore the link between institutions and the habits that individuals develop. While James is well-known for his quote that an individual can be thought of as a “bundle of habits,” another central motivation of his work is frequently overlooked: James’ argument was not simply that individuals develop habits, but that habits contribute to the stability and conservation of an individual over time (Lawlor, Reference Lawlor2006: 330). In this respect, the habits that Hodgson has continued to emphasize are agential properties that also contribute to the continuity of individual personality.

The arguments of Davis and Hodgson are brought together here to create the following definition of individuality within institutional economics. Individuality is here defined as the unique combination of objective and subjective agent-level properties that serve to distinguish individuals from each other and enable them to navigate and interact with the environment they are embedded within. The inclusion of subjective properties of individuals is central to this approach, and obviously includes the habits that individuals possess, and a self-concept that can establish reflexivity. Furthermore, the “combination” referenced here is also particularly important. A single choice is not sufficient to discern the nature and extent of individuality, and instead needs to be understood in the context of both conscious commitments and relevant habitual thought processes.Footnote ⁴ As further clarified in the following sections, both deliberative decision making and habitual unconscious response can play important roles in differentiating individuals and enabling them to navigate and interact with their social context.

The social environment and the foundations of human individuality

To develop the concept of individuality in institutional economics, it is useful to clearly establish the role of the social environment in shaping the characteristics of individuals. Research now clearly demonstrates that while genetic structure is an important building block of individual differences, the social environment is also a significant foundation of individuality. The variation in genotypic structure across individuals is enormous and gives rise to a vast range of realized traits (phenotypes). Although the process of pure Mendelian heritance has previously been referred to as simple, even within this category of so-called “simple traits” phenotypic development can often be inextricable in nature.Footnote ⁵ However, it is the category of complex (i.e. multifactorial) traits that includes those characteristics that result from genetic and environmental interaction.Footnote ⁶ While in some instances genetic inheritance plays a more important role in determining behavior than was previously recognized (Rowe, Reference Rowe1994), the advent of twin studies has highlighted dramatic differences in the personalities of monozygotic twins, demonstrating that non-shared environmental factors play a significant role in this divergence of personality.Footnote ⁷

In work that summarizes much of the evidence regarding individual personality development and individual differences, Harris contends that individuality emerges through the process of socialization, and that the environment outside the home has a particularly significant impact on personality development (Harris, Reference Harris1998, Reference Harris2006; Pinker, Reference Pinker2004). These works highlight the complexity of human trait formation and emphasize that individuality emerges via a multifaceted relationship between the biological structure of genotype and the environment, which continues over an individual's life experience.Footnote ⁸ As such, many aspects of the social structure play a role in the development of individual differences, even economic behavior. Remarkably, even the early development of an individual's consciousness and private inner dialogue is inexorably linked to the social context they inhabit (Parrington, Reference Parrington2015: 166–173). Furthermore, the interaction of these factors occurs such that human individuality is an undeniable scientific fact: no two people can possibly be identical, and individuality will always manifest itself in behavioral traits (Jobling et al., Reference Jobling, Hurles and Tyler-Smith2004).Footnote ⁹

The above research serves to confirm much of Davis’ arguments that individuals are best understood as embedded within a social structure (e.g. Reference Davis2003, Reference Davis2011).Footnote ¹⁰ Due to the fact the social environment is integral to the process that generates this individuality, integrating the notion of individuality within this social context is clearly important. Furthermore, individuality is a meaningful concept only in relative or comparable terms, i.e. differences between individuals (both objective and subjective) can only be understood as relative. Not only does this direct attention to the important relationship between the individual and the social structure in which they operate, it also highlights the importance of an individual's own awareness of their place in the social structure, and how such awareness (or lack thereof) might vary between individuals. This affirms the need for a conception of individuality to recognize this interaction, just as some of the historical discussions of the concept have emphasized.

Definitions of the different elements of the social world are appropriate to provide points of reference if we are to adequately place the concept of individuality within the domain of institutional economics. In the following analysis, social structure is considered the broadest category of social relations, and includes all forms of social relations – even those that are not codified in any way (Hodgson, Reference Hodgson2006: 3). The term institutions will be used to refer to systems of social rules (Hodgson, Reference Hodgson2015: 388), which includes formal legal structures, informal rules, and cultural norms of behavior. Both customs and routines are specific forms of institutions, and emerge as rule-bound patterns of behavior that are normally associated with social groups (customs) and organizations (routines). There is no clear perimeter at which localized or idiosyncratic rules should become classified as institutions. However, as Hodgson notes (Reference Hodgson2015: 388), all social rules must rely upon some shared understanding in order to function as rules. When the shared conception of a rule is highly limited or peculiar to few individuals, its role as a social rule becomes questionable and of little significance. The discussion in this paper will focus on the relationship between individuality and social rules that are not limited to organizations and smaller social groups, and instead possess wider appreciation and application.

Individuality and habits

One important way institutions impact upon the subjective properties of agents is through the development of habits. This connection has been examined and explored by Hodgson, who argues that habits shape and direct important aspects of individual economic behavior (e.g. Hodgson, Reference Hodgson2003, Reference Hodgson2004, Reference Hodgson2010). In terms of their formation, Hodgson's explanation of habits is largely consistent with the explanation of psychologists. The latter contend that habit formation is an incremental process that can occur with repetitive behavior and a reward-learning mechanism. As individuals repeat the same behavior and experience a positive outcome (reward response), the cognitive and neural mechanisms that are central to procedural memory undergo small adjustments that links the behavior with the reward outcome (Wood and Rünger, Reference Wood and Rünger2016). This is further buttressed with dopamine signals that support the reward response of the behavior.Footnote ¹¹ Furthermore, this increased utilization of procedural memory is correlated with shifts away from the medial temporal lobe and pre-frontal cortex of the brain, which is associated with conscious goal-setting and memory, i.e. non-habituated activity (Hodgson, Reference Hodgson2010; Fuller, Reference Fuller2010).

The most important point for the present discussion is the link that Hodgson emphasizes between the habits that individuals develop and the institutional structure. As institutions tend to circumscribe the range of actions, the habits of individuals will demonstrate a general compatibility with the social institutions they are embedded within. The habits of individuals are not, however, to be considered as simply a component of those social institutions. Drawing on Hodgson, Fleetwood has emphasized that although institutions can shape the type of behavior that ultimately becomes habitual, habits remain properties of agents themselves (Fleetwood, Reference Fleetwood2008b: 249).Footnote ¹² While an important link is established between social institutions and the formation of habits, the latter remain agential properties and should not be conflated with social phenomena such as rules.

Hodgson has repeatedly emphasized that a habit is first and foremost a disposition or tendency the individual possesses, and not simply the incidence of recurring behavior (the definition of Becker, Reference Becker1992).Footnote ¹³ This is particularly important, as habits can also include habitual beliefs. The institutional structure that the individual is embedded within can leave an imprint upon the set of beliefs that individuals develop, just as it can shape habits of thought that are revealed in actions. Furthermore, whether in the form of habits of action or engrained beliefs, habits operate unconsciously. While individuals may become aware of a particular habit they possess, it is not the case that an individual will be aware of the full range of habits they have developed. Thought processes or beliefs might be habitually followed without explicit recognition by the individual, and those habits of action that are compatible with the actions of others may equally go unnoticed.

As agential properties, habits can contribute important features of individuality. First, as many habits are compatible with the social institutions within which they are developed, they are also important subjective characteristics that assist individuals to navigate the social context in which they are operating. Furthermore, as habits operate unconsciously, individuals can negotiate their social context without having to devote deliberative or conscious attention to all aspects of their activities. Lawlor, for example, explains that habits of action and thought allow the individual to keep navigating their world, and maintain some coherence in their unique approach to it, even when other aspects of their own belief system are challenged (Lawlor, Reference Lawlor2006: 333). Second, the combination of habits an individual develops also plays a role in preserving individuality and differentiating one individual from another. The pragmatist approach of James, for example, emphasizes habits as playing an important role in the conservation of an individual's personality across time. The set or bundle of habits that individuals develop provides their personality with some stability, and conserves aspects of their nature in the context of change. Similarly, Hodgson links habits to the life experience of individuals, as the habits they possess serve as “marks of their own unique history” (Reference Hodgson2003: 164).

To ascribe habits a central role in the development of individuality and personality is not to reduce or diminish the multifarious nature of individuals. Habits are not simplistic and are instead adaptable means to deal with complex human society (Hodgson, Reference Hodgson2010: 7–9). For example, habits allow individuals to operate without rethinking each specific action or making continual marginal adjustment (Lawlor, Reference Lawlor2006: 334). Some authors contend that the habitual and unconscious systems of humans enable further multitasking capability than what could be obtained in their absence (Lisman and Sternberg, Reference Lisman and Sternberg2013). Furthermore, the habits that individuals develop are malleable, allowing room for interpretation and variation between individuals (Hodgson and Knudsen, Reference Hodgson and Knudsen2004: 287).Footnote ¹⁴ Even when an individual develops a habit after having originally observed the behavior of other individuals, their own execution of the activity (and the associated formation of a habit as the behavior is repeated) is not a precise replication of the originally observed behavior. Ultimately, the specific and unique mix of habits that individuals develop stems from various social environments they occupy, the choices they make, and the many different roles in society that individuals may perform (Lawlor, Reference Lawlor2006: 336). The crucial choice then, according to Lawlor (Reference Lawlor2006), in determining individual personality is not simply what one will do, but the choice of who one shall be. This naturally leads to a consideration of an individual's self-concept.

Individuality and subjective reflexivity

While habits are agential properties that can augment an individual's ability to navigate the social structure, developing a comprehensive notion of individuality requires a conception of individuals as also possessing reflexive properties (Davis, Reference Davis2003, Reference Davis2011). Davis draws on work by Bhaskar (Reference Bhaskar1989 [1979]) and Archer (Reference Archer1995) to argue that agents and the structure in which they operate are not conflated and can be analyzed as separate entities. Expanding on this separation of the individual and the social, Davis argues that a self-concept and the potential for reflexivity is essential if we are to avoid the implication that individuals are simply determined by their social context and thereby lack real agency (Reference Davis2003: 114).Footnote ¹⁵ This is not to suggest that an individual's self-conception will be absent of social influence, but simply that individuals have the ability to investigate and evaluate the externally imposed conceptions of themselves (Davis, Reference Davis2003: 111–117). Davis couches his analysis of self-concept in the context of group participation, and argues that a satisfactory self-concept must incorporate an ability to comprehend the social environment and enable conscious participation in group activities, rather than participating without reflexivity. This capability of an individual to comprehend and adjust their interaction with the social environment is referred to as an individual's degree of “individuation” (Reference Davis2003: 157–159), and it is only in establishing this capability, Davis argues, that individuals can be considered relatively autonomous agents.Footnote ¹⁶ While Davis focuses particularly on defined social groups in his discussion, this can be extended to the wide range of social contexts in which individuals are engaged.

A satisfactory conceptualization of individuality in institutional economics must include recognition of self-concept, and some notion of the individuation that Davis has described. Self-concept and reflexivity are important subjective properties that are central to the way an individual can navigate their environment. Davis’ concept of individuation refocuses attention on the individual's ability to exercise input into the terms on which they engage with, and participate in, their social context. It is also a differentiating factor between individuals, as the degree of individuation they exercise will vary between them. In fact, Davis is himself cautious in how much individuation he is prepared to ascribe to individuals, and interprets the full development of this capability as an ideal rather than a commonplace (Davis, Reference Davis2003: 159). Furthermore, the individuation capability prevents individuality from becoming reducible to a positional concern, wherein differences between individuals are simply a function of the institutional context an individual is operating within (Davis, Reference Davis2003: 143). For example, two individuals in the same context, and bound by the same set of institutions, can have a different awareness and interpretation of their interaction with those social constraints.

The integration of self-concept and individuation within this institutional approach to individuality must also incorporate two characteristics. First, self-concept is a product of mediation between both internal (subjective), and external social influence. In Davis’ terms, a self-concept is both institutionalized and individualized (Reference Davis2011: 213), and the process of its development is both intrapersonal and interpersonal (Reference Davis2011: 178). Second, the individuation that Davis describes is an ongoing and dynamic process where individuals continue to interact with – and reflect upon – the environment in which they operate.Footnote ¹⁷ In the context of habitual behavior, this ongoing organization may entail the individual becoming conscious of habits, or developing habits of which they are not aware. While there are a number of potentially useful approaches to further developing self-concept, this discussion will adopt the analytical dualism of Archer.Footnote ¹⁸ An institutional approach requires a link between individuals and the broad social structure (including institutions) and Archer's approach is precisely aimed developing a mechanism linking agency to social structure (Archer, Reference Archer2003: 64).

Archer's approach begins with an argument for the existence of a subjective ontology in which individual self-consciousness operates, and through which the individual addresses themselves. By addressing themselves through the first-person perspective of “I,” the individual utilizes a private mental space, inaccessible to all others, wherein priorities and concerns are identified and deliberated. Archer describes this process by which an individual makes ongoing self-reference as an “inner conversation,” and argues that it is central to understanding reflexivity (Reference Archer2003: 37).Footnote ¹⁹ Furthermore, this ability to make ongoing self-reference through inner conversation has two important implications for individuals in the context of broad social structure (which includes institutional structure). First, the reflexivity of individuals allows them to monitor their commitments, and then adjust and adapt in accord with their highest cares and priorities (Archer, Reference Archer2000). Second, reflexivity must be exercised in order for individuals to navigate their social relations, such as the demands and expectations of others (Archer, Reference Archer2003: 40–42).

The interaction between the individual and their environment in Archer's approach is hinged upon a distinction between the subjective reality of an individual's reflexivity just described, and the objective reality of the social environment in which they operate. The agential properties of individuals come to the fore in their subjective interpretation of the objective situation that they find themselves within. The various enablements and constraints that the individual encounters in this environment emerge only as the outgrowth of the fact that the individual is pursuing plans and projects. Their reflexive capacities are essential in that they will repeatedly interpret these plans in the context of the various enablements and constraints that they experience, perhaps altering and adapting their projects accordingly. This becomes part of a “life-long dialectic between objectivity and subjectivity because circumstances can change” (Archer, Reference Archer2003: 141). In other words, this is a process of continuous mediation between the individual and the social environment they are embedded within.

There are two specific reasons why Archer's approach is useful in conceptualizing individuality as defined in this paper, and for institutional economics more generally. First, through its emphasis on the subjective properties of individuals there is also an inherent recognition of individuality in her analysis. An individual's subjective interpretation or construal of their objective environment will be different from all others (even those who share that context). This is particularly important as it helps to avoid the trap identified by Davis of attributing differences to positions and institutional heterogeneity. In explicitly recognizing that agents make differing interpretations, evaluations, and choices within the same context, Archer's approach can offer a recognition of individuality that does not rely upon positional difference (Reference Archer2003: 139).Footnote ²⁰ Second, the ongoing dialectic that she describes between the individual and their social context (through an inner conversation), is part of a process of unique personal development, and is consistent with the scientific and biological approaches emphasizing the continual change of individuals as they interact with their environment.

Archer's general approach can be used to form an explanation of how individuality continues to evolve over time. In pursuit of their distinct plans and projects, the individual interacts with the social structure and engages in an ongoing dialectic. They bring their own subjective interpretation of the feedback they receive in response to these actions, and this in turn shapes any change or adjustment of their plans. This feedback may serve to confirm specific aspects of their projects and commitments, or it might signal their infeasibility. An individual's understanding of the objective environment may change, and formerly held beliefs may be further entrenched or challenged and adjusted. The choices that individuals make in the context of the ongoing dialectic that Archer's approach clarifies brings with it a range of habits that are associated with the specific projects and roles that individuals pursue, the point that Lawlor (Reference Lawlor2006) makes effectively. Furthermore, as individuals change their focus the experience of their previous commitments leaves some imprint upon them, as Hodgson (Reference Hodgson2003) notes in identifying habits as markers of unique personal history. In the event that the individual has some impact on the environment, however marginal and localized it may be, this will further have a unique effect on their own development.

Differences continue to emerge as individuals, exercising agency through their various choices and actions, interact with the social structure they are embedded within. Most importantly, differences in plans and projects place each individual in a unique relationship to their social context.Footnote ²¹ This feedback loop (dialectic) between the individual and the social structure remains ongoing and without cessation, and Archer emphasizes that both the individual and the circumstances in which individuals act are always changing (Reference Archer2003: 141). This self-transformation that Archer describes is a process that is a constant feature of human life, as individuals revisit their commitments to confirm or adjust these on a daily basis (Reference Archer2003: 123–129).Footnote ²² Consistent with Davis’ emphasis on individual development as both intrapersonal and interpersonal, the development of individuality therefore becomes a generative process (Lane et al., Reference Lane, Malerba, Maxfield and Orsenigo1996) that evolves as agents interact with each other, and with the social structure they are all embedded within.

Integrating habits and subjective reflexivity

The strength of Archer's approach is the focus on the conscious dialectic between the individual and the social environment. However, the relationship between this deliberative narrative and the habits of individuals presents a theoretical tension: how to reconcile the acquired habits of individuals with the deliberative narrative those individuals use to navigate their environment? While this theoretical tension also introduces a potential conflict in underlying philosophy, i.e. determinism versus free will, the focus of this paper will be limited to the integration of unconscious habits with the conscious choices of reflexive agents.Footnote ²³ More specifically, to further develop the conception of individuality for institutional economics the focus needs to shift from the relationship between the self-concept of the individual and the external institutional structure (which Archer's approach clarifies) to a consideration of the internal relationship between self-concept and the institutionally acquired properties of the individual (Fuller, Reference Fuller2013: 123).

Archer is particularly cautious as to what is to be assimilated into the habitual repertoire of the individual, and argues that deliberative matters do not belong there (e.g. Reference Archer2003: 126). This is in contrast to Davis, whose caution extends in the other direction, focusing instead on the struggle some individuals encounter in developing a conscious awareness and engagement with the environment. The omission of the habitual aspects of behavior from Archer's ongoing dialectic becomes more glaring in the context of the points raised by Lawlor, who emphasizes the value of habits in allowing individuals to hold some matters constant while directing conscious attention to the subject of change or adjustment (2006: 333). In his account, habits do not undermine choice or deliberation, but instead offer a foundation from which the individual can extend their conscious focus.Footnote ²⁴ It could be argued that the dialectic Archer emphasizes relies upon habits to play a more significant supporting role than she has acknowledged, and that they ensure the individual is able to undertake the mental process that she has clearly articulated.

Other authors have noted the difficult but important relationship between habits and deliberation in this literature. In his own contribution to institutional economics, Fuller (Reference Fuller2013) analyzes alternative theories of the mind and considers this tension between deliberation and habitus. Fuller's proposed solution is that the mind possesses a dual structure that encapsulates both an inner conversation that is consistent with Archer's account, and also a tendency to adopt habitual beliefs and actions that concord with Hodgson's approach. In this way, a discursive process that underpins deliberative commitments exists alongside an individual's disposition to generate habitual beliefs. Fuller's solution amounts to an acknowledgment that individuals utilize elements of each approach, and that only some individuals become the relatively autonomous agents that Davis has described by consciously integrating habits into their plans (or discarding and/or replacing them).Footnote ²⁵

Fuller's approach is valuable for institutional economics in acknowledging the potential for some individuals to utilize habitual beliefs in the formation of self-concept. He combines Archer's categories of reflexive types (four modes) with Davis’ analysis of capabilities (and corresponding capacities) to outline different levels of reflexivity. These range from the ability to generate habitual beliefs (which may dominate individual self-concept), to the ability of an individual to truly examine one's own mental process as an object of enquiry (Fuller, Reference Fuller2013: 123–124). Recognition of differing levels of self-awareness is important: if individuality is to be meaningfully linked to institutions acknowledging their potential to imprint upon personal consciousness and development is vital. This potential for elements of self-concept to be unconsciously adopted from the institutional structure through habits obviously varies between individuals, and Fuller's discussion is particularly relevant on this point.Footnote ²⁶

In summary, this section has outlined a detailed conceptualization of individuality. The foundations of individuality are established, and serve to confirm the impact of the social environment on the ongoing development of individuals. Individuals develop a unique set of habitual behaviors and beliefs that contribute some continuity in action and thinking, even within the context of change. A self-concept facilitates an ongoing relationship between individuals’ subjective interpretation of an objective social reality. The two main aspects to the approach (the subjective reflexivity that underpins differences in choices and commitments, and the variations in personal habits of individuals) allow individuals to navigate their social context. Furthermore, the existence of differing levels of self-awareness, an implication of the individuation stressed by Davis, is another important determinant of individuality and difference. The latter feature of this integrative approach means that the individuality of agents is maintained even in the context of behavior that appears acutely similar, as individual's subjective interpretation of their actions and the relationship to their social context can be at variance.

The role of shared habits in social coordination

The extensive differences between individuals naturally leads to consideration of observed social stability and coordination among agents. How are plans formed, and coordination among individuals achieved, in the context of such differences? Although emphasizing the role of institutions is indeed a conventional response among economists to questions of uncertainty (e.g. Hayek, Reference Hayek1973; North, Reference North1990) and certainly an important part of the answer, it has shortcomings in the present context of individuality. Institutions are social rules and although they play a role in shaping social outcomes and can reduce uncertainty by narrowing behavior to a certain classes (O'Driscoll and Rizzo, Reference O'Driscoll and Rizzo1996: 32), they do not define the ultimate behavior of individual agents.Footnote ²⁷ The purpose of the following discussion is to emphasize one of the agential properties – rather than social rules (Fleetwood, Reference Fleetwood2008b) – that make a contribution to observed social coordination.

The argument advanced here is that habits can play an important dual role in the manifestation of individuality. The malleability of habits offers some scope for behavioral differentiation that is consistent with the reality of individual difference, as outlined above. On the other hand, habits also engender the emergence of similarity across individuals, thus reducing the potential social dislocation resultant from individual differences. Hodgson explains there exists two different forms of habits: those that are shared, and those that are private or personal (Hodgson, Reference Hodgson2003, Reference Hodgson2004). In the first case, the connection between institutions and the habits of individual agents means that habits are often very similar across individuals, as they are shaped by the common environment that such individuals share.Footnote ²⁸ Some examples of these habits include those associated with road-usage and driving, table manners, language and communication, or even smartphone usage on public transport. In the second case, personal habits are not mirrored in the behavior of others. These habits might also be affected by the social environment – in the case of habits that are private, their confidential expression can be influenced by the social norms that indicate such behavior to be unacceptable in a public domain. However, they are not shared by others in a social context. This distinction between shared and private habits can assist in explaining the existence of social coordination in the context of individual differences.

In explaining the emergence of coordination, O'Driscoll and Rizzo argue that action must be tolerably predictable if expectations are to be formed, and point to habit and routine as providing predictability (O'Driscoll and Rizzo, Reference O'Driscoll and Rizzo1996: 31–32). This tolerable predictability of action could be referred to as demi-regular, i.e. when one specific event occurs, another specific event often (but not always) follows it (see Fleetwood, Reference Fleetwood2017: 47). However, this predictability must entail some demi-regularity of behavior across individuals, rather than simply refer to the predictability of each individual. Accordingly, habits that make this contribution to coordination must be habits that are similar across individuals, which are referred to as “shared” by Hodgson (Reference Hodgson2003, Reference Hodgson2004). In creating similarity in behavior across large numbers of individuals, shared habits align expectations and support the ability to plan. This similarity does not compromise individuality, as even when individuals are demonstrating behavior that is consistent with that of others they can maintain differing levels of self-awareness and reflexivity. However, such similarities can reduce the degree of behavioral heterogeneity.Footnote ²⁹ Certainly institutions play a role in guiding behavior, but the shared habits that individuals form within those broader structures are agential properties that provide some anchor of similarity across the behavior of otherwise diverse individuals.

Shared habits play an important role in the formation of market expectations and stability. While firms often use variation to exploit differences between consumers, the similarities among individuals through shared habits allows the development of stability in production strategies. Shared habits contribute to the existence of interpersonal consistency in social behavior, as the many differences between individuals are tempered by the habits that create similarities. This means that firms can rely on some commonality of behavior in determining their output. The role of shared habits as anchors of similarity can help explain some of the concordance that the market often obtains, and contributes to the coordination of economic plans stressed by scholars of market processes (e.g. O'Driscoll and Rizzo, Reference O'Driscoll and Rizzo1996; Kirzner, Reference Kirzner1997). The observance of shared habits (common behavior) contributes to the formation of expectations, and serves to mitigate the potential for dislocation or unpredictability in daily economic life that might otherwise be created by individuality and difference.

This posited role of shared habits in supporting coordination also depends on institutional context. Hodgson (Reference Hodgson2006) makes a distinction between institutions that are insensitive to the nature of individual agents, and those that are sensitive to agent personality and preferences. In the first case, institutions that are hard constraints (most obviously laws) leave very little room for action that diverges from them, and therefore the coordinative property of such institutions is less vulnerable to deviations in behavior. It is the second category of institutions, however, that are sensitive to the behavior of individuals. If sufficient individuals challenge these rules with variation in behavior the social coordination is susceptible to erosion. Hodgson's point is that this second case is more prevalent (than the first), and research should acknowledge this difference to ensure more careful treatment of the relationship between individuals and the institutional setting they are operating within.Footnote ³⁰ The argument here is that the role of shared habits in supporting social coordination by mitigating the impact of individuality is particularly important in the context of these agent-sensitive institutions. It is in such cases that the agential properties of shared habits are likely to shoulder more of the burden of generating social stability. Where constraints are hard, and institutions are agent insensitive, there is less scope for individuality to penetrate them and lead to adjustment or a lapse in coordination. In contrast, in the case of agent-sensitive institutions any equilibrium in social interaction is likely to be an unstable one (Hodgson, Reference Hodgson2006), and the existence of shared habits is likely to play a more central role in preventing individuality from eroding the social order.

Finally, the prevalence of shared habits means that differences between individuals are not equi-proportional. Because habits are shaped by the broader institutional structure, and much behavior that becomes habitual is first learned as individuals imitate those around them, individuals who occupy the same institutional structure will often exhibit much similarity, e.g. individuals subject to the same cultural norms will demonstrate more shared habits.Footnote ³¹ In contrast, individuals who have experienced significant differences in social environment are more likely to present more salient behavioral differences.Footnote ³² However, this variation in observed differences can be misleading, and this is precisely why reflexivity (and Davis’ related concept of individuation) is important in fully appreciating individuality. Differences between individuals will always be one of degrees, and while observed behavioural differences are often shaped by institutional context, acknowledging agency and reflexivity prevents an interpretation of individuals as simply repositories of social forces. The next section considers some of these issues.

The effect of institutions on individual reflexivity

While the previous subsection focused on how the properties of individuals (shared habits) can contribute to social stability, this subsection will consider how institutions might affect individual properties themselves, particularly self-concept and reflexivity. As each individual possesses different reflexive capacities it is difficult to disentangle and isolate the precise impact institutions have on an individual's level of self-awareness. Furthermore, the resources available to an individual in each institutional context are another mediating factor that will play a significant role in that individual's experience of the institutional conditions, and fully abstracting from such issues is challenging. Nevertheless, the discussion below will draw inspiration from arguments presented by Archer, and related points by Davis, to contend that different institutional experiences have the potential to trigger adjustments in self-awareness. Again, the degree to which any change is realized will vary between individuals.

A central thread of Archer's (Reference Archer2012) critique of attempts to integrate habitus and reflexivity is that the contextual discontinuity (and even incongruity) of modernity is increasingly eroding the relevance of habitus such that it is becoming redundant. Archer contends that contextual discontinuity and incongruity, with its inherent “unpredictability, incalculability, and the valorization of novelty” (Reference Archer2012: 42), means that the individual has little to guide them other than their personal concerns. She argues that deliberative reflexivity is an imperative due to such rapidly changing structural and cultural conditions.Footnote ³³ Similarly, Davis has argued that a relatively autonomous agent does not simply possess a self-concept, but instead has a self-concept with the ability to change through time, particularly in response to exogenously changing circumstances. These arguments can offer some counsel as to how an experience of new institutions might spur adjustments or shifts in the reflexivity of individuals. It is argued here that the mechanism by which a new institutional environment can shift levels of self-awareness is through significant interruption to the ongoing dialectic between the individual and her social environment. Such a disruption to the dialectic might reveal to the individual how they are affected by the environment they are embedded within, and may even result in an adjustment to the self-concept the individual has hitherto relied upon to navigate their social context. The level or degree of individual reflexivity, as outlined by Fuller (Reference Fuller2013), has the potential to increase through this process. This potential for a shift in the individual's degree of reflexivity (as distinct from Archer's shift in the type or mode of reflexivity) represents a development of individuality, as the individual's understanding of the relationship between themselves and their environment is changed.

When individuals experience a new (and different) set of institutions, some of the norms and customs they previously followed, and habitual behaviors and thought processes they formerly relied upon (even unconsciously), may be problematic, inappropriate, or even redundant in the new context. Similarly, agency and choice may be challenged by newly experienced formal sanctions that delimit the range of options and alternatives that are available to them. The associated disruption to the dialectic signals to the individual that the way they formerly navigated the various institutions they interacted with is no longer effective, and this revelation might provoke a reconsideration of their social context. The degree of difference between the institutional contexts (the new and the former) is a central factor in the potential for this institutional experience to trigger a shift in awareness for an individual, i.e. the starker the difference in institutions in each location, the more challenging the shift in dialectic. Indeed, the interruption to the dialectic must be significant enough that aspects of former behavior or beliefs are clearly incompatible with the present context.

One example of an intertemporal difference in institutional experience, and associated shift in dialectic, is the process of immigration. Immigrants may experience a new dialectic that can trigger an adjustment in awareness of how the environment affects them. The conflict between their former habits and the newly encountered cultural institutions can signal that new forms of behavior are required to navigate the new social environment. The literature on acculturation offers some support for this argument, and suggests that individuals often endure a “disorganization” and then “reorganization” in order to reshape their identity in the new context (Bornstein, Reference Bornstein2017: 4). In a comprehensive overview, Bornstein (Reference Bornstein2017) emphasizes that the complex process of acculturation can incorporate changes in the individual's customs, habits, activities, language, and even values (Reference Bornstein2017: 4).Footnote ³⁴ Furthermore, this reorganization commonly involves recognition of the disconnect between the two contexts. Boulanger (Reference Boulanger2015) argues that immigrants continue to link themselves with both their origin and their destination, and that this promotes an acute awareness of the differences between these places and their sense of self in each location.Footnote ³⁵ The important insight for the present discussion is that this shift in institutional context (new laws, norms, customs) can initiate a reconsideration of the relationship the individual has with the environment they are embedded within.

An example where the difference in institutional context can be more significant is immigration by individuals who have exited apartheid after experiencing its prejudicial effects. In this case, the intertemporal difference in institutional experience and associated change in dialectic is amplified by institutions that possess interpersonal discrimination. The potential for an adjustment in self-awareness can be even more pronounced, as individuals experience a shift out of a dialectic in which agency is prejudicially suppressed, to one in which institutions are relatively more equitable between themselves and others. Sonn et al. (Reference Sonn, Ivey, Baker and Meyer2017) study a group who immigrated to Australia from South Africa, and note how this transition effected their sense of identity. As with other studies of immigration, the individuals express a feeling of being “in-between” as they attempt to straddle two identities (Sonn et al., Reference Sonn, Ivey, Baker and Meyer2017: 49). What is particularly relevant is that in a number of cases the new context enables an increased cognizance of how their identity is formed by the context they are embedded within, particularly for those rebuilding their identities with education and career opportunities unavailable to them in South Africa. One of the participants noted that she only recognized the extent of being “robbed” by apartheid once she had spent time in Australia (Reference Sonn, Ivey, Baker and Meyer2017: 48). This increase in awareness was not merely backward looking, but also enabled an elevated consciousness of the new social environment; one individual notes a heightened awareness of racism in Australia (relative to her peers), and of how some individuals treat her in this new context (Reference Sonn, Ivey, Baker and Meyer2017: 50). These are complex cases, and no individual subject in the study exhibits exactly the same response. However, it appears the transition between these institutional contexts has unearthed some shift in awareness of how the social environment impacts upon them.

The example of individuals who have exited apartheid suggests that the transition out of institutional experiences that impact or restrict agency can be a trigger to increased self-awareness. Another significant difference in intertemporal institutional experience is one that incorporates a set of rules that exerts an extreme suppression of agency. The example considered here is incarceration, i.e. an experience of imprisonment followed by the return to normal society and institutional structures. Research into the effects of long-term incarceration by Liem and Kunst (Reference Liem and Kunst2013) find that former inmates can self-identify the ongoing effect of institutionalization in their post-release experience. The subjects of the study revealed an awareness of how their previous experience (pre-release) had conditioned them to feel fear, anxiety, and a general lack of trust, in social contexts (Reference Liem and Kunst2013: 335). But most significantly, the authors note that the subjects find the process of decision making in normal society particularly challenging (Reference Liem and Kunst2013: 335). It could be argued that the long-term suppression of their agency has weakened their ability to make conscious choices and undermined the habits that individuals rely upon to navigate various social contexts. The new dialectic they are engaged in (post-release) is not only different, it is overwhelming, and the individuals are aware of the role the previous social context played in this. The extreme institutionalization and transition to a new (and relatively free) institutional context does spur some shift in self-awareness, if only to the extent that individuals begin to notice how the conditioning of their previous social context is affecting their ability to navigate their present environment.

Taken together, these studies provide some support to the argument that intertemporal differences in institutional experience do have the potential to generate shifts in self-awareness, particularly when the divergences between the two are significant enough to interrupt and change the dialectic the individual is engaged in. While differences in cultural experience can certainly have this impact, differences in experience that are more stark and significantly subvert agency, such as exit from extreme discrimination or incarceration, might have the potential to generate changes in self-awareness that are more distinct. Even though these factors may reveal a tendency for such experiences to shift self-awareness, this should be not generalized to a proposition that any such change would work precisely the same way for each individual. The way it will impact individuality can only be understood in the context of the individual's own history. It is noteworthy that individuals who have experienced such changes don't simply discard their former self, but instead remain aware of the differences between their behavior in the different social contexts. In fact, their previous individual experiences remain highly relevant to how they experience the new environment.

Finally, it would be a mistake to discount the ongoing role of habits. On this point, the general theme of Archer's discussion might be contested. While a new institutional context means that precise replication of extant habits is difficult to sustain, there remains the possibility that some individuals have still not developed a reflexivity that is without the influence of non-conscious factors and habitual beliefs. As Hodgson has argued, habits are sophisticated agential properties that evolve with the complexity of human society. Habits do not appear as exact replications of those previously existing and could be mutations that are evolving with individuality itself.Footnote ³⁶ A new institutional experience might be a force that increases self-awareness, but habitual thought processes can still emerge in the context of the new environment. How new habits emerge is likely to be linked to the personal history of each individual, as Hodgson and Lawlor have emphasized.