For several decades, economists have been preoccupied with an attempt to place their entire subject on the ‘sound microfoundations’ of general equilibrium theory, with its individualistic premises. However, this project has run into seemingly intractable problems. This essay examines underlying questions such as the appropriate building block of analysis and the structure of explanation in economics. The examination of biology is found to be instructive, due to debates concerning the limitations of reductionism within that discipline. The final part of the paper argues for the autonomy of a non‐reductionist macroeconomics, based on the institution as the unit of analysis.