Spontaneous order (20TH CENTURY)

Theory of Austrian social scientist Friedrich A. Hayek (1899-1992).

Social order is not deliberately created but arises out of the natural selection of those institutions and values and practices which are effective, so that a traditional framework develops over time within which individuals may operate securely.

Source:
F A Hayek, Law, Legislation and Liberty (London, 1982)

History

According to Murray Rothbard, Zhuangzi (369–286 BCE) was the first to work out the idea of spontaneous order. The philosopher rejected the authoritarianism of Confucianism, writing that there “has been such a thing as letting mankind alone; there has never been such a thing as governing mankind [with success].” He articulated an early form of spontaneous order, asserting that “good order results spontaneously when things are let alone”, a concept later “developed particularly by Proudhon in the nineteenth [century]”.^[4]

The thinkers of the Scottish Enlightenment developed and inquired into the idea of the market as a spontaneous order. In 1767, the sociologist and historian Adam Ferguson described society as the “result of human action, but not the execution of any human design”.^[5][6]

However, the term “spontaneous order” seems to have been coined by Michael Polanyi in his essay, “The Growth of Thought in Society,” Economica 8 (November 1941): 428–456.^[7]

The Austrian School of Economics, led by Carl Menger, Ludwig von Mises and Friedrich Hayek made it a centerpiece in its social and economic thought. Hayek’s theory of spontaneous order is the product of two related but distinct influences that do not always tend in the same direction. As an economic theorist, his explanations can be given a rational explanation. But as a legal and social theorist, he leans, by contrast, very heavily on a conservative and traditionalist approach which instructs us to submit blindly to a flow of events over which we can have little control.^[8]

Examples

Markets

Many classical-liberal theorists,^[9] such as Hayek, have argued that market economies are a spontaneous order, “a more efficient allocation of societal resources than any design could achieve.”^[10] They claim this spontaneous order (referred to as the extended order in Hayek’s The Fatal Conceit) is superior to any order a human mind can design due to the specifics of the information required.^[11] Centralized statistical data, they suppose, cannot convey this information because the statistics are created by abstracting away from the particulars of the situation.^[12]

For Hayek, prices in a market economy are the aggregation of information acquired when the people who own resources are free to use their individual knowledge. Price then allows everyone dealing in a commodity or its substitutes to make decisions based on more information than he or she could personally acquire, information not statistically conveyable to a centralized authority. Interference from a central authority which affects price will have consequences they could not foresee because they do not know all of the particulars involved.

According to Barry this is illustrated in the concept of the invisible hand proposed by Adam Smith in The Wealth of Nations.^[1] Thus in this view by acting on information with greater detail and accuracy than possible for any centralized authority, a more efficient economy is created to the benefit of a whole society.

Lawrence Reed, president of the Foundation for Economic Education, describes spontaneous order as follows:

Spontaneous order is what happens when you leave people alone—when entrepreneurs… see the desires of people… and then provide for them.

They respond to market signals, to prices. Prices tell them what’s needed and how urgently and where. And it’s infinitely better and more productive than relying on a handful of elites in some distant bureaucracy.^[13]

Hayek’s account of the spontaneous order and the impersonal nature of the economic outcomes in the free market has led him to reject the notion of social (or distributive) justice as a meaningless concept.

Game studies

The concept of spontaneous order is closely related with modern game studies. As early as the 1940s, historian Johan Huizinga wrote that “in myth and ritual the great instinctive forces of civilized life have their origin: law and order, commerce and profit, craft and art, poetry, wisdom and science. All are rooted in the primeval soil of play.” Following on this in his book The Fatal Conceit, Hayek notably wrote that “a game is indeed a clear instance of a process wherein obedience to common rules by elements pursuing different and even conflicting purposes results in overall order.”

Anarchism

Anarchists argue that the state is in fact an artificial creation of the ruling elite, and that true spontaneous order would arise if it was eliminated. Construed by some but not all as the ushering in of organization by anarchist law. In the anarchist view, such spontaneous order would involve the voluntary cooperation of individuals. According to the Oxford Dictionary of Sociology, “the work of many symbolic interactionists is largely compatible with the anarchist vision, since it harbours a view of society as spontaneous order.”^[14]

Sobornost

The concept of spontaneous order can also be seen in the works of the Russian Slavophile movements and specifically in the works of Fyodor Dostoyevsky. The concept of an organic social manifestation as a concept in Russia expressed under the idea of sobornost. Sobornost was also used by Leo Tolstoy as an underpinning to the ideology of Christian anarchism. The concept was used to describe the uniting force behind the peasant or serf Obshchina in pre-Soviet Russia.^[15]

Recent developments

Perhaps the most prominent exponent^[16] of spontaneous order is Friedrich Hayek. In addition to arguing the economy is a spontaneous order, which he termed a catallaxy, he argued that common law^[17] and the brain^[18] are also types of spontaneous orders. In “The Republic of Science,”^[19] Michael Polanyi also argued that science is a spontaneous order, a theory further developed by Bill Butos and Thomas McQuade in a variety of papers. Gus DiZerega has argued that democracy is the spontaneous order form of government,^[20] David Emmanuel Andersson has argued that religion in places like the United States is a spontaneous order,^[21] and Troy Camplin argues that artistic and literary production are spontaneous orders.^[22] Paul Krugman too has contributed to spontaneous order theory in his book The Self-Organizing Economy,^[23] in which he claims that cities are self-organizing systems. Credibility thesis suggests that the credibility of social institutions is the driving factor behind the endogenous self-organization of institutions and their persistence.^[24]

The competitions between huge numbers of self-interested individuals will lead to many possible income distributions. Among all possible income distributions, exponential income distribution will occur with the highest probability. Following the natural selection process “survival of the likeliest”, the exponential income distribution is most likely to evolve and survive, and hence is called the “Spontaneous Order” by Tao.^[3] By analyzing datasets of household income from 66 countries and Hong Kong SAR, ranging from Europe to Latin America, North America and Asia, Tao et al found that, for all of these countries, the income distribution for the great majority of populations (low and middle income classes) follows an exponential income distribution.^[25]

Criticism

One commentator states that (Hayek’s) theory of spontaneous order, “the foundations of Hayek’s liberalism are so incoherent” because the “idea of spontaneous order lacks distinctness and internal structure.”.^[26] The three components: lack of intentionality, the “primacy of tacit or practical knowledge,” and the “natural selection of competitive traditions.”. While the first feature, that social institutions may arise in some unintended fashion, is indeed an essential element of spontaneous order, the second two are only implications, not essential elements.^[27]

Hayek’s theory has also been criticized for not offering a moral argument, and his overall outlook contains “incompatible strands that he never seeks to reconcile in a systematic manner.”