Cross-posted on the Mises Forums.
I have misgivings about the term. ”Spontaneous” can mean “impulsive” (as in “he spontaneously started dancing”), which is obviously unsuitable. In biology, it means “involuntary”, which also obviously doesn’t apply to human action. I suppose “without external cause” (as in “spontaneous combustion”) fits somewhat, because the direction of market activities occurs within the market and not outside of it.
But on the whole I think the term has the same problem as “invisible hand” and “natural order”. They all make the social phenomena seem involuntary, either in a mystical or mechanistic way. And that is particularly unfitting for the Austrian tradition, which is distinguished for, more than any other tradition, consistently basing social science on purposive, deliberate, voluntary human action. I think “cooperative”, “polycentric”, or “distributed” order would be more accurate.
I also agree with Joseph Salerno, who prefers to use the term “process” instead of “mechanism”. As he wrote:
First, the vague, nebulous, and mystical metaphor of the “invisible hand” is inadequate to capture the richness of the modern Austrian conception of the pricing process. It is, therefore, an easy target for the enemies of the market economy and should be abandoned.(…)
…the term “price mechanism” is–well–too mechanistic. It does not convey the dynamism and human rivalry that is the essence of price making. I suggest the term “pricing process,” which goes back to Boehm-Bawerk and was used by Mises. The former by the way also used the German term “Preiskampf” (“price struggle”) which he adopted from A. E. Shaeffle, one of his teachers.
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In psychology, attempts have been made to characterize mental processes by reference to computation, on the grounds that mind/brain = software/hardware. (In my view, such attempts ultimately fail when taken literally rather than analogically, for reasons well articulated by philosophers such as John Searle and Raymond Tallis; but let this pass.) In this regard, two contrasting forms of computation have been distinguished: linear and connectist. (Some characterize connectistist processing as non-computational in nature; but let this pass too!)
Loosely speaking, the difference is this: in linear computation, an input is converted to an output via the algorithmic manipulation of explicit symbols; in connectionist computation, however, the output emerges from the input via an implicit learning process distributed across a network of many units. The analogy to planned versus emergent economies is obvious. Moreover, it is liable to be highly useful rhetorically, given that connectionism is scientifically cool.
Now, as regards terminology, one type of connectionism is known as “parallel distributed processing”, or PDP for short. Isn’t this a nice term to describe the coordinated price system too? (The word “parallel” is a useful addition: lots of economic actors are interacting simultaneously.) Some improved variant, makeing a nice acronym, might be invented.
It strikes me that there is much scope for finding correspondences between the connectionist approaches to mind and free-market approaches to the economy. For example, connectionist networks “learn” by progressively adjusting up and down weights between many distributed units, such that an input to the system progressively approximates a desired output. This reminds me of profit and loss criteria guiding which individual business lines are invested in or deinvested in, with unit weighting reflecting levels of capital investment.
Intriguingly, Wikipedia reports that “In the 1950s, Friedrich Hayek proposed that spontaneous order in the brain arose out of decentralized networks of simple units. Hayek’s work was rarely cited in the PDP literature until recently.”
The term “spontaneous” is not inappropriate, in my view, as it does capture the essence of societal order: an order of the kosmos type, i.e. a self-generating order, as opposed to the taxis type of order, which is made according to human design. The term “spontaneous,” championed by Hayek, corresponds with at least three meanings indicated by Dictionary com: “unplanned,” “produced by natural process,” “(of natural phenomena) arising from internal forces or causes; independent of external agencies; self-acting.”
http://dictionary.reference.com/browse/spontaneous
The Fergusonian distinction is important: by human action, not by human design. The whole subject-matter of the social sciences arises thanks to the discovery of a type of ordered structure, called society, that has not and cannot be created by human design.
It is the ambition of the statist to treat society as if it were a mechanism depending for its functioning on a human engineer.
Neither society nor markets have been invented, planned and purposefully “built”. They developed as sponateously or naturally as trees, clouds or elephants.
Liberty is the recognition that we ought to ADJUST (by following appropriate RULES of adjustment) to the spontaneous order of society, rather than try to substitute it by a designed society.
The only serious criticism levelled by Hayek against Mises seems to related to this issue – Hayek calls Mises a “rationalist utilitarian,” i.e. Mises – my interpretation from having read Mises eclectically – is not always felicitous in his formulations regarding this question, giving at times the impression as if he believed man was the creator of his society and his future (or capable of such), but I have no doubt that Mises shares the above insight, and does distinguish between human action and the spontaneous emergence of order in society.
Correction: In the last paragraph of my above comment I meant to write “… seems to be related to this issue.”
Dang, George! I think that if you agree that society is unplanned, then you cannot stop them from trying to “improve” it with planning. In fact, everyone plans. Every oil company has an energy plan. If the government creates a national energy plan, if will not fill a void. It will sweep aside all the other plans. It will crush the hopes and dreams of thousands of people who work in the energy industry. The world has an very large and effective energy industry is spite of government taxation and regulation because of massive planning of many energy executives and workers over decades. It is not spontaneous at all.
Central planning destroys society by disrupting free planning of society members. In my opinion.
There are levels of complexity that can no longer be managed (or indeed created) by conscious manipulation.
If you had to control the functioning of your body with your conscious mind, you would not surivive a second. The somatic order is too complex for our cerebral capabilities. It was not developed by our concious mind, nor has it developed to be controlled by our conscious mind – like innumerable other “spontaneous” orders whithout which we could not exist.
Likewise evolution has brought forth cultural institutions (like a highly differentiated division of labour and markets) that are better at handling complexity than our brains – such institutions may involve our conscious participation, planning etc. but only as one among many other tributary factors.
It is surprising how hard people find it to accept non-human-made order when it comes to social phenomena, while spontaneous order is readily accepted in the natural sciences.
Personal planning and spontaneous order are in no way mutually exclusive or necessarily rivalrous (often rather to the contrary), they correspond to different levels of complexity.
By personal planning I can pretty well adjust to the (spontaneous order of the) weather, while the latter cannot be made the subject of my design.
The difference is that there is no purposeful actor at the root of natural phenomena. In human society there are purposive actors who will say, “if there is no planner, then there should be. I will take over.”
You are right, there is the problem of taking over, as you call it. In the absence of the concept of spontaneous order, we will tend to take over when taking over is far beyond our abilities. That’s the difference between the friends of liberty and the statists, the latter lack the concept of spontaneous order, and therefore get arrogantly meddlesome in any number of matters.
Ludwig von Mises has written one of the most important books in economics – “Die Gemeinwirtschaft” (“Socialism” in English) – in which he explains why we cannot supplant the spontaneous order of a free (society’s) economy. Hundreds of millions of dead people – victims of the fatal conceit that we can take over what we truly can’t take over – and the eventual collapse of socialism have confirmed Mises theoretical anticipation.
Instead of “spontaneous, how about “voluntary,” “peaceful,” “non-aggressive” or “unforced”?
I prefer to think of prices as the universal language of the universal market.
I agree that the word ”spontaneous’ seems too narrow to describe the purposefulness of action. One way of regarding the ‘natural order’ of the economy is to regard it as alertly human.
I usually see the term emergent behavior used for this kind of thing. The example of a snowflake is a good, showing how simple physical processes result in intricately-shaped flakes.
I think the term “spontaneous” is meant to describe the duration of the transition between the preceding disorder, or lesser order, and the succeeding order after the transition. Presumably the preceding and succeeding orders were of long duration in comparison to the transition.
I also think it’s better described as an emergent property of the interactions of people exercising their free will and freedom of choice.
Ultimately I think it will be discovered that at it’s basic level interventionist policies are an attempt, though maybe not consciously, to impose or substitute someone’s, or a group’s, will on those wishing to exercise their free will and freedom of choice.
Something very similar to interventionists policies happens in abusive relationships, where the abuser is commonly known as a sociopath though better described as someone who has “dissocial personality disorder“. I think the same psychological conditions are present in both most government officials and abusive relationships.
Note that this is not meant to imply that all people who participate in interventionist policies are sociopaths. Sometimes the victims are psychologically so dependent or fearful of their survival that in their minds develops a cognitive dissonance where they unconsciously choose to side with their abuser or in the case of interventionist policies with the government officials.
Correction to my previous comment:
Groups don’t have one will since they are made up of individuals therefore a “group’s will” is not a good description. What I meant to say is a group’s agreed upon policies.
Correction to my previous comment:
Groups don’t have one will since they are made up of individuals therefore a “group’s will” is not a good description. What I meant to say is a group’s agreed upon policies.
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I tend to agree that “spontaneous order” is a bit too ambiguous of a term, and that there are better terms to describe the market process with. I have argued before that the term doesn’t explain well enough the real market processes — equilibrating versus disequilibrating forces.
Societal order is not “self-generating”. Order does not occur “naturally”. It is a product of purposeful human action. In this sense, societies are not developed without plans, but by the individual plans of millions of market agents — the only true type of planning. When understood within the context of disequilibrium and equilibrium, you realize that societies are built through coordination — coordination reached, in large part, through the pricing process and through entrepreneurial action (action in the face of uncertainty).
“Spontaneous order” echoes of the same lack of definition as the term “invisible hand”. It seems to speak more of faith than scientific fact (maybe a reason why Lachmann ultimately remained undecided on whether the discoordinating or the coordinating forces would win out at the end). I don’t think we need to rely on faith to defend markets. We know enough to give a general view of the equilibrating forces in the face of disequilibrium, and we definitely know enough to explore these equilibrating forces with further depth. I think it’s beyond time to drop terms like “spontaneous order”.
Cross-posted: Spontaneous Order
Jonathan, equilibrium and disequilibrium are great ways to discuss the nature of market ordering or processes, but is more a subset of the greater context provided by the concept spontaneous order. The key word here is context/larger framework. Order does occur naturally as a result of infinitesimal human decisions and plans, and given the impossibility of precisely mapping (desirable?) this process, can be seen as self generating. Order or Chaos, however you wish to view it, cannot be anything but natural unless you consider the perceivers (human beings) to be outside of nature. While I respect the drive of social science to try to wrangle some sense out of natural chaos through the invention of interpretations/narrative/formulas etc. and while I acknowledge that such insights can be useful to understanding the human condition, all too often it leads to the social scientist believing that they have a unique ability to condition/plan the greater abstract order and to intervene though mechanisms such as government policy. In some ways, it seems to me the height of human intellectual arrogance to believe that some one individual or some one school of thought has a monopoly of understanding and has the “right” answers from which well intentioned but disastrous interventions flow.
Terry,
I think you are confusing “knowing how markets coordinate” with “knowing how to centrally plan every market agent’s action”. Knowing the economics behind coordination is not the same as knowing how to intervene in a market to garner a supposed “optimal” result. We’re discovering economic relationships; i.e. objective, value-free relationships. Mises embarked on discovering this part of the theory when writing on the pricing process in Human Action. Mises’s work is far from complete, though. There’s much to be discovered on the economic relationships with allow the market to coordinate in the face of separate and constant discoordinating forces.
Just because we know economic theory doesn’t mean we can centrally plan. These are two separate concepts (in fact, economic theory tells us why we can’t centrally plan).
By the way, I understand that “spontaneous order” is supposed to establish a framework. But, like Danny, I’m arguing that the description is misleading, because order doesn’t arrive “spontaneously”. It is consciously planned by separate market agents, each acting towards his own ends.
Jonathan,
Societal order is not “self-generating”. Order does not occur “naturally”. It is a product of purposeful human action.
Isn’t human action something that occurs naturally? And if so, aren’t markets (and society) then self-generating?
Henceforth, a spontaneous generation…
By the way, Jonathan, I am not trying to be clever and just spin your words around. Since man acts is a priori, it follows that human action is a naturally occurring phenomenon…right? But human action (directed as such) cannot presuppose an outcome.
Therefore, everything that comes from those actions is essentially spontaneously generated.
If I ponder deeper into the psychology of human action, all markets are reactive in nature (a form of spontaneity). In other words, isn’t most everything we experience today derived from someone’s dissatisfaction with his or her condition… and then acted upon to change it?
My comment is generated spontaneously from your comment-which I appreciate because it has produced a reaction and motivated contemplation. Your comment is generated from others all the way back to Danny Sanchez and even his post is a reaction to the term-spontaneous…beautiful isn’t it.
Last, spontaneous is such a sexy word…literally and figuratively.
Note:
I believe trying to find a single definitive term to describe the markets is futile. The term spontaneous or as I prefer spontaneous generation is a broad concept meant to convey the essence or spirit of the market. Also, the spontaneous nature of the market/society is an easy presentation to those who are not academically inclined.
Dagnytg,
Ok, if we’re to define human action as natural, then all bureaucratic action is human action, so it too is natural. But, then we lose meaning of the word and of the point. The argument is that there is no mystical force which maintains coordination in the market. Coordination is achieved because of specific economic forces which have developed on the catallactic markets (and forces which continue to develop; especially in the realm of entrepreneurship). I would suggest reading some Ludwig Lachmann (although, he’s not as sympathetic as Hayek in regards to concluding whether or not coordinating processes will be able to counter discoordinating processes – probably thanks to Shackle’s influence on Lachmann).
Overall, it’s not a comment on the pscyhology of human action. It’s an economic argument, not a sociological argument.
Jonathan,
Overall, it’s not a comment on the psychology of human action. It’s an economic argument, not a sociological argument.
I know that…and that’s why I took a praxeological approach to my comment. I felt the economic interpretation was far too rigid and limited and failed to fully explain the spontaneous nature of the markets.
The difference is you believe markets come together based on economic calculations (catallactics) and I believe they come about through ideas and these ideas are a reactive response to previous stimuli and therefore spontaneous.
The economic calculation part comes after the fact but even it has limited value because exchange ratios and prices are constantly in flux. Adaptations in the market are made reactively in response to that flux and henceforth spontaneously.
There is nothing “mystical” in this view. Mises states that every conscious action is intended to improve a person’s satisfaction. It is this conscious action (a reaction to dissatisfaction) that creates all social phenomena. Everything else (i.e. catallactics, cooperation, and what have you…) is an outgrowth from this essential premise.
That is why “spontaneous” is the best (general) description of the markets and society.
You write:
“Societal order is not “self-generating”. Order does not occur “naturally”. It is a product of purposeful human action.”
I argue, societal order is the result of human action, but not of human design. The claim that it is the product of human design is easily refuted. It simply isn’t true that a specific condition of the economy or even society at large enters the indiviual’s objective function (economic ends, aims and purposes). And even if it did, this would be irrelevant, as any human being is incapable of bringing about society or the specific state of the economy in that or any other manner. What brings society or the specific state of the economy about is an evolutionary process that is removed from human volition.
However by cleverly adjusting to it (protecting the principles and institutions of freedom) we can hugely benefit from that spontaneous order.
As analogous to our relationsship with nature in the broadest sense (man, society and the economy being an integral part of nature), there is no need to despair because we have not invented gravity, and do not control the solar system etc – what matters is our ability to adjust successfully to our environment.
We tend to destroy this vital ability of ours to adjust successfully to our environment by succumbing to the illusion that we are the masters, or capable of being the masters of ordered structures whose authors in truth we could not have been and cannot possibly be.
Whether or not one likes the term “spontaneous order,” which I think is felicitously chosen, for reasons that I have explained in other comments to this thread, understanding the MEANING of “sponataneous order” is insdispensable for anyone wishing to comperehend and defend liberty.
Greg,
Human action is the only real type of human design.
That individual human action is the only real type of economic planning doesn’t presuppose that the individual hold society at large as the ultimate end.
———
Modern society is not a product of us adjusting to our environment. Modern society is an economic phenomenon. Economic phenomena follow objective economic relationships, which were developed (most likely unconsciously) by acting human agents (like the development of money, and all the economic relationships of the catallactic market that go with it).
I have always loved the term spontaneous order given my own grounding in Daoist philosophy. I can see how it might have objectionable mystical and even theist connotations to some, and that as a term it doesn’t imply or incorporate a specific human action element that could be useful to distinguish it from the invisible hand if such an connotation is indeed needed. I was just thinking that “spontaneous human order” might be a term that could add a bit more clarity for the purpose of Austrian Economics, though I personally like to use spontaneous order as a greater context for all natural ordering of things without the human element which still incorporates the human society/human markets outflows from the concept.
I really like Georg Thomas’s interpretation above in that regard.
The contemporary scientific term is “self-organization.” Such a system emerges out of the (inter)actions of the constituent parts. Use it if you prefer, but it means exactly the same thing as spontaneous order.
A more accurate term for “spontaneous” in this context is “anarchic,” but some people are squeamish about that word.
Here are a couple more possible terms:
1) Iterative – reflecting that it is a process which involves ongoing changes to reflect new ideas, preferences, etc.
2) Negotiated – similar to above, except it recognizes that the process reflects the willingness of buyers and sellers to participate.
Both, of course, contrast with an “order” which is fixed by some type of fiat or top-down plan.
Gentlemen
What an interesting discussion.
I’d not considered the term “spontaneous order” to be problematic previously, but perhaps it is since the possibility of it being employed to admit an unwanted notion appears to exist- a “smuggling in” of idea/s that can be directed to be antiethical to freedom etc. So perhaps a different term is required. Shay offers “emergent behaviour” for instance. I like that one. It’s worth consideration.
This is reminiscent of the problem one may have in discussing topics such as “capitalism” with a person to whom the meaning of such terms are far removed from what one is referring. Then the misunderstandings begin working to undermine the foundation for understanding between the parties. In the end, for the discussion to develop, it becomes necessary to focus on definitions. THAT is a long and tedious undertaking.
Geoge Orwell demonstrates the power of language and its relationship to thought in his novel, “1984″. He was correct in his analysis. Seems like the collectivists well know that lesson and certainly have seized the “tools of the mind” in many, many respects. Early education is of fundamental importance here. Habits of a lifetime of thought are difficult to alter later.
Recall that TV and radio presenter, L Perigo, once opined that state educators were “child molesters of the mind” or something like that. Yes, he was forced to apologise for his comment. Did he have a point though?
Looks like choosing terminology is something which is going to require the labours of careful consideration after all.
Comments?
Sione
I agree that the term “spontaneous order” is problematic. See part 1 of my paper here with the discussion of the term “spontaneous order” beginning on page 7: http://libertarianpapers.org/2009/12-the-role-of-subscription-based-patrol-and-restitution-in-the-future-of-liberty/
Frankly, I suspect not “”the term “spontaneous order” is problematic,”" but the authors’ insufficient acquaintance with the literature in which the term is expounded.
I have read your paper’s section on “spontaenous order.” It is of hair-raising crudity, consisting of one-sided, ad-hoc, prima facie comments on issues that the authors do not seem to have studied at all.
After all, there is a vast (largely libertarian!) literature on the evolutionary origin and character of language, and other social institutions – on money read Carl Menger etc. – of which the authors seem oblivious.
The authors regress back to the level of Rousseau, the Cartesian rationalist and great enemy of liberty, who firmly believed that one fine day somebody decided to invent the human language.
It is ironic that the authors choose examples (language, money, social institutions (like law)) whose very study launched the modern social sciences as THAT branch of scientific inquiry dedicated to examining society owing to its being a phenomenon uniquely characterised as a structure of self-generated and not man-made order.
Wedded to an anthropomorphic bias, the authors seem to think, if there is order, it must have been human-created.
In their crude rationalism, the authors are incapable of making a dintinction between (a) the fact that humans do act (often purposefully) within a larger order, even making contributions to its shape and growth, and (b) the fact that that larger order in its vital entirety frequently is not and cannot be of their conscious making.
Human action affects the order, but human agents are not the author (the planners and realizers) of the order’s specific state at any particular time.
To take another example used in the paper, the development of accounting techniques has been a matter of trial and error (to this day) affected by any number of incentives for human beings to act purposefully, but it never has been and never can be integral part of consciously bringing about the larger order of the economy, the society, or the epoch that it is part of.
No one has invented capitalism, and accounting practices – to the extent that a certain aspect of these practices or a certain stage of their development were purposefully created – have never been part of an effort to invent capitalism, or the Modern Era.
Accountancy’s own state of development will at any time largely be unauthored, unforseen, ephemeral, fallible and perfectible, the result of innumerable persons, intentions and historic circumstances etc far too complex and unknowable for anyone to engineer accounting practices in full cognition of these influencing aspects. In fact, we seem to live at a time where human hubris in decreeing accounting norms appears to be most embarrasingly exposed by recent turmoil, being just another episode in the EVOLUTION of accountancy.
The more complex – and the more powerful by virtue of their complexity or complixity-managing qualities – ordered structures become, the less likely is it that they were or could be purposefully created by human beings.
It is the statist school of thinking that tries to flatter us by claiming that the best order is of necessity a man-made order.
Human beings have achieved considerable advancement, not because we are primarily makers, but because we are primarily adjusters.
We survive not because we are so good at creating things just as we would like them to be, but because we are very good at adjusting to conditions given to us by a constantly evolving universe, of which latter we are an incredibly minute and insignificant facet.
And so the sciences of liberty (including certain schools of economics and law – in fact, law was once called just that “the science of liberty”) are not concerned with blue prints for concrete outcomes, and they are not corrupted by the rationalist adulation of the powers of the human mind (quite to the contrary), and they do not confuse the ability to act purposefully with the ability to be the sole or best source of order in the world; instead they are concerned with rules and methods that improve our ability to adjust to an environment that we never have fully under control as it is full of the unforeseeable.
I recommend that the authors take a look at Jesús Huerta de Sotos excellent “Socialism. Economic Calculation and Entrepreneuship” – as a starting point, profound in its own right, with superb bibliographic leads.
I also recommend another Mises Institute author, the late Sudha Raghunath Shenoy, whose superb book “Towards a Theoretical Framework …” is available online among the countless gems discerningly selected and so generously offered by the inestimable Ludwig von Mises Institute.
I still like my definition and term: “an emergent property of the interactions of people exercising their free will and freedom of choice.”
Therefore a good term for it might be free emergent order.
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