Understanding Spontaneous Order

“Understanding Spontaneous Order by RYAN YOUNG on 4 APRIL HERE

“Spontaneous order is one of the most important concepts in the social sciences, and also one of the most maligned. It’s most closely associated with Friedrich Hayek, but it has roots going back to at least the 18th century English and Scottish Enlightenments. Thinkers like Bernard Mandeville, Edmund Burke, Adam Smith, and David Hume all used some kind of spontaneous order framework. They knew that not every design requires a designer.

Nobody designed languages, for example. They emerge and continually evolve on their own, with nobody deliberately directing the process. The economy is also a spontaneous order, even though most people think it has to be consciously directed. Nobody is in charge of food distribution for New York or Paris, and yet those great, farmless cities are still fed every day. It’s an everyday miracle if you think about it.

The reason that a lot of non-economists are skeptical or unaware of spontaneous order is that it’s a difficult concept for the human brain to comprehend. We’re not wired to.

Back in our hunter-gatherer days, the traits that evolutionary biologist Michael Shermer calls patternicity and agenticity had a great survival advantage. Find a pattern in everything, and know that some agent is probably behind it. There’s a rustle in the bush. A hungry tiger must be causing that rustle. Run. Hide. Survive.

Even if most rustles are false alarms, people with strong patternicity and agenticity tended to outlive their fellows who didn’t. We are their descendants, and our brains haven’t changed to match our new surroundings. We think that there are patterns and agents behind everything, even though there aren’t, really. We’re still looking for that tiger, but it isn’t there anymore. …

… Hayek has a well-deserved reputation as poor prose stylist. But he did come up with a very clear way to explain how spontaneous orders can emerge in everyday life:

The way in which footpaths are formed is such an instance. At first everyone will seek for himself what seems to him the best path. But the fact that such a path has been used once is likely to make it easier to traverse and therefore more likely to be used again; and thus gradually more and more clearly defined tracks arise and come to be used to the exclusion of other possible ways. Human movements through the region come to conform to a definite pattern which, although the result of deliberate decisions of many people, has yet not been consciously designed by anyone.

-F.A. Hayek, The Counter-Revolution of Science: Studies on the Abuse of Reason, pp. 70-71.

And when a regulator comes along and tries to design a straighter, more orderly path, the results will rarely be what he intends. In a way, you can blame his hubris on tigers.”

Comment
Ryan Young’s short piece on “spontaneous order” is neat. It’s not self-evident the tiger parable accounts for the phenomenon (not all early humans were vulnerable to tigers, especially where there was none in the African bush). However, we get his point.

I have long been dissatisfied with the word “spontaneous” as the description of non-designed processes. Maybe it is my limited imagination. I agree whole-heartedly with what the word describes; I just do not think it describes situations particularly well.

Such events produce behaviours and ideas (knowledge) about a form of response (‘avoid rustles in the bushes’), which is not planned or initiated by a directing individual, though elders pass knowledge onto children which those who react appropriately (‘run fast away from rustles’) survive to tell their children (as do those who ‘stand and fight and kill the lion’).

In short, I think another word might be better suited than “spontaneous”. Some do not run away or are insufficiently skilled or strong. Mainly, they die. For those who do, is the difference only that they act ”spontaneously”? Or is it that they are more fearful or remember what they were told by elders about dangers whereas those who are killed? Choice may be random; on leaving their night location next day they go left rather than right and nothing rustles in the bushes where they go.

In the case of the informal shorter path that appears to cross an open space instead of using the designed perimeter path prepared for the development, is the diagonal crossway “spontaneous”, or is it explained by people who see a shorter walk from their relative lethargy, or they are carrying heavy shopping bags, or similar such motive. This suggests an action following a motive driving the actor, and their deliberate, not mysteriously “spontaneous” or motiveless, action (and similarly for all those who take the short-cut).

The consequence of these actions, contrary to the intentions of the designer of the longer pathway, is unintentional – nobody intended the informal path to appear; it did appear though, despite the intention of the architects who designed the intended official, but unused path.

An unintended consequence of actions has a long history in economics. Adam Smith identified unintentional consequences in Wealth of Nations when he used the metaphor of “an invisible hand” of the additive affects of individuals who are so concerned with the security of their capital if they sent it abroad to invest domestically and thereby, in consequence, unintentionally add to domestic “revenue and output” (WN IV.ii.9: 456).

This is the famous “invisible hand” paragraph. The grammatical object of this particular metaphor is the “concern for his security” that leads the merchant to invest locally. His insecurity leads him to act in a certain manner. Is “spontaneous” an adequate description for his actions? I am not convinced that it is.

My search for a better word continues …

A Blog Worth Bookmarking

Dan Hirschman writes the Blog, “A (Budding) Sociologist’s Commonplace Book” (Highly Recommended) HERE:

“Rescuing Adam Smith from Wikipedia”

“I just made a small edit to the wikipedia page on Adam Ferguson. Ferguson was a contemporary of Adam Smith, and another major figure in the Scottish enlightenment. The wikipedia page claimed that Ferguson, Hume and Smith were all theorists of “spontaneous order” and referenced Smith’s “invisible hand”. As readers of this blog may know, I’m with Gavin Kennedy: the invisible hand in Smith’s work is a metaphor for unintended consequences, not a theory of spontaneous order and certainly not a theory of how “private vices” create “public virtues” (in Mandeville’s terms). Whether or not you think Smith and Ferguson were spontaneous order theorists of some variety – in other words, that they believed that social order was emergent from lots of little unplanned interactions rather than the result of some grand design* – we can agree that the invisible hand metaphor is not a theory of markets, and we should dissociate the two. Connecting the invisible hand to a theory of markets makes it seem like Smith believed markets just worked if left to their own devices – the laissez-faire position. Of course, that’s not what Smith thought, as a casual reading of the entirety of Wealth of Nations would show – or a casual reading of Gavin Kennedy’s excellent blog.

Both Ferguson and Smith do highlight how the modern order emerged from the unplanned actions of all kinds of people. But neither Smith nor Ferguson argues that the modern order is any way optimal or efficient, nor do they argue that this order would be more optimal or efficient if in every case government let individuals do their business unimpeded. Smith opposed many regulations – like those on what occupations someone could pursue – but supported others – such as regulations on bank lending and the creation of money. See Viner 1927."

Comment
That is why I recommend that you bookmark Dan Hirschman's Blog, 'A (Budding) Sociologist’s Commonplace Book':
HERE

The more we chip away at the modern consensus with he facts about what Adam Smith actually wrote and the context in which he wrote, the earlier that modern economists will liberate themselves from spurious ideas about the use by Adam Smith of the metaphor of 'an invisible hand', which misled most commentators to believe the myths about how a modern economy works. And then hubris struck...

Some thoughts on ‘Spontaneous Order’ Type Explanations

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The market, explains Hayek is “the result of human action but not of human design.” I agree wholeheartedly with that statement. The problem comes next when we try to explain how the processes of human action become the outcome known as market solutions.

I am not convinced that the concepts of 'spontaneity', or 'invisible hands', in their modern guises (since the 1950s) advance science as an explanatory mode for understanding complex fields like markets, social change, and social evolution.

The problem I have with ‘spontaneity’ is in its inadequacy for explaining how markets work; it substitutes a conclusion (spontaneity) for a process. In its ‘invisible hand’ guise, I have criticised it on Lost Legacy for its mystical tones. It is a particular target for my criticism of modern attributions to market forces, though in fact, markets have been well understood since Adam Smith’s days. He did not need, nor did he use, an ‘invisible hand’ non-explanation to analyse market exchanges through price signals in Books I and II of Wealth Of Nations, though modern economists slip the metaphor in at every opportunity and, today, many believe that the metaphor of 'an invisible hand' is the explanation.

Human action in markets has history behind it. The propensity to ‘truck, barter, and exchange’ did not appear spontaneously; it was not an innate faculty that humankind were born with. It emerged over untold millennia and, in a sense, it still is emerging in its contests with that prime alternative to voluntary exchange, that of violent plunder, theft, and coercion, which I have attempted to explain in my papers, The Pre-History of Bargaining, Parts I and II; and about which I may soon be re-writing into an accessible book.

People learn, as they do in most cases of human-to-human exchanges, to barter and exchange through processes like mutually beneficial reciprocation (‘quasi-bargaining’), Gift exchanges common to all human cultures, and the simultaneous exchanges of modern bargaining, all of which have a long history and pre-history. I agree with Jim Otteson that people are engaged in exchange across a wide variety of social fields (Otteson, J. 2002: Adam Smith’s Market Place of Life’, Cambridge University Press).

Human knowledge is passed on and absorbed by generations in all aspects of life, which need not mean that lessons once learned are adopted, but neither do they need to re-invent everything in the knowledge base. But humans are thinking actors as well, and the proclivity of trying to ‘improve’ how they and others act is ever present, not least because any form of human action has positive and negative outcomes (if only in the opinions of some observers).

My main consideration in this post is not to present a new theory. That themes of modern ‘explanations’, such as ‘spontaneous order’, and, to an extent, that of the attribution to Adam Smith of what modern economists call the ‘invisible hand’ phenomenon, do not explain, indeed obfuscate, what Adam Smith stated was the purpose of philosophical science, namely, to reveal the ‘connecting principles of nature’, which ‘abounds’ with:

‘events that appear solitary and incoherent with all that go before them’… ‘by representing the invisible chains which bind together all these disjointed objects, and endeavours to introduce order into this chaos of jarring and discordant appearances, to allay this tumult of the imagination, and to restore it, when it surveys the great revolution of the universe, to that tone of tranquillity and composure which is both most agreeable in itself, and most suitable to its nature’ (Adam Smith: 'History of Astronomy', II.12: pp 46-47).

General themes, such as ‘spontaneous order’ and ‘invisible hand’ explanations move away from science in my, necessarily, humble view, in contrast to Smith's use of the example of uncovering the ‘connecting links’ with his parable of the loadstone under the table actually moving the pieces of iron on the table, which an uninitiated observer thinks are moving miraculously on their own! But once explained by the physics of magnetic fields, the ‘miracle’ (such as an invisible hand explanation) disappears (Smith, 'History of Astronomy', II.5 p 40, 42), but when it is left unexplained, notions of ‘mystical’ orders and ‘invisible’ body parts, take on a credibility of their own

In Moral Sentiments and Wealth Of Nations, on the two occasions only where he uses The Metaphor of an invisible hand, he explains the cause of the supposed 'miracle' first and introduces The Metaphor last. I think the science of the explanation is more important than The Metaphor, and I offer the thought that we should concentrate on the science, not The Metaphor.

Taking my analysis of Adam Smith's two cases (the Astronomy incident of the Roman god Jupiter, is sui generis), I have shown exactly what Smith indicated were the causes of the so-called invisible hand 'events'. In Moral Sentiments, the landlords did what they could not avoid doing in three ways: first, they used some proportion the food output from their land for their own consumption (not all of which went into their limited stomachs - they could also 'sell' some amount of the food output for purchasing other goods that were not restricted by the size of their stomachs - jewellery, fancy clothes, artefacts, and luxuries, or their consumption of their profits); secondly, they used another proportion of the output for next year's sowing (no seeds, no food); and thirdly, they paid some of their output as the subsistence for their peasants and their families to survive the winter to do next season's farming, herding, and so on. All fully explained; no 'invisible hand' at work; we can see the loadstone!

In Wealth Of Nations, he described how the psychological state of degrees of risk-avoidance led some wholesale merchants to trade with the colonies for compensating higher profits, under a regime of the monopoly Navigation Acts and the power of the Royal Navy; and he described the circumstances that led some other merchants to invest locally, even for lower, or not much less of the same profits, which added to national output (because the whole is the sum of its parts – the more parts the larger the whole). Again no need for an invisible hand, except as a metaphor, which is the proper use of metaphors (Adam Smith: Lectures in Rhetoric and Belles Lettres, {1762-3]).

Briefly, I think the science of the explanation for events is far more important than the themes of 'spontaneous order' and the metaphor if an 'invisible hand'. I offer the thought that we should concentrate on the science and not the themes.