Those of us who respect the Hayekian view of the world emphasize the idea that markets (among many other kinds of “orders”) were not consciously designed by anyone. The market as a “spontaneous order” means that the free association of buyers and sellers came about through a long process on individuals trying to improve their natural conditions. The emergence of markets and patterns of trade was not, however, a random occurrence. It was the result of deliberate human actions to improve their conditions but it was not the result of any conscious plan by individuals or groups who figured out after decades of research that, “hey, markets are a good way to organize economic activity.” Like language we stumbled upon it through lots of trial and error.
This view is no doubt correct. But critics of the view improperly attack it as being Panglossian. I can see why this is common. Since markets usually end up producing fantastic outcomes, careless market defenses are sometimes made to the effect of, “markets evolved naturally, so they must be good.” (quick aside: Hayek argues forcefully that things that emerge can rightly be considered natural without attaching moral characteristics to it). Well, that is of course wrong. The theory of market imperfections was a theory that originated among market sympathizers, and its critics rarely recognize this fact (nor understand that the existence of market imperfections does not mean some alternative institutional arrangement is less imperfect).
The point being is that the concept of a spontaneously evolved order is devoid of moral character. Just because some order today is the result of such a process it would be improper to regard it as ipso facto “good.” Hayek makes the observation that some things that have long survived the evolutionary process, like cockroaches, have no more or less moral value than any other thing. I agree. In fact, we can go a step further – many things that are the result of human action but not human design turn out to be “bad.” Slavery would be a good example. Other milder examples would include the emergence of governments. The existence of government is no less an emerged order than is the existence of markets.
If you make a defense of “markets are good” on the basis of the fact that they emerged, then you would be bound to conclude also that “governments are good” on the same grounds. That is inconsistent, and therefore rules that position out as being a legitimate form of argument on moral (or other) grounds. I hope it is clear to my regular readers that this is not the type of argument I make against governments (again, I may write in the future on my possible defense of very large government).
If that is not why we liberals focus so much on spontaneous order, then what is the reason? Read the quote that I head my site with for a clue. That quote references the idea that it is pure folly to believe that we can shape the world according to our wishes by appealing to our reason to construct a better “order” even as we understand that the existing order itself emerged. Our reliance on spontaneous order is a clarion call to remain humble with respect to how we want to intervene in the trading and pricing process. But it should also be a clarion call to remain humble with respect to the design of political institutions. The ugly mess that is modern politics has evolved from centuries of custom, tradition, conflict, give and take, etc. helping us stumble upon arrangements that help us to get more out of life. If markets alone were sufficient to get the most out of life, I suspect that governments would not have emerged – indeed, I have in my mind a theory that “government” is a type of trading relationship that is not entirely distinct from some market mechanisms. The water here is too deep to swim in for the moment, but we will jump back in over the summer.
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It is refreshing to see a defense of government based on evolutionary principles. I hope you go swimming in this deep water again because too many people, running the gamut from Glenn Beck to Keith Olberman, draw a false and sharp distinction between “gubmint” and the “free market.” There is no difference in origin, and assigning moral values to either type of organization is akin to asking how many angels can dance on the head of a pin.
I may be reading between the lines too much, but your comments seem germane to recent and ongoing events in Egypt. I am frustrated by the lack of commentary on the economics blogs about what happened there, but that may indicate a refreshingly humble position. Despite the euphoria in some circles it seems that a military dictatorship has been replaced by a …..military dictatorship. Is this is a sustainable market outcome? Is the government/military business supplying a service for which there is insufficient demand?
Wintercow, your post was great. As with all blog posts, certainly mine, need editing, but the questions you raise would be worthy of a printed read in NR. Classical Liberals need to make their case; otherwise someone else will get the high ground by default.
The Founders got it right when they identified the inalienable rights of life, liberty and the pursuit of happiness. Upholding these Natural Rights is good. Thus personal liberty (and with that economic liberty) is a good that ought to be upheld.