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Understanding Hayek

July 29, 2007

In a personal podcast comunication, Tyler Cowen responded to the question whether government is a spontaneous order with a resounding “Yes!”, and he added that this is an easy question. He appeals to Hayek’s definition of spontaneous order as “that which is the product of human action but not human design”, and then goes on to list several examples of “government” such as bureaucracies, committees, lobbies, the institution of the presidency, etc….

In my vague recollections of Hayek’s books, of which “Law, Legislation and Liberty” is my all-times favorite, “language” sticks out as a main example, and also “currencies”. Spontaneous orders evolve under the constant refinement from human action, but at the same time preserve certain distinguishable qualities over time so as to be recognized as human institutions. Hayek was also fond of orders that are actually unintended by the myriads of individuals who are helping creating them, and whose goals in their actions might be completely at odds with the reality they generate. This is an intriguing idea and it would be nice to find more examples. Should we talk about “society’s subconscious”?

On the other hand we do talk about “constitutional framers” and “nation-building”, words which imply deliberate design, and sometimes it is possible to trace back some aspects of government to specific historical figures. You could then say that even though a single individual might be responsible for some modern custom, that he was part of a generational struggle or that, in a sense, she was “standing on the shoulders of giants”, as the saying goes (a saying which, by the way, should be reformulated as “standing on the shoulders of a myriads of average folks”). After all someone must have been the first to utter that cool new word which then caught on and ended up being adopted into the official language. But even there the question remains, was this new word “in the air”? If not this person, would someone else have come up with the same word soon afterwards?

So maybe, if government as an institution is a spontaneous order, at least “government action” is definitely not. Bastiat distinguishes between “Ce qui est vu et ce qui n’est pas vu”, what is “seen” and what is “unseen”. Government action is highly visible, it’s proclaimed, it’s written and recorded into the books as law. The unintended consequences of government action and the unwritten laws that do govern society are what is unseen, unpublicized, and ignored by our conscious mind (but definitely not ignored by our subconscious). So in fact, deliberate government action only projects a faint shadow of altered spontaneous orders in a sea of orders that already exist and thrive within society.

In this view government becomes very much like any other corporation, say, Microsoft. It does somewhat operate by design, but it would be a stretch to call it an “order”, because all it does is produce ripples in a sea of human customs.

One should be careful in attributing to Hayek things he didn’t say, or that he might disagree with if he was interviewed today. His theories are often compared to “natural evolution” and the term “market ecosystems” sounds appealing. It would be too easy to label Hayek as the GreenPeace equivalent for markets of today’s environmentalism. Just because one studies an ecosystem and is able to describe it and analyze it, it doesn’t mean that the best recipe is to “just let it be”, “don’t tamper with what is “natural”!”

So even though on might say that government is a spontaneous, even natural, human institution, it doesn’t mean we shouldn’t tamper with it.

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