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Posts Tagged ‘Hayek’

Greg believes that spontaneous order can be too broadly applied so as to become meaningless.  Sure, if the analysis is too broad, then socialist states could be viewed as federalist experimentation, but I think this reading is intentionally mischievous.

Knowledge belongs to individuals.  This was a theoretical foundation from which Hayek was working.  A corollary of the normative defense of spontaneous order is that for any centrally planned system, central planners can’t have the knowledge to produce outcomes as efficient as a system where empowerment is decentralized to individuals to take advantage of the knowledge that they have.  This is enough to defend spontaneous order as a normative prescription.  It would be an abuse of language to say that socialist Cuba is spontaneously ordered because of a kind of international federalism, because political power is so concentrated there, relative to other types of systems.

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This month’s issue of Cato Unbound features a pretty good discussion of Hayek’s conception of spontaneous order.  Timothy Sandefur’s first critique in the lead essay is provocative, but has some flaws.  On Hayek’s description of how law is constructed, Sandefur writes:

“No system of law,” Hayek admits, “has ever been designed as a whole, and even the various attempts at codification could do no more than systematize an existing body of law, and in doing so supplement it or eliminate inconsistencies.” Even the most sophisticated bureaucratic, top-down plan is going to incorporate lessons learned through historical experience. In other words, the “partially different rules” that compete in the spontaneous order are necessarily “constructed” ones. And because Hayek incorporates these elements of constructivism into his account of spontaneous order, he ends up making it impossible to discriminate between a spontaneous and a constructed order.

This misses the point!  Hayek uses the idea of spontaneous order to comment on how centralized or decentralized power, knowledge, and decisions are in a social system.  Sure, a system of primarily constructed order can have feedback from the bottom, and a system of spontaneous order can have top-down universalities.  That doesn’t mean that if features of one type exist within a system of the other that the distinction between each becomes meaningless.  After all, Hayek was contrasting central planning with a market economy.

Sandefur oversimplifies.  He wants to classify systems into absolute categories while ignoring the existence of messy continua.  While it is possible to nitpick, we can easily classify the United States as a liberal market economy, and Cuba as a socialist economy.  It would be dishonest to deny these categorizations; we wouldn’t say that because the U.S. has public schools, and that because Cuba has a money supply, we simply can’t distinguish any difference between these economies.

Hasnas corroborates my sentiment that the difference really is simple:

If there is anything more to this problem, I am blind to it. Spontaneous orders are the product of human action but not human design; constructed orders are the product of human design. That’s about it. The former implies the absence of a conscious final decision maker; the latter implies its presence.

Sandefur attacks Hayek for making a normative critique of constructed orders.  Though he builds this argument from the supposed lack of distinction between spontaneous and constructed orders, he contradicts himself by acknowledging the existence of the difference, so that he can continue.  Given that the distinction does exist, is Hayek justified in making a normative critique of constructed orders?  Yes, he is!  Hayek’s point is that spontaneous order can handle more complex systems than constructed orders.  Constructed order can only be as complex as the central planner can design it, but spontaneous order can handle far more complexity.  This is a good thing.  A more complex system is able to handle more information and processes, and is able to give more people more of what they want.  Sandefur lays this in the introduction, so why not accept this normative claim at face value?

Sandefur chastises Hayek as lacking a basis for advocating social reform since spontaneous order will have provided some optimal socially constructed order.  That could be true, but that’s not how I read Hayek.  I read him as desiring to decentralize power and decisions, which would be social reform in and of itself.  Did Hayek really ever consider reform of social institutions that had already arisen from spontaneous processes?  Wasn’t the point just to criticize social processes that had been implemented from a central authority?

Obviously Hayek was a liberal, in the true sense.  He defined himself as such in “Why I Am Not a Conservative.”  So it doesn’t make sense that he would position himself against social change–he welcomed the dynamism of free markets, which carries a kind of social change.

Hold on!  Was the decision of Lawrence v. Texas justified by spontaneous order?  Sandefur is correct in pointing out that Hayek’s framework is ambiguous enough to both attack and defend the decision.  It’s a strong example of an instance where the logic of spontaneous order does not provide a clear normative prescription.  Does that matter?  Spontaneous order is a useful analytical tool, but it doesn’t apply to everything.

Hasnas’s normative defense of spontaneous order seems accurate, that true spontaneous order advances legitimate moral values, but also indicates the proliferation of them.  Also, Hasnas agrees that Hayek stretched the applicability of spontaneous order when using it to describe law.

Another point that comes up in the discussion is whether Hayek was making normative claims at all.  Caldwell writes:

Another way to make sense of Hayek is simply to assert that he was making no normative claims at all, that he was doing positive science. This would probably be Hayek’s preferred route, given that the Austrians always claimed to be following Weber’s strictures regarding Wertfreiheit. Thus when he criticized central planning, Hayek was actually claiming that, given the goals of socialists, central planning was not the appropriate means by which to reach them.

Is this true?  It seems to me that socialism has always held egalitarianism as its goal, not uplift.  Have you ever heard of a socialist discuss positive-sum game?  I haven’t.

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