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“Kinds of Order in Society” Part II

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My latest column for AIER is the second of a two-part series on F.A. Hayek’s insightful 1964 New Individualist Review paper, “Kinds of Order in Society.” [2] A slice from my column:

But the distinguishing feature of an organization is not found in the kinds of goals (such as profit) that it is consciously established to pursue. Rather, the distinguishing feature of an organization is simply that it is consciously designed and established to pursue some particular goal or goals, whatever it or these might be. And so the actions of every person in an organization can and will be judged by how well those actions contribute to the achievement of the organization’s goals.

Spontaneous Orders

Spontaneous orders differ categorically from organizations. Spontaneous orders, like organizations, are highly useful to individuals. But unlike organizations, spontaneous orders are not designed and created. They emerge as unintended consequences of the actions of persons, each of whom is pursuing his or her own individual goals with no awareness that those actions will give rise to a larger order. While a spontaneous order assists each individual in the pursuit of his or her goals, such an order, unlike an organization, itself has no goal towards which it aims. And because a spontaneous order as such has no goals, the actions of the individuals whose choices give rise to the spontaneous order cannot be judged by how well or poorly they promote the goal of the spontaneous order – for, again, the spontaneous order has no goals.

The most obvious example of a useful spontaneous order is language. Language is clearly (to use a phrase much-favored by Hayek) the result of human action but not of human design [3]. Languages emerged from human beings attempting to communicate with each other. Yet no one consciously decided what specific words and sounds refer to, or mean, in any language. The word “chair” emerged over time to mean the particular thing that it today means to those who speak English.

Being undesigned, it follows that language was not designed to serve any purpose or to achieve some particular goal. It would be silly to talk about the goal of the English language or of the Korean language. And yet language does indeed enable each of us as individuals to better pursue our own goals. The shopper uses language to explain to the store clerk just what items he wishes to buy, and the store clerk, at the end of her work day, uses language to inform the cab driver of her destination. But the shopper and the store clerk, by using the same language, are not together acting to achieve some higher goal. Further, it would be mistaken to describe language as having among its goals the service of the shopper and of the store clerk.

Another example of a spontaneous order is the global market. No one designed today’s division of labor – with some of us working as plumbers, others of us as web designers, yet others of us as butchers, brewers, bakers, or baseball players. And no one designed the indescribably complex pattern of exchange relationships that enables each of us to enjoy the fabulous prosperity that each of us enjoys. And yet these phenomena are real. They are the result of human action but not of human design. The market, like language, provides enormous assistance to each of us as we each pursue our own individual goals. But the market, also like language, has no overarching goal toward which it aims.