"Readers' Forum, Comments on 'The Tradition of Spontaneous Order' by Norman Barry"

By James M. Buchanan and David Gordon and Israel Kirzner

Norman Barry states, at one point in his essay, that the patterns of spontaneous order “appear to be a product of some omniscient designing mind” (p. 8). Almost everyone who has tried to explain the central principle of elementary economics has, at one time or another, made some similar statement. In making such statements, however, even the proponents-advocates of spontaneous order may have, inadvertently, “given the game away,” and, at the same time, made their didactic task more difficult…. [From the text, James M. Buchanan, “Order Defined in the Process of its Emergence”]

Book Cover

First Pub. Date

1982

Publisher

Literature of Liberty. vol. v, no. 4, pp. 5-18. Arlington, VA: Institute for Humane Studies

Pub. Date

1982

Comments

Collected commentary, various authors. Collected commentary, various authors.

Copyright

5. Roland Vaubel, “Comment on ‘The Tradition of Spontaneous Order’ ”

Norman Barry’s essay is extremely valuable in at least three respects:

1. it describes the evolution of thought about spontaneous orders;
2. it contrasts various versions of rationalist and anti-rationalist libertarianism;
and
3.it subjects Hayek’s theory to a number of revealing checks for consistency.

In my comments, I shall focus on the second and third of these aspects. In particular, I shall criticize and supplement the answers Barry gives to the following two questions: What is the role of reason in Hayek’s theory of the evolution of legal order? And: What is Hayek’s normative criterion in evaluating a legal order?

According to Barry, Hayek’s “extreme anti-rationalism” (p. 46) . . . “is so distrustful of reason that it instructs us to submit blindly to a flow of events over which we can have little control” (p. 52). It is easy to find passages in Hayek’s writings, especially in his later ones, which, taken by themselves, seem to support this interpretation. However, they have to be seen in the context. Remember, for example, what Hayek wrote, after his devastating attack on rationalist constructivism, in The Constitution of Liberty:

The reader will probably wonder by now what role there remains to be played by reason in the ordering of social affairs… We have certainly not meant to imply… that reason has no important positive task. Reason undoubtedly is man’s most precious possession. Our argument is intended to show merely that it is not all powerful… What we have attempted is a defense of reason against its abuse by those who do not understand the conditions of its effective functioning and continuous growth… What we must learn to understand is … that all our efforts to improve things must operate within a working whole which we cannot entirely control… None of these conclusions are arguments against the use of reason, but only arguments against such uses as require any exclusive and coercive powers of government. (pp. 69-70)

Hayek is not generally distrustful of reason but he is not explicit about the positive role which reason can play in the evolution and improvement of the legal order. We are mainly told what reason cannot do and must not try to do, and that reason is not a sufficient or necessary condition for progress to occur. But Hayek does not deny that reason affects the evolution of social orders:

Our issue may now be pointed by asking whether… human civilization is the product of human reason, or whether… we should regard human reason as the product of civilization. . . . Nobody will deny that the two phenomena constantly interact. (“Kinds of Rationalism,” in: Studies in Philosophy, Politics and Economics, p. 186)

After all, human reasoning is nothing but the application of learnt rules to new circumstances and in new combinations.

For Hayek, the distinguishing characteristic of a spontaneous order is not that each or most of its rules have never deliberately been adopted but that it is the result of a gradual and decentralized evolution:

While the rules on which a spontaneous order rests may also be of spontaneous origin, this need not always be the case… It is possible that an order which would still have to be described as spontaneous rests on rules which are entirely the result of deliberate design. (Law, Legislation and Liberty, Vol. 1, pp.45-46)

Even more, Hayek calls for deliberate attempts to improve our rules of just conduct:

Their gradual perfection will require the deliberate efforts of judges (or others learned in the law) who will improve the existing system by laying down new rules. Indeed, law as we know it could never have fully developed without such efforts of judges, or even the occasional intervention of a legislator to extricate it from the dead ends into which the gradual evolution may lead it, or to deal with altogether new problems. (Law, Legislation and Liberty, Vol. 1, p. 100)

Hayek certainly does not “instruct us to submit blindly to (the) flow of events” as Barry suggests. But the reason for Barry’s misunderstanding is a general difficulty in interpreting Hayek: he is not careful to qualify his statements in the immediate context. Hayek is a writer on the offensive who rarely guards against misunderstanding and potential charges of inconsistency. He trusts that the reader will give him the benefit of the doubt and interpret separate statements of his as mutual qualifications rather than as contradictions.

Barry raises the important question whether the same process of spontaneous evolution can be thought to apply to economic processes under a system of legal rules and to the development of the legal rules themselves. I would answer that individual behavior and customary or contractual arrangements in production and exchange can be viewed as a private decentralized affair; however, an enforceable legal order is a collective or public good. Since Hayek tends to neglect this distinction, it seems reasonable to assume that he envisages the same type of evolutionary process for both economic practices and legal rules: a process that is driven by the interaction of human reason and random events and guided by imitation and procreation of the successful. Human reason proposes, the survival test disposes. Since legal rules cannot be tried by an individual on his own, they must at first be tested in voluntary small-group experiments:

Voluntary rules… allow for gradual and experimental change. The existence of individuals and groups simultaneously observing partially different rules provides the opportunity for the selection of the more effective ones. (The Constitution of Liberty, p. 63)

What we wish to stress… is… the importance of the existence of numerous voluntary associations, not only for the particular purposes of those who share some common interest, but even for public purposes in the true sense. (Law, Legislation and Liberty, Vol. 2, p. 151)

We therefore arrive at an implicitly contractarian explanation of the legal order [11]: not constructivistic or holistic contractarianism À la Rousseau but evolutionary or piecemeal contractarianism.

In contrast, Hayek’s ultimate normative criterion for evaluating a legal order is not contractarian (this distinguishes him from James M. Buchanan, for example). Nor is it true that Hayek regards the results of evolutionary, undesigned processes as necessarily good (as Barry seems to believe; pp. 12, 45-46). For Hayek, evolutionary and decentralized procedure is expressly not a sufficient but “merely” one necessary condition of progress (Law, Legislation and Liberty, Vol. 3, p. 168). Another necessary condition is that the chances of anyone selected at random are maximized:

Since rules of just conduct can affect only the chances of success of the efforts of men, the aim in altering or developing them should be to improve as much as possible the chances of anyone selected at random. (Law, Legislation and Liberty, Vol. 2, pp. 129-30)

Indeed, this maximization criterion seems to be a logically sufficient normative criterion which delegates the evolutionary (as well as any contractarian) principle to the status of auxiliary test, an operational indicator.

Hayek’s maximization criterion is a probabilistic version of rule utilitarianism. It allows for the existence of risk (as did Bentham) and the need for rules (as did John Stuart Mill). Curiously enough, Hayek rejects utilitarianism at large in his more recent writings. In the mid-sixties, he had still called David Hume’s moral philosophy a “legitimate form” of utilitarianism (“Kinds of Rationalism” in Studies in Philosophy, p. 88). Like any brand of consequentialist ethics, probabilistic rule utilitarianism requires the use of human reason—even if it is of the non-constructivistic type.

Roland Vaubel
Institut fÜr Weltwirtschaft

University of Kiel

This note was stimulated by Norman Barry’s thought-provoking article, “The Tradition of Spontaneous Order,” Literature of Liberty, 5 (Summer, 1982): 7-58. I am indebted to the Scaife and Earhart Foundations for support of my research and to Mr. Bruce Majors (Graduate Department of Philosophy, Catholic University of America) for able research assistance. Elaboration of some of the themes in this note will appear in G. P. O’Driscoll, Jr. and M. J. Rizzo, The Economics of Time and Ignorance (Oxford: Basil Blackwell, forthcoming in 1983).

Henri Bergson, Creative Evolution, Arthur Mitchell (trans.), New York: Henry Holt and Company, 1911, p. 39.

Edna Ullmann-Margalit, “Invisible Hand Explanations,” Synthese 39 (1978), pp. 282-286.

Henri Bergson, Creative Evolution, p. 37.

Frederic Schick, “Self-Knowledge, Uncertainty and Choice,” British Journal for the Philosophy of Science 30: 235-252.

Henri Bergson, Creative Evolution, p. 39.

Here the evolutionary theory is used to explain the maintenance rather than the origin of an order. Thus, an evolutionary principle like “survival of the fittest” presumably can explain the maintenance of certain eating customs.

Henri Bergson, Creative Evolution, p. 28.

James M. Buchanan, “Order Defined in the Process of its Emergence” Literature of Liberty [this issue].

F. A. Hayek, “Degrees of Explanation,” Studies in Philosophy, Politics and Economics, Chicago: University of Chicago Press, 1967.

10.

John von Neumann and Oskar Morgenstern, Theory of Games and Economic Behavior, Princeton: Princeton University Press, 1947, p. 44.

Notes by Roland Vaubel

11.

For a reconciliation of Hayek’s theory of evolution and James M. Buchanan’s contractarian approach see the impressive analysis of Victor Vanberg, Liberaler Evolutionismus oder Vertragstheoretischer Konstitutionlismus. TÜbingen: Walter Eucken Institut (VortrÄge und AufsÄtze, Nr. 80) J.C.B. Mohr, 1981, ISBN 3-16-344411-3.

Notes by Jeremy Shearmur

12.

Barry, p. 28, citing Smith’s Lectures on Jurisprudence; note that this theme of the decline of all constitutions is found also in the work of Hutcheson.

13.

Cp., on all this, J.G.A. Pocock, The Machiavellian Moment, and, for some discussion of its relation to Smith, D. Winch, Adam Smith’s Politics.

14.

See, on this, Jacob Viner’s classic ‘Adam Smith and Laissez-Faire,’ and, for some brief discussion of the interpretation hinted at in this section, my pamphlet, Adam Smith’s Second Thoughts, Adam Smith Club, London, 1982.

15.

Cp. my ‘Abstract Institutions in an Open Society,’ in Wittgenstein, The Vienna Circle and Critical Rationalism, ed. H. Berghel & Others, HÖlder-Pichler-Tempsky, Vienna, 1979, pp. 349-54.

16.

See Hayek, ‘Individualism True and False,’ in Individualism and Economic Order, p. 32.

17.

Barry, p. 37.

18.

Barry, p. 37.

19.

See, for further references and discussion, and a fuller defence of the views advanced in this section, my ‘The Austrian Connection: Carl Menger and the Thought of F.A. von Hayek,’ in B. Smith and W. Grassl (eds.), Austrian Philosophy and Austrian Politics, Philosophia Verlag, Munich, forthcoming.

20.

In which respect he is very close to Hayek’s dismissal of ‘false’ individualism.

21.

Compare here, however, the contrasting claim made in E.F. Miller’s most interesting ‘The Cognitive Basis of Hayek’s Political Thought’ in R.L. Cunningham (ed.), Liberty and the Rule of Law.

22.

Note the way in which the ideas in the text of the Untersuchungen and in Appendix VII are, at least prima facie, in contrast with one another.

23.

In this connection, one should look at Popper’s ‘Towards a Rational Theory of Tradition’ in his Conjectures and Refutations, and its parallels with his ideas about ‘background knowledge,’ and the priority of ‘dogmatism’ over ‘criticism’ from a genetic point of view, as brought out in Popper’s autobiography Uended Quest, rather than the more radical Open Society.

Categories: Norman Barry