"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”]
First Pub. Date
Literature of Liberty. vol. v, no. 4, pp. 5-18. Arlington, VA: Institute for Humane Studies
Collected commentary, various authors. Collected commentary, various authors.
The text of this edition is copyright ©1982, The Institute for Humane Studies. Republished with permission of original copyright holders.
6. Jeremy Shearmur, “Norman Barry: The Tradition of Spontaneous Order”
Norman Barry’s bibliographical essay, “The Tradition of Spontaneous Order” was both erudite and stimulating, and it will be an important source for all who work in this area in the future. In reading it, however, I was struck by certain obvious (but inevitable) gaps—most notable among which were Burke, and Savigny and the German historical school. It also provoked a few reactions, some of which I describe, briefly, below.
1. Interventionism and the Breakdown of Spontaneous Order in Smith and in Hayek
1.1 Smith, Virtue and Commercial Society
Barry quoted Adam Smith on the fatal dissolution that awaits every state and constitution whatever,’ but he made no more of it than to say that ‘the explanation of spontaneous order in the noneconomic sphere may slip unintentionally into a kind of determinism.’ But the ‘fatal dissolution’ theme in fact goes with the concern about the ‘inadequacies’ of a commercial system, and the misgivings about its impact on civic virtue, that Barry discusses in connection with both Ferguson and Smith. It is all, I think, most plausibly understood as the tail-end of the ‘civic humanist’ tradition, stemming from the works of Polybius and Machiavelli, and then influential in the work of many other figures in the history of political thought.
The civic humanist tradition included the theme of the cyclical development of constitutional orders, and of each ‘good’ constitutional form in time becoming corrupt, and declining into its corresponding ‘bad’ form; but where there is a possibility that this corruption, and thus the decline, might be halted through the actions of a ‘statesman.’ This theme, it seems to me, is both echoed and transformed not only in Smith and Ferguson’s depictions of the disadvantages of commercial society, but also in the interventionism that Smith produces in response, much of which may, I think, be seen as an attempt to safeguard virtue in the face of the corrupting influences of commercial society.
1.2 Hayek and the Self-Destruction of a Free Society
Barry rightly emphasizes Hayek’s concern about the breakdown of a cosmos under the impact of interventionism. What is not, perhaps, adequately stressed is the way in which a free society could, on Hayek’s account, be expected to break down of its own accord. For Hayek, following Mandeville and Hume, emphasizes that a free society depends, crucially, for its functioning, on arrangements (including both the market itself and the legal order appropriate to it) some features of which will strike the individual members of that society as unfair or undesirable. If they could understand how these mechanisms function, Hayek thinks, they would see that all is for the best. But Hayek, here following the Scottish Historical School, takes a realistically skeptical view about the role of human reason in society. In Hayek’s view, the individual’s compliance with these institutions was earlier achieved through the influence of custom and uncritically accepted religious belief. But the power of these has, Hayek thinks, been weakened by the development of the market order itself—which, indeed, could be described as having created the social preconditions for the possible practice of Hayek’s false individualism.
Hayek believes that, for a free society to flourish—or even for it to continue in existence—individuals must take up an attitude of ‘humility’ toward the various social forces and processes which they do not understand, but which play a positive role in a free society. But how, on Hayek’s account, is it possible for them to know which are the forces etc. before which they should be humble? Hayek certainly does not advocate a general attitude of the passive acceptance of existing arrangements, and, in some areas, he is all in favor of innovation and change. But how is the individual member of society supposed to tell which elements of his heritage are to be conserved and which overthrown? Here, Hayek seems to oscillate between a view which plays up the role of ideas in society and the possibility of a rational understanding of how society functions (at least for the ‘intellectual’), and a view which emphasizes the role of the customary, the traditional and the tacit. It is difficult to see how any resolution of this problem can be offered within the compass of Hayek’s work, and I think that it is a more general problem for libertarianism, too.
2. Methodology vs. Political Economy in Hayek
In his discussion on Hayek on ‘The Free Exchange System,’ Barry mentions the way in which “in the work of G.L.S. Shackle and Ludwig Lachmann… the spontaneous emergence of order may only be a chance phenomenon;” and he suggests that “In Hayek’s early work on the theory of market process… The assumption was that a catallaxy was leading towards equilibrium rather than being moved away by endogenous factors.”
These ideas are crucial to Hayek’s work—for just consider to what extent, in his political writings, he rests his case on claims about what the market order will deliver. Barry tells us that “there are certain identifiable causal factors at work which bring about this equilibrating tendency, namely competition and entrepreneurship.” But do they actually do the trick, and can one show that a market order will do what Hayek requires of it on the basis of his views about the methodological foundations of economics? This seems to me very much an open question, and one that it is a matter of some urgency for the friends of liberty to answer.
3. Menger vs. Hayek on Spontaneous Order
Barry has, importantly, drawn attention to Menger as a theorist of spontaneous order (as well as of methodology and economics), and he has also pointed to the distinctive character of Menger’s views here. Menger, one might say, stands between Savigny and the radical individualist. He appreciates the historical school’s emphasis on the undesigned character of law, but he thinks little of their theoretical explanations of it, and, while dismissing the ‘pragmatism’ of the radical individualists, he demands that our heritage from the past be submitted to critical scrutiny.
In describing these views, Barry takes pains to contrast them with those of Hayek. But is this correct? For while, certainly, in some of Hayek’s writings he seems to speak as if the deliverances of various ‘evolutionary’ processes should simply be uncritically accepted, this can be matched by passages in which he demands that inherited legal institutions should be rationally appraised to see if they do, indeed, comply with the requirements of a (classical) liberal order. As these latter ideas are found notably in some of Hayek’s earlier writings, it might be tempting to suggest that there is a development in Hayek’s views here. But the two themes occur sufficiently often in writings of the same period, or even in the same works, for it to be unavoidable, I think, for us to admit that Hayek emphasizes both rational criticism and evolutionary themes at once. And his plans for radical constitutional reform—emphasized in some of his most recent writings—rule out the possibility that, in his later work, reason becomes collapsed into ‘evolutionary’ social developments.
It would seem to me, rather, that we must accept that both of these themes are there (at least in parallel—as was also the case in Menger), and I would suggest that, despite their differences on many other points, our best hope of an overall interpretation might be to follow up Hayek’s references to Popper’s critical rationalism, which does offer us a promise that traditionalism and the demand for rational critical scrutiny may be combined.
Dept. of Government
University of Manchester, England
Notes by Roland Vaubel
Notes by Jeremy Shearmur