From “The Power and Pervasiveness of Spontaneous Order,” by Elaine Sternberg at Econlib, July 5, 2021.
Spontaneous order is crucial for understanding human institutions as fundamental as language and the law, and as pervasive as morals, markets and money. It is also central to a key defense of individual liberty. Nevertheless, many people find the notion of spontaneous order counter-intuitive, seeing nothing between planning and anarchy.
What is spontaneous order? When people act spontaneously, they do so impulsively, typically without forethought or concern for the consequences of their actions. Similarly, spontaneous orders feature neither planning nor intention, and just emerge; they are self-generating and self-organizing.
From “I, Pencil,” by Leonard Read.
Irvington-on-Hudson, NY: Foundation for Economic Education, Inc., 1999. First published 1958. Card Catalog
I, Pencil, simple though I appear to be, merit your wonder and awe, a claim I shall attempt to prove…. Simple? Yet, not a single person on the face of this earth knows how to make me. This sounds fantastic, doesn’t it? Especially when it is realized that there are about one and one-half billion of my kind produced in the U.S.A. each year. [Pars. RP.4-5]
…My family tree begins with what in fact is a tree, a cedar of straight grain that grows in Northern California and Oregon. Now contemplate all the saws and trucks and rope and the countless other gear used in harvesting and carting the cedar logs to the railroad siding. Think of all the persons and the numberless skills that went into their fabrication: the mining of ore, the making of steel and its refinement into saws, axes, motors; the growing of hemp and bringing it through all the stages to heavy and strong rope; the logging camps with their beds and mess halls, the cookery and the raising of all the foods. Why, untold thousands of persons had a hand in every cup of coffee the loggers drink! [Par. RP.8]
…My “lead” itself?it contains no lead at all?is complex. The graphite is mined in Ceylon. Consider these miners and those who make their many tools and the makers of the paper sacks in which the graphite is shipped and those who make the string that ties the sacks and those who put them aboard ships and those who make the ships. Even the lighthouse keepers along the way assisted in my birth?and the harbor pilots. [Par. RP.13]
From An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith.
London: Methuen and Co., Ltd., 1904. Edwin Cannan, ed. First published 1776.
From Protection or Free Trade, Chapter VII, “Production and Producers,” by Henry George.
New York: Doubleday, Page & Co., 1905. First published 1886.
Remote from neighbors, in a part of the country where population is only beginning to come, stands the rude house of a new settler. As the stars come out, a ruddy light gleams from the little window. The housewife is preparing a meal. The wood that burns so cheerily was cut by the settler, the flour now turning into bread is from wheat of his raising; the fish hissing in the pan were caught by one of the boys, and the water bubbling in the kettle, in readiness to be poured on the tea, was brought from the spring by the eldest girl before the sun had set.
The settler cut the wood. But it took more than that to produce the wood. Had it been merely cut, it would still be lying where it fell. The labor of hauling it was as much a part of its production as the labor of cutting it. So the journey to and from the mill was as necessary to the production of the flour as the planting and reaping of the wheat. To produce the fish the boy had to walk to the lake and trudge back again. And the production of the water in the kettle required not merely the exertion of the girl who brought it from the spring, but also the sinking of the barrel in which it collected, and the making of the bucket in which it was carried…. [Pars. VII.1-2]
From John Hopkins’s Notions on Political Economy, Chapter 8, “Foreign Trade, or The Wedding Gown,” by Jane Haldimand Marcet.
London: Longman, Rees, Orme, Brown, Green, & Longman, 1833. First published 1831 as a pamphlet.
“But,” said John, “we don’t go over to France to choose the goods as we do at market. It is they send them over to us; and they may chance to send us such goods as we can make as well and as cheap at home: in a word, goods that we don’t want from them.”
“I can assure you,” replied the landlord, “that merchants often do go to foreign countries for the very purpose of choosing such goods as will be most wanted in England. And when they don’t go, they write, which answers much the same purpose.”?”But how can they tell what is wanted?” cried Bob; “for, one wants one thing, another wants another; but, to say what most people want, must be a hard matter to make out.”?”Far from it,” said the landlord; “there is as sure a means of knowing it as if the different sorts of goods had each a voice, and one cried out, ‘I am the most wanted;’ another, ‘I am next;’ and another, ‘I not at all.'”
This made them all stare; and they listened with great attention to learn what this voice could be.?”It is neither more nor less than the price of the goods,” said the landlord. “The more goods are wanted the better price they will fetch; so it is the price which I call their voice; and, moreover, a voice that always speaks the truth.”… [Pars. 8.31-33]
Barry, Norman, “The Tradition of Spontaneous Order,” Literature of Liberty.
This bibliographical essay traces the intellectual history of spontaneous order in both economics and the law. Barry’s essay is a thorough and informative survey of this central topic. An extensive Bibliography is included.
Barry also makes an elegant and subtle distinction: The evolution of laws, commonly cited as analogous to that of markets, differs from that of markets precisely because laws lack the equivalent of a price system to convey information and feedback to the widespread participants. Hence a common-law legal system may be less likely to iterate in on an equilibrium than a freely-developing market system.
Hayek, Friedrich A., “The Use of Knowledge in Society,” American Economic Review, 1945
In F. A. Hayek’s seminal article, he illuminates the real role of markets?the coordination of knowledge and information without anyone being in charge. Hayek argued that markets process more information than could possibly be mastered by a mastermind or even a mastermind working with a computer. It’s one of the most eloquent expositions of how decentralized, unorganized individuals individual decision-making can outperform a central planner.
Hayek’s insights formed the basis of Leonard Read’s whimsical look at uncontrolled order and the role of markets in coordinating knowledge, “I, Pencil.” Reading both side by side is a fascinating look at economic rhetoric.
list of related topics and links here, e.g., links to econlib reading list entries on information and markets; any other pages to be written on, say, division of labor, invisible hand; links to the CEE, links to biographies (e.g., Hayek).