Outline of Sections
Cosmos and Taxis (140)
- The concept of order (140.4)
- definition: consistency, constancy, capacity to extrapolate across time/space
- not the "authoritarian" idea
- The two sources of order (141.7)
- The distinguishing properties of spontaneous order (143.2)
- Spontaneous orders in nature (144.2)
- In society, reliance on spontaneous order both extends and limits our powers of control (145.1)
- Spontaneous orders result from their elements obeying certain rules of conduct (146.5)
- The spontaneous order of society is made up of individuals and organizations (149.2)
- The rules of spontaneous orders and the rules of organization (150.7)
Cosmos and Taxis (140)
The concept of order (140.4)
Two Sources of Order
Informational Definition of Order: a state of relation among things such that knowledge of some permits correct predictions about the rest (140.8).
Observation 1: There are human products that are ordered but not designed.
In other words, decentralized order DOES exist.
Examples: language, moral codes, customs, cuisine,
* definition: consistency, constancy, capacity to extrapolate across time/space
* not the "authoritarian" idea
* we depend on cooperation of others and that depends on stable expectations (coordination)
* order DOES exist; but where does it come from?
* conventional answer is "an arrangement" built by command and obedience, exogenous order from without
* but there is also endogenous order from within
The two sources of order (141.7)
- There's a tendency to deny there can be orders that are not of someone's making
- Hayek wants to ask why we frequently overlook these - answer is like water for fish
The distinguishing properties of spontaneous order (143.2)
- we tend to think of all order as taxis order
- necessary properties of taxis
- surveyable complexity
- serve purpose of the maker
- concrete and observable
- contrast cosmos
- complexity not limited
- can be abstract, not concretely organized
- example: in a chemical equilibrium, molecules are constantly going back and forth between one state and the other even as the proportions are maintained - Hayek would see assigning particular molecules to particular states as made order, but the situation wherein they switch back and forth at equal rates as an emergent order
- do not actually have A purpose
- Taxis is concrete, intentional, limited by cognitive capacity of designer.
- By contrast, CLAIM 1: Orders more complex than a brain could design or manipulate can ONLY happen via spontaneous order processes (143.5).
- In other words, there are "solutions" that cannot be generated by design. By implication, there may be problems that require such solutions.
- "…such orders…may persist while all the particular elements…change. All that is necessary…is that a certain structure of relationships be maintained…"(143.6)
Spontaneous orders in nature (144.2)
- crystals as one model
- order depends on rules governing behavior of elements and initial configuration and environment
- we can have equilibrium overall pattern even if we do not know state of individual elements (e.g., 50:50 red and blue even if elements are switching between red and blue) > EQUILIBRIUM
- "…we shall be able to predict only the general character of the order that will form itself, and not the particular position which any particular element will occupy relatively to any other element"(144.6)
In society, reliance on spontaneous order both extends and limits our powers of control (145.1)
- spontaneous order <- elements adapting to local circumstances (all of which is known to none) (145.1)
- WE can know rules elements follow but NOT the total of all their circumstances (145.3)
Can get macro-order even though no agent has access to macro-information
"…adapting themselves to circumstances which directly affect only some of them, and which in their totality need not be known to anyone…"(145.1)
A macro observer can know the rules, but not all the micro-environments (145.4)
UPSHOT: even if we can change the rules, we generally cannot do so with an eye to a specific desired macro outcome.
DEF: things are related in such a manner that elements learn from immediate environment enough to predict behavior of the whole (140.7)
more complexity that a single mind could comprehend (various places)
"…present…difficulties in our efforts to explain…and influence…" (145.3)
"…we can know at most the rules observed by the elements…but not all the … elements and never all the peculiar circumstances…knowledge … restricted to general character of the order…" (145.3)
Infrastructure for social order
Constant struggle between command and rule. E.g., "mission statements" and critical thinking.
Spontaneous orders result from their elements obeying certain rules of conduct (146.5)
The spontaneous order of society is made up of individuals and organizations (149.2)
The rules of spontaneous orders and the rules of organization (150.7)
"This particular function of government is somewhat like that of a maintenance squad of a factory" (150.2)
- Natural monopoly
- Public goods
- Asymmetric information
- Moral hazard
- Transaction costs
- Property rights
- Bounded rationality
Examples to Ponder
Stadium portraits with colored placards.
"The wave" in a stadium.
You should be able to define the following
What is Friedrich A. Hayek's most famous book? Article? When did he live?
What are the two types of order?
Hayek distinguishes (140.5) "made" order — associated with hierarchy, command, purpose, etc. — and "grown" — associated with spontaneous, emergent order.
What is Hayek's preliminary definition of order?
"a state of affairs in which a multiplicity of elements of various kindss are so related to each other that we may learn from our acquaintence with some spatial or temporal part of the whole to form correct expectations concerning the rest, or at least expectations which have a good chance of proving correct" (140.7)
Explain the contrast between exogenously produced order and endogenously produced order.
EXOGENOUS order is "created by forces outside the system," ENDOGENOUS order is equilibrium that emerges from within (141.6)
What other fields study "spontaneous order"?
economics, biology, thermodynamics, chaos theory, non-linear dynamics, emergence (141.9)
Arrange the terms grown, made, exogenous, decentralized, directed, emergent, exogenous, spontaneous order, centralized, (an) organization under the headings taxis and cosmos.
|(an) organization||spontaneous order|
What is the relationship between spontaneous orders and "purpose"?
"Purpose" in the sense of "intention" is, according to Hayek, absent from spontaneous order. It is not "someone's idea" or "somebody's plan." (143)
Does this mean that we would exclude order generated by Weber's means-end, "Zweckrational" action? Yes, it seems, if we are talking about system level action. But later we'll see Hayek admits combinations can exist. It does NOT exclude individual (or even local group) means-end rationality (in fact, following Adam Smith, he might say that this is pretty much all there is or should be).
"Spontaneous Order Results from Elements Following Rules" — COMMENT
(146ff) We return to the question of what a rule is. Here we mean rule of conduct that everyone, or every member of a category or class, follows. These are general rules that can be "programmed in" — not rules that can be announced or changed day to day.
Note that Hayek gets caught up in a number of tautologies
Society can thus exist only if by a process of selection rules have evolved which lead individuals to behave in a manner which makes social life possible (147.6)
…in a social order the particular circumstances to which each individual will react will be those known to him. But the individual responses to particular circumstances will result in an overall order only if the individuals obey such rules as will produce an order (147.7)
But still, there is a valuable directive here: social science can study "rules" to determine which ones lead to what kinds of equilibria.
For Hayek, what is, for social theory and policy, the main question about the rules followed by individuals?
What properties must rules possess so that separate actions following them produce order? (148.1) And remember, by this we are meaning predictable outcomes (that are beneficial)
Is Hayek a radical libertarian or anarchist who would oppose all coercive rules?
"But there will be still others [rules] which they may have to be made to obey, since, although it would be the interest of each to disregard them, the overall order which the success of their actions depends will arise only if these rules are generally followed" (148.2).
LAW — rules need not be spontaneous. (148.6)
What is, for Hayek, an "organization"?
Hayek discusses "deliberate organization" as existing alongside spontaneous order (149.2). He does a little channeling of Weber when he says "for many limited tasks organization is the most powerful method of effective co-ordination" (recall Weber's description of bureaucracy as the most power form of organization).
Hayek fudges a bit though when he says the reason is "it enables us to adapt the resulting order much more fully to our wishes" — so it is not the efficiency of bureaucracy but the fact that it can be purposive. He immediately goes back to problems of complexity limiting range of circumstances where organization might be useful.
What, for Hayek, is the overall shape of society?
There are lots of pockets of organization — families, farms, plants, associations — but the overall coordination is in a spontaneous, decentralized order (149.4)
What is the proper function of government?
"somewhat like a maintenance squad in a factory" (150.1)
What is the difference between the rules of spontaneous order and the rules of organization? (150.8)
Rules (of spontaneous order) guide individual actions in a manner that allows them to take full advantage of knowledge/information "which nobody possesses as a whole" (151.1).
If members of organization are to be something other than "mere tools of the organizer" (151.2), then command is limited — must leave room for "detail to be decided by the individuals on the basis of their respective knowledge and skills" (151.2).
Cf Marx's picture of alienation in the factory where the worker becomes a mere appendage of the machine. Or the "deskilling" that emerged in Taylorism. On the opposite extreme, consider the arguments in favor of freedom of the professions.
For Hayek, the "rules of organization" (commands) is that they include presumptions about the world and they include purpose. By contrast rules of spontaneous order must be independent of purpose (151.7).
How is Hayekian society like a beehive or ant hill?
Global order emerges without centralized control.
What is an equilibrium?
Perhaps the most important concept in this excerpt but one that is not explicitly thematized.
Briefly, an equilibrium is an aggregate state of affairs that tends to stay the same even if the elements that make it up are changing. It is a state toward which a system will tend. A stable equilibrium is a state of a system to which a system tends to return
Can you distinguish
- made/grown order
What is the role of information in Hayek's logic?
The argument depends on some assumptions about information — the impossibility of an ueber-mind being able to access, collate, and analyze the full body of information available to the members of society. Therefore, it is impossible for command to be the answer to organizing society. Markets are, thus, best thought of as social organizational information processing tools.
Why do you think there is an association between taking Hayek's approach to social order and believing in God?
146.8 "Rules of spontaneous order exist without being known to those who obey them."
147.3 Primitive societies operated under laws that were obeyed but not explicitly written/enforced.
147.4 It is important to know which rules will produce order and which types of order will result from which types of rules.
147.6 Society can only exist if rules that make social life possible exist already- rules of conduct order action of whole.
148.6 Our main interest will be in rules which, by altering, can affect the current order.
149.3 Collaboration= spontaneous order + deliberate organization.
149.5 society= the spontaneous organization of smaller, deliberate organizations.
149.8 One of the organizations in society is called gov't. Spon. order can exist w/o govt but govt necess. to main. des. ord.
150.5 government, rather than capital-S state.
151.3 organizations make use of many minds. If one were to merge orgs, many minds ==> one hive mind. Complex ==> primitive.
152.7 isolated commands requiring actions of members of spontaneous order can only disrupt not improve.
152.7 Spontaneous order results from system of actions/purposes known only to actors.
Last problem was 0480 (HELP)
Q193. In "Cosmos & Taxis" Friedrich von Hayek distinguishes two kinds of order. What does he call them? What are some synonyms for his terms? Demonstrate your understanding of the difference by giving examples of social order of each type.
Q208. Explicate and comment:
One of our main contentions will be that very complex orders, comprising more particular facts than any brain could ascertain or manipulate, can be brought about only through forces inducing the formation of spontaneous orders (Hayek 1976: 143.5).
Q209. Explicate and comment.
The distinction of this kind of order from one which has been made by somebody putting the elements of a set in their places or directing their movements is indispensable for any understanding of the processes of society as well as for all social policy. There are several terms available for describing each kind of order. The made order which we have already referred to as an exogenous order or an arrangement may again be described as a construction, an artificial order or, especially where we have to deal with a directed social order, as an organization. The grown order, on the other hand, which we have referred to as a self-generating or endogenous order, is in English mosts conveniently described as a spontaneous order (Hayek 1976: 142.1-3).
Q210. Explicate and comment:
This means that, though the use of spontaneous ordering forces enables us to induce the formation of an order of such a degree of complexity (namely comprising elements of such numbers, diversity and variety of conditions) as we could never master intellectually, or deliberately arrange, we will have less power over the details of such an order than we would of one which we produce by arrangement. In the case of spontaneous orders we may, by determining some of the factors which shape them, determine their abstract features, but we will have to leave the particulars to circumstances which we do not know. Thus, by relying on the spontaneously ordering forces, we can extend the scope or range of the order which we may induce to form, precisely because its particular manifestation will depend on many more circumstances than can be known to us-and in the case of a social order, because such an order will utilize the separate knowledge of all its several members, without this knowledge ever being concentrated in a single mind, or being subject to those processes of deliberate coordination and adaptation which a mind performs (Hayek 1976: 145.5-7).
Q211. Explicate and comment:
To put this differently: in a social order the particular circumstances to which each individual will react will be those known to him. But the individual responses to particular circumstances will result in an overall order only if the individuals obey such rules as will produce and order. Even a very limited similarity in their behavior may be sufficient if the rules which they all obey are such as to produce an order. Such an order will always constitute an adaptation to the multitude of circumstances which are known to all the members of that society taken together but which are not known as a whole to any one person (Hayek 1976: 147.7).
Q234. Hayek is sometimes taken to be saying that the modern world throws up problems that are too complex to be handled by planning and policy making. Some things can be handled that way, but big and complex things cannot. What are the differences between the two types of order and the limitations and possibilities Hayek suggests each has and how does he get from there to social order?
Q419. What does Hayek mean by "teleological shorthand"?
The use of “purposive" in this sense as a sort of ‘teleological shorthand’, as it has been called by biologists, is unobjectionable so long as we do not imply an awareness of purpose on the part of the elements, but mean merely that the elements have acquired regularities of conduct conducive to the maintenance of the order — presumably because those who did act in certain ways had within the resulting order a better chance of survival than those who did not." (143.9)
Q427. Show what you know by attributing and explaining this diagram: