True freedom

"Freedom means that in some measure we entrust our fate to forces we do not control; and this seems intolerable to those positivist / rationalist who believe that men can master his fate; as if civilization and reason itself were the fate of his making"
F.A. Hayek

Tuesday, June 26, 2012

Money, part1.

Money, part1.                                                                                                                             Natural money, centralized creation, sub-optimality and self-organizing processes
Author: Pablo Paniagua
Editor: Victoria Finn

“Some social phenomena are the results of a common will directed toward their establishment, while others are the unintended result of human efforts aimed at attaining essentially individual goals; but are the unintended result of them. In this case, social phenomena come about as the unintended result of individual human efforts (pursuing individual interests) without a common will directed toward their establishment.” 
Carl Menger

“An extended order is a system in which far surpasses the reach of our understanding, wishes and purposes, and our sense perceptions, and that which incorporates and generates knowledge which no individual brain, or any single organization, could possess or invent.”
Friedrich A. von Hayek

“Reason leads intellectuals to ignore the theoretical limits of reason, to disregard a world of historical and scientific information, to remain ignorant of the biological sciences and the sciences of man such as economics, and to misrepresent the origin and functions of our traditional moral rules.”
Friedrich A. von Hayek

The organic origin of money as a medium of exchange:

Money is probably one of the most useful and fundamental but yet less understood institutions that human societies have ever come to employ in history. The main difficulty in fully appreciating and understanding its power and complexity comes from the trouble in comprehending its natural origin and spontaneous evolution. Social institutions such as money, languages and many other systems that are shaped through evolution, are self-organizing, thus not fully planned and projected through human reason. This implies a huge problem since paradoxically we use the institution of money intensively, but since we did not fully plan or design it, it faces difficulties grasping its own existence and evolution.

The fact that the social institution of money was not fully planned has made the whole idea of a specific origin or a precise birthdate unfeasible and puzzling to economists for hundreds of years. It wasn’t until Carl Menger applied his Individualistic methodology to understand the evolution of money as a social institution that we became aware of the benefits of natural institutions that are constructed only through evolutionary individual interactions and not through planning. His methodology has helped us understand individual interactions and the relevance of unplanned complex systems that are beneficial for societies and most importantly, lie outside any possibility of being completely designed through human thinking.   

We can recognize that humans have taken the first step towards sustainable and immeasurable economic growth, but it happened only when people started adopting a particular skill and then continued to improve their dexterity within that particular job. This was a way of creating a skill advantage in respect to others. Eventually, that job or skill was offered in the form of a service or manufactured product. Through a form of any mutually beneficial exchanging of goods, it became necessary to use the good as a mechanism to enhance exchange. Thus medium of exchanges are inherent in the division of labor and play an important role in the market society and in its evolution.  

When humans started producing certain goods in order to participate in voluntary exchanges, they had to bear a high level of uncertainty while calculating the short-term demand for their products. This led producers to hold some finished goods in stock or cellars in order to have spares to exchange when needed. This stock enabled them to meet sudden demand changes in the near future, therefore successfully counterbalancing the uncertainty. Menger defined these sorts of stocked products ready for future sales as ‘commodities’.  This meant that the artisan would have some part of his wealth translated from a stocked good since it was ready to be exchanged for another good which he may have considered more valuable. Primitive civilization then started producing goods as a way of applying their skills and best knowledge. The small division of labor within their villages was a way of increasing their personal production of certain goods that might have been used as a commodity for exchange or as a portion of personal wealth ready to be exchanged for others goods possibly vital to their existence.  Menger noticed however that the commodity-character of any good of being exchangeable for other goods is not inherent in the produced good itself: it is not an intrinsic property of it, it is just a relationship between the good produced and the person willing to exchange it for another good. Therefore any form of acceptable good as a medium of exchange has a value based on its exchange value rather than its use value.

Even if the producer or owner is willing to exchange, the use of his good as an exchangeable good (i.e. using it as a commodity) and its ease will be limited: his ability for possible exchanges in society are  restricted by the limited marketability of the good he produced. Individuals will accept his good or not depending on certain characteristics that make some goods more marketable than others. Therefore the marketability of goods being used as commodities, as Menger established, will be limited by several factors: to whom and where it can be sold, if it has an expiration, how long it can be stored for, and how long the producer must wait before finding someone willing to buy it.

As a result of the heterogeneity of goods produced, there will be some goods that may expire and cannot being stocked for a long time, i.e. milk; some others cannot be divisible for a proper exchange, i.e. live cattle; additionally, others are not going to be accepted as a general medium of exchange or are going to be hard to transport to other countries, i.e. fruits, and therefore limited due to transportation. So then how do we decide which goods can be used as reliable mediums of exchange for the good of society? How do we establish the best possible commodity for the whole civilization? The answer of course, like many other complex social institutions, relies beyond one single person’s possible reasoning and planning. Menger indeed demonstrated that only the free spontaneous interaction and exchange of goods among individuals will eventually and evolutionary result in a feasible solution. Since it is evolutionary and individually adopted, this solution will naturally be optimal; it will certainly not be planned by anyone and consequently it will determine a common commodity. This will circulate with ease and will be freely accepted by people in order to easily exchange.

Thus individuals in a market economy bring their “best” commodities or goods to the exchange market; those having some particular degree of marketability will compete against others to become the more accepted medium of exchange. Individuals bring their personal products, with the obvious intentions of exchanging them, not only for the specific good that they want to consume now, but also for some other forms of more marketable commodities. Even if the person did not need or want the more marketable commodity at the moment, individuals understood that this exchange for the more marketable commodity will indirectly enhance and facilitate further transactions for them and that eventually it will help them to reach their goals and economic interests. Thus without any form of legislative compulsion, without any consideration of the common public interest, even without imposing a commodity as an official medium of exchange, individuals will lead to the use of the most marketable commodity for transactions based on their necessity and based on their individualistic interests. This individual adoption will lead to the use of the most marketable commodity for transactions and therefore everyone in society will spontaneously start adopting the most marketable commodity as a form of money. 

The noncoercive, decentralized process of self-organizing interactions of individuals being held in exchanges will come with a generally feasible solution. The outcome is spontaneously and freely adopted by people and of course will be individually optimal. Adopting this solution can eventually be transmitted to other individuals and become the best possible outcome for a complex society.  As Menger stated,

“As each economizing individual becomes increasingly more aware of his economic interest, he is led by this interest, without any agreement, without legislative compulsion, and even without regard to the public general interest, to give his commodities in exchange for others, more saleable, commodities, even if he does not need them for immediate consumption purpose”.

Consequently with increasing economic development (being the number of spontaneous exchanges and individual interactions), artisans and producers will naturally prefer to exchange their goods for a more marketable commodity for eventual future transactions. The exchange is mutually beneficial since the artisan will indirectly possess a more marketable commodity that will help him to achieve his future ends and the consumer will buy the artisan’s good in order to satisfy his consumption. These sorts of commodities which were widely accepted and marketable were called “Geld”, originating from the German word “Gelden” which means to compensate or to pay. Therefore “Geld” became the expression for payment or money.  This evaluative process, in which individuals were immersed in collaboration and interaction, trying different forms of commodities as Geld, ended up with the spontaneous selection of the single most marketable commodity available for the society; this is the way money originated. Soon after the adoption of commodity money, the state took control of coinage and then eventually started issuing paper money. This was 100% backed by a commodity as a way of compromising and keeping paper money inelastic. The system also allowed money to be completely backed by gold while simultaneously being easier to circulate than gold coins.

As we have seen through Menger’s insight, money’s origin and evolution is just another form of spontaneous order and individualistic interaction that ended in a natural outcome. Money is not a state invention nor was it created by politicians or any monetary central authority. As Menger stated, “Certain commodities came to be money quite naturally, as the result of economic relationships that were independent of the power of the state.” Different sorts of money will spontaneously appear in societies depending on the level of economic development and depending on the goods and materials available for each society; therefore money has independently existed in various ways in different civilizations.
In basic barter economies, a primitive form of money seems to first appear as cattle due to being the most commercial and most marketable commodity in the ancient world. Greeks showed no trace of coined money even as late as Homer’s time: prices were all reckoned in cattle. Even the Roman Empire used sheep as a means of exchange and therefore as a form money until very late in its reign. Finally when economic development and the extended division of labor and cooperation among civilizations geographically extended to farther places, this spontaneously diminished cattle’s marketability and started increasing that of other commodities which were more suitable for long distances, such as metals. Metals presented better marketability characteristics than cattle and therefore were a better medium of exchange for an extended, complex economy. They had better transportability, including taking up narrower spaces, longer durability and better divisibility.

The Mengerian theory about the evolution of money necessarily presupposes the idea of goods’ marketability in a free-market. In this line of thinking, money possesses nearly unrestricted marketability. Therefore this evolving process happens within all human societies without any form of centralized decisions or any form of applicable reasoning; it is the evolution of a self-organized institution. As Menger noticed, “money presents itself to us, in its special locally and temporally different forms, not as the result of a political agreement, legislative compulsion, or mere chance, but as the natural product of differences in the economic situation of different peoples at the same time.”         

The concluding remarks of the origin of money should be evident now since we have seen that such a complex and beneficial institution is not originated through reason or created by any centralized authority; more impressively, it was not even conceived to be beneficial for the good of the society. Individuals' self-creating process, coordination and exchange were originally aimed towards their personal satisfaction and interests; in the end, they indirectly helped what spontaneously started and continued money's social evolution and success of becoming one of the most relevant institutions for a free society. This spontaneity was simply formed through the evolution of a self-creating process of coordination and exchange of individuals that were first aimed only to specific individual goals, their own satisfaction and their own interest. With that simple idea, leaving individuals the liberty to decide what to use as a medium of exchange, societies can spontaneously create something beneficial for the whole civilization without even conceiving the idea or really thinking about or planning it.  In Menger’s words,

“Organic social phenomena are characterized by the fact that they present themselves to us as the unintended result of individual efforts of members of society, i.e., of efforts in pursuit individual interests. Accordingly, in contrast to rational characterized social structures, these are, to be sure, the unintended social result of individual teleological factors.”

Menger considers this form of unintended social organization as natural. A natural social organism as Menger and Hayek intended it are in the sense of innate or instinctive structures, therefore the word “artificial” means a product of human design, basically based on knowledge and the planned use of reason.

The most successful social institutions paradoxically escape our possibility of planning and intervention. Since they are not planned, they challenge the limits of our human reason. Unfortunately we cannot create them artificially; they are always the unintended consequences of individual coordination. Money, the Rule of Law and Languages are therefore the unintended consequences of free individual interactions and individuals seeking to maximize their ends. Spontaneously-created systems result in outcomes such as Money. In the case established, they are defined as systems with minimum production cost to human efforts and combined with its spreading; this creates the greatest utility and benefits. Extraordinarily Money as a self-organizing evolutionary system was formed by individual activities and multiple exchanges. The outcome of money was unforeseeable and not specifically directed by anyone; its final outcome was the spontaneous social adoption of metals and the eventual coinage of metal coins as money. Finally the institution’s natural function of money is only that of facilitating the exchange process for individuals in a complex society. It indirectly has the positive function of facilitating economic calculations through natural prices for the entrepreneur.

Under the institution of money in a free market system, you don’t directly exchange the good you possess with other goods you desire but rather you exchange it for money, bringing you one step closer to achieving your end. You gain the prospect of accomplishing your purpose through an indirect exchange for the marketable commodity. The social institution of money has only been accomplished through the increasing knowledge of individual ends, regardless of any convention or legal compulsion, apart from any common social goal or interest.

The spontaneous formation of the most common and marketable commodity in a society has the unintended positive consequences of creating the best possible framework to promote and facilitate the price system and making price dissemination reliable and available. Money facilitates transactions and exchanges but more importantly, it enhances entrepreneurial and economic calculation through the price mechanism expressed in money’s value. Good money therefore promotes and facilitates the process of competition, price formation, as well as the most efficient and transparent framework for a healthy allocation of capital.

Naturally and spontaneously adopted money creates more stability in an un-politicized base for the price system to freely prosper from political interference. In a complex system with so many interactions and exchanges occurring in a decentralized manner, relative prices are the fundamental source of transmission for basic information. They send out the most relevant information that facilitates interactions, calculations and allows individuals to make entrepreneurial decisions. Therefore the price system fundamentally relies on some sort of natural and unique “language” in which the information can be revealed and disseminated to economic actors. The only possibility to communicate real information in an unadulterated and untainted fashion is through naturally adopted money because it has no political and centralized control whatsoever. Since it does not answer to particular interests, it does not create the opportunity for anyone to interfere with price dissemination. In this way, natural money is optimal and stays away from political control.  

Natural money provides and disseminates factual and reliable information based on real entrepreneurial efforts and human relationships. State money or paper money systems backed on just the paper instead of sound commodities surpass and undermine the natural system of coordination in a free market economy. It alters and disturbs the true entrepreneurial information, distorting entrepreneurial actions with political and centralized nationalistic economic aims; the state money system and Fiat money bring massive uncovered distortions to the money institution and undermine the real objective of natural commodity money, replacing it with political and nationalist objectives.

Monday, June 18, 2012

Remember Esperanto?

Remember Esperanto?                                                                                                                The limits of human reason and the benefits of self-organizing processes                                                                                                                                                by Pablo Paniagua                                                                                                             June, 2012
“Homo non Intelligendo fit omnia”
 “Man became all he is without fully understand it”
Giambattista Vico

“Some activities of the human mind prosper by the mutually adjusted efforts of individual contributor. Thus language and writing are developed and adopted by individuals communicating trough them with each other. …These as many other branches of human culture, are fostered by methods of spontaneous orders”
Michael Polanyi

“An extended order is a system in which far surpasses the reach of our understanding, wishes and purposes, and our sense perceptions, and that which incorporates and generates knowledge which no individual brain, or any single organization, could posses or invent”
Friedrich A. von Hayek

Esperanto: the first international, planned language

Have you ever heard of Esperanto? If not, then you probably have not heard one of the most interesting stories of an international planned order, applied into social orders. In this case, it particularly applies to languages and communication and became the first attempt in human history to use reason to create a common language.

Esperanto is officially the first try in establishing an international planned and reason- based language into social communication. It is also the first attempt to purposely use reason and mechanic order to design a language constructed by just a few people’s knowledge and reason, then apply and implement it in order to spur common global language coordination. Esperanto is also the first massive project of an international language established through human intention and calculation. Esperanto was formulated to be an internationally auxiliary language, or IAL; in simple terms, this means a language intended to ease the communication among people from different countries who do not share the same native language. In a way Esperanto is a project planned and developed by intended human action and reason. It is an effort to apply knowledge and intelligence to establish an effective and artificially defined second language; all with the hopes for promoting peace and understanding amongst humanity. 

International Auxiliary Languages have been spontaneously adopted by humans since they started to interact with others from different cultures and nationalities. Indeed trade in itself was and has been one of the preponderant factors towards the necessity for humans from diverse countries and backgrounds to easily interact for successful and fluid international trade. Greece, being the first predominant Western cultural and Mediterranean merchant influence, spread the natural necessity for a common language between its trading partners. In order to trade with Greece, people spontaneously adopted ancient Greek as an IAL. We have also seen several other spontaneous adoptions of auxiliary languages throughout history. The main characteristic of them is that they have been adopted instinctively by people’s interaction and through individual’s spontaneous coordination in trading societies. Nowadays we experience the same daily influence from the English language through the necessity of international trade and globalization. This is true despite the fact that it has not been imposed by any law or created by any man; the spontaneous adoption of the English language by free individuals has created unexpected benefits for societies and promoted trade and growth worldwide.
However all IALs which humans have spontaneously adopted and used are, in one way or another, associated with some level of “supremacy” or influence, whether it be cultural, political or economic. Thus even if IALs are used internationally, there is a possibility that some countries accept the language, but with certain reluctance and fear; they could believe that some foreign forces or those with hidden agendas are imposing the new language. Contrarily, people believed in the necessity to promote an artificially created language based on reason, cultural equality and lack of political or economical oppression. This synthetically created language was then supposed to be the most efficient solution for human communication and also eliminate the “imposed supremacy” perception. Esperanto therefore was created with the intention for a language in which no single predominant cultural influence imposed human communication.

Esperanto is nowadays the most extensive attempt of a constructed, rational, artificially created and binding International Auxiliary Language. Its name is derived from “Doktoro Esperanto”, with Esperanto meaning “one who hopes”; this was the pseudonym that L. Zamenhof used when he published his book “Unua Libro” in 1887. Mr. Zamenhof had the idea of fabricating an easy to learn and politically neutral language, which would not use any nationality and would promote peace and international understanding. The first world congress of Esperanto was held in France in 1905, but still today no single country has officially adopted Esperanto as a legal language. It has less than 2 million speakers worldwide and is fluently spoken by less than 100,000 people. We must then ask ourselves, why is Esperanto such a novel and good idea? It is based on human intellect and has the best of intentions, so why was it not internationally adopted?

The reason is that Esperanto supporters unfortunately didn’t realize that the idea of creating a language based on human reason and pre-programmed management had two sides: on one hand it aimed to reduce nationality dominance or political and economic influences but ironically on the other hand it created yet another sort of dominance and control. The influence changed from political and economic influence towards authority of reason over natural orders. The fact of trying to select a “more optimal” common language based on human reason, Esperanto speakers and its creator tried to impose their reason and beliefs upon the spontaneous order of human interactions, those which have been instinctively and unconsciously deciding on languages for international communication without any imposition or artificial creation. Therefore we can clearly see the idea of promoting human programming and excessive use of reason and then attempting to enforce it over natural spontaneous orders, which have in the past generated very optimal languages. This entire endeavor to promote the language instead of leaving it to individuals’ spontaneous interactions and the self-originating languages evolution are always suboptimal and ineffective in the long run. They block and impede the evolution of free interaction and try to promote a controlled “rational” order, which was established by a single individual’s ideas and knowledge. When in actuality we have seen that human society achieves greatness through spontaneous individual interactions without fully recognizing it. 

A planned, administered and reason-based structured language is usually known as “conland”. Languages of this sort possess phonology, grammar and vocabulary that has been consciously created and designed by some authority, single individuals or groups. These people try to employ their reason by proposing a system that should be adopted by the rest, for the greater society.  The base of a planned language relies on the whole idea of rationalist positivism, which helped create the counterfeit assumption that humans can shape the world at will through the full use of reason and conscious planning. This notion is particularly dangerous when applied in the field of large, complex social structures or organisms that are far beyond a single individual’s knowledge and reach.

People always inappropriately neglect the fact that there are orders, especially in complex systems, which lay beyond our planning and control. Therefore we have to approach them with intellectual humbleness and lucid skepticism using the real possibilities and reach of human reason.  In this case, even if Esperanto was created with the best of intentions such as to promote understanding and peace, it neglects the advantage of spontaneously created and adopted languages and ignores the benefits of letting people decide what their common language should be, this in fact is the fastest and easiest way to create human coordination and understanding.  

Dr. Ludwig Lazarus Zamenhof created Esperanto as an applied, mingled, arbitrary constructed language. Therefore his idea was to have a language with an undefined ethnic root, although in reality the grammar, vocabulary and semantics are based on Western European languages. It is, in a way, much defined and has a geographic bias towards Central Europe, especially since Slavic roots influence its phonetics. The main vocabulary is derived from romance languages with lesser contributions from Germanic and Slavic languages, as well as some Greek. 

The Esperanto alphabet is based on the Latin structure and uses a one-sound-one-letter principle. The alphabet does not include the letters q, w, x, or y, which are only allowed when writing foreign terms or names. The 28 letter based alphabet is:

a b c ĉ d e f g ĝ h ĥ i j ĵ k l m n o p r s ŝ t u ŭ v z

Esperanto’s vocabulary was defined in the book “Linguo Internacia”, published by Zamenhof in 1887. It lists 900 word roots. In 1894 Zamenhof published the first Esperanto dictionary, called “Universala Vortaro”. Since that publication, many Esperanto words have been imported into Western European languages. Everyday terms are usually derived from existing Esperanto roots, for example the word “computer” is Komputilo, coming from the verb Komputi “to compute” and the suffix ilo, meaning “tool”. Despite this, Esperanto speakers often debate whether importing “foreign words” is justified or not and whether to use Esperanto based expressions by extending the meaning of existing Esperanto words. 

In synthesis we have seen the basic main structural characteristic of the Esperanto language, so now we have to comprehend why Esperanto is not widely spoken and has barely been adopted. Why has Esperanto, being based on cultural equality, having the goal of promoting peace and having been created in order to be an efficient and easy to learn language, not yet been adopted? The response lays again in the natural order of human interaction and the inherent evolution of self-organizing process, in this case applied to language and communication.

Naturally selected auxiliary languages and why they are optimal for societies:

“The market is not the only form of spontaneous order. Consider language. No one sat down to write the English language and then teach it to early Englishmen. It arose and changed naturally, spontaneously, in response to human needs”.
David Boaz

 “So far as we know, the extended order is probably the most complex structure in the universe, a structure in which biological organisms that are already highly complex have acquired the capacity to learn, to assimilate, parts of supra-personal traditions enabling them to adapt themselves from moment to moment into an ever changing structure possessing an order of a still higher level of complexity”.
 F.A. Hayek

A naturally selected language is a system of coordination and communication based on the spontaneous growth and adoption of structures and expression that end with the creation of our current languages. These languages have not been deliberately selected, designed nor imposed by any human mind, as Carl Menger stated: “There exists a certain similarity between natural organisms and a series of structures of social life, both in respect to their function and to their origin.” In this sense, all auxiliary languages adopted by human societies throughout history have been through spontaneous patterns: Greek, Latin and nowadays English. Hence based on the benefits and the speed by which humans spontaneously select an auxiliary language, we can understand how an imposed and arbitrarily created language such as Esperanto was born a failed project. 

The whole idea of understanding the benefits and the significance of natural spontaneous and evolutionary systems towards the growth of our society comes from a fundamental attitude of true individualism, as Professor Hayek stated, “True individualism…. is one of humility towards the process by which mankind has achieved things which have not been designed or understood by any individual and are indeed greater than a single individual mind.” This evidently can be applied towards our case in which a single individual, Dr. Zamenhof, arbitrarily created a system of language on his own which he believed and reasoned would be the best outcome and solution for coordinating people’s communication. We have to understand that the real source of any language is the outcome of unintended historical development of human interaction and evolution. 

As Carl Menger noticed, there is a subtle difference between organisms being created through reason or mechanical ways and through other social orders which are spontaneous and reason plays a lesser role. He stated:

“Natural organisms are composed of elements which serve the function of the unit in a thoroughly mechanical way. They are results of purely causal processes, of the mechanical play of natural forces. The so-called social organisms, on the contrary, simply cannot be viewed and interpreted as the product of purely mechanical forces effects. They are, rather, the result of human efforts, the efforts of thinking, feeling, and acting human beings”.

Therefore Menger fully understood the benefits of unintended orders, which are based on individual human efforts and not often on thought, reason, authority or a common social will.

Unfortunately Dr. Zamenhof and the people that believed in Esperanto’s benefits neglected that natural social organic systems are greater and more complex that any human mind can design or understand. This error of overlooking the relevance of unintended orders that created our human institutions is a very common mistake which can be seen in numerous areas throughout human history - money and the exchange market being one of the most misunderstand. However falling into this error and human reason abuse is quite a common mistake, even for the most intelligent human beings. In fact, paradoxically the more intelligent a person is, the more likely he will fall into the positivist-rationalist trap; in the pretense of their own knowledge, they consequently abuse and test the limits of their reason. This as Hayek defined embodies a naïve and uncritical idea of rationalism which is an obsolete school of thought for our complex society. Unfortunately it is still a widely applied methodology; Hayek called it “constructivist rationalism”. Under this system we believe we can create institutions such as languages based on our own knowledge and reason, when in fact as we have seen, that solution is a suboptimal alternative when empirically tested in societies.    

Dr. Zamenhof had the best of intentions and was unaware of the benefits and unlimited possibilities of an extended order lying outside any human reason. He fell prey to positive constructivism’s common fallacy based on reason and knowledge and tried to apply it in a communication system. As we have seen, Esperanto has been around for more than 120 years and it has barely been adopted and scarcely fluently used. Unless individuals started to spontaneously and naturally adopt Esperanto as a language, any attempt to impose and push its use as an International Auxiliary Language is consequently ineffective and unnatural. 

I have used the word “natural” so far as Hayek intended it, in the sense of innate or instinctive whereas “artificial” means a product of human design. The ideas of natural evolution and spontaneous orders gradually emerged in Hume and Mandeville’s works, which stated and highlighted the benefits of random formations and selective evolution. Thereafter Adam Smith made a greater methodical use of these insights and developed a more structured theory of natural evolution and spontaneous selection which slowly dislocated the Aristotelian perspective of planning through positivist human reason. Finally through Carl Menger we have a more developed theory and a profound understanding of the benefits of human interaction and the formation of institutions through spontaneous formation of orders. Money, the Rule of Law and in our case Languages are therefore the unintended consequence of individual free interaction. The resulting outcomes of spontaneously created systems such as languages are defined as systems with the minimum production cost of human efforts; they display the greatest utility and benefits when spread. Extraordinarily these self-organizing evolutionary systems are formed by individual activities and communications, moving and changing within a wide spectrum of unforeseeable directions, without anyone specifically directing them.

In conclusion, individuals engage in unplanned organization under a unifying language. Using a certain language, chosen freely by them and guided by their own individual incentives, does not aim to promote societal welfare or the social body as a whole; rather it  indirectly aims to allow free spontaneous interaction of them, unconsciously conducted to be bigger and better than the individual sums of its part. This leads to a freely spontaneous selected International Auxiliary Language. In today’s case the spontaneous interaction led to English, tomorrow it could be Chinese; we do not know the outcome that free society’s future interactions may bring, but we can definitely establish it will not be any form of artificial and imposed Esperanto.          

* Edited by Victoria Finn

Esperanto Flag:


-          Michael Polanyi, The Logic of Liberty, the Liberty Fund, Inc, 1998.
-          F.A. Hayek, The Fatal Conceit, Chicago Press, 1988.
-          Carl Menger, Problems of Economics and Sociology, University of Illinois Press, 1963.
-          David Boaz, Libertarianism, the Free Press, 1997.