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

Monday, October 1, 2012

The Tradition of Spontaneous Order

The Tradition of Spontaneous Order as a way of Understanding Social Phenomena and Social Sciences
The other view, which has slowly and gradually advanced since antiquity but for a time was almost entirely overwhelmed by the more glamorous constructivist view, was that orderliness of society which greatly increased the effectiveness of individual action was not due solely to institutions and practices which had been invented or designed for that purpose, but was largely due to a process described at first as ‘growth’ and later as ‘evolution’, a process in which practices which had first been adopted for other reasons, or even purely accidentally, were preserved because they enabled the group in which they had arisen to prevail over others.”
F.A. Hayek

The spontaneous order tradition is a part of the classical liberal tradition that emerged as a solid body of work during the Scottish Enlightenment. This branch of classical liberal ideas appeared basically with the intention to fight against normal conventions of the constructivist views and the successive abuse and expansion over the limitations of human reason. The constructivist views based on extreme rationalism were at the time (and continue to do so today) trying to expand their reach of action into very complex social areas in which human intellect and reason cannot arrive at. During the Enlightenment, the Scottish tradition saw this increasing over rationalization of social phenomena as a “misuse” and abuse of reason. They foresaw dangers of following that path, so they tried to create a body of intellectual work as a potentially fruitful response to the common rationalist view. It was thanks to this tradition and with the combined works of David Hume, Adam Smith, Carl Menger and Friedrich Hayek that nowadays we possess solid and comprehensive work helping us to increase our understanding of social orders and social sciences as well as have a more skeptical view about our intellect and the limits of human reason.

The glamorous constructivist view quoted above from Hayek’s passage is the line of thought that prevailed for centuries, and still largely does, over the “other view”, being the tradition of spontaneous order. What Hayek called the “constructivist rationalism”, expressed best through Rene Descartes’ works, is a systematic positivistic view of what humans can deliberately design through intellect and reason. While Descartes himself stayed away from utilizing his rationalist approach in the realm of social orders and moral arguments, his followers thereafter completed the rational process in those fields by pushing the old spontaneous order tradition as a way of understanding social and moral complex phenomena into oblivion.

Ever since Descartes and his rationalism, the idea of human reason evolved into what we now understand as “logical deduction from explicit premises”, or what Hayek defined as rational actions that are completely determined by “known and demonstrable truth”, very much aligned with the increasing empiricism of physical sciences in the eighteenth century. From then on it followed the inevitable conclusion of thinking that everything which man had achieved as a species in a civilization had been the direct product of his own conscious reasoning and planning through a systematic application of reason, design and scientific techniques. The rationale then follows: if there is any institution that was not designed through human intellect but yet is beneficial for society, it could just be a product of mere accident. With these positivistic views, morals, religion, laws, languages, writing, money and the market would be deliberately constructed and easily manipulated institutions. Unfortunately the belief that humans have achieved a high degree of mastering their physical and social surroundings through their own capacity of logical deduction is factually wrong and has led mankind to commit great atrocities based on reason, deduction and social engineering. This misuse of reason, applied unsuccessfully to the social sciences and its institutions, is a side-effect from the incredible success which physical sciences and the scientific method have gotten from the process of reason and induction from Descartes and his positivist methodology. Throughout centuries the inductive rationalistic methodology was mastered and so successfully applied to physical sciences for control, prediction and experimentation; this falsely led people to believe that the same methodology and principles could also be effectively applied to the social sciences to solve complex social human phenomena; thus social sciences began to import and apply the rationalistic methodologies all across the spectrum of human phenomena.

Looking back at this tradition’s evolution, we can see how far this glamorous view has come to exclude other forms of perceiving and understanding social order and changing the concept of how they arise as institutions which sustain and enlarge civilization. The “other view” that Hayek mentioned is an old tradition which has lost appeal in the last three centuries but yet is fundamentally important in preserving and understanding  social orders; this leads towards truly recognizing how social institutions arise from beyond the capacity of human design. This tradition also indirectly helps us to create a high level of skepticism and intellectual humbleness that could protect us from committing the same intellectual mistakes and the abuse of rationality that has characterized the last century. As Hayek understood it, returning to the old tradition of the spontaneous order is a return to the belief that most of our fundamental institutions of society are indispensable “for the successful pursuit of our conscious aims”. These institutions are the product of customs, habits and traditions that were neither invented nor designed and they arose spontaneously through evolution without a predefined social purpose but are yet fundamentally important to civilization’s preservation. These forms of order are created through a societal process of selection and evolution and are the tacit translation of the unintended efforts of trial and error of generations of individuals interacting with a high level of complexity.

It was not until the eighteenth century, specifically under what is now considered the Scottish Enlightenment, that thinkers such as Bernard Mandeville, David Hume and Adam Smith made a clear distinction between institutional forms. The Scots saw that there were various social institutional structures which are not included in the two previous categories defined centuries earlier by the Greeks: the Physei, meaning “by nature” and Nomo or Thesei, which Hayek roughly defined as “by deliberate decision”. It appeared to the Scottish philosophers that a third category should exist: a category compiled of a little bit of both, a special kind of institutional form which Adam Ferguson defined as “the result of human action but not of human design”. It was this category that caught most of the Scots’ attention and ended up providing incredibly valuable insights of the theory that encompasses social institutions and the social sciences.

Even before the Scottish Enlightenment they were several other minor contributions to this intellectual tradition; some Greek philosophers acknowledged the idea of spontaneous orders; in the Roman Empire, Cicero in particular, clearly understood that their legislative system was beyond what a single mind could have possible design; sixteenth century Spanish Jesuits addressed social problems in this fashion and worked with the idea of the “natural price” which, according to Luis Molina: “…results from the thing itself without regard to laws and decrees, but is dependent on many circumstances which alter it, such as the sentiments of man, their estimation of different uses, often even in consequences of whims and pleasures. But through time even if different intellectuals grasped the idea of spontaneous order, no one was able to do so quite like those during the Scottish Enlightenment. Using spontaneous order of social institutions as the bedrock of analysis, they were able to create an entire intellectual and philosophical inquiry of the complete society. In this essay I will try to show the contribution of three of the most important thinkers who contributed to this tradition’s evolution: Adam Smith, Carl Menger and Friedrich Hayek.

The Scottish Tradition and the Broader Concept of Order:

There seems to be only one solution to the problem: that the elite of mankind acquire a consciousness of the limitation of the human mind, at once simple and profound enough, humble and sublime enough, so that Western civilization will resign itself to its inevitable disadvantages.”
G. Ferrero

The idea of organization in this sense is a natural consequence of the discovery of the powers of the human intellect and specially of the general attitude of constructivist rationalism. It appeared for a long time as the only procedure by which an order serviceable to human purposes could be deliberately achieved, and it is indeed the intelligent and powerful method of achieving certain known and foreseeable results. But as its development is one of the greatest achievements of constructivism, so is the disregard of its limits one of its most serious defects. What it overlooks is that the growth of that mind which can direct an organization, and of the more comprehensive order within which organization function, rests on adaptations to the unforeseeable, and that the only possibility of transcending this capacity of individual minds is to rely on those super-personal ‘self-organizing’ forces which create spontaneous orders.”
F.A. Hayek

The liberal tradition that emerged from the Scottish Enlightenment differed substantially from the English and French ones. One of the key elements of distinction was that the Scottish tradition carried the old insights of the spontaneous orders then applied them in the social orders previously mentioned. They did not limit themselves to simply carrying the tradition but rather they were even more radical and used the spontaneous orders insights as the fundamental principle in their philosophical analysis of society. They were the first under this line of thought to actually construct a social, political and economic framework that changed the concept of a social order and gave birth to a new form of society: the commercial and merchant society of eighteenth century Britain. This gave special attention to commercial activities, individual exchanges and international trade as the engine of a coordination system promoting wealth. As professor Horwitz noticed, the Scottish Enlightenment can be seen as a dual research project: on one side it was a movement that sought to unveil and understand humanity and its social sciences such as history, moral philosophy and linguistics; on the other side it can also be seen as a project to advance political philosophy and political economy, although the latter could be seen as a product of the Scots larger inquiry into the realm of political philosophy.

Under this large project of social and political inquiry the Scottish tradition sought to deeply understand the relationships among an extensive network of unknown individuals and how these individuals related within a society with spontaneously arising social institutions. The Scottish tradition mainly analyzed the following social institutions: the legal system, moral system, market process and governmental institutions. Their main objective was not only to comprehend how these institutions interacted amongst themselves but also to define a clear framework and limits of their relationships to enhance and sustain social stability, coordination and prosperity.

The core distinction between the Scottish tradition and the English and French Enlightenments was their conception towards understanding social phenomena as complex evolutionary systems formed through human action- not human design. In order to more clearly understand these forms of complex institutions, we must start defining what we understand as order. Hayek in “Law, Legislation and Liberty” defined order as “a state of affairs in which a multiplicity of elements of various kinds are so related to each other that we may learn from our acquaintance 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.From this idea, Hayek helped us to realize what spontaneous order is within society: “It is clear that every society must in this sense possess an order and that such an order will often exist without having been deliberately created. Therefore he is trying to create a wider conception of order that removes itself from the old classic “authoritarian” orthodox conception of what it is supposed to mean. The broader concept of order helps us to understand that if we want to achieve some sort of array in society, we must not rely on the old conception of command and obedience, which presupposes a hierarchical social structure. Rather we can rely on the idea of undesigned order, helping to create a less specific but broader goal of creating probable expectations about others’ behavior and actions. In Hayek’s words, “We depend for the effective pursuit of our aims clearly on the correspondence of the expectations concerning the actions of others on which our plans are based with they will really do. This matching of the intentions and expectations that determine the actions of different individuals is the form in which order manifests itself in social life.Then according to this tradition, societal order is not concerned in a predetermined defined relationship of means and ends but rather on the convergence of the largest quantities of social intentions and expectations that could help coordinate various and complex human actions. We can see that the scope of this unplanned societal array is less specific in what it would like to achieve but the extensive level of harmonization is appropriate for promoting a complex society.

As we have already seen, the classic conception of order is based on a form that presupposes an “authoritarian view”, deriving from the glamorous constructivist view first defined by Descartes. Under this conception, order in society can only be achieved through rational endogenous forces that shape the complex societal system at will. This belief does not conceive the possibility of any type of evolutionary endogenous form of order. Contrasting notoriously with the spontaneous order tradition- which conceives societal order as the aggregate product of human action but not of any specific exogenous human design- the constructivist view sees societal order as planned. They see it as a design imposed through a centralized “master plan” presuming that society can be guided toward a common defined path of prosperity with the correct “enlightened” people who could guide such a novel plan.

As Professor Barry shows, we must clearly establish the difference between this view of prosperity, known as the utilitarian view of prosperity, and the Scots’ idea of it. Under the first, public wealth and the common good can be achieved through rationality and planning in which our goal can be aggregated and defined. According to this view we can reach those goals only through the systematic use of planning and through the rational positivist application of physical science principles. The Scottish tradition sees prosperity quite differently; they perceive it as the unintended result of preserving, improving and not interfering with the holistic framework of the social institutions which assist human coordination. Therefore implicitly the Scots do not believe in a common social goal or a shared defined path that everyone must follow. They believe that everyone should follow their own frame of means and ends, based on collaboration and respect transmitted to us through the spontaneous orders of morality, laws and markets. However, Professor Barry understands that spontaneous orders go through an evolutionary process which may sometimes very well lead to dead ends. As a way to move away from those unwanted spontaneous forms and in order to preserve the beneficial ones, we must use the Humean idea of a posteriori rationality as a mental tool to discover which forms of orders are truly beneficial for our specific civilization and which are worth preserving.

We have clearly understood that there are orders not made explicitly by man in the positivistic rational sense and although we know they “exist”, there is clearly a problem in perceiving them. These forms of orders are not physically or tangibly there, thus not rooted within our external senses, so we have to perceive them a posteriori through our intellect and reason in order to grasp them. We cannot really see these forms of orders since they are available to us only through processes of mental reconstruction. As Hayek identified, we must describe these spontaneous orders as a form of abstract (not concrete) order. In regards to the abstractness, the Scottish tradition did in fact recognize the lack of visibility as a characteristic of these institutional forms coordinating society, more than 250 years before Hayek’s main distinction. The mere fact that Adam Smith called the market system of coordination and guidance as by an “invisible hand” clearly shows that the Scots had understood that there were forms of orders in society that cannot be physically perceived and also that those orders can only be “seen” or understood through mental abstractions.

The tradition of spontaneous orders expanded by the endeavor of the Scottish Enlightenment encompassed human traditions, customs, rules of conduct and social institutions such as the law, market, languages and money. According to the Scots all of these social human institutions were endogenously developed through individual human interaction and were clearly not the forms of orders that were deliberately created from a centralized authority. Throughout the history of civilizations, humans have understood and “discovered” these forms of orders and institutions when in reality they had already been used long before their acknowledgment and were tacitly incorporated into human society. Those orders that are beneficial for humans were adopted, preserved and carried through history only after we had acknowledged their relevance and social potentiality.

The tradition of the spontaneous order within the Scottish tradition was extremely correlated with the anti-rationalist tradition, mostly attributed to David Hume. He understood that human reason cannot be responsible for establishing a priori the moral and legal norms that are useful for the entire society. It is important to state however that Hume was not irrational; he simply believed that the use of reason applied to the spontaneous orders of society and in the moral sphere must be an a posteriori exercise for human rationality. This does not imply that we as human beings must adopt and take every set of rules that arise spontaneously as given, because that would in fact be a form of irrationality. But as thinking animals, we can use our reason in order to realize mental abstractions of institutions which are beneficial in society and are worth adopting and preserving. Also as Professor Barry established, there is an implicit tradition of the spontaneous order of the idea of an “ethical payoff”, meaning that mankind will enjoy benefits and prosperity as long as we cultivate and preserve the spontaneous and natural mechanisms of coordination; in addition, it presupposes a high level of skepticism towards the possibilities of intervention and institutional improvements.

Under the Scottish tradition’s conception of society, the prosperity or what Smith called “the wealth of a nation” comes as Professor Barry defined as a “special kind of accident”, meaning that it cannot be the specific end of a society in itself. Wealth and prosperity are sub-products and indirect consequences of the fact that we protect and preserve properly adapted social institutions which spontaneously arose. In other words, wealth is just a side-effect of preserving beneficial spontaneous orders. Using the Scottish tradition, the recipe in order to keep the prosperity of society is therefore not to seek prosperity itself as an end (since that would involve hierarchically coordinating society through a plan) but rather to focus on the core source of fundamental mechanisms enabling non-coercive human coordination and which help to converge the largest amount of predictable expectations in order to achieve individual ends.

As we mentioned earlier, the tradition was best developed by three intellectuals, increasing its insights and enriching it in order to keep it alive. Their contributions also prepared the tradition to be able to survive the avalanche of abuse of reason and positivism that the glamorous constructivist view has exercised in our modern society in almost every sphere of social sciences. Their three works encompass nearly the last three centuries of this tradition, starting with Adam Smith (1723-1790) in the eighteenth century, followed by Carl Menger (1840-1921) in the nineteenth century and finally with Friedrich Hayek (1899-1992) in the twentieth. The line of thought that these intellectuals formed was focused mainly on three larger categories. The first one being evolution: origins and formations of social institutions which particularly help humans to facilitate coordination and interaction through the distribution and dissemination of communication and heterogeneous knowledge. The second point of interest was the delimitation and understanding the limits of human reason and human design. They were particularly concerned with the abuse of reason and through their works they advocated this concern by showing that social phenomena and social sciences were too complex to be coordinated and modeled at will, in the sense intended by the rational constructivist project. Finally the last concern of this line of research had to do with the understanding of processes which could enhance or interfere with the propitious and natural development of social institutions, in particular government interventions’ reach of action and limitations in these forms of social orders.

Finally the core epistemological problem that these three thinkers were concerned with were to understand and clarify that there are indeed severe and fundamental limitations to what can be deliberately accomplished through human reason. Moreover it is exactly due to human limitations concerning a lack of specific knowledge and high complexity and indetermination that we must rely on and use alternative forms of coordination in order to solve the most fundamental problems of complex social coordination. Therefore it is necessary to rely on forms of social institutions outside of our rational understanding and control to be able to seek efficiency, coordination, social order and prosperity. With the use of spontaneous orders and with the acknowledgement of our rational limitations, we can understand social phenomena that possess the necessary intellectual humbleness that helps us overcome our own limitations and enhance social greatness.

In next week’s section we will separately see the main contributions and ideas of the most fundamental intellectuals of this tradition.