Reading: Lesson 2 – When Order Emerges

Description:

One of the most magical phenomena we find in nature is the emergent beauty of spontaneous order. This concept applies to markets as well. An understanding and appreciation of the spontaneous orders that surround us is essential for understanding markets, customs, culture, language, music, and society itself.”

In this lesson students will watch and discuss a video explaining the concept of spontaneous order - “Can Order Be Unplanned?” with Professor Tom W. Bell. Next students will read an article by Sandy Ikeda and complete an activity reinforcing the “magic” of spontaneous order. Then students will end the lesson with a wonderful and inspiring video called “The Beauty of Emergent Order” with John Papola.

 

Time Required:

45 min

 

Required Materials:

Internet connection, writing instrument, set of index cards, enough candy to have at least one piece for each student, sticky tape

 

Prerequisites:

6.1 – The Marvel of the Market

6.2.A – Watch and discuss the following video using the questions below to guide your discussion [10 min]:

Video:(Learn Liberty, 3:26 min)

“Can Order Be Unplanned? Some people assume that for there to be order in human society, there needs to be some central planning or direction. But as Chapman University Professor Tom W. Bell explains, much of the order we observe in our lives is not the product of human design; it's a product of spontaneous order. Drawing from the work of Adam Smith and Friedrich Hayek, Bell describes how an understanding of spontaneous orders helps us to understand markets, language, social norms, customs, and society itself.”

Discussion Questions: Can Order Be Unplanned?

1.  What is spontaneous order? Who is in charge of the market when spontaneous order exists?

1. Spontaneous order occurs when a seemingly, but unplanned logical order emerges from individuals following their own plans and acting for their own self-interest. Professor Bell uses the example of the beach to show how order emerges that was not the design or rational plan of anyone one person. There is no mastermind. Order emerges spontaneously as individuals follow their own, individual plans.
2. Professor Tom W Bell explains “So who’s in charge of markets, of language, and of crowds at the beach? Everyone in general but no one in particular.”
3. Professor Tom W Bell uses the example of the beach to explain spontaneous order – “Have you ever been to the beach and wondered who’s in charge here? A keen eye will certainly discern intriguing patterns of people in certain places. In one area of the beach for instance, you might spot a bevy of preening young ladies. Not far away you will likely find young men, showing off the same. Elsewhere, you might see a cluster of families watching their children play together at the edge of the surf. Pale tourists clog some stretches of sand while others seem to attract only tanned locals. These mini neighborhoods of like-minded beach go-ers ebb and flow like the tide itself. Nobody plans them, yet they do not arise purely by chance. They result from human action not from human design.”

 

2.  What are some of the benefits of spontaneous orders that emerge from individuals pursuing their own self-interests?

1. Adam Smith explains, “By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.” This means that if everyone is acting in their own self-interest, they tend to promote the interests of society in general.
2. Friedrich Hayek explains, “Although there was a time when men believed that even language and morals had been ‘invented’ by some genius of the past, everybody recognizes now that they are the outcome of a process of evolution whose results nobody foresaw or designed.”  He explains that one of the benefits of spontaneous order is the new innovations and changes that come with it.
3. If the market is free of central planning and spontaneous order can occur, people will act in the interests of themselves, which is the most effective way of promoting the interests of a society and allowing people to have the freedom to make their own choices.

3.  What did Friedrich Hayek think about the idea that society must be deliberately planned to achieve and maintain order?

1. Friedrich Hayek explains, “If indignant reformers still complain of the chaos of economic affairs insinuating an absence of order, this is partly because they cannot conceive of an order which is not deliberately made.” 
2. Hayek calls the idea that modern society must be deliberately planned as the fatal conceit. He explains that if we don’t understand the concept of spontaneous orders, then we cannot understand markets, customary norms, or society itself.

 

6.2.B - Read the following article about spontaneous order and complete the activity that follows [15 min]:

Article: Cavemen, Money, and Spontaneous Orders by Sandy Ikeda (The Freeman, FEE.org)

Discussion Questions:  Cavemen, Money, and Spontaneous Orders

1.  Money isn’t a product of nature, nor was it invented by man, so how did it come into being?

1. “The thing to notice about this story is that at no point did anyone invent money.  Rather, there was a long, step-by-step process that involved human action–trading goods for something that gradually (and unintentionally) became more and more marketable because others were using them that way.  And from that process, over time, money emerged.”
2. “People who tried to barter their labor for things they wanted to consume soon discovered that it would be easier to trade their labor for something that, even if they didn’t want it for themselves, they knew others would want in trade.  That’s how cows, sea shells, wampum, and eventually precious metals came to be used as media of exchange.” 
   1. “When a particular medium of exchange becomes so popular that you’re sure that anyone would accept it in exchange, it becomes money–in technical terms, a good primarily valued for direct use that evolves into a good primarily valued for its indirect use as a medium of exchange.”
   2. Carl Menger, founder of the Austrian school of economics, was the first to distinguish between a good’s use value and its exchange value. (Principles of Economics).
   3. “The iPad, like money, is the result of a long evolutionary process that began, well, with the caveman.  Some say Steve Jobs invented the iPad–and in a real sense he did–but he could never have actually produced it on his own, without the support of all that historical infrastructure, developed over a long process of exchange.”
      1. Historically, social science–economics in particular–really was born with the realization that in addition to the natural and the manmade there is a third category. 
      2. We refer to it today as “spontaneous order,” which is, to use a phrase that F.A. Hayek culled from Adam Ferguson (a contemporary of Adam Smith):  “the result of human action but not of human design.”

2.  What is one similarity shared between money, language, and other complex social phenomena?

1. It would not be possible to design and implement these complex social phenomena through deliberate, rational planning.
2. Complex social phenomena are the result of spontaneous order that emerges from individuals following their own plans and their own self-interest.
3. It shows the limits of human reason in shaping and directing social order.

 

6.2.C – Complete the following activity to witness the magic of how spontaneous order emerges [15 min].

Activity: Magic of Market Coordination  [requires a minimum of 15 students to be effective]

Required Materials:

• Set of index cards
• Writing instrument
• Enough candy to have at least one piece for each student
• Sticky tape

Directions:

1. Ask for three volunteers to be interviewers and set them up at a desk that are located side by side on one end of the  classroom.
2. Without telling them, give each of them a different set of instructions – ask interviewer A to ask each student their name, graduation year and favorite subject. Ask interviewer B to ask those three questions plus the students’ food and favorite TV show. Ask interviewer C to ask those three questions and the “phrase that best describes you”. Give each interviewer a stack of index cards to write the answers on. Explain that the interviewer must ask each student the questions they were given and write the answers down on an index card.
3. Ask the class to play a “getting to know you” game that involves answering a few questions about themselves in return for candy.
4. Tell the class that they may enter any line they wish and that they are not stuck to any line once they have entered it – they can move to different lines. You may want to announce this again throughout the game.
5. Tell the students you are making a prediction about the outcome of the game and are going to write it on one of the index cards. Write “All lines will clear at the same time” on the back of a card and tape it on the board.
6. As the game begins students will usually move to the line closest to them, but as they see the lines moving at different speeds they will start to move lines. More students will start counting how many people are in each line and moving around. As the experiment comes to an end students will move around so that all lines clear at approximately the same time.
7. Reveal to the students what you wrote on the index card stuck on the board
8. Use the discussion questions below as a guide for your class discussion.

Discussion Questions:

1.  What is one similarity shared between money, language, and other complex social phenomena?

 

2.  Why did all lines finish at the same time?

 

Teacher Tip: At this point tell the students that each line had a different set of questions and it actually took longer to go through some lines than others.

3.  How many people switched lines? Why?

4.  What was the incentive to switch lines?

 

5.  What was in place that ensured coordination among the class?

Teacher Tip: Explain that the coordination in the classroom was due to human action but not human design and that this represents how a market works.

All the class needed to coordinate was an incentive (candy and being able to sit down quickly) and knowing the rules (that they were allowed to change lines).

 

6. What would happen if one of the lines had cash prizes instead of small pieces of candy?

6.2.D – Students will watch a video and answer the questions that follow about the beauty of emergent order [5 min]:

Video:[Voice and Exit, 3:24 min]

“Harmony emerges when you “fly” with your instincts! John Papola discusses the unplanned order of nature, economics and life. Papola believes that the best way to communicate the concept is to find the beauty in it. With attempted control, history has shown time and again that it creates chaos, collision, and disorder (“unintended consequences”).”

Discussion Questions:  The Beauty of Emergent Order (excerpt)

1.  Explain how the starlings are an example of spontaneous order

1. John Papola explains “These are starlings…and when you look at them what you see is the beauty of emerging order. They’re dancing. But there’s no one to lead their dance there’s no choreographer. They’re producing art and yet there’s no artist, no auteur to put the pen to page. There is no leader here and when you look closely as you do here, it looks like chaos, anarchy, scary. Just like our lives can be scary. We see the chaos at the ground level and so it’s hard for us to pull back and see this beauty of the order that emerges in society.”
2. The starlings are an example of spontaneous order because there is no one starling in control, they are all in control. As the speaker explains there is no leader, no control, they are all acting in their own self-interest, which best promotes the self-interest of the group. He explains that it may look like chaos, but because they are all acting in self-interest they are careful not to bump into one another.

 

2.  Can you think of any other examples of spontaneous order?

1. One good example of spontaneous order is people driving through traffic. With a set of rules and without a central planner, millions of people within cities are able to cooperate, spontaneously to drive themselves to a destination safely. This is an example of spontaneous order because people were able to make their own decision about where they wanted to go without a leader or central planner telling them exactly what to do.
2. World languages are another example of how communication has evolved over time and developed into thousands of languages that are used today- all without a central “language” planner.

Lesson Recap

• Spontaneous order (emergent order) is a logical order that emerges from individual human action but not deliberate human planning or design.

 

• Money, language, traffic patterns, culture, and music are all powerful examples of emergent orders.

 

• Hayek explains that one of the benefits of spontaneous order is the new innovations and changes that come with it. These innovations would not be possible to deliberately plan.

 

• It’s a common misconception that for order to exist in human society there needs to be a central planner or mastermind. In fact, history shows that attempts to centrally plan society results in chaos and disorder.

 

Additional Resources:

Article: Spontaneous Order by John Stossel (FEE.org)

“And the absence of those things will somehow lead to chaos. But what you often get when you try to enforce mandates and restrictions from a distant bureaucracy is planned chaos, as the great economist Ludwig on Mises once said. We have to rely more upon what emerges spontaneously because it represents individuals’ personal tastes and choices, not those of distant politicians.”

 

Article: In Defense of Spontaneous Order (The Economist)

"What it means to say that an order is spontaneous is simply to say its stable macro-level patterns—those things that make a complex system a system, an instance of order rather than disorder or randomness—do not come about through design, planning or imposition, but arise instead from the interactions of micro-level elements operating according to certain basic principles or rules."