Spontaneous order

From Academic Kids

Spontaneous order is a term that describes the spontaneous emergence of order out of a seemingly chaotic context, as the result of a (temporary or permanent) balance of forces, or some sort of natural selection process.

Spontaneous order lowers the entropy of the system in which it arises; this means that a comparatively higher increase in entropy must occur elsewhere. For example, the evolution of life on Earth may be seen as an example of spontaneous order. This evolution is driven by energy from the Sun. Thus, while the entropy of Earth's biosphere decreases, the entropy of the Sun increases.

Spontaneous order has been offered as an explanation for numerous phenomena, such as the development of human language and the aforementioned evolution of life on Earth. However, many of these claims are highly controversial. For example, creationists argue that life on Earth could not have arisen spontaneously, and must have been designed by a higher consciousness. There are wheels within wheels in that controversy: some scientists, such as Fred Hoyle, accept spontaneous order as an explanation for the proliferation of species, but don't see it as plausible as an explanation for the original emergence of life. Others, such as Francis Crick, don't believe that life could have arisen spontaneously on earth, but conclude that it may have arisen spontaneously on a more hospitable planet, and been transported to earth.

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Spontaneous order and political issues

As noted above, there are many controversial claims regarding spontaneous order. Some of these are in the fields of politics and economics, such as those that concern markets, anarchy, and financial transparency.

Markets

Many advocates of laissez-faire economics, such as Friedrich von Hayek, have argued that markets function through spontaneous order. They further claim that this spontaneous order is superior to any order that can be designed by the human mind, due to the number and complexity of the factors involved. In other words, their argument is that the forces of supply and demand, the aggregated results of millions of individual decisions, are far too complex for any planning process to master, and that an apparently chaotic unregulated economy actually manages itself better than any human manager could.

In response, advocates of planned economics certainly agree that no single human being can posses the knowledge and skill to manage an entire economy, but they point out that economic planning is not done by a single person - or any small group, for that matter. An economic plan is the end result of a long process that involves the input of millions of ordinary people, both producers and consumers. This data is then processed by the planners, who form a network with the same degree of complexity as any market system, and, advocates argue, with the added benefit of self-awareness. Thus, the key advantage of a planned economy - according to its supporters - is that it is directed by human beings, rather than merely being constituted by human beings and their decentralized decisions, left undirected.

Keynesian economics, on the other hand, seeks a balance between the two previously mentioned tendencies. According to this school of thought, limited conscious intervention in the economy can improve upon the spontaneous order of the market by mitigating the negative externalities of the business cycle. They aim to achieve this limited intervention by, in a sense, having the state play the role of one more "self-interested" participant, spending money on things that will be categorized as public goods.

As can be seen, the crux of this debate over spontaneous order in the economy is whether or not human beings (either as individuals or as groups) have the intellectual capacity to make improvements in the market system, or to replace it altogether with something better. All participants agree that there is a good deal of planning within a market, or indeed within a laissez-faire system, (no skyscraper has yet been built without blueprints) but disagree over meta-planning of the sort that some believe should supplant such a system.

Anarchy

Few of the institutions of modern society have actually risen spontaneously from chaos. Most are the results of various historical factors, and evolved from previously existing institutions. Thus, it is not at all clear which ones (if any) can be deemed the results of spontaneous order. Anarchists argue that both the state and the market system (discussed in the previous section) are in fact artificial creations of the ruling elite, and that true spontaneous order would arise if both of them were eliminated. In the anarchist view, such spontaneous order would involve the voluntary cooperation of individuals.

Critics of anarchism essentially argue that the chaos created by the abolition of the state would not give rise to any spontaneous order, and/or that the only spontaneous order which could arise from this situation would lead right back to a system of government.

Transparency

The bubble in dotcom and telecom stock prices in the late 1990s, which led to a flurry of corporate scandals in the United States in 2001-2003, led many observers to stress the importance of "transparency" as a condition of the efficient development of spontaneous order in the financial world. The idea is that a corporation can't be a black box into which investors pour money in the hope of returns -- they have to be able to see through the box, into the books and records of their company.

Advocates of broad application for the concept of spontaneous order have argued that the aforementioned corporate scandals could have been avoided through the alleged self-correcting tendencies of the private sector. This argument is centered on the actions of a private sector agency, the Financial Accounting Standards Board, who warned against certain practices that were distorting balance sheets and enabling a stock price bubble. As early as 1993, the FASB issued a rule that would have required corporations to count the value of employee stock options on their books as an expense a rule that might by itself have done a good deal to moderate the still-then-forming bubble, according to its advocates. However, when the U.S. Congress held hearings and called the more conscientious accountants to the carpet, the FASB backed down from its initiative.

According to the advocates of spontaneous order, the FASB initiative could have been a successful example of spontaneous order in practice, leading to self-regulation in the private sector. They criticize the actions of Congress for ensuring an unregulated period of easy money in some industries, while also ensuring an eventual bursting of the bubble and consequent scandal.

See also

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