Monday, October 02, 2006

Spontaneous order in economics

I've been thinking lately about the organization, structure and evolution of economic systems, so I was excited to see the excellent conversation that came to life on the HES (History of Economics Societies) mailing list. Diana Weinert, a PhD student, has put forth an invitation for examples of "vast spontaneous order." She cites Leonard Read's essay I, Pencil, and Adam Smith's example of a woolen coat.

Spontaneous order is an engaging subject, but how can one tackle it when the definition of dis-organization is so flexible? Further, why do we care to make the distinction between spontaneous order and centralization?
Humberto Barreto, in his response to Weinert, does an excellent job articulating why decentralized systems are of interest to us. He also points out that patterns shouldn't be confused with centralization.

Here's part of his reply:

I think we do have a predisposition to be more impressed by decentralized systems than hierarchical ones. A marching band that spells out the school's name is not that interesting since we know the individuals have practiced and practiced under the direct control of the band director. A flock of geese flying in a V is much more interesting than the marching band because there's no head goose. The spontaneous order, the pattern that is the V, is, as Smith said, "an end which was no part of his intention." You have to admit that figuring out why there is a pattern without top-down control is a mighty appealing question. Plus, add to that the fact that many people will deny that a decentralized system could work at all, while others will confuse any decentralized system as automatically generating a pattern and you've got grist for the mill for pretty much 'til the end of time.

Another example, which Michael Perelman posits, is an orchestra that plays without a conductor. I won't quote his amusing comment on this blog, but it's worth reading.
Perhaps it's trivial of me, but I can't help but wonder if Weinert could add clarity to her project if she focussed on nature, including human nature. Nature, I would argue, is an aggregation of spontaneous order. Through this aggregation, organized systems are formed. In an attempt to make my reasoning clearer, here's an example using human nature:
A few years ago I heard a sociologist share some interesting insights about the psychology of a Japanese individual versus that of an American. Not only do I forget her name, but I forget the exact details of the study. Ironically enough, her research was on the subject of memories. Anyway, the vast sample of Japanese individuals who participated in her research over a period of years appeared to have lost their childhood memories at an earlier age than the Americans in her study. American teens and adults could recall events which happened to them at an earlier age than the Japanese. The reason, speculated the sociologist, could be that Japanese adults were brought up less self-absorbed and less introspective.
What is the cause and what is the effect? Are the Japanese by nature different than Americans? If so, has human nature been responsible for the differences in the heuristic methods between each country? I might do well to put an end to my uneducated speculating here and instead invite the opinion of one of the most engaging profs I've ever had: a professor of environmental philosophy.

Anyway, this is an interesting area. I truly hope Weinhert keeps HES informed with the results of her project!


BSF said...

Or do the Japanese just have really boring childhoods?

true dough said...

I'll admit, the conclusion of the study is But the point remains! Surely human nature must affect the organization and structure of anthropogenic systems. In retrospect, I could have chosen a less controversial example!