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From:
[log in to unmask] (Peter J Boettke)
Date:
Thu Sep 28 08:40:48 2006
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There are many issues involved in these discussions about "intended" and "unintended"
orders that can send the conversation in a variety of directions.
  
I don't want to contribute to the ideological issue, but just the analytical issue.  
  
Diana is asking a straightforward question --- what examples have different theorists used
over the years to study the complex division of labor that exemplifes a modern economy?
Adam Smith used the woolen coat, Leonard Read and Milton Friedman used the pencil --- Joe
Stiglitz in his Principles book talks about an automobile and modern computer.  The point
is very simple --- no one mind or group of minds is "smart" enough to make these common
products, but instead we rely on the social cooperation through the division of labor as
guided by the incentives of property, prices and profit/loss.
  
The question was what other examples have been used so that Diana can catalogue them.  
  
Stiglitz has in lectures (in the early 1990s) used the tee shirt.  
  
There is also a book on the global division of labor that is utilized in producing a tee
shirt that was published by a business professor at Georgetown (I forget her name).
  
Fred raised the common law --- that of course was one of Hayek's favorite example.  He
also used morals and language.
  
Paul Seabright's work, The Company of Strangers (Princeton, 2003) also addresses how the
spontaneous emergence of cooperation that  characterizes the modern world has both a
bright side (advanced economy) and dark side (ability to form military coalitions).  It is
this puzzle of cooperation in anonymity --- a puzzle that attracted the attention of
sociological theorists such as Simmel ("How is Society Possible?") and Schutz. And as Mat
pointed out, Lowe.
  
On the issue that has touched the ideological nerve of many, as has been stressed by Steve
Horwitz and Greg Ransom, Hayek in the debate over socialist planning never asserted that
planning was at issue, it was instead a question of who and whom was going to do the
planning.  Polanyi (who I believe is the source of the term spontaneous order for Hayek,
not Mill) spoke of the "span of central control".  And lets not forget that Menger was
explicit in his Investigations that we must study both intendend and unintended order.
Though admittedly, the Austrians have tended to focus their analytical attention on
unintended orders.  This is because it is the unintended orders (or disorders) that
present us with an intellectual puzzle --- neither explanations of social order as the
result of a good King, or a bad Prince do much to satisfy our curiosity.  Instead, the
counter-intuitive puzzle of how private vices can be public virtues, or how private virtue
can result in public vices has captured the mind of economists and social philosophers
from Mandeville to today. Still there is a significant literature inspired by Mises and
Hayek that addresses firms and organizations --- see the work of Richard Langlois, Nicolai
Foss, Peter Klein and Frederic Sautet (and the blog -- Markets and Organizations).
  
Anyway, I think to help Diana the real question is what examples other than Smith's woolen
coat, Friedman's pencil, Stiglitz's automobile, have been used to explain the complex
division of labor that is ordered through the market in the history of our discipline.
John Stossel in ABC News illustrated the principle in his show "Greed" with steak.
  
Peter J. Boettke  
  

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