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From:
[log in to unmask] (Doug Mackenzie)
Date:
Wed Sep 27 16:09:08 2006
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> I do  
> not see how the ingredients or raw materials or   
> intermediate parts of bread or pencils or   
> computers or anything "made" go spontaneously   
> together, how any process or order of production   
> can be spontaneous--changeable, yes, of course,   
> but spontaneous, no. I do not see how just the   
> fact that "local knowledge" may go into the   
> process would imply "spontaneous order" in it.   
> Try building a 747 spontaneously, or making a   
> pencil, or composing an e-mail. I can see a   
> meaning for "spontaneous" in markets." But in  
> production?  
  
the spontaneous order is in how individuals who pursue  
their selfish interests end up cooperating. This  
cooperation of many takes place through price  
adjustments. As prices move towards equilibrium the  
plans of many to sell are reconciled with the plans of  
many others to buy. Equilibration in markets results  
in mutual plan adjustment. Near equilibrium prices  
constitute a spontaneous order of nearly consistent  
plans. Hayek sorted this out in his 1937 paper, online  
here-   
  
http://www.econlib.org/library/NPDBooks/Thirlby/bcthLS3.html  
  
Hayek was thinking in game theoretic terms, only  
without complete equilibrium, but with continuous  
evolution and change. Brilliant stuff...  
  
So it is plans, not planes, that come together  
spontaneously. The 747 example is actually quite  
important because the coordination of plans in  
producing such a complex device, using so many unique  
and varied factors of production- all with so many  
alternative uses, requires decentalized plan  
adjustment through the price system. I wrote a short  
bit on this sort of thing recently-  
http://www.mises.org/story/2289   
  
Doug MacKenzie  
  

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