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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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