Doug Mackenzie wrote:

>The basic idea of spontaneous order is quite old, ... and it is a
>matter of not foreseeing the full consequences of actions.


I wonder: is a stock market bubble (the result of) spontaneous order?
People quite rationally buy in the expectation of a price increase,
and price actually increases, confirming that they have been
(individually) rational. But at some point the bubble bursts, for no
rational reason whatsoever: the individually rational actions prove to
be collectively insane, only few go out unscathed, all the others get
burned.

This surely has to do with being unable to foresee the consequences of
collective action taken by a number of individuals acting
independently of each other; but is it a kind of order?

In June 1720, the banker Thomas Martin communicated to one of the
partners of his house that he had subscribed £500 to the South Sea
Stock, reasoning that although one who witnessed the dealings would
scarcely have the courage of venturing, “When the rest of the world is
mad we must imitate them in some measure” (cited in M. Phillips,“The
South Sea bubble”, Journal of the Institute of Bankers 33:3, March
1912, pp. 131­61)

Daniele Besomi