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Societies for the History of Economics

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Subject:
From:
Doug Mackenzie <[log in to unmask]>
Reply To:
Societies for the History of Economics <[log in to unmask]>
Date:
Tue, 6 Oct 2009 14:35:55 -0400
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Mohammed Gani wrote:
 > When people deliberately choose to follow traffic rules,
 > there is order, but how is it spontaneous?


Your example assumes the existence of a rule concerning traffic 
lights. Spontaneous order concerns the emergence of rules through 
experience. The classic example of a spontaneous order is the 
emergence of money out of barter trade. People initially carry out 
barter trade, but finding double coincidence of wants is troublesome. 
So barter usually involves multiple indirect trades, and this wastes 
time. Through experience one commodity emerges as the one that is 
most able to carry out exchange through a single indirect trade. The 
people who start using a particular commodity, (gold, seashells, 
cigarettes...), to carry out single indirect trade transactions do 
not intend to form a social institution, they are just minimizing 
their own costs. But a social institution emerges none the less. 
Traffic rules might emerge the same way. See "The Economic 
Organization of a POW Camp by R.A. Radford.


Doug Mackenzie

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