Sumitra Shah wrote:
 >  Order is
 > definitely not guaranteed as we know from all the examples
 > of traffic jams, bubbles and collapses folks have pointed
 > out.


The meaning of "order" is in contrast to "chaos."
In chaos, movement and outcomes are not predictable.
In an order, one can with substantial probability predict motion and 
outcomes. With predictability comes coordination of plans.

Daniel Klein in various papers has provided the example of a
skating rink, in which there is a spontaneous order, each
skater directing himself, and with few collisions.
In contrast, a performance is a planned order.

The outcomes of a spontaneous order are not necessarily pleasant.
There can be a traffic jam if many individuals happen to want to go 
someplace at the same time.  But this is not chaos, as one can
predict that the other cars will not deliberately crash into other
cars, and that they will not abandon their cars, as would happen
in chaos, where anything goes.

When highways are privately owned, the owner has an incentive to 
charge tolls at least high enough to prevent congestion, and a government
seeking sound policy would do likewise.  Hence periodic jams such
as during rush hour are the result of governmental failure to
make users pay the costs of the negative externalities.
A pure free market would not experience periodic traffic jams.

Fred Foldvary