Spontaneous Order

To use:

"interoperable interface protocols that enable interactively growing systems to support independent transactions efficiently and reliably."

in the context of the essence of market behavior is unbelievably pedantic and pompous. It completely obscures the simple process of a number of people with a variety of products to sell and a variety of people who want to obtain the products reaching agreements. The object of everyone, to their mutual benefit (it turns out) is to buy the best product at the lowest price and and to sell their products at the highest price. In order to do this buyers scout around and apprise themselves the prices of all the products for sale and the sellers check out all the other sellers so that they may price their wares at a competitive level.

You can talk about 'flow of information' and other higher levels of abstraction but all this does is obscure the actual, simple process. Nobody making those transactions thinks in those terms. "Interoperable interface protocols" is about five levels of abstraction above 'flow of information.'

The term, 'bafflegab' comes to mind.

William:

"With a nod to Sam, I might say we have found "farmers selling their produce in the village square with interoperable interface protocols that enable interactively growing systems to support independent transactions efficiently and reliably."

I have not said that the above was not true; I said that it was not necessary to have protocols.

Sam

(Edited by Sam Erica on 9/07, 9:14pm)

Post 21

Wednesday, September 7, 2005 - 11:09pm

Sam,

I claim that the rules of social interaction - the protocols - that make the Market possible were invented by men.

You claim that the Market just happens, "spontaneously."

To refute you, I identified in engineering terms the nature of the specific pre-requisites of the Market that were designed by human minds to make market transactions possible. So you rip that technical identification from context, and note that, out of context, it sounds like "bafflegab."

I do not debate against obscurantism. Over and out.

(Edited by Adam Reed
on 9/07, 11:11pm)

Post 22

Wednesday, September 7, 2005 - 11:24pm

Adam,

For what it's worth, I stand completely in agreement with you in the market spirit of anti-spontaneous combustion.

I like this phrase a lot:

The very concepts of private property, of mutual agreement, of conditional consent to a transfer of title - the elements of even the simplest barter transaction - are themselves protocols that would never have existed at all, except for the work of human genius. These protocols were invented so far in the prehistoric past that we do not know the names of their inventors, but they are no less of human design for being that old.

This is the first time I have ever heard - ever - a tribute like yours to the genius of specific prehistoric men.

Michael

Post 23

Thursday, September 8, 2005 - 5:51am

Again, like in the price-gouging thread, it appears that the critics of spontaneous order here do not know what the term means. It does not mean that humans are not inventive or purposeful. "Spontaneous order" is a kind of order, especially in contrast to command order, as in centralized economic planning or a military command structure.

You can point out agriculture, check-writing, making electricity and a multitude of other things humans have invented. However, doing so is only attacking a straw man. Economists who use the term "spontaneous order" would not argue with any of them. Indeed, they would say that human invention contributes to the "spontaneous order." The term essentially means that the order of free markets arises from widely decentralized decision-making by individuals about production and consumption. All market participants are decision-makers, not simply a few "government economic czars."

A key feature of this spontaneous order is prices. Prices are driven by aggregate supply and demand for particular goods or services (and their substitutes). These are in turn the result of a multitude of individuals independently making decisions about about consumption or production. They are not dictated by government.

Post 24

Thursday, September 8, 2005 - 7:07am

I have always wanted to enunciate "Sam's Dictum for Communication" that states "Never use a level of abstraction higher than necessary to convey your message." As good advice as that may be, it is self contradictory.

"Write simply" is an instruction that even a third grader can understand and it says everything that Sam's Dictum says.

Sam

Post 25

Thursday, September 8, 2005 - 9:03am

Merlin,

OK. Good idea. Let's define terms. Centralized is a good concept to talk about on the way to a definition.

Let's see now. Are you claiming that establishing a Constitution and Bill of Rights, setting up a currency and things like that are not centralized, all of which are so necessary to the market?

Or they just popped up out of nowhere accidently - or maybe even should not be a part of a discussion on markets?

How about the false dichotomy? Let's just state it and get it out of the way.

Those who claim that these human achievements are blueprints (protocols, designs, whatever) for the market are also endorsing Communist-like central planning committees.

Whew! Feel better now? Sorry, though. I ain't buying it. Completely false dichotomy and Adam is correct. So am I.

Like you said (but not like you mean), this kind of crap actually did occur on the anti-gouging thread.

Michael

Post 26

Thursday, September 8, 2005 - 9:57am

MSK wrote:

Let's see now. Are you claiming that establishing a Constitution and Bill of Rights, setting up a currency and things like that are not centralized, all of which are so necessary to the market?
Or they just popped up out of nowhere accidently - or maybe even should not be a part of a discussion on markets?

I said nothing that could rationally be construed that way. So I have no interest in anything you have to say on the topic. Over and out.

Post 27

Thursday, September 8, 2005 - 11:43am

Merlin,

It would be helpful to any discussion if the participants bothered to read it from the start. Rick and Sam objected to my point that the Market is a human achievement, created by the genius of men who invented the rules of social interaction ("protocols") that make it possible.

Your point - that the market protocols enable interactive optimization without hierarchical or centralized control mechanisms - is one that was first introduced to this discussion from the side of recognizing the Market as the product of deliberate human achievement: I compared the invention of Market protocols to the invention of Man's most advanced technologies, the Internet and the Unix operating system. The Internet, like the Market, was made possible by the design of protocols that enable interactive optimization of transactions without any hierarchical or centralized control mechanisms, without enforced predictive planning etc.

Toward the end of this thread, Rick and Sam assert that the Market in its simplest forms (such as primitive barter) does not require Man-made protocols at all, although they concede that man-made protocols contribute to the efficacy of modern markets. I pointed out that even the most primitive barter requires amazingly sophisticated man-made protocols: private property, mutual agreement, conditional consent etc. I also pointed out the level of genius it took to design these fundamental protocols, by describing them in modern engineering terminology. This description was dismissed by Rick and Sam as "bafflegab" - a response that in my judgement amounts to plain obscurantism, something that I will not legitimize by further debate.

So your recent point, about the Market being based on distributed rather than hierarchical or centralized protocols, in the context of this discussion is already old hat. I look forward to any new points that you may wish to make, in the context of the discussion to date.

(Edited by Adam Reed
on 9/08, 12:05pm)

Post 28

Thursday, September 8, 2005 - 1:18pm

Adam:

As amazing an achievement as the market is you have romanticized its development beyond credibility:

"... recognizing the Market as the product of deliberate human achievement..."

as if this were a goal of every human development from walking upright, and the use of fire.

"I pointed out that even the most primitive barter requires amazingly sophisticated man-made protocols: private property, mutual agreement, conditional consent etc."

What you have described is under the umbrella of the development of a civilized society and those protocols are not the exclusive requirements of markets.

Those who originally recognised private property rights, mutual agreement, conditional consent had no idea what a protocol was and your use of the term in this context strikes me as very strange. What's amazingly sophisticated about two cave men agreeing that if you give me that hunk of meat I'll give you my spear? What's sophisticated about a cave man saying, "Get away from that woman, she's mine?" Even some animals behave this way and most are possessive.

Sam

Post 29

Thursday, September 8, 2005 - 1:18pm

Adam,

I got involved on this thread and the price-gouging one over the meaning of "spontaneous order." You, with MSK following, ridiculed the word "spontaneous" and anyone who uses it, for example, as follows:

The idea that distributed systems are "spontaneous and not designed" comes from wishing to deny an evident fact: the power and greatness of the human mind. (post #2)

I'm willing to accept that there may be a better word than "spontaneous" to label this kind of order. However, that was the word chosen, and I believe one should have a sufficient understanding of what is meant by "spontaneous order" before trying to ridicule it, especially since it was coined by free market advocates.

Post 30

Thursday, September 8, 2005 - 2:08pm

Merlin writes:
>Again, like in the price-gouging thread, it appears that the critics of spontaneous order here do not know what the term means.

Merlin is right - it is becoming an inane debate over what is meant by the terms "invented" and "spontaneous". (Most debates over terminology go this way. I notice over on the "Price Gouging" thread there has been over 200 posts, but still we hear the plaintive cry that a "correct" definition is required before true discussion can commence....) Like that thread, it seems clear that the participants in essence agree over everything except the choice of words!

I would look at it a different way. we all agree that the better the information, the better the decision, right?

Well, human individuals generally have the best knowledge of their particular circumstances, and what is best for them (this extends even to things they know but never talk about, or what Hayek terms "tacit" knowledge.)

So the more you leave human individuals out of decision-making processes by centralising those decisions, ultimately ending with a Central Comptroller In Charge of Everything, the *dumber* those decisions get - you're leaving out 99.9999% of the relevant information!

Thus, "inventions" or "protocols" or "orders" or whatever that develop from a grass-roots level up therefore tend to be much *smarter* at solving problems than from the top down - because the information is better! (The Austrians put this slightly differently - they would say the ignorance is less gross). These bottom-up orders are loosely called "spontaneous" orders, just to differentiate them from the Central Comptroller-top-down type decisions. (If you are a bore who likes playing with words, you can argue that Central Comptrollers make "spontaneous" or spur of the moment decisions too, but to non-bores the intent of the distinction should be clear). Sometimes a particular protocol might become widespread, and even centralised to some degree. This is only an indication of its usefulness. And of course, in a free society, such centralised rules or protocols *are always subject to grass roots criticism* and can be changed if they turn out to be mistaken or become irrelevant.

A very good example of a "spontaneous" order is a language.

Languages are the result of millions of individual innovations, and various attempts to systemise it and formalise rules, but no-one can claim anything like design or authorship of the whole. In fact one of the few planned languages was Esperanto, which was naturally a complete failure. I recall a nice saying that summarises the situation - that a language is a city to which everyone has brought a stone. And this is as good as analogy as any for what is meant by "spontaneous" order.

- Daniel

Post 31

Thursday, September 8, 2005 - 2:49pm

Sam,

You wite: "Those who originally recognised private property rights, mutual agreement, conditional consent had no idea what a protocol was and your use of the term in this context strikes me as very strange."

It strikes me as no stranger than calling the original invention of the wheel a stupendous achievement in applied geometry - even though the concept of "geometry" would not be explicitly identified until thousands of years later.

Animal territoriality is indeed the result of spontaneous evolution - but it is something very, very different from the protocol of private but transferable property. If you could show me one pre-human example of a non-coerced transfer of ownership from one animal's private property to another's, I would grant your point - but I am positive that you cannot.

Merlin,

This discussion started when Rick challenged my claim that property rights, mutual agreement, and conditional consent were purposeful human innovations, invented with specific useful functions in mind. He used the term "spontaneous" explicitly to challenge "function."

I have no problem conceding that before the term "distributed" (as in "distributed information", as opposed to central or hierarchical control) was invented, some advocates of the free market used the term "spontaneous" where today one would say "distributed." Given the anti-mind implications of "spontaneous," it is not a term that promotes objective understanding when the more precise term "distributed" is available. "Distributed" is better because it does not preclude "function" - and it is "function" that was originally attacked by Rick and Sam.

(Edited by Adam Reed
on 9/08, 3:00pm)

Post 32

Thursday, September 8, 2005 - 4:03pm

This thread is going nowhere. I'm retiring from the field.

Sam

Edited:

Sorry, I can't leave this alone:

"It strikes me as no stranger than calling the original invention of the wheel a stupendous achievement in applied geometry - even though the concept of "geometry" would not be explicitly identified until thousands of years later."

It was not a triumph of applied geometry. It was an achievement of the human mind. Applied geometry can't achieve anything ... it's an effing concept. Jeez ... why is it so difficult to get down to concretes on this board?

Now I'm done.

(Edited by Sam Erica on 9/08, 4:40pm)

(Edited by Sam Erica on 9/08, 4:45pm)

Post 33

Thursday, September 8, 2005 - 4:27pm

Adam, I don't know anything about information systems, and I would like to understand better the concept of "distributed" order as applied to the free market.

Does "distributed" cover the idea that the total order is not intentionally willed (in the sense that no one intends that all the goods and services will flow in such-and-such a way), although all the individual transactions (and some related groups of transactions) are intentionally willed?

I think I have other questions, but I'd better take them one at a time to stay sane.

Post 34

Thursday, September 8, 2005 - 4:44pm

Jay,

Yes. That is exactly the sense in which the Internet and Market protocols are, and were designed to be, global tools that independent participants use, without a need for central or hierarchical controls, to achieve efficiently their individual goals.

Post 35

Thursday, September 8, 2005 - 4:58pm

OK . . . and am I right in thinking that the "order" part of the free market is analogous to the fact that the Internet, say, as it has existed for a while now, is greater functionality-wise than the sum of its individual, purposefully designed links (or whatever they're called)?

Also, by "global" (in the phrase "global tool") do you mean that it's a tool that a lot of different users can use without changing the make-up of the tool?

Post 36

Thursday, September 8, 2005 - 5:37pm

"Market protocols are, *and were designed to be*, global tools that independent participants use, without a need for central or hierarchical controls, to achieve efficiently their individual goals." (emphasis added)

This is almost too asinine for words. Market protocols were designed on an ad hoc basis for one time use. They were used repeatedly by those who had devised them because they worked. They were imitated, adapted, and spread through the culture by other people for the same reason. They were certainly *not* "designed to be global tools" for use by everyone. That is precisely the point that Adam appears to be too obtuse to see.

JR

Post 37

Thursday, September 8, 2005 - 5:56pm

Jeff,

Cutting out the intended insults, you do have a point. Nearly all human inventions build on ad-hoc insights originally intended for one-time use. The Internet came out of a military project - to design a command-and-control network in such a way that it could not be knocked out if the enemy destroyed its command center. The solution - protocols that do not require a command center - is what I am (and we all are) using now. The genius is noticing that what was intended (often by someone else) as a one-time solution has a more general function - and using it for that more general function henceforth. "Chance favors the rational mind" and all that.

Post 38

Thursday, September 8, 2005 - 10:48pm

Four short excerpts from Folkways: A Study of the Sociological Importance of Usages, Manners, Customs, Mores, and Morals by William Graham Sumner (1906):

"If we put together all that we have learned from anthropology and ethnography about primitive men and primitive society, we perceive that the first task of life is to live. Men begin with acts, not with thoughts. Every moment brings necessities which must be satisfied at once. Need was the first experience, and it was followed at once by a blundering effort to satisfy it."

"The method is that of trial and failure, which produces repeated pain, loss, and disappointments. Nevertheless, it is a method of rude experiment and selection. The earliest efforts of men were of this kind. Need was the impelling force. Pleasure and pain, on the one side and the other, were the rude constraints which defined the line on which efforts must proceed. The ability to distinguish between pleasure and pain is the only psychical power which is to be assumed. Thus ways of doing things were selected which were expedient. They answered the purpose better than other ways, or with less toil and pain. Along the course on which efforts were compelled to go, habit, routine, and skill were developed. The struggle to maintain existence was carried on, not individually, but in groups. Each profited by the other's experience; hence there was concurrence towards that which proved to be most expedient. All at last adopted the same way for the same purpose; hence the ways turned into customs and became mass phenomena."

"In this way folkways arise. The young learn them by tradition, imitation, and authority."

"It is of the first importance to notice that, from the first acts by which men try to satisfy needs, each act stands by itself, and looks no further than the immediate satisfaction. From recurrent needs arise habits for the individual and customs for the group, but these results are consequences which were never conscious and never foreseen or intended. They are not noticed until they have long existed, and it is still longer before they are appreciated. Another long time must pass, and a higher stage of mental development must be reached, before they can be used as a basis from which to deduce rules for meeting, in the future, problems whose pressure can be foreseen. The folkways, therefore, are not creations of human purpose and wit."

Post 39

Friday, September 9, 2005 - 1:10am