ABSTRACT
Introduction Hayek describes spontaneous orders as social institutions that are the result of an undirected, evolutionary process, rather than the product of human design.1 Social order can emerge spontaneously when people stumble upon rules and institutions that create a common set of beliefs and expectations that guide individuals to act in a co-operative fashion. Spontaneous social orders crystallize out of the evolved regularities of human action and interaction, even though these actions may not be motivated by a desire to produce any kind of order. Thus, rule following need not be instrumental, since people can follow rules that induce social co-ordination without knowing that their actions will produce this or any other particular outcome. But the potential for the spontaneous emergence of social order does not imply that consciously designed public policy cannot successfully shape the contours of that order. Hayek argued that properly executed public policy can establish the conditions for spontaneous social orders to emerge, much as scientists can induce the formation of crystals by creating the proper environment (Hayek 1973: 39-40). He believed that the guiding principle for public policy to follow in order to induce the emergence of a spontaneous market order is implementation of the rule of law. In The Road to Serfdom, Hayek argued that the pursuit of national economic planning to achieve socialist objectives would lead a country down a path to political tyranny and poverty. According to Hayek, advocates of economic planning did not recognize the benefits that flowed from a spontaneous market order and did not understand that the improvement of human well-being would be impaired by attempting to control economic outcomes. Hayek’s long-running attempt to rehabilitate classical liberalism against twentieth-century socialism had two components. First, he insisted that attempts to create rational plans for social orders were bound to fail, primarily because central planners cannot gain access to the necessarily dispersed, subjectively held knowledge of production possibilities and resource scarcities that exists in individual minds. Second, Hayek sought to update Adam Smith’s claim that the voluntary exchange of private property governed by the rule of law could spontaneously generate wealth without the need for conscious design.
