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"... Hayek argued that those who misunderstood or disregarded the notion of spontaneous order did so because they incorrectly divided the world into two categories: "planned" (which implicitly means order and purpose) and "unplanned" (which connotes disorder, randomness and chaos). Hayek argued that society, and its most advanced institution—the market economy—fit into neither category and, therefore, belonged in a third group. Each member of this third group would be bounded by rules, have its own order and increase in complexity in a way that would not be fully understood. Hayek's best example of this third group would be our language. No single individual or group thought it up. It has its own rules of grammar, and language continues to evolve as mankind advances.
The political implications of spontaneous order theory are strikingly evident with the recent fall of the Soviet Union. In fact, Hayek's 1944 book, The Road to Serfdom, foreshadowed what we see and read about daily. No political system could assume, as fascism did on the right and communism did on the left, that men were cogs to be "fit" into the state machine. Tyranny results from government's attempts to plan the workings of daily life.
Second, reliance on institutions that were created through government fiat need to be questioned and reevaluated. Hayek, for example, grew increasingly disenchanted with a central bank as the sole authority for a nation's money supply and called for competitive currencies that would eliminate monopoly control. A competitive currency would allow for all types of previously untried services for producers and consumers alike in a more uncertain environment. Monetary institutions would then evolve naturally rather than being artificially created by government.
The political implications of spontaneous order theory are strikingly evident with the recent fall of the Soviet Union. In fact, Hayek's 1944 book, The Road to Serfdom, foreshadowed what we see and read about daily. No political system could assume, as fascism did on the right and communism did on the left, that men were cogs to be "fit" into the state machine. Tyranny results from government's attempts to plan the workings of daily life.
Second, reliance on institutions that were created through government fiat need to be questioned and reevaluated. Hayek, for example, grew increasingly disenchanted with a central bank as the sole authority for a nation's money supply and called for competitive currencies that would eliminate monopoly control. A competitive currency would allow for all types of previously untried services for producers and consumers alike in a more uncertain environment. Monetary institutions would then evolve naturally rather than being artificially created by government.
Finally, Hayek would argue that centrally directed institutions neither have the wherewithal to keep abreast of all the relevant economic conditions of "the particular time and place" and be able to fully understand the information received. This means the policymakers may not be able to know all the relevant information to make decisions or may base decisions on old data no longer applicable. Only a spontaneously created market, resulting from hundreds of millions of valuations by individuals, would ensure economic vitality. ..."
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