Freedom in One Lesson

49.

Distinguishing Chaos
from Incomprehensible Order

Many people make New Year’s resolutions to improve their lives. Most involve rectifying perceived errors, mistakes, and failings in their personal lives. But making resolutions to overcome mistakes in our understanding of society, and the policies the mistakes lead to, could also be productive.

One costly mistake is the common view that market mechanisms reflect social chaos rather than an order that cannot be fully understood. This view carries an implied conclusion that coercive government policies replace chaos with order, but in fact they do the reverse.

Leonard Read recognizes this clearly, particularly in “Incomprehensible Order,” from his 1965 book The Free Market and Its Enemy (Read 1965b). For those who would like to make New Year’s resolutions to improve social coordination, it is worth reviewing his incisive words.

Most of us claim an affinity for freedom; but if given a choice between a freedom suspected of chaos and a regimentation assured of order, we would choose the regimentation. We instinctively fear and detest the opposite of order which is chaos, and for a good and compelling reason. . . . Man’s existence requires a fairly dependable level of order. . . .

. . . Required is an orderly social environment, so that man can know what to expect, within limits, from his fellow man. . . . Because of this he will pay almost any price— even his freedom—for certainty, for order. Indeed, when confronted with but a modicum of chaos, he will accept with alacrity numerous variations of the goose step, those constraints which appear to minimize uncertainties and thus give him the semblance of order.

Most of these “goose steps” which appear as a relief from chaos, such as controls of prices, wages, rents, hours of labor, or ‘planned’ production and exchange . . . are, in fact, contrary to order. These rigidities are necessarily interferences with men’s choices and result in chaos.

The truth is that order and chaos in the economic realm are the reverse of what is generally supposed to be the case. . . .

. . . Order is actually born of disorder, for [millions of private decisions] do harmonize in the end. . . . Why not simply confess that these data are an order . . . which we do not comprehend? That we are unable to bring their order within our narrow purview?

The complex of creativities flowing through the minds of men . . . the “chaos” . . . if not aborted . . . result in order. . . . But there is all too little of this faith and humility as it concerns the free market. . . . As we witness millions of economic decisions made independently of each other, we will, if not perceptive, refer to them as chaotic; whereas, in fact, we are viewing an order the complexity of which cannot be brought within our limited grasp of things. What we lightly pass over as chaos is but a reflection of our failure to comprehend . . . sensing only chaos in the complex data of the free and unfettered market.

. . . But observe that one man’s orders, aimed at bringing about his singular idea of order, result in everyone else’s chaos. . . .

Unfortunately, the chaos brought on by one-source decisions . . . is seldom thought of as chaos once the subjects have endured the oppression . . . for a short time. . . . They come to think of their fetters as more a part of ordered than chaotic life. . . .

The more a country’s economy is politically ordered or “planned,” the more chaotic is production and exchange. Conversely, the freer the market . . . the more order there is in production and exchange. . . .

. . . The nature of the system prescribes the characteristics of the order and the chaos peculiar to it. . . .

. . . The free market . . . resting, as it does, on common consent, is consonant and in harmony with freely acting man. Dynamism . . . is . . . a characteristic of the free market. Order . . . exists only as this dynamism, showing forth peacefully and creatively finds unfrustrated expression. Any man-imposed goose step must breed chaos. . . .

. . . Whenever we impose . . . one-source decisions for millions of decisions made independently . . . we get chaos for our unintelligent pains. And it is axiomatic that freedom must disappear as we practice the error!

To illustrate the mysterious order of the free market, think of any one of millions of goods or services . . . forces too numerous ever to recount and which appear as chaos, but are, instead, incomprehensible order—miraculously combine to form the fantastic order . . . by which we live. Observe that the order of these is so perfect, their production and exchange and their demand and supply so nicely balanced, that we take them as much for granted as we do our next heartbeat. . . .

Now reflect on those goods and services no longer entrusted to the millions of economic decisions made independently of each other in a free market, but delegated instead to one-source governmental decisions as a way of bringing “order out of chaos.” . . . Observe the imbalances and note that these are the only goods and services we ever argue about. By his method, we do not bring order out of chaos but, rather, chaos out of incomprehensible order! The very fact that these goods and services are now in a chaotic state is testimony in itself that incomprehensible order has been converted to chaos. . . .

. . . Because we differ from one another . . . human beings require freedom to express those needs and to satisfy them, individual by individual. The free market is an agency for the expression and sorting of these countless differences . . . whereby each may pursue his own proper interests without infringing upon or denying the nature and the interests of any other peaceful person. When alternatives have been sought . . . the result always has been some variation of the master-slave arrangement, with one man’s order bringing chaos into the lives of others. . . .

. . . Man generally seeks a static, motionless kind of order . . . while his nature calls for an order of the dynamic variety which, unless he is highly perceptive, he looks upon as chaos. . . .

. . . Freedom in the market, without which other freedoms are impossible, can exist only as creativities of the peaceful variety remain unrestrained. True, this calls for an order so complex that it gives the appearance of chaos; yet, it is order, however incomprehensible. . . .

When we mistake incomprehensible order for chaos we leave ourselves open to . . . deceptions of the know-it-alls. These people, when they succeed in acquiring coercive power, impose restraints on the free flowing of creative energy. Yet, the free market works many of its wonders in spite of their meddling. Unaware of how little they know, they are led to believe that it is their restraints which account for the wonders; and because of this erroneous correlation, they claim credit for the accomplishments which take place despite their subversions. . . . It is fatal if we believe their claims. For, if we do, we shall substitute their know-it-all-ness for the miraculous market; we shall look to them for our blessings . . . a fearful penalty.

Leonard Read recognizes that markets, which appear chaotic to many, in fact represent a far more advanced and beneficial social order than the alternative. It is an order that accommodates the almost infinite variety of ability, circumstance, and desire, without violating people’s rights regarding themselves and what they own. No other known mechanism can generate this peaceful, sophisticated, and dynamic order. The perception of the market’s order as chaos results from an inability to understand it. As a result, many support coercive government policies to impose order, but these in fact disrupt order and replace it with chaos.

He also believes that people can recognize that the order of markets, precisely because it so vastly exceeds the comprehension of any one individual or group, demonstrates why politically imposed “order” cannot work as well as the order it overrides no matter how many violations of self-ownership it commits.

Therefore, if you make resolutions, you might consider resolving to follow Leonard Read’s example and expand your understanding of the incomprehensible order of markets and the all-too-comprehensible chaos imposed by the government as “order” in its place. Few things could do more to improve social coordination and, with it, our own lives.