Freedom in One Lesson

51.

The Mystery of Social Order

Order and chaos have long served as polar opposites guiding people’s views of their circumstances. For instance, I have read that order versus chaos— which also represented justice versus injustice—was the primary division in ancient Egyptian religion. Much more recently, Henry Adams wrote, “Chaos was the law of nature; order was the dream of man” (Adams 1918).

But to juxtapose chaos and order as opposites may lead us astray when we are trying to understand economic relationships. The government restrictions and determinations that are sometimes called “order” may actually cause disorder or chaos, while the effects of the market that are sometimes thought of as chaotic may actually produce a far superior economic order.

In “The Mystery of Social Order,” from his 1975 book Castles in the Air (Read 1975a), Leonard Read considers these issues, which he feels are important because how we define chaos and order profoundly affects our view of markets versus government, or expanded freedom versus extended control.

I wish to examine . . . an extremely critical kind of order— the social order that brings progress—as opposed to the disorder that is all too prevalent in today’s world.

Read starts by distinguishing order with regard to things, which is often desirable, from order with regard to human interrelationships, which often involve coercive impositions that may appear to provide order but actually cause social disorder.

Most people seem to think of order as a fixed state . . . everything neat, trim, definable, predictable—in a word, everything in its place and a place for everything. As related to the arrangement of things, this is commendable. . . .

But people are not things, and it is error of the first order to wish for fixed arrangements of people: everyone in his place and a place for everyone! . . . An accurate model of order as related to daily experiences with things provides a false model when it is a question of orderly human relations. . . . The order desirable for things, when applied to persons, means the goose step . . . and this is order’s opponent, social disorder!

. . . What is the arrangement? Just this: a commander— “Do as I say, or else!”—and . . . willing or subdued persons manipulated as automatons. . . . Is that kind of order appropriate for society?

Who are the modern commanders that manipulate us?

There are untold millions today—politicians and bureaucrats—each with his own whimsical step. . . . Follow my order—on seat belts, wages, prices, interest rates, education, rationing, hours of labor, what and when to sow and reap, what and with whom exchanges may be made, what shall be used as money, on and on endlessly—do as I say! Anyone with the courage to look can see the goose step in these growing interventions—all contrived in the name of social order.

This is not to deny the role of government in maintaining social order—government limited to inhibiting the destructive actions of men: fraud, violence, stealing, predation, killing, misrepresentation; in a word, keeping the peace and invoking a common justice.

There is an immense difference between government acting as a commander over people and government enabling people to be more effective self-owners by controlling certain destructive actions. Putting things in order does not harm anyone, but putting people where you want them to be or getting them to do what you want, regardless of their desires, harms them by taking away their power over their lives.

Many economic controls that have been adopted in the name of order, such as price controls, undermine both self-ownership and the order that would have been generated by markets. Prices determined by voluntary markets tell consumers how much they can buy goods for, but prices imposed by government ceilings tell consumers how much they can buy goods for in the unlikely event they’re available.

Social order . . . is mysterious because no one can describe it in advance. Opposed to the perfect cadence of the goose step is the blessing that flows from everyone peacefully pursuing his own goals, going his way, that is, every which way . . . each person responding to his own ever-changing aspirations, abilities, uniqueness. . . . we are what we were meant to be: originals! Yet, these very differences appear as intolerable and disorderly to most people as things not in their place. They cannot imagine freedom as a means to social order. . . .

Truly, social order is mysterious, yet it is possible for us to gain an awareness of its constitution. . . . Freedom in transactions without let or hindrance! . . .

I have more corn than I can consume but want cattle. You have more cattle than you can feed so you want corn. I exchange some of my corn for a few of your cattle. Each of us gains. I thank you and you thank me. Why? The comforts of life are increased for both of us. You are a blessing to me and I to you. Good will abounds. There is harmony and order. . . .

Instead of only corn and cattle—the specializations of some—there are as many unique products as there are human beings, times all of the unique skills of each. . . . Who, in all the world, can comprehend, let alone manage, these! Such a thought is absurd.

The idea that markets are chaotic may arise from the different values people place on goods and services. Buyers and sellers disagree about the benefits and costs of every unit traded (which is why trade creates value and why it’s worth engaging in), but their freedom to determine how many units to exchange turns their disagreements about value into coordinating agreements on the value of the marginal (or last) unit traded in equilibrium.

Market prices also resolve problems caused by changes in preferences and circumstances, everyday variables that are conveniently ignored by those who imagine a static, “neatly organized” world. Moment-to-moment changes can throw arrangements out of sync, but markets can deal with dynamic change in a flexible, peaceful way, unlike systems that dictate choices to others. Such changes require renegotiated terms, but transaction partners need only agree on the value of the last unit exchanged. Price changes, therefore, can solve temporary conflicts in a way that is jointly voluntary rather than coercively imposed by one party on another and backed by the threat of violence. In voluntary situations, changing prices can lead each individual to offer better incentives to all who might offer assistance in achieving their ends, even if the individuals and the means are unknown to them. This is a truly amazing feat of social cooperation.

The more an economy is centrally planned, the less coordinated—the more chaotic—its exchange relationships will be. The more free people are to make their arrangements in the market, the more coordinated—the less chaotic—those arrangements will be.

The sole reason that goods do not pass freely among people . . . is that political goose steppers have interfered; they have impaired freedom in transactions . . . [so that] relations are governed by politicians . . . rather than by traders and their goods. The result? Friction, misunderstanding, ill will . . . arousing violent passions and disorder.

. . . Think of borders, not merely as the boundaries between nations or states or counties or towns, but as imaginary lines between you and me. To the extent that we are legally prevented from freely producing and exchanging with each other, to that extent will misunderstanding grow. . . . Result: disorder! . . .

So let all of us freely produce and exchange with . . . whom we please. . . . What is obviously appropriate for you and me is equally workable for all the human beings who inhabit this earth. All of us, here or there, near or far, exchanging our wares, are the real ambassadors of good will and social order. This would be a society of mutual benefit; or, we might say: The Thank You Society, under the Golden Rule.

The common view that market mechanisms create social chaos rather than order is mistaken. And the belief, based on that false premise, that coercive government policies can replace chaos with order involves a logical error. Yet those beliefs have led many to support coercive government policies under the assumption that they will bring order. They in fact disrupt order and replace it with chaos.

There are two quotations about order, chaos, and the role of government that I find of particular use in recognizing beneficial social organization. There is an aphorism, attributed to Marty Rubin, that says “order is what exists before you start arranging things.” If this were taken to heart by our “rulers,” they would unburden us of immeasurable costs and give us vast amounts of freedom. John Vaillant offers sharp insight into how a ruler might respond to the question “ What is chaos?”: “ We do not comment on economic policy” (Vaillant 2010).