GIVE ME A BREAK!

Spontaneous Order

APRIL 21, 2011 by JOHN STOSSEL

You are our Ruler. An entrepreneur tells you he wants to create something he calls a “skating rink.” Young and old will strap blades to their feet and speed through an oval arena, weaving patterns as moods strike them.

You’d probably say, “We need regulation—skating stoplights, speed limits, turn signals—and a rink director to police the skaters. You can’t expect skaters to navigate the rink on their own.”

And yet they do. They spontaneously create their own order.

At last January’s State of the Union, President Obama said America needs more passenger trains. How does he know? For years, politicians have promised that more of us will want to commute by train, but it doesn’t happen. People like their cars. Some subsidized trains cost so much per commuter that it would be cheaper to buy them taxi rides.

The grand schemes of the politicians fail and fail again.

By contrast, the private sector, despite harassment from government, gives us better stuff for less money—without central planning. It’s called a spontaneous order.

Lawrence Reed, president of FEE, explains it this way:

“Spontaneous order is what happens when you leave people alone—when entrepreneurs . . . see the desires of people . . . and then provide for them.

“They respond to market signals, to prices. Prices tell them what’s needed and how urgently and where. And it’s infinitely better and more productive than relying on a handful of elites in some distant bureaucracy.”

This idea is not intuitive. Good things will happen if we leave people alone? Some of us are stupid—Obama and his advisers are smart. It’s intuitive to think they should make decisions for the wider group.

“No,” Reed responded. “In a market society, the bits of information that are needed to make things work—to result in the production of things that people want—are interspersed throughout the economy. What brings them together are forces of supply and demand, of changing prices.”

The personal-computer revolution is a great example of spontaneous order.

“No politician, no bureaucrat, no central planner, no academic sat behind a desk before that happened, before Silicon Valley emerged and planned it,” Reed added. “It happened because of private entrepreneurs responding to market opportunities. And one of the great virtues of that is if they don’t get it right, they lose their shirts. The market sends a signal to do something else. When politicians get it wrong, you and I pay the price.

“We have this ingrained habit of thinking that if somebody plans it, if somebody lays down the law and writes the rules, order will follow,” he continued.

“And the absence of those things will somehow lead to chaos. But what you often get when you try to enforce mandates and restrictions from a distant bureaucracy is planned chaos, as the great economist Ludwig on Mises once said. We have to rely more upon what emerges spontaneously because it represents individuals’ personal tastes and choices, not those of distant politicians.”