Thursday, 19 August 2010

On Resilient Social Institutions

According to Hayek´s thought, we might state that the price system is a sort of perception device which enables the spontaneous –or abstract- order to get knowledge of changes in the relative scarcities of economic goods and to proceed to an automatic and purposeless reallocation of them, working as a negative feedback system. But, in Hayek’s theory, the price system is not enough to fulfill the function of providing the spontaneous order with the necessary adaptation to the changes in the environment. Normative systems –both legal and social- and traditions are some of the many behavioral patterns that give a framework to the maximizing activity of the decision making agents, who have to cope with the fragmentation of information and the resultant costs of transaction. As we mentioned in a previous post, those systems are forces emerging from a natural selection process and fitted to the changes in the environment. Now, it is high time to acknowledge that, besides an expected time lag between the changes in the environment and the subsequent adaptations to them, it is very likely to be found that each sub-system responses to those changes at a different pace. Moreover, we can find a complex of resilient social institutions that remain unfitted to the new conditions the spontaneous order has to deal with.