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.

Patterns of Perception and Behaviour

Friedrich A. Hayek states that reason is conditioned by patterns of perception and behaviour. Those patterns are grown, not designed. They evolved as a result of a process of natural selection. This idea was present in Adam Smith’s works. Rotten food is both forbidden and distasteful not because of having anyone decreed so or of any quality of the rotten food concerning taste, but due to people who found it tasty or felt allowed to eat it did not survive. The population of those who avoided rotten food spread, while of those who did not diminished to extinction. The interrelation of those patterns of perception and behaviour which human reason is built of necessarily implies an order of a higher degree of complexity than human reason itself. That is why Hayek speaks of a complex order.

Orders & Forces

Economic central planning supporters usually accuse market economy of being a chaotic system, or at least intrinsically unstable. In this confrontation, cultural evolutionary approach plays a major role. Evolutionism depicts different types of orders, defined by the characteristics of the forces prevailing among them. An unstable order is mostly conditioned by random forces. We also can find an order compounded with forces arranged by a decision making agent –that is the case of the firm or the government. In terms of Hayek’s social thought, the latter is a created or simple order. On the other side, a complex or spontaneous order –like the market- is made of forces emerging from a natural selection process, not random forces but fitted to the changes in the environment.

Law & Nature

To ascertain whether Hayek is a natural law advocate or belongs to the legal positivism is an intricate task to perform. In the third volume of Law, Legislation and Liberty, he criticized Hans Kelsen for separating law from morals. Nevertheless, Hayek’s whole works reject neither the possibility of founding any legal system on a speculative construction of reason nor on a revealed code of conduct. Legal realism is not an option either, since he regarded it as too simplistic. In fact, the particular issue to address concerning Hayek’s jurisprudence is not law, but his idea of nature.

At the beginning...

For Hayek, the law is logically and chronologically previous to the government. That is the meaning of the rule of law: a political order founded on the law. Since the political powers receive their legitimacy from the law, the latter is exogenous to the political subsystem. That is why Hayek regards the law as a spontaneous phenomenon. This is not a description of the political reality, but a theory on a political system based on the rule of law which the social scientist can derive normative statements from.

Impossibility Theorem

It is amazing to reread “The Road to Serfdom” (1944) and to recall the paper “A Difficulty in the Concept of Social Welfare” (1950) by Kenneth J. Arrow. Specifically, Chapters 5 and 6 of Hayek’s book seem to be a philosophical statement about the consequences of Arrow’s impossibility theorem. Nonetheless, being both works close in time, the complexity of the ideas contained in them prevents us from suspecting any mutual influence, and we must conclude that the parallelism is mostly due to the zeitgeist.

Spontaneity

Spontaneity, being understood as the automatic response of the social order to a change in the environment, is closely related to the concept of negative liberty, for coercion implies an arbitrary command or a lack of information. Since the individual is enabled to infer the spontaneous changes given in a social order from the knowledge of a fragment of it, he can adjust his plans to his own expectancies, not being coerced his will in such cases. This consideration is a bridge to be built between “The Constitution of Liberty” and “Law, Legislation and Liberty”.-