Arnold Kling  

Order and Disorder

Learn Social Science at the Gr... Two Stories of House Prices...

Richard E. Wagner writes,

There is an equivalence between a tariff and a quota as these are drawn on the blackboard...They are not, however, equivalent in practice. A tariff and a quota generally involve different institutional frameworks...With the quota, the distribution of sales across vendors and the specific types of products sold are not determined through ordinary commercial arrangements. Rather, they are determined through a political process where those who hold offices of political power are able to award allotments to the particular vendors that those holders of power choose. A quota necessarily injects venality, inequality, and hierarchy into political practice and changes the character of effective commercial conduct. What economists refer to as rent seeking (Tullock 1967)(Rowley, Tollison, and Tullock, eds. 1988) and rent extraction (McChesney (1997) will flourish under quotas, and such activities may eventually come to comprise new norms for commercial conduct.

Today in class I talked about order and disorder. My point was that markets produce an orderly outcome--for example, there are no shortages or surpluses. As examples of disorder, I used the gasoline lines of 1974-75 caused by price controls and the impact of rent control on the supply of rental housing in New York City.

But reading this paper reminds me of another good example--how we deal with alcohol, tobacco, and recreational drugs. By using taxes, we retain the order of the market place. By making recreational drugs illegal, we create huge disorder, including criminal gangs and murder.

Peter Boettke recommends Wagner's book, which retails for $110. That's when I decided to look up the paper.

COMMENTS (3 to date)
Troy Camplin writes:

Order and disorder are always in balance in a complex system. Thus, if we try to impose order, we get disorder. While if we allow disorder to rule, order will emerge on its own (the invisible hand). But order and disorder are always in balance. The sooner we realize that, the sooner we will understand the world and be able to solve a lot of problems.

Max writes:

But, my, there is no true balance, yes, they try to get an equilibrium, but they never reach it. This one of the difficult things, one should not forget. As there is no balance or equilibrium in nature, although nature tends to try an equilibrium without ever reaching it, there is no balance or definitive equilibrium in human interaction (thus order and disorder).

If someone can point me to the perfect equilibrium (aside from mathematics or engineering), I'd be happy to know :)

Troy Camplin writes:

The balance between order and chaos is disequilibrium. Complexity arises at the borderland between order and chaos. Self-organization creates a complex system from randomness, or disorder, to create something more orderly.

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