Arnold Kling  

Arnold Kling and Russ Roberts

Are Refineries Really a Bottle... Questions for Civil Libertaria...

We discuss his new book, The Price of Everything, and spontaneous order vs. central planning and design. Perhaps the most interesting part of the discussion concerns the issue of how to view political decisions. One tends to view them as top-down designs. In fact, that is part of the Austrian critique of the political process--that it is inferior to the spontaneous order that emerges in markets.

However, particularly over time, political decisions look less and less like grand designs. They dissolve into the overall emergent order.

Meanwhile, within the market people and businesses work with designs and plans. If I could use a metaphor (not used in the podcast), the emergent order is like a pool, and the plans of businesses are like rocks tossed into the pool. They cause some disturbances, but the pool settles down in its own way. The plans of government may work similarly. We want to pretend that the government can transform the pool into any shape it chooses. In fact, it can only toss in rocks, just like anyone else.

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COMMENTS (5 to date)
MattY writes:

Government tosses bigger rocks.

Hollywood_Freaks writes:

Or in the case of Zimbabwe, the government pulled the plug on the drain.

Joe Marier writes:

I don't think he was talking about the kind of pool that has drains. Who tosses rocks into swimming pools?

another bob writes:

I'd argue that govt plans are different in kind not just in quantity. By aggregating all individual choices into a single choice and forcing the choice-making through a single body you systematically eliminate experimentation, innovation and learning at the margin and substitute the incentives of the bureaucrat for the incentives of the consumer.

So, instead of simply slower evolution due to fewer choices (that is fewer, bigger rocks) you get a completely different pond.

For example, school boards and administrators make one big decision for hundreds or thousands of students. Vouchers would allow for disaggregation. I'm convinced they make the same choices that most parents and students would make and eliminate the possibilities that some parents would make. Therefore, there is no learning by most parents from the adventurous choices of a few. There's nothing quite so stagnant as education services.

a david writes:

So maybe the "emergent order" is more like a rushing stream than a pool: various parties throw in rocks diverting the course of the stream. The process eventually creates dams and sidestreams, both old and new.

The end result is a situation where no single party controls the boundaries or course of the stream. Some players, certainly the governement, are more influential than others, but even it cannot completely control the path. Political decisions, despite being the prevailing form of centralized design, often yield unintended consequences as a result of outside influences and lack of information.

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