Spontaneous order and the theory of cultural evolution
The problem of social learning has two aspects which, although they cannot be sharply separated, are nevertheless distinct (see also Hayek, 1960, ch. II, esp. p. 27). First there is the cross-sectional problem of using and communieating the fractional knowledge that is dispersed among the individual contemporaries in a society.
This aspect is the subject of Hayek’s theory of the spontaneous order of the market which is best known for its emphasis on the capacity of markets to utilize dispersed knowledge (Hayek, 1948 [1980], pp. 77-91). On account of his work about the social role of prices as carriers of information, allowing the specialized knowledge of each individual to be fully incorporated in decisions concerning resource allocation, Hayek has been considered a precursor of the economics of information (Laffont, 1989, p. 68; Landsburg, 2002, p. 306). Markets are polycentric orders. They can be seen as continuing, open-ended processes of trial-and-error elimination, processes in which constantly a multiplicity of independent trials, of conjectural problem solutions are tried out and selected through the choices of market participants. Through the interaction of experimental exploration and competitive selection, markets can be expected to generate a cumulative growth of problem-solving knowledge. Hayek’s notion of competition as a ‘discovery procedure’ (see Hayek, 1978, pp. 179-90) alludes to this role of the market as an evolutionary learning process.
Hayek’s theory of the spontaneous order of the market delivers the insight that, if we want to generate in society any particular order of a certain degree of complexity, we should look for general rules of conduct which, if followed by individuals, would tend to induce that order to form spontaneously. Such a spontaneous or polycentric order rests on a ‘division of knowledge’ which is analogous with the division of labour in classical economic theory.
Because each individual makes use of his or her specific knowledge in deciding how to act, spontaneous orders embody a totality of knowledge that is not known to any single mind. Via the insight that a spontaneous order utilizes much more knowledge than can possibly be made accessible to any central agent or agency, the theory gives us reasons for doubting the ability of governments to achieve complex feats of social organization by deliberate planning. At the same time the theory amounts to an instrumental justification of a particular type of rules. Spontaneous orders emerge out of the interaction of a multiplicity of elements which, in their responses to their particular environment, are governed by certain general rules. The individuals themselves may be unable to articulate the rules they follow. However, the rules of just conduct on which spontaneous orders rely exhibit certain structural characteristics that make them conceptually distinct from rules of organization. They are negative, purpose-independent, abstract, universal and permanent (Van den Hauwe, 1998, p. 101). The character of these rules will permit the inference only of the general features of the overall pattern. The particular content of the resulting order will always be dependent on the specific circumstances to which the elements respond and consequently will be unpredictable. Furthermore, it should be noted that the specification of the criteria that rules must meet in order to allow for the formation of a spontaneous social order remains, equally, very general. In fact, Hayek’s account offers only a very general schema which has to be filled in in detail.The theory of the market, or the catallaxy, is only one part of Hayek’s idea of an evolutionary process of collective learning. The second aspect is concerned with the accumulation and growth of knowledge over time, that is, the intertemporal problem of profiting from experiences that previous generations have had. With regard to the intertemporal dimension of the use-of-knowledge problem, Hayek has advanced a theory of cultural evolution.
At the core of this theory is the notion that ‘the various institutions and habits, tools and methods of doing things, which... constitute our inherited civilization’ (Hayek, 1960, p. 62) have passed ‘the slow test of time’ (Hayek, 1967, p. 111) and can, therefore, be expected to embody the experience of generations. They are, as Hayek argues, the ‘product of long experimentation in the past’ (Hayek, 1978, p. 136) and ‘embody the experience of many more trials and errors than any individual mind could acquire’ (Hayek, 1967, p. 88). What is distinctive in Hayek’s theory is his account of social institutions and rules of conduct as ‘bearers of knowledge’ (Kukathas, 1989, p. 220).The rules and institutions that define the frameworks within which social interactions take place embody knowledge of which we are otherwise unaware because they are themselves the outcome of a process of competitive selection. The abstract frameworks which contribute to the formation of spontaneous orders - basically the rules of the law of property, tort and contract (see Hayek, 1976, p. 109) - are thus themselves conceptualized as more or less unintended products of an evolutionary process. Thus Hayek sees common law both as a codification of previously unarticulated rules of conduct and as providing a framework within which spontaneous orders can form.
As Vanberg points out (Vanberg, 1994, passim), Hayek’s theory of cultural evolution becomes disputable where it seems to argue that because of our ‘incurable ignorance’ we ought necessarily to rely largely on unquestioned traditional rules instead of attempting to choose rationally or to construct the system of rules that we want to follow.
The question of how the different kinds of rules differ in their nature - rules of conduct versus organizational rules - must be distinguished from the question of how they originate - whether they ‘spontaneously evolve’ or are ‘deliberately designed’. In a particular sociohistorical situation there may exist a de facto correlation between the two aspects, but this need not be so. The two dimensions are conceptually distinct. This fact was acknowledged by Hayek (see Hayek, 1973, pp. 45-6).