One of the biggest economic myths is the notion that a functional, efficient, and ordered social system must be the result of conscious human design. If one found a watch, intuition would say (correctly) that it probably should be attributed to a specific designer, that it was accompanied by a detailed operation manual, and if it breaks, a watchmaker could fix it. However, people have a tendency to automatically apply ideas and knowledge from the domain of mechanical systems to the domain of social problems. They see the work of a conscious designer (a minister and his advisors) behind social order and call for their intervention when social problems appear. That, however, is a false belief.
The origins and behavior of a functional social order resemble a bird more than a watch. Both contain signs of order and purposefulness; watches keep time and fit perfectly on a human wrist whereas birds have an aerodynamic shape, hollow bones, and wings, which allow them to fly. However, there is no conscious designer of the latter. Rather, it is a result of the spontaneous power of evolution. A similar power is behind the social order.
Social order is the result of spontaneous processes comprising activities of millions of people (without them intending to contribute to this order) and does not require the presence of a central coordinating authority. Adam Ferguson observed in the 18th century that social structures are often “the result of human action, but not the execution of any human design”. In other words, the order does not need a planner, minister, or engineer. Nevertheless, it works as if it were designed by the best planner with perfect knowledge and the best intentions. Evidence can be found all around us. Nobody plans the IT industry and no individual is responsible for coordinating millions of people whose decisions shape it on a daily basis. Even though there is no coordinating center and no “minister for IT,” the industry runs like clockwork. There are ever newer and better-quality products and efficiency puts downward pressure on prices. The same is true with food, cars, clothing, housing, and so on.
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