Friday, May 29, 2009

General rules

In reading Smith's Theory of Moral Sentiments I am struck by the infuence he played on the idea of emergent and evolutionary order and Hayek's analysis of order and general rules.

It seems clear that these "important rules of conduct" which Smith ties to duty and Hayek to justice have shaped the development of society. In developing countries, these general rules have evolved in such a way to shape wealth enhancing incentives.

Smith writes:

"But upon the tolerable observance of these duties, depends the very existence of human society, which would crumble into nothing if mankind were not generally impressed with a reverence for those important rules of conduct."(http://www.econlib.org/cgi-bin/searchbooks.pl?searchtype=BookSearchPara&id=smMS&query=generally+impressed+with+a+reverence)

Hayek write:

"Men in society can successfully pursue their ends because they know what to expect from their fellows. Their relations, in other words, show a certain order. How such an order of the multifarious activities of millions of men is produced or can be achieved is the central problem of social theory and social policy."

and

"And it is an order which, though it is the result of human action, has not been created by men deliberately arranging the elements in a preconceived pattern. These peculiarities of the social order are closely connected, and it will be the task of this essay to make their interrelation clear. We shall see that, although there is no absolute necessity that a complex order must always be spontaneous and abstract, the more complex the order is at which we aim, the more we shall have to rely on spontaneous forces to bring it about, and the more our power of control will be confined in consequence to the abstract features and not extend to the concrete manifestations of that order."

Source: New Individualist Review, editor-in-chief Ralph Raico, introduction by Milton Friedman (Indianapolis: Liberty Fund, 1981). Chapter: F. A. HAYEK, Kinds of Order in Society

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