Chapter 10: Anarchy Unbound: How Much Order Can Spontaneous Order Create?
Peter T. Leeson 10.1 Introduction Narrowly speaking, spontaneous order is “the result of human action, but not the execution of any human design” (Ferguson  1966: Part III, Section 2, p. 122). More broadly speaking, spontaneous order is any order that private actors generate. In both the narrower and broader conception, spontaneous order is “decentralized,” as opposed to the centrally created order of the state. Similarly, in both conceptions the resulting order emerges endogenously from private individuals acting “within the system” rather than being created and imposed by political agents acting “outside the system.”1 This chapter considers spontaneous order in the broader sense of the term, which includes, but is not limited to, invisible hand-type processes. It also considers spontaneous order resulting from private but visible hands. Spontaneous order has long been central to Austrian economics. Austrian school founder Carl Menger ( 1950) famously argued that money has a spontaneous origin. Following Menger, F.A. Hayek emphasized that language, law, and even the price system that coordinates markets have spontaneous origins (see, for example, Hayek 1948; 1973–79). Long before either of these men discussed spontaneous order, however, there was Adam Smith ( 1976) whose “invisible hand” described the marketplace itself as a spontaneous order. Whether they refer to these institutions as “spontaneous orders” or not, today, most economists recognize that many important institutions that facilitate social cooperation have their origin in the self-interested activities of private individuals, not in the intentional designs of government. But recognition that spontaneous order...
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