Hayek: Law, Legislation and Liberty: Chapter 2: Cosmos and Taxis

Hayek, Friedrich A. Von. (1982). Law, legislation, and liberty : a new statement of the liberal principles of justice and political economy (New pbk. ed.). London: Routledge and Kegan Paul.

Chapter 2: Cosmos and Taxis

Hayek spends this chapter distinguishing between two types of orders: those that are made and those that are grown. “By ‘order’ we shall throughout describe a state of affairs in which a multiplicity of elements of various kinds are so related to each other that we may learn from our acquaintance with some spatial or temporal part of the whole to form correct expectations concerning the rest, or at least expectations which have a good chance of proving correct” (36). He claims that the concept of order has been hijacked by those who favor authoritarianism, as they see it relating to command and obedience. “A spontaneous order…has in many respects properties different from those of a made order” (36).

Spontaneous orders have been studied for a long time in the field of economics and biology, claims Hayek. These orders focus on self-organization and self-generation. These orders are endogenous to a system. On the other hand, made orders are exogenously controlled; these are constructions and can be called organizations.

The title of this chapter derives from Greek words that separate made orders from spontaneous orders. “Taxis” is an order that is constructed, much like, “an order of battle”. “Kosmos”, on the other hand, is a grown order, or a spontaneous order.

“One of our main contentions will be that very complex orders, comprising more particular facts than any brain could ascertain or manipulate, can be brought about only through forces inducing the formation of spontaneous orders” (38). These systems have drivers that abstractly relate to one another. To preserve these orders, all one needs, “…is that a certain structure of relationships be maintained…” (39). These orders have no overarching purpose, or telos (not his words), though they can prove very handy for individuals and groups of people. These orders involve the regular interaction of small units that are relatively consistent. “The important point is that the regularity of the conduct of the elements will determine the general character of the resulting order but not all the detail of its particular manifestation” (40). And, to prediction: “…we shall be able to predict only the general character of the order that will form itself, and not the particular position which any particular element will occupy relatively to any other element” (40).

Spontaneous orders arise because all of the elements that are compromise these orders obey simple sets of rules in their, “…responses to their immediate environment” (43). Some of these rules, for example, can be seen in human interaction in the market place. “In a modern society based on exchange, one of the chief regularities in individual behavior will result from the similarity of situations in which most individuals find themselves in working to earn an income; which means that they will normally prefer a larger return from their efforts to a smaller one, and often that they will increase their efforts in a particular direction if the prospects of return improve. This is a rule that will be followed at least with sufficient frequency to impress u8pon such a society an order of a certain kind” (45).

While society has the features of a spontaneous order, a government, or made order, also exists. These two orders co-exist. The example of a cell and a cell’s nucleus is used to explain this relationship. The government is meant to fill the role of a, “maintenance squad of a factory” (47), or the group that keeps everything free to operate smoothly on its own.

Organizations, just like spontaneous orders, also rely on rules. This is so that the corporate knowledge can exceed that of any individual. This knowledge is far and above what any one individual can possess, and thus it is impossible to constrain through made orders. A spontaneous order, “…arises from each element balancing all the various factors operating on it and by adjusting all its various actions to each other, a balance which will be destroyed if some of the actions are determined by another agency on the basis of different knowledge and in the service of different ends. What the general argument against ‘interference’ thus amounts to is that, although we can endeavor to improve a spontaneous order by revising the general rules on which it rests, and can supplement its results by the efforts of various organizations, we cannot improve the results by specific commands that deprive its members of the possibility of using their knowledge for their purposes” (51).

Humans can not know the effects of their policy interventions. Thus, “…the only possibility of transcending the capacity of individual minds is to rely on those super-personal ‘self-organizing’ forces which create spontaneous orders” (54).