A blupete Essay

Family System and the Extended Order, Part 3 to blupete's Essay
"An Essay On Economics"

There are two basic elements in society, ancient or modern: one is the economic system, with which I now deal and the other is the family system, the subject of a separate page. What needs to be said, here, is that the natural rules in these two systems are different. The family system deals with the innate or instinctual feelings of the "micro-order."9 It is completely natural, as Sir James Fitzjames Stephen observed, for people to chatter away about each other's affairs "in the way of mutual sympathy and compliment, and now and then to get into states of fierce excitement about them; but all this is not love nor anything like it. The real truth is that the human race is so big, so various, so little known, that no one can really love it. You can at most fancy that you love some imaginary representation of bits of it which when examined are only your own fancies personified."10

Stephen, of course, took a position quite opposite to that of Mill and the Utilitarians. The Utilitarians thought that the individual would ultimately be happier if he initially set aside, to a degree, his own interests for the greater happiness for the people.11 The essential difference (it is usually the difference in all philosophical disputes) between Mr. Stephen and Mr. Mill, is in their view of the nature of man. I quote Stephen:

"He [Mill] thinks otherwise than I of men and of human life in general. He appears to believe that if men are all freed from restraints and put, as far as possible, on an equal footing, they will naturally treat each other as brothers, and work together harmoniously for their common good. I believe that many men are bad, a vast majority of men indifferent, and many good, and that the great mass of indifferent people sway this way or that according to circumstances..."
The extended system, that is to say, the economic system, while arising out of a competitive process is one of collaboration. We work in conjunction with another or others through the market system; no "big brother" is needed; we act for ourselves and in the process act for one another. There are, of course, rules of conduct which have evolved and which can be found in our "institutions, moral systems, and traditions," the loss of which -- now being brought on, essentially, by government intervention -- creates great difficulties. What is to be kept in mind, in all of this, is that the extended order arises quite on its own out of a competitive process in which success decides, not approval of a great mind or by a committee. The economic system is so extended as to transcend the comprehension and possible guidance of any single mind. In any event, a plan to create such an extended structure as the economic system would be in the words of Mises "grandiose, ambitious, magnificent, daring," and, I might add, impossible. Man can no more create a workable economy then create a rose.

I again quote Prof. Hayek:

"In dealing with our physical surroundings we sometimes can indeed achieve our ends by relying on the self-ordering forces of nature, but not by deliberately trying to arrange elements in the order that we wish them to assume. This is for example what we do when we initiate processes that produce crystals or new chemical substances ... In chemistry, and even more in biology, we must use self-ordering processes in an increasing measure; we can create the conditions under which they will operate, but we cannot determine what will happen to any particular element. Most synthetic chemical compounds are not "constructible" in the sense that we can create them by placing the individual elements composing them in the appropriate places. All we can do is to induce their formation."12
It is economists who claim to understand the process of formation of extended orders; they try to explain structures arising without design from human interaction. They call it "macro economics," and the study of it a science (which it most certainly is not) "which seeks casual connections between hypothetically measurable entities or statistical aggregates." Such a study may "indicate some vague probabilities", but, as Prof. Hayek explains "certainly do not explain the processes involved in generating them."
"But because of the delusion that macro-economics is both viable and useful (a delusion encouraged by its extensive use of mathematics, which must always impress politicians lacking any mathematical education, and which is really the nearest thing to the practice of magic that occurs among professional economists) many opinions ruling contemporary government and politics are still based on naive explanations of such economic phenomena as value and prices, explanations that vainly endeavour to account for them as "objective" occurrences independent of human knowledge and aims. Such explanations cannot interpret the function or appreciate the indispensability of trading and markets for coordinating the productive efforts of large numbers of people."13
The question is, beyond data collection and statistical presentation, can social phenomena be quantified; and the answer, I think, is, no. I quote the imminent scientist, Sir Karl Popper and his views on quantitative-mathematical methods:
"... it is the socialist's task to give a causal explanation of the changes undergone, in the course of history, by such social entities as, for instance, states, or economic systems, or forms of government. As there is no known way of expressing in quantitative terms the qualities of these entities, no quantitative laws can be formulated. Thus, the causal laws of the social sciences, supposing that there are any, must differ widely in character from those of physics, being qualitative rather than quantitative and mathematical. If sociological laws determine the degree of anything, they will do so only in very vague terms, and will permit, at the best, a very rough scaling."14
There is only one way by which we might extend human cooperation beyond the family system; it will not come about simply because we in "society" share the same purposes, - though unquestionably we do.15 So, is it possible to get people, beyond normal family relationships, to cooperate with one and other? It is not, - though, God knows, we have tried for generations to do so. Thankfully, though few it seems have come to the realization, we do not have to get people -- short of obeying the criminal law - to do anything. There is in place a natural engine which drives people to choose for themselves the exact nature and extent of their own contributions to the extended economic order, and to choose for themselves the exact nature and extent of their allocations from the extended economic order. This engine is egocentric; it drives each of us to cooperate with one other, for our own self-interest, and, as it happens, quite naturally, in the interests of the larger order of things. I talk of the market.

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2011