Cosmos and Taxis

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Cosmos and Taxis

• Presentation, 2008, Howard Baetjer
• Adapted from Barry Brownstein

2

• Why We Need Order

• Living as members of society and dependent for
  the satisfaction of most of our needs on various
  forms of co-operation with others, we depend for
  the effective pursuit of our aims clearly on the
  correspondence of the expectations concerning the
  actions of others on which our plans are based
  with what they will really do. - Hayek

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• What Is a Paradigm?

• "...the basic way of perceiving, thinking and
  valuing...associated with a particular vision of
  reality. A dominant paradigm is seldom if ever
  stated explicitly it exists as an unquestioned
  understanding"- Willis Harmon
• You cant get out of your box until you recognize
  the box you are in.

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Examine The Belief that More Control Leads to
More Order

• Some believe that economic and social problems
  are solved by more controls.
• "If indignant reformers still complain of the
  chaos of economic affairs, insinuating a complete
  absence of order, this partly because they cannot
  conceive of an order which is not deliberately
  made, and partly because to them an order means
  something aiming at concrete purposes..."

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How Do Spontaneous Orders Come About?

• The first answer to which our anthropomorphic
  habits of thought almost inevitably lead us is
  that it must be due to the design of some
  thinking mind. - Hayek

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• Chaos and Complexity

• Major paradigm shift in the natural sciences
  and social sciences
• Previously, explanations of how the world works
  were cast in terms of Newtonian order and
  regularity. Systems moved in predictable ways.
• Now, the emphasis is on the creative role of
  disorder and irregularity. Systems move in
  self-organizing ways with unexpected and
  unpredictable outcomes.

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Accuracy of Weather Forecasts

• Meteorologists hoped increases in computing power
  would dramatically increase forecast accuracy
• Because weather is a complex system small changes
  in weather patterns can have big effects.
• Does a butterfly flapping its wings in China
  create a storm in Kansas?
• Next day accuracy 70 2 day accuracy 63 3 day
  accuracy 60 4 day accuracy 55

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• Friedrich Hayek (1899-1992)

• Nobel Laureate, 1974, in Economics
• 130 articles, 25 books from technical economics
  to the philosophy of science
• pioneer in Economics and Social and
  Organizational Learning
• "It is unlikely that we will see the likes of
  such a wide-ranging scholar of the human
  sciences again."- Peter Boettke

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• Two Types of Order

• Cosmos - self-generating, endogenous, grown,
  spontaneous order, no specific purpose
• Taxis - made, exogenous, constructed,
  artificial order, usually has a specific
  purpose

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• Characteristics of Spontaneous Orders

• "Its existence need not manifest itself to our
  senses but may be based on purely abstract
  relations which we can only mentally
  reconstruct."

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Characteristics of Spontaneous Orders

• "And not having been made, it cannot legitimately
  be said to have a particular purpose, although
  our awareness of its existence may be extremely
  important for our successful pursuit of a great
  variety of different purposes."

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Characteristics of Spontaneous Orders

• "Its degree of complexity is not limited to what
  the human mind can master.

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• Complexity of Spontaneous Orders

"Thus by relying on the spontaneously ordering
forces, we can extend the scope or range of the
order which we may induce to form, precisely
because its particular manifestation will depend
on many more circumstances than can be known to
usand in the case of a social order, because
such an order will utilize the separate knowledge
of all its several members, without this
knowledge ever being concentrated in a single
mind, or being subject to those processes of
deliberate coordination and adaptation which a
mind performs.- Hayek
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Inverse complexity of rules and order

• Simple, clear purpose and principles give rise
  to complex, intelligent behavior. Complex rules
  and regulations give rise to simple, stupid
  behavior.- Dee Hock, founding CEO VISA

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More Control Frequently Results in Less Order

• The Soviet Union had much control over food
  production and distribution
• Yet the average Soviet citizen stood in line 40
  hrs a week, Moscow stores had no fresh produce
  even in the summer and food rotted in the fields.
• Similarly our own public school system at times
  is unable to provide even discipline and safety
  falling quality.
• Both are examples of paradigm blindness in that
  solutions offered are/were within the orthodoxy.

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Advantages of Spontaneous Orders

• More complexity
• More diversity
• More flexibility
• More innovation

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• CEO's On Spontaneous Order In The Firm

• "Complex human systems, whether societies or
  organizations, can only function properly by
  spontaneous order."- Charles Koch, CEO Koch
  Industries
• "We can't run 21st century society with 17th
  century notions of organization".- Dee Hock,
  Founder and former CEO Visa International
• "Command and control organizations are not only
  archaic and increasingly irrelevant, they are a
  public menace, antithetical to the human
  spirit."- Dee Hock

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The Internet

• Complexity beyond complete comprehension
• Almost infinite flexibility and adaptability
• No central authority making or enforcing anything
  but the simplest of rules (domain names,
  protocols etc.)
• No master plan for what businesses should operate
  on the net or new technologies
• Yet out of that chaos comes a rich order

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Why Are Markets Feared?

• " To the layman untrained in economics, the
  market economy presents a bewildering face. It
  consists of numerous individuals each intent on
  his own goals, giving no concern to the overall
  social implications of his pursuits. No central
  coordinating agency controls or even monitors the
  innumerable independent production and exchange
  decisions made by these countless individuals. It
  is no wonder that the market economy seems to be
  nothing but a jungle of clashing, discordant
  individual activities.- Kirzner

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• Can We Improve Spontaneous Orders?

• There will be many aspects of it over which we
  possess no power at all, or which at least we
  shall not be able to alter without interfering
  withand to that extent impeding the forces
  producing the spontaneous order. Any desire we
  may have concerning the particular position of
  individual elements, or the relation between
  particular individuals or groups, could not be
  satisfied without upsetting the overall order. -
  Hayek

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• Examples of Spontaneous Order

• Language
• Taxis Esperanto anyone?
• Invented in 1887 by L. L. Zamenhof
• Science and technology
• Markets and economies
• Customs, culture, entertainment
• Law
• Ecosystems
• Taxis The Biosphere project

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Firefox Takes Advantage of Spontaneous Order

• Mozilla allows access to source code for browser
  and allows modification of browser to meet
  individual and organizational needs.
• Filters and incorporates best innovations
• the Mozilla Foundation employs only a dozen or
  so programmers. But they are the tip of an
  iceberg of thousands of programmers who, via the
  open-source model, donate their time and
  brainpower
• In a networked world open platforms win
• Other examples of open platforms-
• Apache web server software
• Linux operating system for Unix

23
Spontaneous Order in the Military

• Self-organization does not mean that tank crews
  fly helicopters or that soldiers spontaneously
  decide to support Kurdish rebels against Baghdad
  Pascale
• Never tell people how to do things, tell them
  what to do and they will surprise you with their
  ingenuity- General Patton
• Combat units improvise and initiate but always
  within the larger structure of Commanders
  intent.