Hayekian spontaneous order and the international balance of power.

• Author: van de Haar, Edwin
• Position: Report

Despite work by think tanks and a few scholars, most often about a particular country's foreign policy, international relations is hardly a topic for polite classical-liberal conversation. For the past century or so, classical liberals have been rather complacent about this issue, for the most part limiting their statements to the maxim that if only free trade and globalization were increased, the world would become harmonious and peaceful. It may be seriously doubted whether this position ever made much practical sense, but it certainly no longer suffices as a statement of general principles. Global events have an ever-expanding influence on people's lives, which requires classical liberals to develop comprehensive views on international relations. We are lucky that, from David Hume and Adam Smith onward, many of the great classical-liberal forefathers put forward sophisticated views on this subject. These old ideas have been forgotten or neglected, perhaps owing to academic specialization that has led economists to focus on the economic ideas in the classical-liberal canon (for example, in the works of Smith, Ludwig yon Mises, and F. A. Hayek), philosophers on the ideas of Hume, and political theorists on the domestic side of classical-liberal political thought. One result is that classical-liberal thinking is for the most part absent from academic international relations, even though the classical-liberal ideas put forward on this subject still have value for current debates.

Another consequence of the lack of a "standard" classical-liberal view on international affairs is that false ideas about world politics have continued to circulate for many decades, if not centuries. In this article, I focus on a part of the heritage of nineteenth-century liberal thought. From Richard Cobden (1878, 1-21) onward, one element of international relations has had an especially bad press among classical liberals: the balance of power between states, which has been seen as a major cause of war and destruction. As I discuss, this view undeniably contains some truth. Yet the positive effects of the balance of power, in particular its capacity to stabilize international order and therefore to prevent war and misery, have been overlooked completely. Without international order, individual liberty is impossible. This fact alone requires classical liberals to pay more attention to the international balance of power than they have done in the past century and a half.

This oversight seems even more peculiar if one scrutinizes the thought of Friedrich Hayek and his intellectual forebears, such as Hume and Smith. A major element in Hayekian thought is the idea of spontaneous order, in which order emerges unintentionally. I argue that the international balance of power has all the characteristics of Hayekian spontaneous order. This link between Hayek's ideas and the balance of power is less surprising than it might seem because the great classical-liberal thinkers, such as Hume, Smith, Mises, and Hayek, were rather power oriented in their views on international affairs. Hence, in this article, I call on classical liberals to reappraise the international balance of power, perhaps as part of a general reconsideration of their ideas about international relations.

Hayekian Spontaneous Order

Order is a precondition of any society. Without it, people would be involved in a daily struggle for survival. Conditions in Somalia and the northeast region of Congo during recent decades may serve as examples of the latter. Although some order may exist in such a situation, it is certainly not liberal order because life, liberty, and property remain under constant threat. So questions of the origin and maintenance of order are central to liberal thought. The classical-liberal founding fathers of" the eighteenth century were well aware of this matter, if only because the bloody wars of the previous century remained fresh in their memory. Therefore, the perennial question is, How can both domestic and international order be achieved?

One of classical liberalism's most defining characteristics is its belief in spontaneous order. This idea's origins can be traced to a number of classical texts, such as Bernard Mandeville's The Fable of the Bees ([1714] 1988) and its "private vices, public benefits," Adam Smith's Wealth of Nations ([1776] 1981) and the "invisible hand," and Adam Ferguson's Essay on the History of Civil Society ([1767] 1995) and the notion of order as "the result of human action, but not of human design." From the Scottish Enlightenment this idea found its way into the thought of writers such as Edmund Burke, Jean-Baptiste Say, David Ricardo, James Mill and John Stuart Mill, Charles Darwin, Herbert Spencer, and of course the Austrian school of economics (Hamowy 1987; C. Smith 2006, 1-7), and Hayek cited many of these thinkers in his discussions of order (Petsoulas 2001, 6).

Hayek was motivated to work on this issue as part of his overall struggle against socialism and collectivism. It was central in his efforts to show that extensive government centralization was not needed to enable the functioning of modern societies. In his view, human cooperation was possible without rational planning (Boykin 2010).

In the context of his work in legal philosophy, Hayek distinguished thesis, the law or legislation through a top-down process driven by a sovereign's or an elite's narrow interests, and nomos, or the law of liberty, which spontaneously emerges from human interaction (Skoble 2006). Thesis represents deliberate design and planning, nomos the spontaneous forces that bring about beneficial effects no individual intended. On a broader note, but still following this line, the choice is between Cartesian rationalism and (Scottish) moral philosophy aiming at "natural liberty." The former involves planning and government compulsion, the latter individual freedom and the undesigned results of individual action.

In Hayek's view, spontaneous order and its institutions are the products of an evolutionary process of the elimination of less-effective alternatives. Therefore, spontaneous order is not based on a harmony of interests. It is instead the result of individuals' pursuing their own interests without much concern for unseen external effects, although these effects may turn out to be positive in the end. Referring to the work of the founder of the Austrian school, Carl Menger, Hayek asserts that "social institutions developed in a particular way, because the coordination of the actions of the parts they secured proved more effective than the alternative institutions with which they had competed and which they had displaced" (1967, 96-101). Note that none of these thoughts excludes application to international affairs, which also involves social institutions, such as war, the balance of power, diplomacy, and international law (Bull 1995).

This applicability becomes clearer when the relation between order and equilibrium is taken into account. The essence of spontaneous order, in the words of the man who is often credited with coining the term, Michael Polanyi, is that "no constraint is applied specifically to the individual particles." Order comes from within the parts, from internal forces, and "the resultant order represents the equilibrium between all the internal and external forces." In society, spontaneous order is achieved by "allowing human beings to interact with each other on their own initiative, subject only to laws which uniformly apply to all of them" (1998, 189-95).

Hayek followed Menger in his assertion that social institutions--such as money, language, markets, and communities--were grown "naturally" and were unintended outcomes. As a consequence, they cannot be understood by the methods of the natural sciences; social theorists need to develop their own tools and methods (Boettke 1990). In this context, Hayek also notes the existence of an information gap. Nobody can obtain sufficient knowledge and take conscious account of all relevant facts that enter into societal order. The fragmentation of knowledge means that each individual can have only a small fraction of the knowledge possessed by all and that each is therefore ignorant of most of the facts on which the working of society depends (Hayek 1998, 1:13-14). This condition enters into one of Hayek's major arguments against economic planning and "rational constructivism" by a central government. Of course, there is no reason why this insight applies only to the domestic political situation.

The rules that govern human conduct evolved over time. They were observed without being known to most individuals in articulated form and were generally accepted because observance of them produced certain positively valued consequences. Yet the rules were not observed because individuals held those consequences in mind (Hayek 1998, 1:19). They resulted from a discovery procedure of trial and error under conditions of dispersed knowledge. These rules served as a solution to a coordination problem, allowing people to make the best use of their own specific knowledge without social control. Therefore, the order was dynamic; it was a process open to continual improvement (Bianchi 1994).

Hayek embraces evolution and spontaneous order as "twin ideas" that enable the complex societies of large numbers of people to survive (Caldwell 2004, 352-61). Besides the terms thesis and nomos, Hayek also uses the classical Greek distinction between kosmos (grown order) and taxis (a made order) to illustrate his arguments. The kosmos can have a degree of complexity much greater than the degree that one person can master. It often rests on abstract relations that are not observable in the sense that the structure of these relations remains stable, even when the constituent elements change. Because this order has not been made, it cannot legitimately be said to have a particular purpose, although...