Center for a Stateless Society
A Left Market Anarchist Think Tank & Media Center
A Terrible, Horrible, No Good, Very Bad Critique of Spontaneous Order

According to Damon Linker, spontaneous order “might be the silliest and most harmful of all” libertarian ideas (“Libertarianism’s terrible, horrible, no good, very bad idea,” The Week, Sept. 26). He summarizes spontaneous order, popularized by Hayek in the 20th century, as the belief that “when groups of individuals are left alone, without government oversight or regulation, they will spontaneously form a social and economic order that is superior in organization, efficiency, and the conveyance of information than an order arranged from the top down through centralized planning.”

Linker treats as “classical liberal mythology” the Lockean idea that “civilizational order (including the formation of stable families and the institution of private property) emerges spontaneously, prior to the formation of government, which is instituted for the sole purpose of protecting and preserving it.” This idea, combined with Smith’s “invisible hand” of the market, implies a Prime Directive: “Leave people alone, and a coherent civil order will spontaneously emerge and perpetuate itself.”

Well, we anarchists see this as half right. Spontaneous, complex social orders did arise before the state, although their models of property and family were probably quite different from what most right-wing libertarians and anarcho-capitalists have in mind. The predominant mode of property in land, in the great majority of peasant village societies around the world between the agricultural revolution and the rise of the state, was the “open field” system in which the village owned the surrounding farmland communally and periodically assigned possession of a certain number of strips in the various fields to each family. This system prevailed in England until destroyed by sheep enclosures, in Bengal until destroyed by Warren Hastings, and in the Russian Mir until destroyed in a one-two punch by the Tsarist minister Stolypin and the Soviet regime.

And if Locke can be used as a critique of illegitimate power, it also serves as a legitimizing myth to justify governments as based on “popular consent.” But it’s obvious the state wasn’t actually created to protect and preserve a preexisting order. It had its origins, rather, as a parasite on that preexisting order. When the stateless village society reached a sufficient level of surplus output to feed parasitic ruling classes, the state emerged as the coercive mechanism by which extractive classes like landlords, military castes, monarchs, priesthoods, bureaucrats — and eventually capitalists — enclosed the productive power of society as a source of rents for themselves.

In place of Locke’s “classical liberal mythology,” Linker puts forth an original myth of his own:

President Obama got a lot of flack during his 2012 campaign for re-election for saying that wealthy business owners “didn’t build that” all by themselves, but his point was indisputable. The president mentioned the internet, roads and bridges, firefighting, and other public works that make it possible for the market economy to function and thrive. He could have said far more. How about the culture of general law-abidingness that we call the rule of law? The Federal Reserve’s regulation of the money supply? An independent judiciary for the settlement of civil disputes? Law enforcement at local, state, and federal levels that fights violent crime, fraud, corruption, monopolistic business practices, and a host of other behaviors that would otherwise scuttle the working of markets? And on and on and on.

The order we see at work in the United States and in other advanced democracies is anything but spontaneous.

But there is one situation where it’s possible to see genuine spontaneity in action: when an established political order is overthrown. Now it just so happens that within the past decade or so the United States has, in effect, run two experiments — one in Iraq, the other in Libya — to test whether the theory of spontaneous order works out as the libertarian tradition would predict.

In both cases, spontaneity brought the opposite of order. It produced anarchy and civil war, mass death and human suffering…..

Order doesn’t just happen, and it isn’t the product of individual freedom. It needs to be established, and it needs to be established first (sometimes by force), before individuals can be granted civic, economic, and social freedom.

Linker does a poor job concealing his Hobbesian assumptions — that people can only cooperate when rules have previously been imposed by force. And he ignores the fact that whatever cooperative order has emerged within the rules has been despite the fact that they were originally imposed for extractive purposes by some very bad people. In other words, he operates from an unstated social contract assumption that’s far more mythical and ahistorical than anything he’s criticizing.

Some of his examples of the supposed prerequisites for order that government creates, in the block quote above, actually illustrate — when stripped of their liberal packaging — the extractive interests of the classes that control the state. The Internet has turned out to have an impact on society far different from the original goal of its creators, who imagined it as a sort of walled garden, unidirectional Super-AOL of static institutional websites and streaming proprietary content. The very fact that, far from the intention of its institutional creators, it became the organizational infrastructure for file-sharers and Wikileaks, and for networked resistance movements from the EZLN to the Seattle movement to the Arab Spring, M15 and Occupy (and Al Qaeda for that matter) is itself a powerful testimony to the ability of self-organized activity to make more effective use of state and corporate hierarchies’ own creations than they can, and to turn their own weapons against them.

As for “roads,” the Interstate Highway System was created under the superintendence of former GM chief Charlie “What’s good for America” Wilson, and has played a massive role in the corporate centralization of the American economy. The Interstate facilitated the big box “warehouses on wheels” distribution model which has destroyed Main Street retail. Its artificially cheap distribution costs made corporate agribusiness plantations in California artificially competitive against local agriculture, and enabled nationwide food processing corporations to drive local canneries out of business.

The Federal Reserve is a state-organized banking cartel, and the way it “regulates the money supply” is about as unprogressive as anything that can be imagined. It allows banks to lend money into existence, at interest, out of thin air.

The law “fights… monopolistic business practices”? Seriously? The main function of the state is, in the words of Henry George Jr, to enable privileged classes to control access to natural opportunities. The way to get really, really stinking rich is not to make or do something, but to control the circumstances under which others are allowed to make or do anything. In other words, monopoly. The state enforces absentee title to vacant and unimproved land, thus enabling landlords to hold vast tracts of land out of use and charge tribute to the first users. The state enforces regulations whose primary purpose is to impose artificial capital outlays and overhead on producers, and thereby reduce competition in an industry. Even laws ostensibly aimed at fighting monopoly actually reinforce it. The Federal Trade Commission’s rules against “unfair competition,” adopted immediately after the body’s creation during Wilson’s presidency, prohibited selling goods below production cost. By outlawing price wars it enabled, for the first time — according to New Left historian Gabriel Kolko — stable oligopoly markets with administered pricing on a “price-leader” model.

Probably the single biggest state aid to monopoly is so-called “intellectual property” law, which enables corporations that no longer actually produce anything to nevertheless control production. Because of patent and trademark law, a corporation can outsource all its production to independent job shops in Asia; but as its “intellectual property” gives it a legal monopoly on disposal of the product, it can use its power as sole distributor to mark up the retail price of products a hundredfold over what it paid the sweatshops that produced them on contract. Patents also thwart the development of module-platform product designs, which would otherwise prevail given natural market incentives to interoperability, and thus facilitate planned obsolescence. Tom Peters once exulted that most of the price of his new Minolta camera came, not from the cost of labor or materials, but from “intellect” — that is, embedded rents on patents. Like the industrial tariffs of a century ago, “intellectual property” limits who is allowed to sell a given product in a given market area. The most profitable industries in the global economy all have business models that depend heavily on “intellectual property”: electronics, software, entertainment, biotech, pharma, agribusiness…

What about “law-abidingness”? Every class society has some form of cultural reproduction apparatus, whose purpose is to reproduce the kinds of citizens and workers who are needed to keep the system running on a stable basis. This means enculturing them to see the system they live under as natural and inevitable, and its rules as fair and common-sense. In fact what we have, at best, is equal protection of the law — but the laws themselves are not equal. In a society where laws were generated by communities of equals for ensuring fair dealing with each other, “law-abidingness” would be admirable. In a society where the majority of our working hours go to tribute to parasitic rentier classes, and the main function of the laws is to enforce the artificial scarcities and artificial property rights that their monopoly rents derive from, respect for the law is not good but evil.

So no — Obama and Linker are entirely right. Big business didn’t “build all that.” The state — their state — built it for them, at our expense. Socialization of cost and risk, privatization of profit. In case you haven’t noticed, the “liberal” wing of corporate capital is still a wing of corporate capital. And the Elizabeth Warren/Bill Gates/Warren Buffett model of corporate capitalism is every bit as intimately hooked into the state as the source of its profits as anything Tom Delay or the Koch Brothers have come up with.

So much for the state. But what of the other side of the coin — spontaneous order? To be blunt, Linker’s critique reads like the work of someone who only just heard of the idea, and recoiled in horror. He shows no awareness of its larger context, including other related ideas and the wide variety of thinkers who have embraced and built on the idea. As far as he’s concerned, it’s just some cranky idea to justify right-wing libertarian hatred of the gummint.

The concept of spontaneous order is closely connected with another cluster of concepts popularized by Hayek along with organization theorist Herbert Simon: the calculation problems of central planning, and bounded rationality within hierarchical organizations. Hierarchies do a really lousy job processing information — which, not surprisingly, is a major reason self-organized horizontal networks outperform them so spectacularly. This isn’t just the province of right-wing libertarian cranks who hate the gummint. There’s a wide body of organization theory literature — by respected, non-cranky academics! — on the subject.

It’s not just the sheer volume and complexity of the distributed information possessed by the functionaries of an organization, which Hayek emphasized (although that’s important). It’s also the way that power and authority relations distort information flow. As R.A. Wilson argued, nobody tells the truth to someone with a gun — or to a superior with the power to fire them, or to approve their budget. The result is one-way, top-down communication, with horribly distorted feedback from below on how policies are actually working — a cybernetician’s nightmare, in Wilson’s words. Because their own power robs them of accurate feedback about the effects of their actions, the leadership of a hierarchical institution has a functional relationship to its environment analogous to a delusional individual.

To put it simply, hierarchies are machines for telling naked emperors how good their clothes look.

But the complexity of the information to be processed is still a major problem in its own right. Never mind the question of whether complex orders require hierarchies and central planning to arise. Hierarchies are unable to even cope with complexity.

There is simply no adequate way to anticipate and make policies for unpredictable, one-off — sometimes referred to as Black Swan — events. The only way to respond to them is to decentralize and empower the endpoints to react to unforeseen situations.

Historically, centralized hierarchies like states, corporations and assorted other large institutions were able to counter this problem by using brute force to render the surrounding environment simpler and more manageable (even at the cost of severely degrading efficiency and productivity).

This is not only to render the situation manageable from an informational standpoint, but also to lower the transaction costs of extracting a surplus. As James Scott put it, in Seeing Like a State, states — and by implication other coercive hierarchies — render their managed domains “legible” from above. This is done, in part, by systematic cataloguing, grading and sorting of managed populations and assets. It’s also achieved through the principle of radical individuation and isolation inherent in Jeremy Bentham’s Panopticon, as described by Foucault in Discipline and Punish. And it’s done as well through standardization and simplification of procedure (e.g. Taylorism and Weberian procedural rules).

Any form of simplification and standardization that makes a managed unit more legible for purposes of control also makes for ease of exploitation and rent extraction. In a bureaucratic hierarchy, the result insofar  as possible is to eliminate hidden, distributed knowledge, and make the production process less dependent on such forms of human capital, by standardizing the work process and deskilling the work force to the point that any random person off the street can replace anyone in the organization and learn to do their job in a short time.

Of course this increased legibility and expropriability comes at a great cost in the productive capacity of human beings and their relationships. Any organization that deliberately designs processes to make human aptitudes, situational knowledge, interest and engagement irrelevant will necessarily be less efficient than one that takes maximum advantage of them. But given the extractive goals of any system based on hierarchy and authority, there is really no alternative.

Authority relations exist only in situations where one party is being commanded to do something it doesn’t want to do, and has no intrinsic interest in doing — usually for the benefit of the party doing the commanding. When there is a zero-sum relationship or conflict of interest built into the basic structure of a system, and both sides know it, those in a subordinate position have a rational interest to take advantage of, or hoard, their hidden knowledge as a source of rents; that is, to keep the work process as opaque as possible to their superiors so as to minimize their own expenditure of effort relative to pay. This is in their rational interest because they know that any contribution they make to productivity will be expropriated by those in authority. And because subordinates know they will not be remunerated for their contributions to productivity, likewise, those at the top of the hierarchy cannot afford to trust them with the discretion to put their own knowledge to most effective use.

Knowledge can only be used with full effectiveness when direct knowledge of the situation on the ground is combined with full appropriation of one’s own contribution to productivity and the discretion to use one’s knowledge — in other words, in a decentralized, horizontally organized, self-managed society where people cooperate voluntarily and control their own work and living conditions. Authority relations, by their very nature, create conflicts of interest that result in incentive problems. Ursula LeGuin, in The Dispossessed, shows a character’s gradual realization of the true purpose of hierarchy: to force people to do that which is abhorrent to them, or in which they have no rational interest:

Atro had once explained to him how this was managed, how the sergeants could give the privates orders, how the lieutenants could give the privates and the sergeants orders, how the captains… and so on and so on up to the generals, who could give everyone else orders and need take them from none, except the commander in chief. Shevek had listened with incredulous disgust. “You call that organization?” he had inquired. “You even call it discipline? But it is neither. It is a coercive mechanism of extraordinary inefficiency–a kind of seventh-millennium steam engine! With such a rigid and fragile structure what could be done that was worth doing?” This had given Atro a chance to argue the worth of warfare as the breeder of courage and manliness and weeder-out of the unfit, but the very line of his argument had forced him to concede the effectiveness of guerrillas, organized from below, self-disciplined. “But that only works when the people think they’re fighting for something of their own–you know, their homes, or some notion or other,” the old man had said. Shevek had dropped the argument…. [Thinking back later,] he now understood why the Army was organized as it was. It was indeed quite necessary. No rational form of organization would serve the purpose. He simply had not understood that the purpose was to enable men with machine guns to kill unarmed men and women easily and in great quantities when told to do so.

Getting back to our discussion above of complexity and the sheer volume of information: to repeat, hierarchies can only manage society with even limited effectiveness by rendering them artificially simple. This enabled them to stumble on, after a fashion, at the height of the bureaucratic organization in the mid-20th century. Since then, the rise of networked communications and the radical downscaling of both the capital outlays and output volume required for production, have resulted in an explosion of complexity far beyond hierarchies’ ability to cope with.

The problem, as stated by the First Law of Cybernetics (aka Ashby’s Law) is that a decision-making apparatus has to be complex and flexible enough to fully model the larger social units or processes it’s trying to manage. And absent the crudely oversimplified Galbraithian and Schumpeterian organizational models of the mid-20th century, the cognitive capacity of hierarchical leadership has fallen behind by entire orders of magnitude. The leadership of a hierarchy is simply unable to encompass the complexities of the larger, more differentiated unit it’s trying to manage.  The hierarchy’s cognitive map, because of inadequate scale, must abstract information below the level needed to navigate the terrain.

The only thing that meets the requirements of Ashby’s Law is the self-organized, stigmergic network. The reason is that, rather than the decision-making authority being compartmentalized into a body much smaller than the outside/below unit it’s attempting to manage, the management of a network is a property of the system as a whole, coextensive with all its nodes and the links between them. The map is the terrain.

Horizontal networks are far more agile than hierarchies because they operate without permission, entirely on the initiative of their composite nodes. Individual nodes contribute stigmergically to a larger product based on perceived need, and their own affinity and interest, which means that tasks are self-selected by those most qualified and motivated to perform them. Any innovations produced by individual nodes immediately become the property of the network, available to any other node that finds them useful. And any node that wishes to do so can immediately add further improvements based on its own perceived need. The result is that networks throw off innovations with the speed of replicating yeast, compared to the glacial speed and reaction time of bureaucratic decision-making.

To borrow a term from strategic thinker John Boyd, networks have a tighter OODA loop than hierarchies. They are able to process, and react to, the feedback from their own actions far faster than hierarchies. The key to rapid improvement or victory is not a high rate of success in individual iterations, but the fastest cycle of iterations and responses possible. When you get inside an enemy’s OODA loop, the enemy is always off-guard, reacting to a situation you’ve created. That’s why the file-sharing movement is running circles around the corporate dinosaurs of the movie and music industries, why Wikileaks’ proliferating network of mirror-sites and numeric IP addresses made a mockery of the US government’s attempts to censor it via domain name seizures, and why the TSA spends untold thousands of committee labor-hours ponderously grinding out a “security theater” procedure to counter an outmoded Al Qaeda attack vector that will never be repeated again anyway.

To summarize: Far from creating the preconditions necessary for spontaneous order, hierarchy and authority have parasitized on it throughout history. After a millennia-long arms race between self-organization and authority, between abundance and enclosure, the forces of self-abundance and enclosure are becoming too agile, resilient and productive for authority to enclose any more. The T-Rexes of state and corporation are about to be eaten alive by swarming piranha.

Markets Not Capitalism
Organization Theory
Conscience of an Anarchist