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Year 8. No. 16. July 2022

Criticism of the Spontaneous Order of Friedrich von Hayek

Facundo Guadagno Balmaceda

UBA/UNSAM
facundo.guadagno@gmail.com

Nicholas Axel diPaola

UNGS
nicolasaxeldipaola@gmail.com

A Critique of Friedrich von Hayek's Spontaneous Order

Critique of the Spontaneous Order by Friedrich von Hayek

Reception date: January 24, 2022 Approval

date: June 27, 2022

Summary
In numerous publications, the philosopher and economist Friedrich von
Hayek postulated that a society based on constructivist, rationalist and
interventionist ideas can only lead to servitude, so that the desirable path to
follow is that of spontaneous order. This indicates that the ends and states
achieved benefit the whole of society without necessarily having been
deliberately desired. Economically, it is an unrestricted approach to
methodological individualism. In this work, an elucidation of this theory will
be carried out and its problems will be manifested, in addition to examining
whether it is useful as an analytical conception to study social change. We
conclude that semantically it is vague, it does not offer causal mechanisms, it
is useless for economic analysis,

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 Criticism of the Spontaneous Order of Friedrich von Hayek

Keywords: Spontaneous Order; Liberalism; interventionism; Economic

development; Austrian School.
JEL Codes:B00; B25; B41.

Abstract
In numerous publications, the philosopher and economist Friedrich von Hayek
stated that a society based on constructivist, rationalist and interventionist ideas
could only lead to serfdom. The desired path to follow is that of spontaneous
order. This indicates that the ends and states achieved benefit society without
having deliberately desired it. Economically, this is an unrestricted approach to
methodological individualism. In this paper, we will elucidate this theory and
highlight its problems and examine whether it is useful as an analytical
conception for studying social change. We conclude that it is semantically vague,
offers no causal mechanisms, is useless for economic analysis, and is simply a
sophisticated justification of conservatism through philosophical abstractions.

Keywords: Spontaneous Order; liberalism; interventionism; Economic

Development; Austrian School.
JEL codes:B00; B25; B41.

summary
In numerous publications, the philosopher and economist Friedrich von
Hayek postulated that a society based on constructivist, rationalist and
interventionist ideas can only be served, so that either the undesirable path
to follow is or it gives spontaneous order. This indicates that the ends and
states achieved benefit society as a whole will necessarily be deliberately
discarded by them. Economically, this is an approach unrestricted to
methodological individualism. In this article we will elucidate this theory and
highlight its problems, and examine whether it is useful as an analytical
conception for the study of social change. We conclude that it is semantically
vague, does not offer causal mechanisms, is useless for economic analysis,
and is simply a sophisticated justification of conservatism through
philosophical abstractions.
Keywords: Spontaneous Order; Liberalism; interventionism; Economic
Development; Austrian School.
JEL Codes:B00; B25; B41.

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Facundo Guadagno Balmaceda and Nicolas Axel di Paola

Introduction
In the world of ideas we find philosophical disputes that are essential to
understand the actions that guide individuals. Examples of such
controversies are easy to find: the belief that each question could have an
answer gave rise to enlightenment and its universal reason; the fact of
conceiving the West in decadence gave a propitious climate for the
emergence of the totalitarianism of the 20th century. In this way, the
dichotomy appeared, on the one hand, between a conception where society
can be thought according to certain fundamental principles that emerge
from the natural condition of each human being and, in the opposite sense,
the conception that affirmed that individual actions they do not possess the
attribute of being abstractly free and that they can conduct themselves
according to certain regularities; this means to say that human behavior can
be predicted, shaped and directed towards the ends that society as a whole
deems necessary for its reproduction: something inconsistent, as will be
seen, for Austrian thought and that of von Hayek in particular. Friedrich von
Hayek (2008, pp. 121-133) takes us towards this dichotomous Manichaeism
where the desirable society is only one.
It is necessary to revisit the origin of these ideas and their logic, given that
with the emergence of new rights in different political systems, the adoption
of this conception of the world as true without nuances could give rise to
problems related to the way in which we approach crises. economic, political
and cultural of our time. By the way, in Latin America the situation is
especially worrying.
One of the new relevant political actors on the Latin American scene who
vindicates Austrian thought and, by power oflobby, enter party politics, are
thethink tanks. In Argentina the case is explicit: Javier Milei1openly vindicates
von Hayek. This politician is considered as the one who sets the discursive
agenda of Argentine politics todaytwo. There are presidents ofthink tankssuch
as Agustín Laje -Fundación Libre- or Alejandro Bongiovanni -Fundación
Libertad-, who exert pressure

1-Chaluleu, M. (2022). "That day I started playing first." A chance encounter with Fantino and
the teachings of Mauro Viale: Javier Milei tells how he became famous. The nation. https://
www.lanacion.com.ar/lifestyle/ese-dia-empece-a-jugar-en-primera-un-encuentrocasual-con-
fantino-y-las-ensenanzas-de-mauro-viale-nid14032022/ [consultation: May 11, 2022]

two-Moreno, M., and Marin, L. (2022). Who really is Javier Milei, the emerging one who
challenges politics. The nation. https://www.lanacion.com.ar/politica/que-tiene-en-la-cabeza-
javier-milei-la-estrategia-politica-del-hombre-que-esta-agitando-el-tablero-nid23042022/
[consultation: May 11, 2022]

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 Criticism of the Spontaneous Order of Friedrich von Hayek

By other means. In the case of Laje, it would take place in what he calls the
“cultural battle” (Goldentul and Saferstein, 2020), while Bongiovanni brings
together the Argentine business community at the annual dinners of his
foundation. Among his ranks, he has as a pivot someone who recognizes the
Austrian school as fundamental in his intellectual journey, such as Mario
Vargas Llosa (2018).3. Thethinktankturned into a university, UCEMA,Alma
materdoctorate of the politician José Luis Espert, and of great influence
during the last military dictatorship, as well as in the convertibility (Strauss,
2003), has to his credit the UCEMA Friedman Hayek Center for the Study of a
Free Society. A similar scenario can be seen in Chile, with Axel Kaiser at the
head of the Fundación Para el Progreso, a promoter of the Austrian school in
that country, or the Center for Public Studies -advised by von Hayek in 1981-,
both of marked support for the conservative candidate, José Antonio Kast4.
The situation has its peculiarities in Mexico, since its impact has greater
media influence: thethinktankCaminos de Libertad is owned by TV Azteca.
Without an explicit connection with Friedrich von Hayek, but with the freedom
associated with a universe of meanings where the action of the individual is
vindicated, where rights are replaced by competition, and the private sector is
considered more efficient than the public, they can place Jair Bolsonaro -Brazil-
(Troyano, 2020), Guillermo Lasso -Ecuador- (Barrera, 2021) or Iván Duque
-Colombia- (Kajsiu and Tamayo Grisales, 2019). However, the progressive growth
of Javier Milei in Argentina and the popularization of Friedrich von Hayek achieved
by the libertarian candidate5they invite us to discuss the ideas that he managed to
install in the political discourse from his precinct in the Chamber of Deputies: one
of them, spontaneous order. For these reasons, it is necessary to carry out a
critical reading of the phenomenon and its theoretical foundations in the history
of ideas in the academic sphere, in order to account for the

3-Mauricio Macri highlighted a methodological individualist, popularizer of Von Mises in the

United States, such as Ayn Rand, although her works are usually essays or novels with very
vague theoretical content. See: Politicargentina.com (2022). Who is Macri's favorite writer?
https://www.politicargentina.com/notas/201507/7029-quien-es-la-escritora-preferida-de-
macri.html [accessed: May 11, 2022].
4-See: Kaiser, A. (2021). Kast, the restorer. Foundation for Progress. Retrieved on May 11,
2022, from https://fppchile.org/es/blog/kast-el-restaurador/ [consultation: May 11, 2022]

EPC (2021). The economic program of José Antonio Kast. https://www.cepchile.cl/cep/

seminarios-y-eventos/seminarios-y-eventos-2021/el-programa-economico-de-jose-antonio-
kast [accessed: May 11, 2022]
5-Montero, S. (2022). Javier Milei, the kitsch right. elDiarioAR.com. from https://www.eldiarioar.com/
politica/javier-milei-liberta-kitsch_129_8975327.html [accessed: May 11, 2022]

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Facundo Guadagno Balmaceda and Nicolas Axel di Paola

way in which the reproduction of these conceptions operates not only in the
field of academic discussions, but also in the development of the political life
of contemporary Latin American societies
This paper will criticize this myth that persists in the concept of spontaneous
order, popularized by the Austrian economist Friedrich von Hayek, who has
supported in various works the idea that all forms of control, estimation and
even forecasting of behavior Human behavior distorts the social order and,
taken to an extreme, the inexorable destiny is that of a path of servitude (Von
Hayek, 1946, 2006, 2008, among others). The thesis that the author maintains
is that the ends and states achieved by human action that satisfies ends by
having scarce means benefit society as a whole without these necessarily
having been deliberately desired. An analysis of this theory will be carried out
and the problems it has will be manifested, in addition to examining whether
it is useful as an analytical conception to study social change.
Methodologically, it is an unrestricted approach to individualism (Bunge,
2011: 48). We conclude that it is semantically vague6, does not offer causal
mechanisms7, is useless for economic analysis and is simply a sophisticated
justification of conservatism through internally inconsistent abstractions and
predominantly idealistic conclusions.

We will make an exhaustive elucidation of the concept ofspontaneous order,

discovering its foundations, its implications and consequences in the context
of market analysis, the phenomenon of money, the emergence and
permanence of law and morality; that is, we will present it as a theory that
attempts to explain, through the mechanisms of the free market, the
reproduction of capitalist society. However, this approach does not
understand it as a historical phenomenon, one more mode of production
with its own logic and internal mechanisms, but as the concretion of all the
splendor of human nature when it is freed from a supposed external yoke, in
general , raised by the state.
Having concluded the introduction, the reader will find himself in the first
section, dedicated to questions of method, in which he will discover the
connection that exists between von Hayek and the rest of the Austrian tradition,
the concepts that found spontaneous order and justify it. , in addition to the

6-For a clarifying definition of semantic vagueness, as we allude to here, see Romero (2018,
p. 17).
7-Here we follow the position of Mario Bunge (1995, 1999, 2011), who affirms that the
objective of a scientific explanation is to show the causal and non-causal mechanisms of the
processes that operate in the system that we refer to as the object of study.

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 Criticism of the Spontaneous Order of Friedrich von Hayek

roots that give rise to it, according to von Hayek, as a universal and natural
phenomenon of human action. From the second section, calledMarket,
Production and Distribution, the logical consequences of the spontaneous
order will be exposed and it will be opposed to the different traditions
contemporary to von Hayek and those that have emerged as contrary
throughout the 20th century, either in economics or in the rest of the human
sciences and social. In the third section, the inconsistency of the triangular
argument that gives rise to money exposed by Carl Menger is demonstrated,
and that von Hayek maintains throughout his works about the nature of
money and the monetary system, opposing it to Marx's proposal. and Keynes
that the monetary system is inherent in the social system. In the fourth
section, von Hayek's proposal for extrapolating the concept of spontaneous
order to the field of law and morality is exposed. Finally, In the fifth section, a
conclusion is developed around the question: Does spontaneous order exist?
The question is pertinent given that during most of the paper allusion is
made to the idea that the Spontaneous Order constitutes a pseudo-
explanation, a fetishization of the relations of production: a naturalization of
a historical process, suppressing the conflict for the sake of satisfying the
ideological imprint of the author.

1. Questions of method: What is thespontaneous order?

It is not the intention of the authors to make here an exhaustive exposition of
the referents of the Austrian school and its proposals; however, it is necessary to
establish this relationship between the foundations of the school and the position
that we will describe of one of them, namely, Friedrich von Hayek. He himself is
indebted to the tradition that Menger initiates in the context of the so-called
marginalist revolution, whose zenith idea, namely, the principle of diminishing
marginal utility, had been cultivated since the mid-seventeenth century by
mathematicians and statisticians such as Daniel Bernoulli, especially in
conjunction with the advances in infinitesimal calculus, until well into the
nineteenth century, by economists such as Hermann Gossen who laid the
foundations for the formation of the neoclassical tradition and other scholastic
forms of marginalism (Kauder, 2015).
From the 1870s, Jevons and Walras, founders respectively of the Cambridge
and Lausanne traditions, rapidly became the predominant theoretical form of
economics. However, in relation to marginalism, two traditions emerged that
started from the assumptions of the so-called subjective theory of value, but
with slight differences about the conclusions and the way of reaching them.
One of these is the

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Swedish tradition, whose greatest reference is Knut Wicksell, and on the

other hand the Austrian tradition whose initiator was Carl Menger. We refer
to the latter in this article.
The Austrian school, in turn, differs in different generations that have made
theoretical developments, some more radical than others around the
foundations of the theory and the continuity and link with the previous
generation. In the theory of value, Carl Menger replaced the objective cost of
production of the classics with subjective utility as the theory of value.
Friedrich von Wieser popularized the concept of opportunity cost,
emphasizing its subjective and universal character. Eugen von Böhm-Bawerk
was interested in adapting Menger's theory of value to the theories of capital
and interest, criticizing with these conclusions a supposed contradiction in
the Marxist system. Ludwig von Mises and Hans Mayer spearheaded the next
generation, emphasizing epistemic, theological, and philosophical issues.
Among the fourth generation of Austrian economists were important
economists such as Fritz Machlup, and the author who provokes the
following reflections: Friedrich A. von Hayek, whose disciples came to have
considerable relevance in the Anglo-Saxon world, such as Gottfried Haberler
and Oskar Morgenstern (Boettke and Leeson, 2003; de Soto, 2010). Precisely,
von Hayek will be recognized for his development of the economic cycle, the
use of information in the economy, his criticism of central banking, proposing
the existence of international and even individual currency competition;
however, his work has been gaining relevance from his political philosophy,
which supports his economic arguments (Boettke and Candela, 2020).

The idea ofspontaneous orderit is found very early in the history of the
development of economic science.The first glimpse of this idea can be
glimpsed in theWealth of Nations…(1996), a book published in 1776 by the
Scottish economist Adam Smith, in which he makes the following statement:

This division of labor, from which so many benefits are derived, is not the
effect of any human wisdom, which foresees and procures the general
wealth that said division brings about. It is the necessary consequence,
though very slow and gradual, of a certain propensity of human nature,
which does not pursue such vast benefits; it is the propensity to barter,
barter and exchange one thing for another (Smith, 1996: 44)

Individual actions, seen in a disaggregated way, can be considered fatal if

they are released to a dynamic that depends on their own organizational
judgment. Morally, it is common to observe that the public, in general,

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ral, reject actions that involve usury, selfishness or that incite community
insensitivity; however, for the 18th century author, an eminent representative
of so-called classical liberalism, this type of behavior constitutes the
fundamental characteristic of human nature. That is why the idea persists
that, from the aggregation of behaviors that estimate individual preferences,
the fullness of civil society will necessarily be reached through the division of
labor and the institutional order. This is not alien to the evolution of
liberalism in the following centuries.8.
As the volume of sympathizers towards the political movements in favor of
a more severe regulation of business activity and work increased, a current
began to form within liberalism that proclaimed a State of pre-political
nature: a natural economic order ( Laval and Dardot, 2013, pp. 69-84). In this
situation, a new conception was developed that distanced itself from the
liberal tradition rooted in the ideas of Adam Smith, conserving his axioms,
but questioning some of his conclusions or developments.

As Marx had already stated in thegrundrisse(1985: 47-52), the allusion to a

fanciful natural state can only be a metaphor that, as the theories developed,
was taken too seriously. Thus, myths such as the idea of the rude and
primitive State of society in which the institutionalized use of barter prevailed
as a form of awareness in circulation, replaced by money as a mere facilitator
of commercial activity (Graeber, 2012, pp33-58)9. In the same sense, the idea
of the natural state of society survives, which is nothing more than an
ahistorical form of idealistic development, which postulates that human
beings necessarily tend to behave according to certain theoretical figures,
such as thehomo economicusor the utility-maximizing agent of neoclassical
economics. The reality is always much more

8-However, it is important to make some nuance. Despite the considerations of Adam Smith
on natural behavior, this and other later authors, such as John Stuart Mill, envision in a
certain exacerbation of this founding egoism a conflict with public order, for which they
resort to the exception of government intervention. on private matters in certain areas that,
in principle, do not have visibly direct economic incentives. Regarding the concept of public
good, see Stiglitz (2003, pp. 150-179). 9-In the aforementioned book by Graeber (2012), the
main argument is that there is no anthropological record that certifies that famous
transition, as intuitive as it may sound, between a primitive barter economy and the modern
monetary economy, as has been argued since Adam Smith stated it in 1776 is historically
false; in fact, even in the oldest economic-anthropological records that we can account for,
barter and money as such coexist in the same exchange system.

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complex than these ideological fictions that are presented as accurate

descriptions of the social form.
Since the Austrian school, to which von Hayek traditionally belongs, has
raised serious debate and concern about questions of method, it is
imperative to work on these issues first. The same tradition has been
concerned with three fundamental concepts: time, subject and individualism
(Huerta de Soto, 2006; Hangemann, Nishizawa and Ikeda, 2010), and has
claimed to synthesize them in economic analysis.
The first corresponds to the introduction of what has been called subjective
time, whose objective is to try to incorporate into the economic analysis the
idea that the agent intertemporally orders the coordination and disposition
of quantities based on the concept of dispersed information, aroused in
prices. The second of them is the emphasis on the notion of subject; that is,
for the Austrian economic tradition the concern for agency is nodal, to the
point where only the acting subjects exist, in a markedly ontological sense,
but not their aggregation or their representativeness, as happens in the
Cambridge neoclassical tradition or from Lausanne (Huerta de Soto, 1999).
From this follows the concept ofmethodological individualism, and this lies in
the idea that all analysis must result in the ontological individual as the only
possible object of study (Huerta de Soto, 2006;Bylund and Howden, 2015).
Unlike the neoclassical tradition, the Austrian school does not consider
averages or aggregates, rather causality can only occur in the one-to-one
context between actions of specific subjects. This can be seen developed as
the Manichaean way we mentioned in the introduction to von Hayek's
famous article, Individualism: true and false(1946), where those who
advocate an organized society based on individual action are identified as
"true individualists", while any attempt at institutional planning would be the
product of "false individualism".

This approach cannot be conceived without understanding what freedom

means for Austrian thought. Following Skinner (2012), von Hayek would be
located in the tradition begun by Hobbes, which defines freedom as the
absence of coercion. This notion is consistent with the idea of negative
freedomby Isaiah Berlin (2001) orfreedom of the ancientsby Benjamin
Constant (1978). InThe foundations of freedom(2014), von Hayek is explicit on
this topic and titles a section “freedom as the absence of coercion” (2014, p.
29). This is related to the way in which the author conceives the concept: "it
refers to the lack of arbitrary coercion by another or others" (p. 30).
Consequently, a policy that privileges agents as free must “minimize coercion
or its harmful

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effects and even eliminate them completely, if possible” (p. 32). For von
Hayek (2006) there are two types of orders, the constructed and the
spontaneous, one guided by conscious actions of individuals and the other by
non-deliberate actions. However, the author begins by defining what he
means by order, a key notion to understand his argument:

⦍By order⦎We understand a situation in which a multiplicity of

elements of various kinds stand in such a relation to one another that
from knowledge of some temporal or spatial part of the whole we can
learn to form expectations about other parts of the same whole, or at
least , expectations with a good chance of being successful (Von
Hayek, 2006, p. 58)

For von Hayek, although there is individual knowledge, civilization can only
be reached by ordering impersonal acts (p. 60). This implies that some
practices are solely the result of tradition, and individual design could only
lead to failure (Feser, 2003). The Spontaneous Order, then, would be
characterized because the behavior of its members would be conducive to
order being preserved in an unintentional way, following certain rules of
conduct that promote collaboration between the elements of this system
(Von Hayek, 2006, p. 66). Following the characterization of Roncaglia (2006, p.
420): "coordination is entrusted to the market, which operates as an
adjustment mechanism that ensures balance." However, von Hayek's
argument is based on the presumed wills of individuals,

In a modern society based on exchange, one of the main regularities

in individual behavior will result from the similarity of situations in
which most individuals find themselves when they work for income:
this means that they will normally prefer higher remuneration to their
relatives. efforts to a smaller one, and that they will often increase
their efforts in a certain direction if the remuneration expectations
increase (Von Hayek, 2006, p. 69)

However, regardless of the scholarship with which von Hayek wields his
arguments, his assumptions are, to say the least, vague. If the spontaneous
order implies that there is tacit knowledge in society, where individuals are
free to choose based on their knowledge - based on a learned code of
conduct - and where the only problem would be the laws that he

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considered arbitrary, then its theoretical edifice would be untestable. Indeed,

it is guided by three pivots that, not in vain, title his magnum opus: law,
legislation and freedom. All these notions are interrelated and, as we will see,
attributing that societies reproduce by a supposed spontaneous order is not
only ignoring historical events that condition the development of one or
more societies: beyond this, the Hayekian theoretical framework is
deliberately metaphysical for hide their inability to function at the
macrosocial level.
The authors here support Durkheim's maxim:the social is explained by the
social. We understand that the discovery of the material determinations of
the real movement of social systems cannot appeal to idyllic forces or orders
whose epistemological condition is to function as a lifesaver when the
theoretical system cannot account for the concrete processes of the real
world. We understand that the capitalist mode of production is part of the
real development of the deployment of the need for social metabolism to
remain and expand, as stated in the maxim that can be attributed equally to
Spinoza, Marx or Nietzsche. Social systems are realized as such by deploying
their determinations and manifesting them in each concrete movement for
which there are new social relationships, new hierarchical structures, new
orders created only and for the sole purpose of realizing the aforementioned
maxim, so they must be studied in their concrete historical specificity as
particular modes of the development of consciousness in its alienation and
not as a natural and sporadic unfolding, put there abstractly. Here we
reproduce the words of Juan Iñigo Carrera:

The private and independent assignment of social work under its

useful concrete forms, typical of the capitalist mode of production,
determines individuals as personifications of the social powers of the
product of work. They are free individuals only insofar as they submit
their consciousness and will to the production of value and, more
specifically, surplus value. Political economy is the scientific expression
of this alienated consciousness that believes it is free. As such, it starts
from naturalizing merchandise and capital. Marx opposes the
discovery of why social work is represented as value when it is done
privately and independently. Then, he discovers the contradictory
historical specificity of capitalism, as a way of increasingly socializing
work as an attribute of private work.

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 Criticism of the Spontaneous Order of Friedrich von Hayek

a free conscience, but of an alienated conscience to which said

socialization imposes to account for its own alienation. In discovering
how free consciousness is the necessary concrete form of alienated
consciousness in capitalism, the course opened up by Marx is by its
very form the critique of political economy. (2013, p. 321)

2. Market Order: Alienation presented as free subjectivity in Production

and Distribution (Circulation)
2.1. The Market as Spontaneous Order
For a methodological individualist, the market is the meeting of the agents
through their preferences and consumption objectives, and on the other
hand the entrepreneurs and their desire and actions undertaken to satisfy
the benefit of their projects (Huerta de Soto, 2006, p. 28-45). For this reason it
is that in the Austrian tradition the market is considered not as a thing in
itself but as a process, continuous modeling cannot be generated, since the
economy as a whole would not be a sum of homogeneous elements, but of
discrete decisions , differentiated and sporadic; In a word: spontaneous. That
is why they receive the name of market process within the tradition10, and not
dry market.
Given scarce means to achieve specific objectives, individuals create
companies. But a company, according to the Austrians, does not consist so
much in a productive organization, but in a mental project; a set of ideas that
are given towards their possible objectives, understanding the social
dynamics and the calculation of costs, where the (subjective) cost of
opportunity is gravitating. More than one thing, it is an attitude regarding the
distribution of available resources and the state of consumer preferences.

Here it is necessary to introduce the concept ofentrepreneurship, which is not

rooted in the work of von Hayek, but in Israel Kirzner (1978), which in turn takes it
from von Mises (1986), and consists of the following: when an individuala he
learns certain information about his environment, such that this information is
economically significant, he acts to get what he wants. To do this, he makes an
exchange of a good, which he has in excess, for another that he needs to achieve
his true objective: the goodb. That attitude of realizing that real opportunity of
needs and provoking the dynamics of the market process is called
entrepreneurship or entrepreneurial function (Huerta de

1.0-See the name of the famous Spanish magazine directed by a leading figure in the
Austrian economy, Jesús Huerta de Soto:Market Processes.

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Facundo Guadagno Balmaceda and Nicolas Axel di Paola

Soto, 2010, p. 41-84)eleven. It finds perfect support in what has been described
about the spontaneous order: the supply of goods in the market can never be
the product of planning or external control, but simply of the spontaneous
and strictly subjective attitude that arises from the natural drive to
undertake, to exchange, and to make expected personal goals real:
entrepreneurs are creators of the future.

2.2. Criticism of the Market as Spontaneous Order: the naturalization of

productive consciousness in circulation through imputation
In Walrasian economics12, on the contrary, prices and quantities adjust
simultaneously, such that we can construct a system of equations where then
unknowns of the same are all the prices of the economy: we obtain, however,
an incompatible system whose hypothesisad hocit is the interference of an
agent that adjusts the exchanges that could not be carried out at an arbitrary
but potentially optimal price: the Walrasian auctioneer (Hildenbrand and
Kirman, 1976, p. 156). Starting from the assumption that, in the general
equilibrium scheme, prices are given by the economic aggregate that
supposes the intersection of the supply and demand curves of the market as
a whole, arranged independently by the assumptions of the axiomatic
system, and not in the interaction and negotiation, as occurs in the Austrian
scheme, for example, which gives rise to money (Menger, Rodríguez and
Infantino, 2013, pp. 84-94).
The Austrians are not necessarily opposed to the automatic or simultaneous
adjustment -in the non-mathematical sense of the term- of the economic system
as in the Walrasian scheme, although the incipient discussions between von
Wieser and his contemporaries qualitatively incorporated the concept of
economic time (Von Wieser and Smart, 1893, pp. 39-66). The notion of equilibrium
proposed by von Hayek and his predecessors differs in that it is not taken for
granted in the mechanism of intersection of supply and demand, but through
psychological variables and the social mechanism of transmission of information,
preferences adjusted to the social change and evolutionary institutions (Martínez
Meseguer, 2013, pp. 153-172).

eleven-An exhaustive description of Huerta de Soto's position can be found in Ravier (2016).
12-Here we will distinguish between Neoclassical Economics and Marginalist Economics; all
neoclassicists are marginalists, but not all marginalists are neoclassical. The Austrians, who
in this text we analyze through Hayek's work, are marginalists, but they are not neoclassical,
and their differences will be highlighted as long as it is necessary for the objectives of the
article.

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 Criticism of the Spontaneous Order of Friedrich von Hayek

The neoclassical notion ofexternalityloses all its meaning here, since in a

free economy, in the Austrian sense, every form of social relationship, which
necessarily arises from the free coordination of agents, even if it indirectly
affects third parties, will be corrected in the long run by the spontaneous
order. Therefore, in principle, von Hayek's observation regarding how the
economy adjusts quantities and prices is resolved through the introduction of
the psychological variables of the agents in relation, ruling out the aggregate
nature of supply and demand. Von Hayek himself sees this as the
quintessentially effective method for genuine economic science by roundly
criticizing the quantity theory monetary tradition:

If monetary theory continues to try to establish causal relationships

between aggregates or global averages, it means that it is behind the
development of the general economy. In fact, neither aggregates nor
averages interact with each other, and it will never be possible to
establish necessary connections of cause and effect between them as
we can between individual phenomena, individual prices, etc. He
would even go so far as to claim that, because of the very nature of
economic theory, averages can never form a link in his reasoning (Von
Hayek, 1996, p. 22).

For the Austrians, then, it is to be expected that in a free economy, in which

spontaneous order prevails, the so-calledfull employment13resources and factors
of production, given that the market functions as an adjustment mechanism,
either by eliminating the companies that were investing in unprofitable projects,
or by redirecting the capital of the rest of society through the voluntary saving of
their available resources (Ravier , 2009); is the natural state of the economy under
the dynamics oflaissez-faire. Harrod's famous anecdote is recalled when he asked
von Hayek if the conclusion of his system inferred that buying a coat would cause,
in the long run, unemployment due to the hypothesis of forced savings
(Robinson, 1972, p. 2, as shown). cited in Fiorito, 2019, p. 79). This argument could
be carried to the point of absurdity, such that if the demand stopped, there would
still be full employment of the

13-The notion of full employment implies that developed by Keynes in the General Theory of
Employment, Interest and Money (Keynes, 2014) It is an assumption of the pre-Keynesian
tradition that the economic system is in full use of resources available, and that these that
cause supply in turn "generate their own demand", so that any external interference in the
economic system results in imbalances, such as the classic example of introducing a
minimum wage.

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Facundo Guadagno Balmaceda and Nicolas Axel di Paola

resources, which contradicts Menger's principle of imputation.

On the other hand, this conception of production separate from
consumption, in the sense that the determination of consumption is not due
to the need to satisfy the social metabolism, that is, the incipient
reproduction of the mode of production and material life, but rather consists
in his naturalization; as something that is strictly restricted to the
manifestation of biological necessity, if you will, as abstractly given, that is, as
assumed in the systema priori:

The object of study of praxeology, on the other hand, is the action as such. [...]

Action is not simply preferring. Man can feel preferences even in a

situation in which things and events are inevitable or, at least, the subject
believes so. He may prefer the bonanza to the storm and wish that the sun
disperses the clouds. Now, whoever only wishes and hopes does not
actively intervene in the course of events or in shaping his destiny. Man, on
the other hand, when acting, chooses, determines and seeks to achieve an
end. Of two things that he cannot enjoy at the same time, he chooses one
and rejects the other. The action, therefore, implies, always and at the
same time, preferring and giving up. (Von Mises, 1986, pp. 36-37)

This individualist position, although it appears to be systematic, as some

authors have wanted to point out (Beltramino, 2005), cannot account for
structural problems such as poverty, overproduction, widespread and
involuntary unemployment, endemic crises or inequality. The proposal is only
capable of emphasizing suitable characteristics, such as the aforementioned
entrepreneurship or assumptions such as the imputation scheme in which it
is assumed that the consumer has full control of the market relationship over
the companies. Assuming that it has the capacity to solve the qualitative
differences between the levels of complexity of social systems, reducing itself
to its components, and to these attributing functions with the appearance of
reality, but revealing the complete idealism that underlies these
characterizations.
Nor does it account for specific problems of production and distribution by
taking as given the natural characteristics of the system under the scheme of
spontaneous order, blaming the alleged failures that could arise in an
apparently centralized organization that is absolutely external to the pristine
mercantile order. . The principles of human action and spontaneous order
are, to say the least, arbitrary and devoid of

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any kind of evidence. This happens because, as we pointed out, the authors
of the Austrian school deny statistical evidence and empirical causality,
relying excessively on the a priori deduction of the aforementioned principles
through subjective intuitions (Mises, 1986, 235-70). More than an exhaustive
description of human cognition, it seems more like an ideological wish or a
political justification, covert or not, of the supposed natural order of society.

Criticism of on Hayek can also be found in other currents, including conservative

liberalism. The Canadian historian Jerry Z. Muller (2007) points out that in
different periods the economic order was not spontaneous, but organized: the
conscious and planned introduction of institutions allowed capitalist development
in the late eighteenth century in Germany, or the end of the nineteenth century in
Japan (2007, p. 199). Timothy Sandefur, associate researcher at thethinktank
liberal Cato Institute, develops a criticism similar to that of Muller: spontaneous
order does not explain how political or institutional decisions can be made in this
desirable society devised by Hayek (Sandefur, 2009, p. 8).

From a socialist perspective, Cottrell and Cockshott (2007, p. 7) argue that

the spontaneous order guided by price signals is imperfect, since it hides
how prices are set and assumes a very broad capacity for adaptation by
agents. For example, if a technician wants to fix a television, he will not
necessarily be guided by prices, but by the availability of materials, and their
quality compared to others. The prices simply do not contain that
information.
The works of von Hayek that we have mentioned also suffer from a poor
criticism of the concept of social justice, since it is considered a logical
impossibility due to the fact that the market would not be fair: since it is the
unintended result of individual actions, it is not there would be no precise
culpability. Such a claim ignores any study of long-term institutional impact.
The pattern of bad political institutions in Africa would be somewhat random,
contrary to a whole literature that explores the relationship between
colonialism and growth in that continent14. But leaving aside elements of
macro analysis, von Hayek's approach only considers exchange relations
regardless of their consequences: inequalities within a country and why they
occur are ignored or, rather, are the result of a higher order. .

14-The literature on this topic is truly abundant and the consensus on the impact of
colonialism on poor economic performance in Africa is evident (see Acemoglu and Robinson,
2010; Nunn and Wantchekon, 2011, among others).

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The Spontaneous Order quickly finds its theoretical limits in the author's
own contradictions. In the same way that the economic calculation would be
impossible since it would alter the market process, the bureaucratic
intervention of the government is still necessary to help with economic
transfers those who cannot satisfy their basic needs (Von Hayek, 2006, p.
410 ), although for the author these goods can be provided, over time, by the
market. This premise is not fulfilled neither in terms of economic assistance,
health and public education, or economic credits, since it is simply an
expression of desire.
Logical inconsistencies in von Hayek are pointed out by proponents of a free
trade economy. This is the case of Cole (1999), editor of the magazinelaissez-
faire, who not only thoroughly criticizes the Austrian author's approach to
social justice, but also includes the remarks of the neoclassical Nobel
economist George Stigler, who highlights the limits of conceiving freedom as
negative -absence of coercion- since it annuls the fact that an increase in
income or access to education can provide some effective freedom. From
understanding freedom in a negative way, state actions in the economy for
Hayek are interferences that distort market signals, when any economy in the
world is mixed (2002, p. 64); Furthermore, under the Hayekian framework,
fiscal goals, monetary policy, or providing credits to a certain sector, would
be mere distortions, which demonstrates the lack of realism in the author's
approach.

The argumentative contradictions regarding the Spontaneous Order show

that the fact of approaching it as the product of different impersonal acts
without any delimited intention is a mere strategy: the actions would be so
many that locating them would become impossible; The curious thing is that
von Hayek himself points to specific government interventions in this
dynamic. His claims are metaphysical: it is impossible for individuals to guide
themselves spontaneously indefinitely. In addition, it is important to highlight
the enormous ambiguity with which the concept is built. We will see that it
can be applied to virtually any social relationship that has ever existed
without detracting from its accuracy.

3.Money, Savings, Credit and Economic Cycles

3.1. The Fruits of Spontaneous Order
One of the most common phenomena where Austrians highlight the
concept of Spontaneous Order is when talking about money. Generally, his
argument is the same one outlined by Menger, Rodríguez, and Infantino in
their famous 1882 essay entitled, precisely,The money(2013), where

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has his famous triangulation argument.If we schematize it, the following

happens:Let there be three individuals A, B and C, with three goods, one of
each type for each individual in unestimated amounts,a,bYc. In the barter
system, which is maintained prior to the emergence of money, each
individual exchanges the surplus of what he produces after he has consumed
what he needed.
Think of Robinson Crusoe and Friday, both of which produce a specific good
and develop their respective comparative advantages, then trade in that
happy double coincidence of needs that results in barter. Continuing with the
scheme, the individual A who produces the gooda, has need of the goodb
produced by individual B, but the latter does not want the good produced by
individual A, so the exchange does not take place, in principle. However, A
recognizes that B needs or wants the good. c, whose producer is individual C,
but the latter does not want the good produced by B according to what A
knows, although he does need the gooda. Here are born two central ideas
that accompany the concept of spontaneous order for the Austrian tradition:
entrepreneurshipYscattered knowledge. The origin of money is that the good
ais nowthe general purpose brokerbetween the individuals in the
aforementioned economic relationship (Menger, Rodríguez and Infantino,
2013, pp. 94-107). This is essentially Menger's argument about the role of
money in exchanges, a facilitator that slowly lowers transaction costs.
Although the Austrian tradition will not change the essence of money as a
medium of exchange, there will be Austrians who approach money bythe
supply side, arguments closer to the quantitative tradition. (Von Mises, 1936)
fifteen.

Let's go back to the concepts ofscattered knowledgeYentrepreneurship. In

the Hayekian scheme, the idea that knowledge is dispersed is widely known
(Von Hayek, 1983); in what was described above, when A finds out that B has
certain preferences, it is not the result of superior control or that A has access
to a high technical knowledge about the causes of B's desires, he simply
intuits or expects it : obtained form informationdecentralized, without
resorting to a higher entity to achieve it. This is the essence of the
spontaneous order argument about money. When two agents obtain
information about each other's preferences, whether by mistake, omission or
intention, then spontaneous order arises: the exchange takes place without

fifteen-This conception is highly criticized within the Austrian school itself for being related
to the monetarist tradition, for example, in Rallo (2019). By the way, von Hayek mentions
that it is a naive conception of the business cycle because it is only linked to the "money
supply" and not also to its demand (Von Hayek, 1996).

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there is no control at all over the dispositions of the agents.

3.2. Money as a commodity and as a unit of account: a critique of the
spontaneous order from historicity
Despite the apparently plausible description of this conception of money,
which considers it essentially as a means of exchange, and the Mengerian
scheme as the form of its appearance, it has raised questions. In the first
place, its logical validity is criticized: when an attempt is made to generalize
to more than three elements, serious objections appear, as also happens in
the Walrasian scheme of general equilibrium; Just adding an individual to the
scheme begins to suffer from coordination problems that even led Walras to
postulate the idea of a planner archetype, the Walrasian auctioneer; In
short, under the strict scheme oflaissez-faire, exchanges can no longer take
place because money sporadically loses its function. If an individual D
appears, with a good ddesired by the other parties, but does not discreetly
want the available goods, then the system stops. Von Hayek's conception
argues that in an equilibrium situation, that is, when spontaneous order
occurs, money acts as if it did not exist (Fiorito, 2019, p. 77), so transactions
occur as in the exchange system based on barter that, as we saw, finds
serious logical inconsistencies and severe empirical deficiencies.

Another of the greatest known critics of the principles on which the Austrian
school is based is the Italian economist Piero Sraffa, who in various articles
questioned the implications and assumptions on which von Hayek based
himself to elaborate his system (Sraffa, 1925; 1932; 1960). As von Hayek starts
from the idea that money is essentially a medium of exchange, any alteration
in intertemporal coordination, whether the product of government
intervention or even failures in business organization, would affect the short-
term equilibrium, but the ambiguous concept ofspontaneous order, with the
characteristics demonstrated, serves as an explanatory lifesaver to account
for a necessary order to which the system tends when it finds itself in a
situation of supposed lack of coordination that, if everything were given as
von Hayek shows, should not even occur, unless there is an intervening state.
That is, von Hayek denies the historical reality of any system or mode of
production in order to justify his idealistic theory of the formation and
coordination of production and distribution.

Second, anthropological and historical evidence has shown that an

institutionalized barter economy has never existed (Graeber,

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2012, p. 47) and that, on the other hand, money was born as a unit of account
to the extent that the credit system was developed, and not as a mere means
of exchange: “it is important to emphasize that it is not presented as
something that really happened but as a purely hypothetical exercise.
InThe denationalization of money(1996b), von Hayek argues that in a
society where government currency is forced to flow, money in circulation
would be based on the trust that agents have over the currency issued by
entities that also function as intermediaries. The reality is that this happened
practically during the first two hundred years of the history of capitalism, and
on various occasions it provoked endemic crises that caused the banking
system to collapse, or led to various crises in the balance of payments, or
caused serious debt crises, which is why the creation of central banks was
necessary to serve as lenders of last resort,

Herein lies one of the most celebrated ideas of the Austrian tradition, the Austrian Business Cycle Theory or TACE. This is that the

economy under the forced currency, arranged by government discretion, produces abrupt swings in the economic cycle of production and

distribution by uncoordinating the intertemporal preferences of the agents. This happens because money is part of the exchange

calculation that entrepreneurs and consumers carry out in their projects on the optimal distribution of resources necessary to provoke

production and, finally, exchange and consumption. But the economic cycle is not a product of money itself, but of the natural interest rate.

The Austrians are indebted to the position of Wicksell and Böhm-Bawerk, who assume that the interest rate is the difference between

present consumption and future consumption, that is, the savings made from consumption, so that in a monetary economy it is expressed

by saving in money. However, this conception suffers from considerable logical flaws, as Sraffa himself detects, when when defining the

natural interest rate of the exchanges, defined by the voluntary savings of present consumption, it is found that an interest rate is derived

for each good with respect to other goods, for which the system has far from a monetary equilibrium as many as there are goods in the

economic system, which brings to light a supine theoretical ambiguity product of a naive conception about the way in which money works

in the economy. the savings made from consumption, so that in a monetary economy it is expressed by saving money. However, this

conception suffers from considerable logical flaws, as Sraffa himself detects, when when defining the natural interest rate of the

exchanges, defined by the voluntary savings of present consumption, it is found that an interest rate is derived for each good with respect

to other goods, for which the system has far from a monetary equilibrium as many as there are goods in the economic system, which

brings to light a supine theoretical ambiguity product of a naive conception about the way in which money works in the economy. the

savings made from consumption, so that in a monetary economy it is expressed by saving money. However, this conception suffers from

considerable logical flaws, as Sraffa himself detects, when when defining the natural interest rate of the exchanges, defined by the

voluntary savings of present consumption, it is found that an interest rate is derived for each good with respect to other goods, for which

the system has far from a monetary equilibrium as many as there are goods in the economic system, which brings to light a supine

theoretical ambiguity product of a naive conception about the way in which money works in the economy.

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4. Law and Morality

The development of von Hayek with respect to the behaviors implicit in a
certain legal system that, sooner or later, would become explicit, is extensive
from chapter IV ofLaw, legislation and freedom(2006). Its empirical model is
Anglo-Saxon law, orcommon law, based on general rules learned over time,
with judges' decisions that vary from case to case. On the other hand, the
opinions are binding, that is, they advise an action to be followed16. Here we
find three Hayekian elements: (1) tradition-related order -a corpus of laws,
treaties and rulings, not a constitution-; (2) another aspect that could be
considered traditional: that the rulings of the judges be binding; and that (3)
the magistrates "discover" particularities in the new cases and that is taken
as a precedent. That would be Hayek's argument -the law has not been
invented, as legislation was (2006, p. 96)- and none of that is "spontaneous",
rather, it is a construction of the author, in the sense that it opposes
continental law that does have a corpus of laws and a constitution to refer to.
The judges, incommon law, they may know the “how” and not the “what” of
their decisions, but still the final decision is made by the judge.

For von Hayek there is a tradition that runs from Greece and Cicero, the
Middle Ages, classical liberals, Scottish moralists and North American
statesmen, who have not separated the law from liberty (2006, pp. 74-75).
The Austrian author suggests that primitive societies had legislation that did
not depend on any legislator, but he does not provide any evidence, he only
mentions in a footnote toSocial Anthropologyof Evans-Pritchard, who reaches
almost the same conclusion as him regarding English empiricism and French
rationalism (Evans-Pritchard, 1951, p. 29)17. Then, he affirms that what we
know about these societies allows us to support the existence of an origin
and a formation of the law different from the will of a legislator (2006, p. 99).
This does not coincide with Evans-Pritchard's own research on the Azande
(1976), who were characterized by having a legal system without any code,
but with the arbitrariness that an oracle could decide the guilt or innocence
of the accused: of course , this does not seem like a very fair treatment of
legal disputes, however ethnocentric this statement may sound.

16-Hayek opposes the common law system as bottom-up to the French system, considered
constructivist and "top-down" (Gordon, 1993).
17-Another anthropology book that is mentioned, attributing that this discipline would
finally be convincing itself that societies are governed by a spontaneous order, is the work of
Gluckman (1965, p. 17), but there is no clear evidence on the claims of von Hayek.

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But if, following Hayek's reasoning, legal processes are based on discovery,
starting from already established traditions, this implies that individuals will
not see severe alterations in the system for an indeterminate, immeasurable
period. The author himself explicitly acknowledges this:

The fact that the law that has thus developed has certain desirable
properties does not prove that it will always be a good law, or that
some of its norms may not turn out to be highly inadequate.
Therefore, it does not mean that legislation can be totally dispensed
with (Von Hayek, 2006, p. 116)

On the other hand, if the legal system is based on case law, the final
decision must be made by a judge. Well, this agent for von Hayek knows the
traditions on which he must act. However, as Hasnas (2005) argues, a judge
who considers it socially desirable to maximize wealth will not coincide with
another magistrate who believes that a good society is one where resources
are distributed equitably: this fact is irrelevant if it follows from the system
juridical, or if it should be appealed to from tradition. Interestingly, from
liberalism they offer criticism that follows the same path: Shenfield (1987)
coincides, practically in its entirety, with the Hayekian argument on the
common law, but it does not stop indicating the arbitrariness in which a
judge can fall when making a sentence.

However, von Hayek's argument is full of unsubstantiated claims, with the

sole purpose of passing off as fact what is really ideology. It is redundant to
list the times he does so, but it is important to highlight one in particular: “We
have already pointed out that the ideal of individual freedom seems to have
flourished mainly in those peoples in which, at least for long periods, a law
made by the judges” (2006, p. 123). Mahoney (2001) tries to show that this
statement is true by arguing that, between 1960 and 1992, countries of
common lawgrew more than those who use a continental legal system. The
author argues that this is due to greater contractual security, but today,
Japan is a rich country and its system iscivil law, as it is also from Nicaragua;
thecommon lawneither would it explain India's economic growth together
with its income inequality -and no democracy-, nor does it say anything about
dissimilar countries such as Canada or Sri Lanka. Legal systems affect the
economic order, and in fact Xu (2011), after reviewing the specialized
literature, maintains that we are far from reaching a consensus on which
system favors economic development the most; This debate is valid, but it is
much more concrete than stating

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something like “the ideal of individual freedom” when that only implies the
absence of state coercion18.
On the other hand, what would be the point of laws evolving
spontaneously? The mere fact that a sentence is taken as precedent implies a
deliberate action by one or more individuals. And if von Hayek himself
acknowledges that the system requires a legislator to intervene
"occasionally" -without specifying how often- (2006, p. 30), then one can no
longer speak of any spontaneous order. Anglo-Saxon and customary law do
not start from a rigid legal corpus like continental law, but they do not imply
a kind of entelechy, for convenience called spontaneous order, which does
not guarantee the deliberate action of individuals. At times, Locke's influence
on von Hayek leads him to make bold claims:

Today it is no longer disputed that the recognition of property was prior

to the appearance of the most primitive cultures, and that without a doubt
everything that we call civilization has been able to develop on the basis of
that spontaneous order made possible by the delimitation of protected
areas. of individuals or groups (2006, p. 139).

If the protection of private property were the conditionsine qua non for a
supposed spontaneous order to develop, this does not explain what historical
events occurred so that certain property is considered private, nor what
actions maintain it. If we concentrate on primitive societies, the practice of
potlatch, analyzed by Mauss (2009), includes the destruction of property as a
power struggle between heads of clans or families, and this could be a
custom of a primitive state. In this way, how property is understood, the
administration of a society, or the conception of the individual, are not
homogeneous in every human group in any historical time.

Beyond the bold statements that we have commented on, von Hayek recognizes
certain limits in his approach and, in a no less ambitious section where the judges
would be functional to the Spontaneous Order, he understands that

18-The celebrated neo-institutionalist approach of Acemoglu, Johnson and Robinson (AJR) is

criticized by Olsson and Hibbs Jr. (2004), demonstrating the complexity of the debate.
Between 1500 and 1830, the full conquest of the Hispanic world, the Western world had few
solid capitalist institutions. One could only speak of a possibility of such a scenario during
the war for Africa that began in 1885, but deadly diseases altered institutional development.
As a result, AJR's econometric analysis of Latin America has little or no validity.

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there are actions with clear intentions in the formation of institutions: this
would be part of an "evolutionary (or critical) rationalism" (2006, p. 150). The
author's argumentative strategy, as we have seen, consists of large
statements that imply a detailed historical description -never carried out-,
followed by propositions of a normative nature that are practically
untestable. A clear example of this type of operation is to affirm that beyond
individual knowledge, civilization -which one?- is reached by impersonal acts;
but this can only happen if individuals are allowed to develop according to
their knowledge, except for special circumstances -which ones?- (Von Hayek,
2014, pp. 60-69). Quickly, the author contradicts himself, pointing out that a
free society is characterized by the conscious effort of a few that will later be
adopted by a majority (2014, pp. 82-83). The author, affirming that in the long
term it is not possible to foresee human actions, simply falls into an
obviousness to maintain that society is guided by a process of discovery: not
all the consequences of an intervention can be known, but not for that
reason this it will be negative.

If for von Hayek the legal system, that is, the dispute over what is fair in a
society, is based on the evolution of actions that would have been considered
valuable or inefficient in the past, morality responds to the same thing. In this
way, there would be no impositions on what would be morally acceptable for
them to have survived time. Hayekian morality is indistinguishable from law.
Given that conscious intervention in society is conceived as a deviation from a
natural order, it is understood, following Vergara Estévez (2009), that von
Hayek conceives man as individualistic, that in the long term this action will
result in the results of the Great Society, of limited reason, negative freedom
and of naturally unequal men, to which I would add, guided by laws based on
custom or tradition.

Regarding morality, for von Hayek the individual must follow their own
interests (2014, p. 69), thus fitting into moral selfishness. Of course, his
position is not so naive where the social actors find themselves in an
ahistorical situation, as in Friedman (2007) or Rand (1961), since the agents
are conditioned by a legal system, which is essential to establish restrictions
and freedoms regarding the behavior that can be adopted. In this way, the
individual does not exist if he is not in some relationship with respect to the
traditions, customs and laws of the society where he is.

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Conclusion: does the Spontaneous Order exist?

By way of conclusion, we wonder if it is indeed possible to discern
spontaneous order in the Hayekian version as a consistent theoretical form
that explains or at least manages to discern what is eminently social, not as a
natural and abstract condition of a fictitious individual in the desert. In this
way, we could establish that it develops in the following system: a
spontaneous order derives in some kind of macrosocial form that,
evolutionarily, would derive in the great society; from this, a microsocial one
emerges, related to the general order.
As the author never delimits historical periods where order can be
established, it would not be wrong to maintain that it occurs when, in fact,
there is enough information to establish a civilization.

These Hayekian inconsistencies make it possible to explain almost every

social phenomenon by attributing the property of causality to the entelechy
of spontaneous order. When Polanyi (2007, p. 231) refers to the fact that the
market was planned, but planning was not, he is referring to the fact that
knowing each consequence of our actions is impossible; but the capitalist
market was produced by very concrete facts. We consider that this is the
fundamental fact for which the Hayekian approach to social facts is naive, as
well as vague, a reason that allows salvage.ad hocbefore any interpretation
that could contradict the Austrian intellectual. If the spontaneous order
responds to a series of customs that the individuals did not plan, then it does
not matter how this order was produced.

Another inconsistency in von Hayek is to pretend that each state

intervention alters the discovery process that market relations are. If this
were the case, such a period would not have been very long, since in
England, the cradle of developed capitalism, the existence of this system
would have been impossible without a health office that will insistently seek
to improve the quality of life of workers. . Although the State did not
persecute the welfare of the workers, but rather the protection granted was
to avoid their discontent (Gorostiza, 2014), it is no less true that this was
essential for the work to continue its reproduction.
However, von Hayek's spontaneous order does exist, but not as an
explanatory mechanism to systematize why a society changes or is
preserved, on the contrary, it only implies the justification of a given system.
Since von Hayek does not consider relevant the causes by which a system
was formed -there is no justice or injustice in a market process, according to
his analysis- the spontaneous order becomes a justificationad

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 Criticism of the Spontaneous Order of Friedrich von Hayek

hocof conservatism. It allows us to forget the very feat of capitalism: original

accumulation. It does not matter how or why some own the means of
production and others work for them; nor is it relevant under what conditions
it was done: it only matters that it happens. In this way, the spontaneous
order ignores injustices in the market -a moral judgment for "natural"
relationships- and considers that if each one followed their own ends, this
would favor a general order -always under a capitalist system-.
Von Hayek's reasoning is about, bluntly, the justification of the economic
system without consideration, modifications or deliberate proposals that
alter it. If the social order is impersonal, there is no one else to blame for
individual misfortune than the person in question, or the state. The market
does not have to be in balance or perfect, each of its defects is a desirable
consequence of cultural evolution. In this way, the appalling working
conditions of the sweatshopsand the anguish caused to the workers would
be justified by the savings; thus, poverty is justified in a voluntary way, since it
would be a state in which one wishes to be because the possibilities of
improving that state are always available, regardless of the cost.

The strategies that Friedrich von Hayek develops to disassociate himself from
conservatism are based on the fact that the conservatives would have
bequeathed their wisdom regarding the importance of spontaneous orders -a
legacy that was not accidental for the Hayekian system-, differing in how the
liberals would appreciate the change. However, the ultramontane or
traditionalists that von Hayek champions - Coleridge, Bonald, De Maistre, Justus
Möser and Donoso Cortés - believed that change in society was just as dangerous
as state interventionism in von Hayek.
In epistemological terms, the form of justification of the spontaneous order
suffers from a contradiction with the philosophical principles of the Austrian
tradition that rejects the empirical evidence as an offshoot of inductivism or
naturalistic falsificationism (von Mises, 2010, p. 198) In the context of the
market order, of the institution of money, of morality or of Law, it is only
enough to start from general principles without adhering to the real
development of historical institutions (Von Mises, 2010, pp. 197-198).
As we have seen, spontaneous order is nothing more than a conceptual
device to justify a free market policy with a State that would only be in charge
of providing justice and security. Philosophically, it arbitrarily collects thinkers
who advocated methodological individualism; his epistemology lacks causal
explanations and only justifies the relations of production under capitalism.

We have analyzed throughout the previous pages the concept of order

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Facundo Guadagno Balmaceda and Nicolas Axel di Paola

spontaneous and the various arguments that have been outlined in defense
and to the detriment of its application and theoretical relevance. The Austrian
tradition is clear in its emphasis on the natural market order and its way of
unfolding. Agents are the only ones capable of acting when reality resists
their expectations. However, this conception of social reality suffers from
serious problems of application and theoretical coherence, whose logical
conclusions contradict the principles of supposed dynamics from which they
start with so much emphasis. By not being able to provide macrosocial
explanations, appealing to a spontaneous order implies a justificationad hoc
of why the facts in a certain way, leading to a fallacy of false dilemma where if
methodological individualism is not adopted, then the result will necessarily
be detrimental.

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