 We're very fortunate to have Sheldon as the Vice-Chair of the Libertarian Party, and as our speaker here tonight. Join me in welcoming Sheldon Richmond, please. I have to make two corrections. Number one, I never wore a return Vietnam button, and if I did, it didn't specify which side. And ordinarily you would have been correct that you were the person who's known me longest, except my parents were in the room. I'm Dave Touche. I got you. Well, thank you very much. It's very nice to be in Maryland. And Maryland is a great LP state, and you all saw the rundown of the Mathers campaign, and I think Tom deserves all the credit in the world for what he did. And we're looking forward to a great campaign from Jerry. Yeah, there it is. So it's nice to be here. Now I've titled this talk, this is sort of a title that's guaranteed to put you all to sleep after dinner. The spontaneous order and its value to liberty. Great lively year. And I knew this title was going to scare people, especially applied to an after-dinner speech. So I figured I would find a humorous story to open up with. Unfortunately, there aren't many jokes being written about the spontaneous order. Or at least there are not many clean jokes being written about the spontaneous order. So I'll have to forego the intended humor with the hopes that there will be some unintended humor. And that is really subtle. Now, actually I came to the conclusion that it's symbolic that there aren't too many jokes about the spontaneous order. Because when a conscious understanding of this important topic filters down to the joke smiths, we'll be much closer to the libertarian society. It's kind of the point of the whole talk tonight. Now, I don't want anybody to be alarmed about the title, because I don't intend to give a heavy lecture on the meaning of the spontaneous order. There are many other people who are better equipped at that, and there's plenty of writing on the issue, and I urge you all to go out and read it, dating back to Adam Smith and even earlier than that. But what I want to discuss briefly is the role this concept should play in our strategic activities. This role was emphasized in a lecture this summer by Walter Grinder of the Institute for Humane Studies. Grinder struck a responsive chord in me and some others in this room when he said that we won't succeed in abolishing stateism unless many people grasp the meaning of spontaneous order. And I hope this will become clearer as we proceed here. Now, to start off with an understatement, advocates of the free market are badly outnumbered these days. And you can just look at the results in Washington Tuesday for some empirical evidence. There are a lot of reasons for this, ranging from ignorance to semi-conscious aversion to outright power lustful hostility. For many people, unspoken ethical principles automatically condemn any system that allows people the freedom to pursue their own ends. And this applies even to many self-styled advocates of capitalism. I have George Gilder in mind. To George Gilder's self-interest and ambition are so objectionable he has had to devise a contorted gift-based rationale for capitalism that most people to their credit have found hard to accept. Gilder has gone so far as the right quote that with friends like Adam Smith, businessmen hardly need enemies. Now, whatever the reason, most people have it in for the free market. And over the years, every ill or alleged ill has been attributed to it. Mises has a marvelous opening paragraph in his little 1947 book, Plan Chaos, that reads, Nothing is more unpopular today than the free market economy, that is capitalism. Everything that is considered unsatisfactory in present-day conditions is charged to capitalism. The atheists make capitalism responsible for the survival of Christianity. But the papal encyclicals blame capitalism for the spread of irreligion and the sins of our contemporaries and the Protestant churches and sects are no less vigorous in their indictment of capitalism's greed. Friends of peace consider our wars as an offshoot of capitalist imperialism. But the adamant nationalist warmongers of Germany and Italy indicted capitalism for its bourgeois pacifism, contrary to human nature and to the inescapable laws of history, sermonizers accuse capitalism of disrupting the family and fostering licentiousness. But the progressives blame capitalism for the preservation of allegedly outdated rules of sexual restraint. Almost all men agree that poverty is an outcome of capitalism. On the other hand, many deplore the fact that capitalism, in catering lavishly to the wishes of people intent upon getting more amenities and a better living, promotes crass materialism. These contradictory accusations of capitalism cancel one another. But the fact remains that there are few people left who would not condemn capitalism altogether. Well, I think you get the point. My focus tonight is on the people who oppose the free market, not out of informed hostility, but out of ignorance. And my particular point is on... I have a particular kind of ignorance in mind. The ignorance of the essential orderliness of a market society. And perhaps it's a subtle point. But fundamental to the very concepts of society and market is the idea of self-generated orderliness. If you think about it, you can't conceive of the concept of market or even society without some sense of there being an order involved. Not an imposed order, but an order that comes out of it, you know, from within. In fact, it's the very element that drew the attention of Adam Smith and others to study these things. The fact that they looked out there and they noticed regularity in order. Now, given this ignorance, it is unsurprising that people oppose the market. After all, it's understandable that people want to live in an orderly environment by which I mean an environment where they generally know what to expect of other people under many kinds of circumstances, however complex. Imagine the problems of living in a society in which you'd never know how people will react when you say, good morning, or where the phrase, have a nice day, could get you a punch in the nose. Of course, considering the sappiness of that cliche, you're likely to be punched in the nose today and you may deserve it. The desire for order, then, is not objection. But, in fact, entirely fitting for rational beings. Now, probably the person who's done most of the writing, explicit writing and thinking about this is F.I. Hayek. And he's described two kinds of order in human affairs. The imposed order and the spontaneous order. And what he pointed out, and what I think must inform our strategic considerations, is that in the view of many people, there are only imposed orders. The idea of spontaneous or self-generated order has never occurred to them. This is ironic because they act within spontaneous orders all the time without realizing it. For example, even in a highly interventionist society, there is a large degree of predictability in people's everyday actions. To take a simple example, when you say good morning, most people respond in kind. The same applies to very highly complex exchanges. These rules of conduct, or customs that are more complex than they may appear at first, were not decreed by any law giver. They evolve through the ages, just through the individual acts of people seeking to better the condition. They comprise institutions that are, in Adam Ferguson's immortal phrase, the product of human action, but not human design. But I'm getting ahead of myself. When libertarians argue against the idea of a planned economy, we are arguing really two things at once, and unfortunately we don't separate the two as clearly as we should. The easier of the two arguments is the idea that planning is a bogus issue. As Mises put it, the alternative is not plan or no plan. The question is who's plan? Should each member of society plan for himself, or should the paternal government plan for all? The issue is not automatism versus conscious action. It is spontaneous action of each individual versus the exclusive action of the government. It is freedom versus government omnipotence. Now this argument, I think many non-libertarians will readily grasp, even though they still may choose omnipotent government, but they still can understand the idea that the issue is not between no planning and planning, but rather who's going to plan. So it's the next point that may evade them, and unless we are very careful and confident about making this argument, they'll never discover the point. Since it is such a critical point, I highly recommend that libertarians study the subject so that they can be conversant in it. You don't have to be a full-time libertarian scholar to pursue this subject so that you can better argue to the people you meet every day. Now here's the point. Once having grasped the idea that the free market means that the individual plans for himself or herself, the non-libertarian will likely ask, okay, what prevents, though, the countless individual plans, this pursuit of countless individual plans from turning into chaos? I'm sure you've all heard the people tell you that well, the market's okay for small primitive societies, but not for huge complex ones. We're way beyond the time when we can have a free market. So this is where the concept of spontaneous order comes in. Now it has gone under many names, undesigned order, unintended order, unplanned order, automatic forces, harmony of interests, and Adam Smith's immortal, the invisible hand. All of these names have merits and drawbacks. To the extent that they distract us from the fact that individual actors plan their actions, they're deficient. In other words, if we talk about spontaneous order, we don't mean people are acting only spontaneously. It doesn't mean that people don't plan their own actions. It has nothing to do with that aspect of it. But the merit of these various terms lies in their indicating that some web of consequences emerges that is orderly and yet unintended. Nozick in his book, Anarchy, State, and Utopia, wrote, quote, that an invisible hand explanation explains what looks to be the product of someone's intentional design as not being brought about by anyone's intentions. Thomas Sowell, in his book Knowledge and Decision, says that the mutually constraining complex of relationships whose results, excuse me, he refers to the mutually constraining complex of relationships whose results form a pattern not necessarily similar to the intentions of any of the individuals involved. And even Engels, Frederick Engels, was aware that quote, what emerges is something that no one will. Now let me quickly retreat from Engels, this is not the group to quote Engels in, I'm sure, by turning to Hyatt when he has a marvelous passage in the Constitution of Liberty, where I think he really gets at the whole point. He said, the enemies of liberty have always based their arguments on the contention that order in human affairs requires that some should give orders and others obey. Much of the opposition to a system of freedom under general laws arises from the inability to conceive of an effective coordination of human activities without deliberate organization by a commanding intelligence. One of the achievements of economic theory has been to explain how such a mutual adjustment of the spontaneous activities of individuals is brought about by the market, provided that there is a known delimitation of the sphere of control of each individual. And understanding of that mechanism of mutual adjustment of individuals forms the most important part of the knowledge that ought to enter into the making of general rules limiting individual action. The Hyatt, this was the critical thing you had to teach people that there could be order without a designer. One of the things we have to do is communicate this to people through examples, concrete examples that they will grasp first in the particular case and then generalize. For instance, the language is something that has arisen as a result of what we're calling here the spontaneous order. No one invented language, no one sat down and said, okay, let's have language and rules of grammar and words that refer to different things. It evolved just through people's actions, through their seeking to achieve ends, which evolved communication. Language grew out of that. Money is another example. If you read Mises or Manger on the evolution of money, you get a good concrete example of how the spontaneous order works. No one invented money. But it was a result of people attempting to make exchange easier and out of that you've got a system that no one sat down to design. Same thing with the price system, standardization of parts, years and whatnot. No one decreed that there should be standardized parts. Again, it was the result of people seeking to better their condition through individual acts and not overall design. A very simple, simplistic, really, example that you can use to get through to people. See, I'll give just a path through some uncharted woods. If someone walks through woods for the first time, seeking to do nothing but to get to the other side, he will have, without intending it, have begun the process of creating even a permanent path because just by walking through, he downs some bushes and grass. The next person to come along may choose that path because it already looks easier because the first person has pushed down some of the brush. Before you have a path, even though no one of the person is crossing it, perhaps no one of them had in mind the actual creation of the path. Now, that's a very simplistic example and you can't leave it at that because in fact the path can be created by deliberate design. These other things though, language and economy, economy that serves human wants, those things cannot be created. It can't be designed by a single mind because the information just isn't available. In teaching people about spontaneous order, it is critical that we point out that there's nothing mystical or automatic or mechanistic about it. It is rooted in human action and human planet, but at the same time it is fantastically complex and so impossible for any one person to grasp in its entirety. This is so because of what Hayek calls the division of knowledge, the fact of life that knowledge necessarily is scattered and incomplete and therefore unavailable in its totality to any one mind. And one of the most ludicrous objections to the free marketing, you've all heard this, to the free market solution of anything is that it's quote simplistic. Okay, we've all tried to have unanimity. In fact, there is nothing more complex in the world than the free market and nothing can be more simplistic than the view that social problems can be solved by decree, by decrees of rulers who are necessarily ignorant of what matters in each situation. And equally absurd is the view that the market is suitable only for small, simple society. As you all know, I don't have to tell anyone here, it's the very opposite of the case. There's a much better case for planning, sort of central planning in a society of five people, but they all know each other. Not that it would be moral, but as far as just strictly speaking in economics, you have a lot more chance of pulling off central planning than we have in a family. In fact, we have central planning for a family, but as soon as the group is big enough that you can't have personal relations with all the people, then central planning has to fall on its face because the information just is not available to the planner. So we sometimes kid ourselves about our stock solutions and social problems, namely that answer, well, the market will take care of it. You've all heard the light bulb joke, right? Do I need to tell anyone here? The question is how many libertarians, he knows it all, number five. How many libertarians does it take to screw on a light bulb? Okay, the answer is none, the market will take care of it. Okay, now I have my own version of that. This is the revisionist joke. And it's how many Austrian economists does it take to screw on a light bulb? And the answer is we can't make quantitative predictions. Okay, now while this may not be a sufficient reply to the uninitiated, namely the market will take care of it, that may not be enough for most people. It does get at the truth. The market does take care of things. But when we say the market, we don't mean a thing, you know, a single institution, an object out there that you can point to. As Thomas Sowell put it, the market is nothing more than an option for each individual to choose among numerous existing institutions or to fashion new arrangements suited to his own situation and pace. In other words, the market is just not a set, even a set group of institutions. In light of this sensible description by Sowell, the phrase market failure becomes nonsensical, something we're always arguing at the Council for Competitive Economy. There's no such thing as a market failure, doesn't it? There's not a thing out there called a market that can fail, and people can individually fail in their own plans, but that's very, very different. I was taking a Soviet history course last year, and the professor who was very anti-communist ridiculed the Soviet economic system as too complex because to get a simple production decision made, somebody down on the low level of the production structure had to send the requests all the way up to bureaucracy to some commasaur, and then the commasaur had to make a decision of course he was far removed from the problem area, had to send his answer all the way down and took months and all that. But anyway, he was ridiculing this as being horribly complex, and that was the reason the system was such a failure. Well, while in physical terms, you may call this complicated, I wondered out loud in the class whether the problem was not that it was, aside from ethics now, but in economic terms, the problem was not that it was too complicated, but that it was too simple. After all, here was a huge society of millions of people being run on a Robinson Crusoe model, as if there was only one end seeker and one decision maker. By the way, the professor agreed, I got an A in that course, so he never thought of that before. Now, this point about the market not being a concrete thing is an obstacle to us, because we can't point to the market, say there's the market connection. How often have you been told after reposing some government program, well, what do you propose? What do you want? You don't just say the free market, that's not a proposal for many people. The many people advocacy in the market is pure negativism without a constructive alternative. William Raspberry in the Washington Post criticized Thomas Sowell for the very thing. He outlined all Sowell's criticisms against schools and this and that, affirmative action, and then said, well, the man never proposed anything. So what uses he as a social company never tells us what he wants. Now, this is a silly criticism, and I've tried to illustrate it with this analogy. You're welcome to all of you use this. Imagine you're walking down the street and you walk past an alley where there's a mugger holding a gun on some honest citizen demanding his money. Now, you walk up to him and you're the citizen type and you say, that's not the right way to get money. You should not be taking this man's mugger. And the mugger turns you and say, what do you propose? And you say, well, you know, there's a free market. Go find a job. He said, well, that's not a proposal. Now, as long as you can't give me a proposal, I'm going to continue with this concrete act, which I can see is very visible. Well, it's the same problem. We'd all agree that the mugger was being irrational. Mugger qua mugger. Now, in strategic terms, in strategic terms, the markets in corporeal nature, the fact that it's nothing to point to, requires us to be patient in making our case because we were asking people to think in a way that they haven't thought before. So we have to remember that. Now, there are other aspects of the spontaneous order that ought to be emphasized. First is synonymous with cooperation. The enemies of liberty have a stake in making the market appear anti-cooperative. Of course, this is nonsense. How could a system whose foundation is the division of labor be anti-cooperative? No one has better illustrated this than Leonard Reed in his essay, Eye Pencil. If you haven't read it, please look it up in the Freeman, Right to the Feet in Irvington, New York, and get a copy of it. It's fantastic. No one can make a pencil. No one person can make a pencil. And yet, the simple thing which costs very little, even with inflation, is made by millions of people, strangers to each other, scattered throughout the world, without central direction and without coercion. That's a great way to impress on people what the spontaneous order is. The cooperative nature of the market is deeply related to its benevolence and its humanity. Its enemies are to be admired, the market's enemies, are to be admired for their perceptiveness. They have known what they have to gloss over in people's minds in order to smash the market. They have to get, they understood the essential benevolence and humanity of the market, and they knew that this was what had to be blotted out if they were going to turn people toward status. If we are to triumph, we must teach people the causal link between the market and what they value about social life. Murray Rothbard, I think, describes this very well in the man-economy and state. I want to read a short paragraph about this. He says, in explaining the origins of society, there is no need to conjure up any mystic communion or sense of belonging among individuals. Individuals recognize, through the use of reason, the advantages of exchange, resulting from the higher productivity of the division of labor, and they proceed to follow this advantageous course. In fact, it is far more likely that the feelings of friendship and communion are the effects of a regime of contractual social cooperation, rather than the cause. Suppose, for example, that the division of labor were not productive and that men had failed to recognize its productivity, or that men had failed to recognize its productivity. In that case, there would be little or no opportunity for exchange, and each man would try to obtain his goods in autistic independence. The result would undoubtedly be a fierce struggle to gain possession of scarce goods, since in such a world, each man's gain of useful goods would be some other man's loss. On the other hand, in a world of voluntary social cooperation through mutually beneficial exchanges, where one man's gain is another man's gain, it is obvious that great scope is provided for the development of social sympathy in human friendships. It is the peaceful, cooperative society that creates favorable conditions for feelings of friendship among men. Very important that we get across the idea that the market is the maker, not only of order, but of cooperation, benevolence, peaceful exchanges. Now, if cooperation is so important, what about competition? Aren't they opposites? Well, here's another notion of the effectiveness of Liberty's foes. Again, if they could paint cooperation and competition as being opposites and show that the market is based on competition, they're able to drive home the point to people that the market has nothing to do with cooperation and therefore score another point for status. Far from being opposites, though, competition and cooperation entail each other. Now, being methodological individualists, we know that society can't cooperate. Only individuals can. And since an individual cannot cooperate with everyone at once on particular projects, he must choose whom he will cooperate with. The result is competition. If I need to choose, and I want to cooperate with someone in providing shoes, and two people want to cooperate with me, I have to choose which one I'm going to buy the shoes from. The byproduct there is competition, to do the cooperating. The stifling or prohibition of competition, then, is not a blow for cooperation, but a blow to cooperation. The eloquent libertarian writer, Albert J. Nock, made a wonderful contribution to the subject in his book, Our Enemy to State, in which he shows the incompatibility of social power and state power. What Nock tells us is that in human affairs, there are two vast networks of relationships. The network of voluntary relationships, society, and that network of coercive relationships, the state. Society is the realm of production, exchange, cooperation, competition. The state is the realm of expropriation, slavery, war, mass murder, and general misery. This is what he meant when he wrote, quote, taking the state wherever found, striking into its history at any point, one sees no way to differentiate the activities of its founders, and beneficiaries from those of a professional criminal class. Close quote. Nock's theme, brimming with benevolence, is that the free market generates a social bond of spontaneous order of cooperation that is undermined by state power. The fabric of society that conservatives are so fond of turns out to be incompatible with their coercive moral guardian. The state tears the fabric with each act, and Nock summed this up when he wrote, quote, but it may be asked where are we to go for relief from the misuses of social power if not to the state? What other recourse do we have? It must be pointed out that this question rests on the old, inveterate, misapprehension of the state's nature, presuming that the state is a social institution, whereas it is an anti-social institution. That is to say the question rests on an absurdity. Therefore, an appeal to the state on the ground of justice is futile in any circumstances. For whatever action the state might take in response to it would be conditioned by the state's own paramount interest and would hence be bound to result as we see such action invariably resulting in as great injustice as that which it pretends to correct or as a rule greater. The question thus presumes in short that the state may on occasion be persuaded to act out of character, with the levity of those quotes. My message in closing is that the libertarian candidate is not that libertarian candidates should campaign as philosophers or that we should nominate Hayek for president. What I am recommending is that all of us become familiar with the rich subtleties of libertarianism and then find ways to make them clear and easy to our lay audience. We have to do this to overcome hundreds of years of prejudice against liberty and this is hardened into unquestioned, blind feeling that the free market is at best simplistic naive and contrary to human nature. What we must do if we are to have liberty and abolish the statism is teach this lesson to people and there is no greater cause. I don't usually go on for bumper sticker philosophy but I'll make an exception here and recommend that to open the subject with people you could hardly do better than to quote Crudone's brilliant formulation which is liberty is the mother, not the daughter of order. Thank you.