Many have noted how chaotic recent times have been in American society. Almost reflexively, many have turned to the government for the solution to chaos. And many have responded by promising order if they were in charge. In contrast, few seem to see the irony involved, when markets are how we reduce what would be chaos into dynamic order, while government is frequently the source of chaos.
Chaos arises from government actions via sins of omission—e.g., not defining and enforcing property rights justly and efficiently, which undermines markets ability to perform the miracles they are capable of—and sins of commission—restricting property rights further with price controls, regulations, restrictions mandates, etc., which more overtly interfere with markets. But both undermine the potential for mutually productive voluntary arrangements.
It is worth revisiting the common view that unhindered markets represent chaos and that coercive government policies replace chaos with order, which reverses the reality that markets produce order from what would otherwise be far more chaotic. In particular, it is worth considering FEE founder Leonard Read’s “Incomprehensible Order,” in his 1965 The Free Market and Its Enemy, currently celebrating its 55th anniversary.
- "Most of us claim an affinity for freedom; but if given a choice between a freedom suspected of chaos and a regimentation assured of order, we would choose the regimentation. We instinctively fear and detest the opposite of order which is chaos, and for a good and compelling reason…Man’s existence requires a fairly dependable level of order."
- "Required is an orderly social environment, so that man can know what to expect, within limits, from his fellow man…Indeed, when confronted with but a modicum of chaos, he will accept…constraints which appear to minimize uncertainties and thus give him the semblance of order."
- "Most of these “goose steps” which appear as a relief from chaos, such as controls of prices, wages, rents, hours of labor, or “planned” production and exchange… are, in fact, contrary to order. These rigidities are necessarily interferences with men’s choices and result in chaos."
- "The truth is that order and chaos in the economic realm are the reverse of what is generally supposed to be the case."
- "[Markets create] an order…which we do not comprehend."
- "The complex of creativities flowing through the minds of men…the “chaos”…If not aborted…result in order…But there is all too little of this faith…as it concerns the free market…as we witness millions of economic decisions made independently of each other, we will, if not perceptive, refer to them as chaotic; whereas, in fact, we are viewing an order the complexity of which cannot be brought within our limited grasp of things."
- "What we lightly pass over as chaos is…a reflection of our failure to comprehend …the complex data of the free and unfettered market."
- "But observe that one man’s orders, aimed at bringing about his singular idea of order, result in everyone else’s chaos."
- "Unfortunately, the chaos brought on by one-source decisions…is seldom thought of as chaos…[people] come to think of their fetters as more a part of ordered than chaotic life."
- "The more a country’s economy is politically ordered or “planned,” the more chaotic is production and exchange. Conversely, the freer the market…the more order there is in production and exchange."
- "The free market…resting, as it does, on common consent, is consonant and in harmony with freely acting man…Order…exists only as this dynamism, showing forth peacefully and creatively finds unfrustrated expression. Any man-imposed goose step must breed chaos."
- "Whenever we impose one-source decisions for millions of decisions made independently…we get chaos…And…freedom must disappear as we practice the error!"
- "The mysterious order of the free market…[converts] forces too numerous ever to recount and which appear as chaos…[into] incomprehensible order…the fantastic order…by which we live…so perfect, their production and exchange…so nicely balanced, that we take them as much for granted as we do our next heartbeat."
- "Now reflect on those goods and services…delegated instead to one-source governmental decisions as a way of bringing “order out of chaos”…Observe the imbalances and note that these are the only goods and services we ever argue about. By his method, we do not bring order out of chaos but, rather, chaos out of incomprehensible order! The very fact that these goods and services are now in a chaotic state is testimony…that incomprehensible order has been converted to chaos."
- "The free market is an agency for the expression and sorting of…countless differences…whereby each may pursue his own proper interests without infringing upon or denying the nature and the interests of any other peaceful person…alternatives…[exhibit] some variation of the master-slave arrangement, with one man’s order bringing chaos into the lives of others."
- "[Man’s] nature calls for an order of the dynamic variety which, unless he is highly perceptive, he looks upon as chaos."
- "Freedom in the market, without which other freedoms are impossible, can exist only as creativities of the peaceful variety remain unrestrained. True, this calls for an order so complex that it gives the appearance of chaos; yet, it is order, however incomprehensible."
- "When we mistake incomprehensible order for chaos we leave ourselves open to… deceptions of the know-it-alls…[who] impose restraints on the free flowing of creative energy…Unaware of how little they know, they are led to believe that it is their restraints which account for the wonders; and because of this erroneous correlation, they claim credit for the accomplishments which take place despite their subversions."
Leonard Read recognized that the process that takes place in markets, which appears to many as chaotic, in fact represents a far more advanced and beneficial social order. It is an order that accommodates the almost infinite variety of our different abilities, circumstances and desires, without violating anyone’s right to themselves and what they produce. No other mechanism has ever been discovered that can accomplish this peaceful, sophisticated and dynamic order.
Read saw that despite reality, people persist in viewing the order that arises from markets as if it was chaos, because it is beyond their understanding. As a result, they support a myriad of coercive government policies to impose order, which in fact replace order with chaos.
He also saw that if people would think carefully, they would recognize that the incomprehensible order of markets, precisely because it so vastly exceeds any one individual’s or group’s understanding, demonstrates why politically imposed “order” cannot work as well as what it overrides, despite ubiquitous violations of self-ownership.
We would benefit by following Leonard Read’s understanding of the incomprehensible order of markets that surrounds us when unhindered and the all-too-comprehensible chaos government imposed “order” imposes in its place. After all, we don’t want to turn order into chaos by our efforts to turn chaos into order.
[Editor's Note: A previous version of this article incorrectly stated it was the 75th anniversary of The Free Market and Its Enemy. It was actually the 55th anniversary.]