Unplanned Order

One of history's most profound discoveries is that complex, beautiful and immensely useful arrangements often emerge without anyone designing them.

Charles Darwin, of course, famously explained how complex life forms emerge over many generations through trial and error. Each of these life forms is well suited to survive in its environment. Yet no one designed these life forms.

Indeed, the complexity of the natural world is so impressive that many people of faith resist Darwin's theory. They find it difficult to believe that the amazing and magnificent order of the natural world could be the result of anything but the conscious design of a creator.

I don't wish to debate theology or biology. Instead, I want to discuss another complex, beautiful and immensely useful arrangement: the modern economy.

No one designed, or could possibly have designed, this economy. It's true that governments enforce many of the rules that put boundaries on economic activities. But the complexity, size and flexibility of the global market are too vast for it to have been designed by any human mind or any congress of human minds.

Pick up an ordinary pencil. What you hold is the result of the ideas and efforts of literally hundreds of millions of people. The seemingly simple pencil in your hand exists only because some people know how to explore for iron ore while other people know how to transform that ore into steel. Still other people know how to mold that steel into blades for chain saws — chain saws whose motors are built by different people. And then other people use those chain saws to fell trees.

Another few people pilot the boats and drive the trucks to transport the logs to the lumber factory. The sheets of lumber are then somehow made into pencil shafts. Each of these pencil shafts encases a cylinder of “lead” (a mixture of graphite and clay) that enables pencils to do their jobs. Yet producing the “lead” itself demands the efforts of countless other workers — as does the pencil's eraser, as does the aluminum ferrule that keeps the eraser attached to the pencil.

The pencil you hold is the result of the knowledge and efforts of literally hundreds of millions of people, nearly all of whom are strangers to you. Even more remarkable is the fact that only a tiny fraction of the people whose efforts were necessary to put that pencil into your hand had any idea that their efforts would help to produce pencils.

No one designed the economic processes that result in pencils. No one could possibly do so. Yet these processes obviously exist. They exist because they emerged, unplanned, over the years from economic competition guided by market prices.

Long before Darwin explained how order emerges unplanned in the natural world, Adam Smith — a Scottish moral philosopher whose work gave birth to the science of economics — explained how individuals in a society with private property but without any guidance from government act in ways that unintentionally create an economy that is stupendously productive.