Hierarchy and generative orders: Theorising the generative order: Part One

Part One

To command nature, we must obey it

Francis Bacon, 1624 (or thereabouts)

Hierarchies and Generative orders

A great theme running through economic and political theory is the distinction between hierarchies and markets as means of cooperation. This is at the centre of Hayek and of Coase. Here I’ll sketch some ideas that paint all this on an even larger canvas.  So as not to get too bogged down I’ll sketch some of these ideas in dot point form. Take this as notes to myself.

• • Language and culture are both generative orders, though they co-evolved and we can also think of them as parts of a single order.
  • They make us human by creating an inter-subjective human world. This functions as an order within the natural world. Like the order of the natural world, we inhabit a generative order. We inhabit our language and our culture. It has an objective existence outside ourselves.¹
  • The market is the next great generative order that emerged in human history (or prehistory).
  • At this point, we encounter certain important facts. Generative orders are built on one another – each successive generative order uses the previous generative orders as part of its operating system. Further, generative orders tend to be less fundamental than the generative orders from which they’re built.
    • This is true by definition historically, but it’s also true in terms of contemporary significance. Thus markets create an order that people can inhabit, but they move in and out of markets whereas language and culture create an order so ubiquitous that our whole lives are lived within it (even to a substantial extent when we’re dreaming).
  • As this process continues a range of quite specialised generative orders come into existence. To give a contemporary example, lawyers are trained by teaching them ‘the practice of law’ which can be regarded as a generative order. It is a set of values and practices that have a significance that is independent of any individual lawyer. Accordingly, I’m going to use the terms ‘specialised’ and ‘general’ generative order to specify the level of generality of a generative order.
  • Placing ideas like those I’ve discussed at the heart of his thought, Hayek used the terms ‘cosmos’ and ‘taxis’ to distinguish between an evolved order and one that was built deliberately by those with sufficient power and insight to do it – as formal institutions are built. (I also think Hayek overdoes the ‘spontaneous’ part of spontaneous order. Even though they come to operate in a decentralised way, some of these orders are often subject to heavy shaping by power and may continue to rely on it).²
  • I’d also mention similar phenomena but which tend to be discrete. They may constitute part of an order, like the liquidity that markets generate with growing depth. But they stop short of being orders in themselves. I call such phenomena emergent public goods. Thus the place at which a market for goods is established is an emergent public good rather than a generative order. A word as it takes on its meaning in a community could also be regarded as a small, discrete emergent public good. Hayek gives an example of one such phenomenon emerging in the animal kingdom as cattle form a path through a field. It’s not part of a generative order.
  • It’s interesting to note at this point that Adam Smith’s two books were each dedicated to anatomising the emergence of culture (The Theory of Moral Sentiments) and markets (The Wealth of Nations). In each case, he told the story of the emergence of a generative order – a social world for humans to inhabit. In his Lectures on Rhetoric, he described a form of exposition as superior to the ancients’ rhetorical methods and he deployed this method in his two great books. This was the “Newtonian method”. Modelled on Newton’s system of celestial mechanics, it was built on an “immense chain of the most important and sublime truths . . . connected together by one capital fact, of the reality of which we have daily experience”. Where Newton had done this for the natural order in his contributions to natural science, Smith followed Hume’s call to build a science of humanity.
  • The Newtonian structure of The Wealth of Nations is built up from the singular innate human tendency to “truck, barter and exchange”. And the ‘secret sauce’ behind the miracle of the market is that cognition and motivation are entangled, cognate in the generative order. Adam Smith explained this. Hayek doubled down on it: The price system in a market is a system of social cognition enabling economic decision-makers to understand the relative scarcity (the economic value) of the various goods they can produce or consume. Meanwhile, the motives generated within the generative order for people to serve their own interests, are (unbeknownst to them), motives for them also to serve society’s interest. Market prices motivate economic actors to produce what is most scarce and consume what is least scarce.
  • The apparatus in The Theory of Moral Sentiments works remarkably similarly. First, it’s predicated on a single innate human trait of which we have daily experience – in this case, ‘sympathy’. Being both cognitive and affective, sympathy works analogously to the price system.
    • It provides the primary ‘sense’ through which we comprehend our social world. We can know nothing of how others think and experience their lives except by imagining ourselves in their place.
    • It is also an emotion that primes us to judge our social world and motivates us to act well in it.
  • In this manner, Smith builds his ‘Newtonian’ exposition of how sympathy knits the social world together binding human beings to one another in circles of sympathy of an intensity that diminishes – as does Newton’s force of gravity – with proximity. From this, Smith builds a theory of human psychology in which culture emerges as a social asset, the glue that holds society together – with the help of government which vouchsafes the rule of law. Without this regularity and justice in social life, Smith argues society would “crumble to atoms”.
  • In each case, the order of culture and markets emerge without being imposed from on high. They emerge as an ongoing residue of the repeated patterns of life itself.
  • Smith was a slow and painstaking writer. He worked over things for decades before publishing them and then updated them with each edition released. He substantially revised The Theory of Moral Sentiments in the last year of his life to take into account his reaction to the French revolution which was very similar to his friend Edmund Burke.³ Though he’d been working for years towards finishing a third great work which would complete the intellectual task of his life – a book on Jurisprudence which today only exists as hints in students’ notes from lectures decades before – his instructions on his death were for all his papers to be burned. There were just a few exceptions most or all of which were early pieces of which we can surmise he was proud. Remarkably they include essays on two other generative orders.
  • Smith’s Considerations concerning the first formation of languages proposed that it evolved as a generative order as defined here. He wouldn’t have used this language, but from what he did say, he’d have agreed with Tomasello’s claims at the turn of the twenty-first century. “Just as money is a symbolically embodied social institution that arose historically from previously existing economic activities, natural language is a symbolically embodied social institution that arose historically from previously existing social-communicative activities”.
  • His Principles which lead and direct philosophical enquiries; as illustrated by the history of astronomy is an exploration of the generative order of science. It’s multi-faceted, but has a strong, if not quite ‘Newtonian’ focus on a single psychological motive which is wonder and surprise and the desire to pacify them by normalising the phenomena that gave rise to them in our mind – i.e. by bringing them within our scientific understanding.

Part Two (To be continued …)